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Balkan crisis leaves MBA students cold

Aaron Steiner | Wednesday, January 14, 2009

Keith Flatley said it was a cold couple of days he and five other Notre Dame MBA students spend in Bosnia at the beginning of the month, as much of eastern Europe was affected by a cutoff of natural gas from Russia that began on Jan. 1.

The MBA students – traveling to Bosnia for a course called “Business on the Frontlines” – arrived in the country on Jan. 2. Shortly after their arrival, they were among the thousands affected by the gas cutoff. The Associated Press reported that tens of thousands of homes and buildings have been left without heat in freezing weather since the disruption.

The cutoff stems from a dispute over pricing agreements between Ukraine and Gazprom, Russia’s state-run monopoly that supplies natural gas to Ukraine and much of Europe.

As temperatures plunged to 6.8 degrees Fahrenheit in Sarajevo, the Bosnian capital, Flatley said that students braced for the cold nights without heat.

“It was about 10 below Celsius,” Flatley said. “We just did what we could.”

While in the country, the students stayed in an apartment, which is heated by natural gas. Flatley said the group had an electric oven which they tried to use for heat, as well as a heat lamp in the bathroom.

Other than that, the students bundled up on the cold nights, he said, and found as much heat during the day as possible.

“We’d be out all day, doing our work, [and] some of the buildings had heat,” he said. But the majority of businesses didn’t have heating.

“We found a couple places of heat,” he said.

The AP reported that sales of electric heaters soared, something Flatley confirmed in an e-mail from Jan. 7.

“There are lines forming at stores selling electric heaters. The price of an electric heater on Monday was under $100 U.S.; it is now over $200,” he wrote in the e-mail. “The heaters sell out within minutes of the stores opening.”

The infrastructure in Bosnia varies, Flatley said, but natural gas heating is common, with much of it constructed since the Bosnian conflicts that left the country in shambles.

“When [Sarajevo] was rebuilt, because the electric grid was kind of shoddy, they basically redid the city with natural gas,” he said. In some cities, where natural gas is less common, there is a mix of firewood and electric heating systems, he said.

Flatley said the mood in the country wasn’t too negative.

“They’re tough people,” he said of Bosnians, noting they’ve endured far worse during years of bombings and conflict in the region.

“I think it was more an issue for us than for the people there,” he said.

When they asked natives about the situation, many commented that it was either Russia flexing its muscles, or Ukraine demonstrating its power.

“Some said it was Ukraine showing the [European Union] how much they depend on them,” Flately said. Ukraine is currently seeking to become a member of the EU.

Flatley said that the heat was finally turned on again the day before they left the country on Jan. 11.

During his time in Bosnia, Flatley and the other students who participated in the course studied the role of business in rebuilding post-conflict societies, according to a Mendoza College of Business press release. In addition to the trip to Bosnia, another group of students traveled to Beirut, Lebanon.

“If a country has negative GDP growth, they have a certain percent chance of falling into a civil war,” Flatley said. “If a country has already had a civil war, any negative growth really compounds their chance of falling into a civil war.”

Flatley said the groups visited with various businesses and organizations and looked at ways of improving commerce in order to improve the stability in the countries visited.”Business on the Frontlines” is taught by associate professor of management Viva Bartkus, who spent time with students in both countries.

“After facing man’s inhumanity in our generation, and within the last 10 years in Bosnia’s case, there is a real challenge to figure out how to re-knit these societies deeply divided by religion, ethnic groups and socio-economic class,” Bartkus said in a press release. “We believe that business has a role in that, both international companies and local ventures. There is nothing to compare with the dignity of work and the ability to be able to look after one’s family after war.”