Although Serbia could be a natural agricultural powerhouse, its ability to realise significant profit from its agricultural sector has been stymied. Not only is the country feeling the impact of climate change, the rise of an illiberal autocratic government – and all the challenges that is bringing - has sustained a political environment that has suffocated agricultural reform through various forms of political interference and manipulation.
Recent changes to Serbia’s Law on Security and Intelligence Agency have given the director broad discretionary powers; similar powers have also been given to the Interior Minister. Notably the Director of the BIA and the Interior Minister are loyal apparatchiks of President Vucic. As a result of these legislative changes, there are indications that President Vucic is close to completing his creation of a de facto party-state. As autocratic rule grows in Serbia, the rule of law and freedom of speech continue to erode; with significant implications for democracy and political stability.
The appointment of Sinisa Mali to the post of Serbian Finance Minister in May has controversial undertones. An experienced political player with strong ties to the inner circle of President Vucic, there is little doubt that Mali will help Vucic remove any remaining barriers to securing systematic control over every part of the state’s administration. Already flagged by various international watchdogs and institutions as a jurisdiction with weak financial integrity and rule of law, and systemic corruption, this move may further undermine political stability.
Despite attempts by Brussels to push Serbia and Kosovo to find a mutually acceptable solution by the end of 2018, the two countries could not be further apart. Sporadic diplomatic incidents, low-level violence, the rise of aggressive nationalist rhetoric is putting a strain on negotiation. This analysis looks at a potential Grand Settlement, and the obstacles that are standing in its way.
Russia has built a relatively strong financial footprint in the Western Balkans, with investments particularly concentrated in a few sectors. As a further display of Russian ‘commercial diplomacy’, Kremlin-approved pseudo-private companies ostensibly operate as tools of informal political influence. In some cases, it is beginning to work, guiding countries in the region towards kleptocracy and state capture.
Authorities in Serbia have been using businessmen as fixers and go-betweens to maintain informal communication channels with key political players in Kosovo. Arguably this is to ensure that ethnic Serbs who live in the north remain loyal to Vučić and his political protégés, but it has also had an impact on the investment environment; contributing to opacity, and the uncompetitive awarding of lucrative projects.
Montenegro under Đukanović has inspired the rise of autocracy in the Balkans. Whilst this small state has seamlessly shifted allegiances between the EU, US, Russia, Turkey and other external influence since independence, it has rather effectively given the façade of democratic stability. More aptly, however, it has evolved into a ‘stabilocracy’ and shows how security in the region is given precedence over the rise of illiberal and authoritarian regimes that simultaneously exert significant influence over the investment and business environment.
A failed Kurdish peace process, and the power struggle with the Gülen Movement, have forced President Erdoğan to secure new political allies. Ironically, Erdoğan has found support from the very (informal) ultra-nationalist groups that he had purged less than a decade ago. With this emerging alliance, Erdoğan is further darkening Turkey’s security apparatus increasing the chances of human rights violations and power abuse for the security forces.
Political fluidity in Macedonia, largely tide to the question of the country’s name and Greece vetoing EU and NATO accession until resolution is found, is facilitating the rise of politically exposed private sector interests. Whilst it is still in government, individuals tied to and associated with senior ruling SDSM figures are isolating ways to secure personal financial benefit before there is a change in the status quo.
Opportunities for growth are increasingly being stymied in the Western Balkans because of the growth of informal political influence (ostensibly through the rise of illiberal regimes), and an evolving notion of corruption. No longer is the main concern focused on influencers that ‘buy’ access to privilege; but more so on concerns that ‘legitimately’ elected leaders are presiding over the capture of state institutions and a massive redistribution of wealth.
Bulgaria’s Prime Minister, Boyko Borissov, has spearheaded recent legal reforms aimed at fighting public and private sector corruption. These reforms include the creation of a new anti-corruption unit with the remit to wiretap senior state officials. Although these efforts appear positive in their aims; given the trajectory of Borisov’s own political influence, there are concerns that a new anti-corruption unit with significant powers could be utilised against opposition groups, whilst further placing the private sector and judiciary under his influence.
Driven by a religious ethos, government-linked foundations operate under low levels of accountability, a factor that has allegedly exposed some of them to questionable activities carried out by government officials. In addition to becoming embroiled in allegations of corruption, Turkey’s charities have also used been utilised as a resource distribution tool; more specifically, as a place where government loyalists are rewarded with employment.