Elements of Romania’s media sector are actively being leveraged in the hands of an opaque network of state officials, businessmen, and secret services as an informal political and economic tool. Media outlets, for example, have been used to fulfil political agendas in exchange for state contracts; to the benefit of the most powerful family holdings in the country.
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Timing in the Balkans is everything, and current developments in Croatia suggest that it is ripe for more careful monitoring. Four years after gaining EU membership, Croatia’s ghosts of its fascist past are creeping out of the closet, and creating an ideological dispute that may put an end to its centre-right, moderate nationalist government. Feeding its wayward trajectory are the ongoing disputes with its neighbours.
The Syrian refugee crisis is worsening the problem of child labour in Turkey. It is believed that as many as 1 million children in Turkey could be exposed to informal labour networks. Expanding concerns about child labour in Turkey are concerns for international investors, further enhancing the need to conduct integrity due diligence on supply chains and partners.
Fiat's 10-year contract with Serbia expires in December 2018, but will likely be extended. Serbia offers a favourable and profitable environment for Fiat; and will do so for as long as fully automated production is more expensive than human labour. Serbia’s sweatshop model of economic growth, however, only feeds the political elite, with low-cost manufacturing jobs contributing to poverty and a growing grey market for employment.
Serbia’s President Vučić is asserting his influence throughout the country’s institutions, including the military. The impact of the President’s visit to Moscow in December 2016 to discuss defence cooperation was, retrospectively, a move that reinforced his position as Serbia’s main guarantor of political neutrality. Vučić continues to balance relations with East and West.
The use of state-sponsored criminal groups is not historically exclusive to Turkey’s ruling AKP, as evident in news that illicit organisations have publically pledged loyalty to President Erdoğan. As a result, elements within Turkey’s ruling political elite can utilise these groups to protect their political interests, further jeopardising political stability.
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Etihad’s financial woes may complicate life for Air Serbia, with the Serbian government particularly placed in a precarious position if the Gulf airline withdraws from this venture. Facing additional pressure from regional low-cost carriers, the one airline that may eventually come out on top to dominate the regional aviation sector may be Lufthansa – but it may not risk doing so directly.
Recent events in Macedonia, culminating in the Macedonia-Bulgaria Good Neighbourly Relations Agreement, are creating an environment conducive to informal networks quietly expanding their influence. Looking beyond mainstream politics, peripheral players are lining up to play a decisive role in influencing wider political and economic decisions. This analysis outlines the commercial players likely to benefit from this context.
Turkey and Qatar have come to the political rescue of each other twice in the space of 12 months; following the failed coup against Erdoğan in July 2016 and now as Tamim Al Thani faces a regional boycott. For investors, the bloated influence of the political sphere on commercial developments must be noted now more than ever.
The failure of the Cyprus peace talks will have a direct impact on the development of the country’s gas market. Given the geographic location of Cyprus, and ongoing territorial disputes, its politics are colouring commercial negotiations in the gas sector, including those surrounding the Israeli Leviathan basin. This is inevitably creating an insecure investment environment.
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Nigeria has become one of Turkey’s most important providers of liquid natural gas (LNG), and with the LNG industry in both countries gaining increasing prominence, LNG trade between the two is likely to continue into the foreseeable future.
Turkey’s President Erdoğan is building his “New Turkey” – a country more empowered and autonomous. Part of his strategy involves exerting influence over the defence industry; but this is also proving beneficial to patron-client relations and resource distribution; i.e. a new pool of assets that can be channelled to loyal businessmen.