TWO decades ago a small wave of Arabs arrived in Bosnia, jihadists coming to fight on the side of the country’s Muslim Bosniaks. Today another wave of Arabs is coming—this time for skiing, saunas and condos. In 2010 Sarajevo, the capital, registered about 1,000 tourists from the six Arab oil monarchies in the Gulf combined; in the first ten months of 2015, over 19,000 came from Kuwait and Saudi Arabia alone. Arab property investment has ballooned. For a country mired in bureaucracy and political stalemate, the new investments provide a welcome bright spot.
The thermal baths of the Sarajevo suburb of Ilidza have drawn tourists since Roman times, and took off as a resort under the Austro-Hungarian Empire. After the Bosnian war of 1992-95 the resort seemed doomed. But the past three years have seen an extraordinary renaissance. First came Libyan militiamen, benefitting from Bosnian expertise in therapy for wounded veterans. Other Arabs followed. Now estate agents, restaurants, hotels and dentists all advertise in Arabic.
In the café of the Hotel Hollywood (where NATO forces snatched two alleged al-Qaeda members in the weeks after the September 11th attacks), Ayyad Salim Al-Ayyad, a Kuwaiti estate agent, says business is “fantastic”. A few tables over, Bosnians working for a Kuwaiti developer are doing the hard sell on their new condominium complex. Another estate agent looks askance when a Bosnian woman asks about buying into a new holiday complex in nearby Hadzici. This is not the place for you, the agent explains; it has been built by a Saudi company for Arabs. The buyer might be better off in a development in Polinje, in the hills above Sarajevo, constructed by the Saudi Al-Shiddi group but marketed to wealthy Bosnians and Arabs alike.
Information on the Polinje development is available at the Sarajevo City mall—also built by the Al-Shiddi group, in 2014. In summer the mall is packed with Arab families, some of whom may be staying in the company’s alcohol-free Hotel Bristol. This investment will be dwarfed, however, by a project in nearby Trnovo where construction is set to start in April. Buroj, a developer from Dubai, plans to build at least 3,000 villas, flats, a hospital and a sports stadium. The total investment could come to €2.5bn ($2.7bn).
Arab tourists “feel at home here”, says one travel agent. In mainly Muslim Sarajevo, much of the architecture and heritage is Ottoman, and halal meat is easy to find. There are few other countries where hiking and skiing are within striking distance of a mosque.
The property market, meanwhile, is targeted at middle-class buyers who would like a bolt-hole far from the war and chaos enveloping the Middle East, but who cannot afford London or Geneva. In Bosnia a new three-bedroom villa can be yours for €200,000. Because Bosnian law requires foreigners to buy property through a local company, data are hard to come by, but property agents’ testimonies confirm that the market is thriving.
Bosnians are both delighted and worried by all this. The investment is welcome, but locals are wary of Arab visitors bringing with them stricter interpretations of Islam, as Arab religious charities have done over the past two decades. Al-Jazeera Balkans, Qatar’s local-language television station, has been broadcasting from Sarajevo since 2011, and competes with Russian, Western and Turkish news organisations. A Qatari government “friendship fund” for Bosnian small businesses is preparing to open soon. Bosnians do not want to be caught in the middle of an international battle for hearts and minds.
Even FIPA, the Bosnian foreign investment agency, is curiously reticent about Arab construction projects. Gulf countries do not rank among the top 12 investing in Bosnia, the agency protests. (In part, this may be due to Gulf investments being made through third-country holding companies.) They have “no special relationship” with the country, and invest only “because they can make a profit, and not because they love Bosnia”. One wonders whether investors would be expected to evince a disinterested love for Bosnia, if they were European.