The Tyres of Change: Remittances as a Wheel of Development in Pirot,Serbia

Abstract

This article explores the agency of Yugoslav migrant workers (Gastarbeiter) and their visions of development, focusing on the establishment of a so-called remittance factory (a manufacturing facility founded primarily using the earnings of citizens working abroad, known as remittances) in the town of Pirot in today’s Serbia. The factory, ‘Tigar’, a major producer of radial Tyres since 1972, became the ‘wheel of development’ in Pirot during the socialist era. The social effects of Gastarbeiter remittances, including changes in gender roles and community cohesion, will also be explored. While Yugoslav migration theorists have primarily critiqued the irrational expenditure of Gastarbeiter savings, my research reveals that, when examined at the micro-level, Gastarbeiter demonstrated prudent investment behaviour, utilising their savings purposefully to contribute to local development upon their return. Through the use of different historical sources (documentary evidence, newspapers and oral history), this article will contribute to a deeper understanding of the complex dynamics of migration, remittance behaviour and development in socialist Yugoslavia. It will underscore the importance of recognising the agency of Gastarbeiter as one of the key contributors to the development of ‘Tigar’ factory, which still operates today, now as part of the French-owned Michelin group. Despite the article’s focus on a single case study, the same research approach can be applied to similar cases, not only in Southeast Europe but also in other emigration regions.

Introduction

Since the mid-1960s, Mediterranean countries have been confronted with the well-documented phenomenon of labour migration towards the industrial countries of Europe. At the time, it was anticipated that this movement, alongside its immediate benefit of alleviating domestic labour market pressures, would also provide long-term positive economic effects. Migration was expected to help narrow the developmental gap between the countries of origin and the receiving nations, ultimately leading to the gradual disappearance of the economic drivers of migration. However, by the same decade, it became evident that these optimistic projections would not be realised. (Baučić, 1979, pp. 21–24). In 1959, Gunnar Myrdal published the book Economic Theory and Underdeveloped Regions, in which he challenged the traditional theory of migration. He was one of the first to recognise that migration has numerous negative effects on the development of countries of origin. By criticising the theory of the free mobility of production factors, he demonstrated that this mobility is predominantly one-way and contributes to the polarisation of development at the international level (Myrdal, 1959).

In this article, I examine similar claims made by Yugoslav scholars of migration, primarily during the 1970s when migration was extensively researched in Yugoslavia. As the only socialist country that liberalised and even encouraged ‘temporary work abroad’, Yugoslavia actively promoted its citizens to use their savings in a ‘potential’ and ‘rational’ manner, a point that will be further elaborated later in the text. Until 1963, the attitude on emigration for work abroad was largely negative. Economic migration was neither accepted, allowed, nor justified, as it contradicted the ideological views and the developmental path towards socialism. The small number of emigrants who left illegally despite the bans were seen as politically, rather than economically, motivated (Mikulić, 1991, p. 79).

However, this negative attitude shifted over time. Faced with rising unemployment, Yugoslav political and administrative bodies began to accept external migration as a temporary necessity. While they acknowledged that temporary migration would not significantly reduce unemployment, they recognised its potential to improve the socio-economic position of migrants and their households. Additionally, it was seen as a way to generate a crucial inflow of foreign currency. This shift in policy coincided with the 1965 economic and social reforms, which aimed to intensify economic modernisation and liberalisation (Mikulić, 1991, p. 80). Bilateral recruitment agreements were signed with other states, in the hopes of providing a legal framework to regulate labour migration of Yugoslav citizens. The first agreement was signed with France in 1965, followed by similar arrangements with Austria and Sweden in 1966, followed by West Germany in 1968, and finally with Belgium, Luxembourg, the Netherlands and Australia in 1970. In this manner, Yugoslavia became the only socialist country to not only permit but also to promote labour migration abroad. Yugoslav authorities thus gradually began to officially recognise the significance of remittances for the country’s development (Baučić, 1972; Bernard, 2019, p. 48; Ivanović, 2012).

Yugoslavs were present in all countries with which bilateral recruitment agreements were signed; however, by far the majority resided in West Germany, a state which depended particularly heavily on a foreign workforce. In 1962, West Germany officially adopted the term Gastarbeiter (literally, ‘guest worker’) to categorise these temporary labour migrants. Yugoslav officialdom itself used the label ‘temporarily employed abroad’ to denote individuals residing temporarily outside the country. Nonetheless, the German term Gastarbeiter has become entrenched among scholars (Ivanović, 2012, p. 28). In accordance with this convention, this is the designation I have elected to use in my research, and as such, the term will also appear in this article.

Utilising the ‘from below’ research method, in this study I focus on a single case: the city of Pirot (together with a nearby village Babušnica) in present-day Serbia. Why focus on a micro-study? As Hein de Haas noted, ‘it would be unrealistic to expect that migration alone would enable people to profoundly change structures’ (De Haas, 2009, p. 241) referring to the impact of migration on the national economy. Keeping this in mind, the goal of this research is to demonstrate that by examining the microenvironment, we can effectively discuss the impact of migrants on development. One key question is how these returnees contribute to the development and social change within the local community. Additionally, in this research, I will investigate the role of local institutions and policies in facilitating or hindering the benefits of migration on development in Pirot, providing insight into how these factors shape the overall impact of migration on the community. Furthermore, I aim to explore the social transformations that have occurred in Pirot as a result of migration and remittances, particularly concerning the employment of women in the tire industry.

For the purpose of this research, the methodology of historical anthropology was applied. Unfortunately, the archive of the ‘Tigar’ factory has been lost, suffering the same fate as many other factory archives in Southeast Europe. For this research, I must note that the current management of ‘Tigar’ made considerable efforts to locate the archives, but without success. Consequently, I adopt the mixed-method approach proposed by Goran Musić and Rory Archer for studying socialist industries. Their methodology in such cases recommends relying on printed media (such as factory newspapers) and oral history to compensate for the absence of archival materials. (Archer & Musić, 2016, p. 15) For this research, I rely on the factory newspaper Tigar, alongside oral history and ethnographic observations.

Oral history has emerged as a key source for capturing the experiences of Gastarbeiter from Pirot. I conducted a focus group interview with 10 former employees of ‘Tigar’, all now retired and active members of the ‘Pensioners of Tigar’ association. This group included both former returnees and investors, as well as family members of those who invested remittances. The only participant not directly involved in work abroad or investment was a former porter. However, his decades-long role within the factory allowed him to provide valuable insights that helped me verify information from the factory newspaper. In addition to the focus group, I used the snowball sampling method to conduct interviews with a married couple—comprising a returnee and his wife—and the daughter of former guest workers. While other potential interviewees were identified, for various reasons, they declined participation. Such challenges are common in fieldwork and must be acknowledged as part of the research process. ¹

Migration and Development in Yugoslav Context

Debate surrounding the impact of migration upon development in workers’ home regions can be traced back to the 1950s and originate with a group of theorists known as the ‘developmentalist optimism’ circle. In this context, ‘optimism’ refers to a recognition among academics of the Gastarbeiter’s positive impact upon local development. This optimism, however, gave way to pessimism in the 1970s and 1980s, being followed again by a more optimistic turn in the 1990s and 2000s (King, 2015). Hein de Haas notes, meanwhile, that despite these fluctuating tendencies, the core opinions of developmental optimism have remained attractive throughout migration historiography (De Haas, 2010, p. 252). Stephen Castles, an expert on migration studies, concurs, emphasising the frequency with which modern academic studies reveal the positive effect of migration on the countries of origin. Nonetheless, the empirical evidence base for linking migration and development is still very weak (Castels, 2008).

Meanwhile, in the West, research on the influence of migration on development has historically been, and continues to be, a complex and multifaceted topic. In the scope of the present research, my main intention is to elucidate how events unfolded within a socialist country. In Yugoslavia in particular, migration research was approached with serious interest; in addition to notable figures such as Ivo Baučić or Mladen Vedriš, Yugoslavia also attracted attention from foreign organisations which frequently analysed migration from the region (Baučić, 1972; Vedriš, 1977). In addition to the previously mentioned studies, Branislav Mikulić has also examined the impact of migration on development in Yugoslavia. He conducted an in-depth analysis of the inflow of remittances into the country, their effect on inflation, the limitations on investment in the small-scale economy and the customs regulations that hindered such investments. Based on these findings, he concludes that Yugoslavia’s migration policy ultimately failed to achieve its intended economic goals. However, he emphasises the distinction between evaluating migration at the macro level and assessing it at the micro level. He argues that it is possible to discuss the effects of migration at both the micro level (individual) and the meso level (enterprise). He also points out that the micro and meso effects do not always align with the broader macro effects. What may benefit an individual migrant or a company might not necessarily be beneficial from a wider social or national perspective (Mikulić, 1991, p. 147).

The Croatian economist Mladen Vedriš is a pioneer in researching these effects at the micro level. His research addressed the so-called remittance factories, that is, manufacturing plants established on the basis of funds sent back home by Gastarbeiter. His study ‘Investing the savings of foreign migrants in the social sector of the economy’ (Vedriš, 1977, p. 33) serves as a significant record of this endeavour. In it, Vedriš provides a list of such factories, emphasising in his introduction that his empirical research not only aims to investigate remittance factories as a socioeconomic phenomenon but also to demonstrate how ‘the rational use of migrants’ savings in the development of the social sector of the economy in emigration regions contributes to their accelerated development and the gradual removal of the economic causes of emigration’ (Vedriš, 1977, p. 5). However, Vedriš’s study remains incomplete. While Vedriš later acknowledges the ‘Tigar’ factory in Pirot in subsequent research, it is conspicuously absent from the 1977 work. Several other remittances factories are also omitted. While the study provides clear data concerning investment, it fails to demonstrate how these factories influenced development or whether they instigated tangible social change. Although the study was intended to highlight positive examples of migrant behaviour, the mention of the ‘rational use of savings’ may suggest differently: that migrants were predominantly assumed to be spending their savings irrationally.

Ivo Baučić shared a similar view, arguing that the use of savings from work abroad for economic activities, whether in the public or private sector, had marginal significance. The official state body, the Commission for Workers Abroad, also supported this perspective, stating that ‘returnees spend their savings quite irrationally; most often, they build houses and buy cars, while paying less attention to creating conditions for future economic development’. This led to the emergence of the idea of ‘modernization without development’ (Schierup, 1973, p. 18) According to this theory, there is no meaningful economic development, as the structural transformations needed to make underdeveloped regions competitive in the global market are absent. Development is limited to personal advancement. The final outcome of ‘modernization without development’ is that agricultural regions begin importing food, former peasants open restaurants and bars, some find work at service stations and the large-scale purchase of consumer goods produced in developed regions depletes the remittances brought back from abroad (Bernard, 2019, p. 62).

All these studies are crucial to understanding remittance factories, as they provide insights into how foreign earnings were utilised. Remittance factories were considered one of the productive and rational investments made by Yugoslav Gastarbeiter. This was because the investments were directed toward the social sector of the economy. Under the principles of self-management, production centres, such as factories, were owned by society, and everything they produced was considered a societal asset. Ulf Brunnbauer highlighted the economic importance of guestworkers for the state, and how they became a frequent topic of newspaper articles (Brunnbauer, 2019, pp. 413–437). The phrase ‘With foreign currency to a job in the homeland’ was frequently repeated in Yugoslav newspapers, encouraging Gastarbeiter to invest in the social sector. It is important to recognise the media’s clear intention to shape public opinion, as evidenced by headlines that highlighted the success of foreign exchange investments. These reports were an obvious attempt to motivate other migrants to undertake similar ventures (Žerić, 2024, p. 159).

More recent research has touched upon the history of the Gastarbeiter phenomenon, albeit without delving into its intricacies. Historian Sara Bernard underscored in her 2019 book that Pirot has been notably neglected in contemporary explorations of Gastarbeiter history, and although ‘Gastarbeiter remittances financed the enlargement of the local factory “Tigar” in Pirot, there is no acknowledgment of Gastarbeiter return either in academic or public debate’ (Bernard, 2019, p. 37). Since this article examines the employment of women in the factory, it is essential to address how they are represented in the existing literature. Caroline Brettell, researching migrations from Portugal, emphasised that throughout the history of migration, women have been misrepresented as dependent and passive followers of the initiating male migrant, with their movement often categorised as family reunification (Brettell, 2003, p. 139). However, women were often active participants in migration processes, particularly among Yugoslav migrants. The state authorities of the SFRY did not impose bureaucratic or legal obstacles upon women seeking temporary work abroad, with the same rules applying to them as to their male counterparts. Yugoslav women were actively engaged in the migration process from its early stages, comprising one-third of all Yugoslav workers abroad (Ivanović, 2012, p. 314, Le Normand, 2021, p. 89). Despite this, as Sara Bernard conclude, ‘silence in women labour migrants extends to academic research’ (Bernard, 2019). Almost everything known about female Yugoslav migrant workers comes from research conducted in the 1970s and 1980s. Melita Švob, one of the few Yugoslav researchers focusing on women’s migrations, highlights the simplistic treatment of women’s migration by Yugoslav scholars, who tend to downplay their role and focus their attention on the male experience (Bernard, 2019, p. 182; Švob, 1990, p. 4). The return of Yugoslav women and their subsequent reintegration into society thus remains conspicuously underexplored in the existing discourse. This oversight underscores the significance of the current research examining the employment of former housewives within the tire industry, as it offers a compelling lens through which to understand the transformative influence of remittances on the possible emancipation of women from Pirot.

Crossroads of Transformation: Migration Trends and Development Trajectories in Pirot in the Context of Socialist Yugoslavia

In order to understand the need for Gastarbeiter investment in the development of Pirot, several key factors should be accentuated which are intrinsic to the nature of socialist Yugoslavia. The state was structured as a federation consisting of six republics (Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Macedonia and Montenegro) and two autonomous provinces (Vojvodina and Kosovo). While the central government identified ‘insufficiently developed republics and provinces’, individual republics concurrently devised programmes targeting ‘underdeveloped regions’. Consequently, although Serbia proper did not qualify as an underdeveloped republic according to the federal categorisation, the Pirot area was indeed regarded by Serbia itself as underdeveloped, relative to other regions within Serbia. This underdevelopment had a range of adverse consequences for overall social development, living standards and ultimately, employment. In the early 1950s, during the early phase of socialism in Yugoslavia, national income per inhabitant in the Pirot administrative district (a synthesised expression of the level of economic development) was 40% lower than Serbia’s national average (Antić, 1973, p. 108). In addition to Pirot being categorised as belonging to the ‘underdeveloped south’, its developmental progress was further impeded by a disproportionate emphasis on agriculture and animal husbandry, which proved inadequate as a foundation for growth during that period (Ibidem, p. 109).

In the midst of the generally poor standard of living in Pirot and its surroundings and the failure of the aforementioned economic reform of 1965, individuals from the region joined the mass departure of Yugoslavs to work abroad. Pirot region has a long-standing tradition of migration, and the Gastarbeiter migrations can be understood as a continuation of an established cultural pattern—now formalised under the terms of the aforementioned bilateral agreements (Vesić, 1978, p. 111). Majority of Pirot’s inhabitants went to work in FR Germany, particularly in town Mannheim (Popis stanovništva, stanova i domaćinstva u 1971, 1991). According to the 1971 census, 1,002 individuals from Pirot were reported as ‘temporarily employed abroad’. Considering that the population of Pirot (excluding the surrounding area) in 1971 stood at 29,298 inhabitants, this accounted for approximately 3.42% of Pirot’s population. Among those, 803 were men. The presence of women cannot, however, be ignored. From a statistical perspective, women constituted a noteworthy portion, comprising approximately 19.86% of the total migrant population from Pirot (Ibidem). Later in this article, the consequences of migration for women will also be examined.

Of all migrations from Pirot, the most popular destination was West Germany (54.19% of migrants), followed by France (28.94%) and other countries of Western Europe and further afield. Prior to departure, the predominant occupation among migrants from Pirot was in the industrial sector, accounting for 46.71% of the total; an overwhelming majority of 92.95% were men. A further considerable section of migrants previously worked in agriculture, comprising 33.93% of the total. Significantly, this group contained a far higher proportion of women, accounting for 22.65%. Most women in the statistics are categorised as ‘dependents’ (izdržavana lica) indicating that they migrated following their husbands (Ibidem).

Particularly among those migrants with previous experience in industry, a chief motivation for migrating to West Germany, as well as to France, were employment opportunities within the tire industry. Popular destinations for Gastarbeiter from Pirot were Mannheim, where they were employed at the aforementioned ‘Seps’ factory, and Clermont-Ferrand, notably at the renowned tire factory ‘Michelin’ (Girić, 1971, p. 7). It is no coincidence that they were employed in the rubber industry, as they often had previous experience in the sector—the ‘Tigar’ factory in Pirot traces its roots back to 1935 and until the 1972 switch to tire production mainly produced traditional shoes known as opanci.

Following the war, in line with the nationalisation of all factories in Yugoslavia, ‘Tigar’ transitioned into state ownership, according to the self-management principle. After the Tito-Stalin split in 1948, the introduction of self-management in the early 1950 represented Yugoslavia’s unique path to socialism and is essential for understanding society in all its aspects. The transformation that the ‘Tigar’ factory underwent mirrored the changes experienced by every factory in Yugoslavia, beginning with an experimental project initiated in 1949 at the ‘Prvoborac’ factory, located in the small town of Solin on the Dalmatian coast (Bogradnović & Ormuš, 1986, p. 76). This transformation of the socio-economic framework included economic liberalisation, which reduced the state’s role in the business sector. One of the main goals was to hand over factories to the workers and to combat bureaucracy. Additionally, self-management aimed to limit state functions by reducing the number of jobs in state bodies and shifting decision-making about factory management from the state to the workers. As a result, many jobs that were once state positions effectively ceased to exist. Self-management also sought to decentralise authority, transferring certain responsibilities from higher state bodies to lower levels, such as from federal to republic bodies or from republic bodies to local committees. This approach aimed to enhance the working class’s involvement in social decision-making (Mratović, 1984, pp. 29–32).

In self-management, fundamental factory matters are debated and voted on through a single enterprise sovereign body elected from among the factory’s members—the Workers’ Council. Accordingly, the ‘Tigar’ factory elected a Workers’ Council in the early 1950s, in line with the principles of self-management (Kostić, 2012). During the 1950s and early 1960s, the factory operated at a loss, concurrent with a decline in Pirot’s standard of living. Meetings of the Pirot municipal council sought to remedy the dire situation and resolved to leverage the rubber industry to transform the city’s fortunes. Since the municipality of Pirot envisioned its economic development through the growth of the rubber industry, which would meet the tire needs of Serbia and Yugoslavia, the new development plan for Pirot aimed to benefit the entire municipality, not just the factory itself (Antić, 1973).

This dramatic change of priorities occurred in 1971, when the rubber industry’s 43.2% contribution the municipality’s industrial output made it a perfect candidate to take centre stage in Pirot (Girić, 1971, p. 1). The implementation of this investment programme ‘would not only reshape the economic structure of Pirot but also facilitate the development of the entire region’, and as such represented a significant opportunity to address the underdevelopment of Pirot in comparison to other regions and to the average development level of Serbia (Filipović, 1972, p. 4). Considering the demands of the automotive industry in Yugoslavia, particularly in Serbia at that time, it was decided to align ‘Tigar’ with the needs of the market (‘Počela izgradnja fabrika radijalnih auto-guma’, 1971, p. 2). With the establishment of the new facility, ‘Tigar’ aimed to comprehensively provide car tyres to Yugoslavia’s largest automotive manufacturer, ‘Crvena Zastava’, under license from Fiat, based in Kragujevac. The management of ‘Tigar’ promptly resolved to initiate the design and funding process for the construction of a radial car tire factory (Girić, 1971, p. 4)

However, the absence of adequate financial resources hindered the establishment of the new plant. Consequently, in 1971, management expedited efforts to secure this quickly and in the required quantity. In a bid to obtain adequate funds from Pirot’s citizens, the factory leadership called for solidarity, as seen in the following plea from then-Director Radmilo Marinković:

I urge the Municipality of Pirot, socio-political and labor organizations, and every individual citizen of Pirot, to demonstrate solidarity and provide moral and material support to the “Tigar” collective in their endeavors to materialize the construction project of the radial tire factory (“Nova fabrika auto-guma osnov za budućnost naše industrije”, 1971, p. 4).

Finally, in October 1972, the factory newspaper Tigar reported on the ultimate solution for financing the new factory—the remittances of Gastarbeiter.

Pirot’s Remittance Factory ‘Tigar’

Following the aforementioned economic reforms of the mid-1960s, state subsidies for industry had been cut and firms were thereafter required to record a profit. Under these circumstances, raising funds proved to be exceedingly challenging: Gastarbeiter from Pirot emerged as a viable source of money, and thus also as catalysts for change. In autumn of 1972, the ‘Tigar’ shoe factory initiated a campaign to gather remittances for the establishment of the new radial tire factory. The goal of this campaign was to encourage workers from Pirot living abroad to submit remittances to finance the import of equipment for the new factory. In return, these workers were offered the opportunity to be employed there and so secure a livelihood (for themselves and their family members) upon their return. The question remained, however, of how such funds, earned in the capitalist West, might best be utilised for the advancement of a socialist state and how this was perceived in the context of workers’ self-management.

Remittance factories were undoubtedly a source of ideological tension. The practice of ‘buying a job’, which prioritised individuals with remittances, faced the most criticism in a society where, according to the principles of self-management and the Constitution of SFRY, everyone should have equal rights to employment. Mladen Vedriš also addressed these criticisms, emphasising that the concept of ‘buying a job’ does not apply because the money is borrowed for an agreed-upon period rather than paid outright. Consequently, the borrower, a returnee from abroad, does not become a co-owner or shareholder of the plant in which they invested their savings (Vedriš, 1977, p. 6). In Pirot, this manner of investment and securing employment was primarily criticised during meetings of the League of Communists of Pirot Municipality, with some members contending that the plan would not be compatible with the Constitution of the SFRY. As previously stated, according to the Constitution, every citizen should enjoy an equal right to employment, which seemed to be threatened by any preference afforded to those who invested remittances in a workplace (Aleksić, 1972, p. 3). Such criticism was indeed accurate, despite only emerging a few months after the adoption of two laws which would govern remittance investment: the ‘Law on Bonds’ and the ‘Decree on Conditions under which Labor Organizations may Issue Bonds Payable in Foreign Currency’. Though these laws legitimised investment of remittances earned abroad, the practice still remained unaligned with the Constitution. Soon though, in 1974, this too would undergo changes.

At the time of the adoption of the new Constitution in that year, the state formally acknowledged the significance of migrants’ remittances for Yugoslav industry. Therefore, based on the aforementioned laws, the Constitution of the SFRY also regulated this activity. Article 28, promulgated on 2 February 1974, decreed that:

The Basic Organization of Associated Labor (Osnovna organizacija udruženog rada) could, in order to expand the material basis of work, collect funds from citizens and provide them, along with the return of these funds, compensation for embezzled funds in the form of interest and other legally determined benefits (‘Ustav SFRJ’, 1974).

This inclusion in the Constitution guaranteed that every factory opened in this manner after 1974 would conform with official policy and as such, the opening of the ‘Tigar’ factory was greeted enthusiastically by many citizens. A local shoe shop employee, Mirjana M., commented on this matter to the local newspaper:

Reading the press, I discovered that numerous companies, particularly in the SR Croatia, successfully constructed various plants and factories, thereby generating employment opportunities for people through this method of fund collection. I believe that ‘Tigar’, and the city as a whole, in its endeavor to construct this factory – that means life to the city and the municipality – will achieve success (Girić, 1972, p. 5).

Mirjana’s awareness of such initiatives in Croatia, particularly the establishment of the first ever remittance factory in the city of Imotski, indicates that at least some individuals were cognizant of such developments on a national scale. Furthermore, her statement indicates that citizens framed their values and visions differently from the ideologically driven Communist party.

Although at its inauguration, the methods through which the factory was funded and staffed were not entirely constitutional, by 1972 the remittances model had become well-established and understood. Returning Gastarbeiter would collaborate with a local bank and the Organization of Associated Labor (represented by the ‘Tigar’ factory) within the framework of a fully-fledged investment programme. The Gastarbeiter would then enter into contracts with the new factory, outlining investment terms and in turn securing job rights. The bank would then provide an investment loan to the Organization of Associated Labor from these funds (Vedriš, 1977, p. 18–19).

In the case of ‘Tigar’, a substantial number of workers employed in the rubber industry abroad (in factories such as ‘Seps’ and ‘Michelin’) decided to invest their remittances in this way. Once the bank had gathered these remittances, in September 1972 a loan was arranged for the new factory, nearly a year after the resolution to construct the factory. In accordance with a Workers’ Council decision, each prospective participant would contribute a minimum of 40,000 dinars, ² contingent upon factors such as the family’s financial status, the number of employed family members and professional readiness, with the latter being one of the most crucial among all the specified criteria. Two hundred new positions were created through this initiative. The invested funds (the ‘principal’) were to be reimbursed to the investors in dinar equivalent within a five-year period, with an annual interest rate of 10% (Mladenović, 1972, p. 6).

Regarding financing, it is important to emphasise certain differences between the remittance factory in Pirot and the first one in Croatia, located in Imotski. The factory in Imotski was established as an experimental project and received 90% of its funding through remittances from Gastarbeiter (Winterhagen, 2011). The first remittance factory was built from scratch, while the factory in Pirot already existed. With the help of remittances from Gastarbeiter, its new facility was constructed, which was crucial for the development of the factory, the city and the wider municipality. However, remittances from Gastarbeiter constituted only a portion of the funds used to build this factory. According to the Tigar factory newspaper, contributions were expected not only from workers engaged in temporary work abroad but also from the Tigar factory itself, its workers through self-contributions (the workers agreed to set aside 10% of their monthly personal income for savings over a period of two years), as well as from the Employment Office of Niš and the municipality of Pirot. The key difference between these contributions and those from Gastarbeiter savings is that the former were paid in Yugoslav dinars. Since almost all the machinery for the new industrial plants was purchased abroad, remittances were crucial. Additionally, skilled workers were needed to operate and manage this equipment (Mladenović, 1972, p. 7). For Tigar, Gastarbeiter presented an ideal solution because they provided both the necessary remittances and the expertise gained from working abroad.

Carpenters, builders, rubber workers and others from abroad began submitting applications and payments in German Marks, French Francs, Austrian Shillings and American Dollars, expressing their intent to invest their funds in their homeland and, concurrently, secure their return to their home country and to the workplace. There were individuals who contributed such high amounts that they earned the moniker ‘record holders’. For example, Božidar R., employed at ‘Seps’ in Mannheim, invested 10,000 DM (Đorđević, 1972, p. 7). In fact, a significant share of investments originated from this group (Girić, 1972, p. 3). Boasting valued experience gained in the German tire industry, they were regarded as the most highly qualified candidates for a position at ‘Tigar’ (Grbić, 1974, p. 2). In 1974, two years after opening, the factory already employed a workforce of 1,000 individuals, of whom 200 were returned workers who had made investments. A total of 9,600,000 dinars in remittances were amassed for the construction of a new production hall and the acquisition of equipment from international sources (Ibidem, p. 2).

The ‘Tigar’ factory in Pirot was not the only one opened in the area. In 1977, ‘Tigar’ also opened a plant in the village of Babušnica, located not far from Pirot, using the same approach. Babušnica previously had no industry and was exclusively an agricultural area, therefore the arrival of a ‘Tigar’ factory was of great importance for the development of the village. According to the 1971 census, 269 inhabitants of Babušnica left for ‘temporary work abroad’, which constituted 16.11% of its entire population. These statistics reveal a conspicuous disparity when compared to Pirot—notably, the percentage of migration was significantly higher from rural areas than from urban centres. A further distinction relates to the type of work pursued by migrants prior to going abroad. Corresponding to Babušnica’s lack of industrialisation, 93.58% of the total number of individuals employed abroad had been engaged in agriculture before departure (Lica na privremenom radu u inostranstvu prema rezultatima popisa stanovništva 1971. i 1981. godine, 1989), a highly typical distinction between urban and rural areas which makes this pattern of migration unsurprising.

The Babušnica factory employed 650 workers, including 200 returnees (Potić, 1977, p. 2) and is a key example of cooperation between top-down and bottom-up initiatives to bring industry and development to rural villages: beyond the vital contribution of Gastarbeiter investments, the establishment of the plant was jointly facilitated by incentives provided by the fund for the development of underdeveloped areas. This was particularly pertinent as Babušnica ranked among the most underdeveloped areas within the Pirot administrative district (Petrović, 1977, p. 5). The decision to partially build the factory using money from the fund was in accordance with the Sixth Five-Year Plan (1976–1980), which advocated for the accelerated development of underdeveloped areas, regardless of whether they lay within developed republics. The Plan also prioritised the use of foreign credit, loans and exchange for the import of equipment and other necessities (Pleština, 1992, p. 105).

The story of the ‘Tigar’ factory in Babušnica underscores the diverse influence of Gastarbeiter investments extending beyond urban locales. It has so far remained perplexingly absent from any study on remittance factories—an area already conspicuously lacking in discussion of the rational contributions of Gastarbeiter to development. This study demonstrates that workers’ commitment to the opening of a ‘Tigar’ plant in Babušnica contrasts with the thesis put forward by most Yugoslav development theorists, who often contend that Gastarbeiter primarily contributed to ‘modernization without development’ through activities such as housing construction and consumption. Their contribution was in reality far greater, and the significance of bringing key industry to a previously exclusively agricultural zone cannot be dismissed. It does admittedly remain challenging to quantify the precise economic contribution of Gastarbeiter remittances. I argue, however, that it is insufficient to consider solely the economic ramifications, and in the subsequent section of this study, I will examine some specific social implications of their investment activity.

Remittances and Gender: Social Influence and Women’s Employment in Pirot

In 1998, sociologist Peggy Levitt underscored the multifaceted nature of remittances, emphasising that they encompassed not only monetary transactions but also social capital, objects, ideals, values and norms (Levitt, 1998, p. 927). My research in Pirot has confirmed this, and has opened up a plethora of new questions for exploration that extend beyond economic considerations. Empirical research conducted in the town has revealed that the motives behind the investment of remittances transcend mere economic incentives and align more closely with the concept of social reproduction, a concept which encompasses broader motivations. In this manner, the tire factory also acts as the ‘wheel of development’ for the social life of Pirot, raising the question of whether it was simply profit and job security which motivated the Gastarbeiter, or were they additionally driven by a desire to bring positive change to their local environment? As mentioned above, quantifying the true impact of these remittances can prove challenging. Although I do not intend to prove the impact of remittances on the emancipation of women—primarily due to the lack of empirical evidence to support this claim—I still want to highlight the changes that have occurred and how they have affected women’s lives.

Women from Pirot accounted for 19.86% of the total number of ‘temporary employees abroad’, and as such represent a cohort that cannot reasonably be ignored (Lica na privremenom radu u inostranstvu prema rezultatima popisa stanovništva 1971. i 1981). They mostly worked as housewives or cleaners in their destination countries. To ensure that their existence is not recorded solely among statistical data, for this article, I examined factory newspapers from the late 1960s to the late 1980s and found a strikingly small number of articles that mention women. When women were featured, it was typically around International Women’s Day, with the focus on their roles in the National Liberation Movement during the World War II, or contemporary issues such as living standards. The narrative surrounding the working woman, particularly the ‘working mother’, emerged prominently. For instance, in 1974, one article featured a worker named Gordana, stating, ‘Like many of her friends, Gordana is a good worker in the factory and always a hardworking wife and a good mother at home’ (Kostić, 1974, p. 5). This portrayal aligns with what Chiara Bonfiglioli describes as the ‘Working Mother’ gender contract, which perceives women’s emancipation as a comprehensive vision of social transformation. This contract seeks to reshape women’s productive and reproductive roles, aiming to turn peasant women into self-managers while ensuring they remain dedicated wives and mothers within family life (Bonfiglioli, 2019, p. 39).

Where do women, who gained employment through their husbands’ remittances, fit into this context? The factory newspaper does not address this topic explicitly, and only one statement indirectly touches on the issue. This statement comes from Dragana, who found employment at the Babušnica plant. In an interview for the factory newspaper, she shared:

Since September of this year, for the first time in my 27 years, I am working. I come from a very poor family and know what hardship is. Until recently, only my husband worked in Germany. But fortune smiled upon us, and now we both work here. It is a real honor for me to work here! I will do my best for the future of this factory, as it also provides my family and my son with a more secure tomorrow. (Stojanović, 1979, p. 7)

Dragana’s experience highlights the underreported reality of returnee women entering the workforce, underscoring their pride and dedication to both family and factory. Relying solely on these sources would leave the topic of women employed in the factory through remittances unexplored and largely unknown. Therefore, integrating a mix of methods, particularly oral history, is crucial for filling these gaps and offering a more comprehensive understanding of events from the 1970s. The use of oral history is particularly effective for gaining insight into individuals and groups often marginalised in the historical record. In the context of case studies of Yugoslav factories, these marginalised groups frequently include low-wage workers, especially female workers (Archer & Musić, 2016, p. 16) as illustrated by the women employed at ‘Tigar’.

A 87-year-old Radoslav, one of my interlocutors in Pirot, was a Gastarbeiter who invested his savings in ‘Tigar’. In Germany, Radoslav had been working in a small town near Mannheim, accompanied by his wife, Mirjana, a housewife. He asserts that this investment strategy proved to be highly lucrative, as by 1978, the entirety of his principal had been repaid, along with accrued interest. At the end of our conversation, he stated: ‘We lived nice in Germany, but when I invested remittances and got a job for us at “Tigar”, it was even nicer for us in Pirot’. In addition to getting a job for himself, Radoslav invested additional money to secure a job for his wife as well, putting up a total of DM 7,000 in total (Interview with Radoslav and Mirjana B., 2023). ³ Our interview thus raised the question of the utilisation of remittances for the employment of women. Before embarking upon field research, my understanding of women engaged in the tire industry was rather limited. The factory newspaper, Tigar, scarcely acknowledged its female workforce—apart from on International Women’s Day, on which they received slightly more than half a page of coverage.

During my conversation with Radoslav, it became evident that his sole motivation for investing was his wish to work in his hometown upon returning to Yugoslavia. However, the case of Radoslav and his wife is reflective of a patriarchy-emancipation dichotomy, and the expectation for men to invest in the creation of job opportunities for their wives. The traditional male breadwinner model is transcended in this way, with a migrant investor contributing to a key aspect of socialist employment policy: enabling women’s participation in the workforce. Radoslav’s investment nonetheless occurred spontaneously and cannot realistically be argued as indicative of a desire for social transformation.

The next interlocutor, Svetlana, also confirmed to me that women who returned from abroad were also employed in the ‘Tigar’ rubber factory. I encountered her in the village of Izvor, situated near Pirot. Her father went to work at the ‘Seps’ factory in the 1960s. Her mother went with him, and lived in Germany as an undocumented (illegal) worker cleaning offices and bars. The prospect of investing in a new factory in her their hometown proved to be optimal for Svetlana’s parents, affording them the chance to return to their local community and reunite the family. Her father participated in the second wave of ‘Tigar’ investments in 1977. His principal was returned to him in full by 1986, when he decided to retire. Just as was the case with Radoslav, Svetlana’s father also invested on behalf of his wife: although she had gathered some work experience in Germany, its unofficial nature prevented the accruement of a pension. Therefore, employment at ‘Tigar’ gave her the opportunity to be visible as a worker for the first time. ‘My mom managed to work in the factory and, after her shift, was engaged in agriculture’, Svetlana states proudly.

While their parents worked in Germany, Svetlana and her brother (who suffered from haemophilia) found themselves in a situation of parental absence in Serbia, compelled to navigate their circumstances independently, a fate shared by numerous children of Gastarbeiter. Svetlana, though proud of her parents’ achievements, harbours no positive sentiment towards that period, recalling it solely with a sense of melancholy: ‘It’s all a bit sad. Ugly. I was alone. No communication. I got married right after school because I was tired of being alone’ (Interview with Svetlana, 2023).

The interviews with Svetlana, Radoslav and Mirjana reveal that the social function of remittances played a significantly more crucial role in shaping family dynamics and women’s emancipation in Yugoslavia than previously believed. Among the sparse literature on remittance factories in Yugoslavia, most has primarily centred on economic considerations.

The majority of women from working-class or peasant backgrounds typically engaged in feminised, low-wage professions, such as agriculture, education, social services and labour-intensive industries like textiles (Bonfiglioli, 2019, p. 59). In Pirot, this pattern was evident, with most women employed in the ‘Prvi Maj’ textile factory. However, a notable exception emerged with the ‘Tigar’ factory, particularly its new tire division, which has traditionally been viewed as a male-dominated field. Given the city’s developmental focus on expanding the rubber industry, investments in foreign currency prioritised ‘Tigar’ over ‘Prvi Maj’. This strategic shift in investment ultimately facilitated the employment of women at the ‘Tigar’ factory. While I do not claim that this situation represents complete emancipation, my findings suggest that, due to remittances, male returnees began employing their wives. In this regard, this research adds to the ongoing discourse about women Gastarbaiters and women returnees, helping to highlight their experiences and perspectives within academic discussions.

Conclusion

Migrants from Pirot (and the surrounding area) have a long-standing tradition of utilising savings earned abroad to enhance the living standard of their families back home. Through this research, I have demonstrated that the establishment of a new radial tire factory in Pirot, and later in Babušnica, would have been scarcely feasible without the remittances of the Gastarbeiter. Given that this is one of the few industries in Serbia that endured the transition and privatisation of the 1990s and continues to operate successfully today under the ownership of Michelin, the ‘Tigar’ factory has significantly influenced the city’s economy and, I would argue, has played a role in stemming further depopulation of the area.

This case study of Pirot has enabled identification of various factors driving development, and both governmental (top-down) and societal (bottom-up) perspectives have been examined. Results from empirical research in Pirot indicate that Gastarbeiter were driven by the ideal of social reproduction, by visions of community and cohesive family life. Incidentally, this partially coincided with the vision of official policy, in which factories were seen as providers of welfare and community and which—under the banner of self-management—encouraged, harnessed and praised the activism of workers. While the state viewed the concept of remittance factories as a means of funding industrial endeavours, for migrants, it served as a vehicle to realise familial aspirations, often resulting in the employment of both male and female family members upon their return. I argue that the actions of Gastarbeiter defy Yugoslav theoreticians’ notion of ‘modernization without development’. Sociologist Alejandro Portes has emphasised the potential developmental effects of pivotal migration patterns, particularly stressing the propensity for returnees to invest productively in their homeland if migration is temporary. Insofar as this pattern was evident not only in Pirot but also in other Yugoslav cities, my research supports Portes’ conclusion.

Is Pirot an isolated case, or could it be productive to discuss the impact of Gastarbeiter on a broader scale? Transitioning to a macroscopic perspective, scholars such as Portes and de Haas argue against expecting sustainable development to be brought about solely through remittances, suggesting that structural change requires more than migration alone. While this assertion holds true for Yugoslavia, a micro-level examination does reveal potential for change. On a grassroots level, the remittances of Pirot’s Gastarbeiter indeed served as a ‘wheel of development’, with significant transformations arising from the actions of seemingly modest individuals, provided they were equipped with adequate opportunity, desire and motivation.