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Turkish-Serbian business relations are set to enter a new era after a meeting held between Presidents Erdogan and Vucic. Emphasizing the need for new energy supply routes for Serbia, the Turkish President noted his commitment to direct additional private Turkish investment to Serbia. Based on Erdogan’s support of Turkish business expansion into other markets, such as Egypt, there are indications that this is yet another example of Erdogan dovetailing Turkey’s minor foreign policy with securing commercial opportunities for his own loyalists.
Serbia’s overblown and unreformed public sector, almost completely under informal political control, produces a staggering amount of debt, and represents a key instrument of social and political manipulation. While the structure of debt is often complex, its background is relatively simple: clientelism and corruption - too much political influence and too little reform.
Despite on-going reforms in the Serbian energy sector, including reforms at state-owned EPS, the political situation in Serbia does not herald the emergence of a more transparent and liberalised energy market. EPS remains a resource distribution tool, with indications that President Vučić will likely seek to exert more control over it.
Greece is toying with expanding its ties to China, Turkey and Russia whilst its relations with the EU falter. In addition to intelligence of various ‘unofficial’ meetings being held between the leadership of these countries; growing ties are evident in the identity of those taking part in Greece’s ‘golden visa’ scheme.
Serbia’s undisputed leader Aleksandar Vučić, has relocated his power to the position of the republic’s President – a formally weak and largely ceremonial office in a parliamentarian system of government. Vučić has appointed a Prime Minister who holds no political power, allowing him to keep his influence in political decision-making. Monitoring the rise of Vucic has echoes of his southern neighbour in Turkey – is Vucic pulling an Erdogan?
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With the growing personalisation of politics in Turkey, embodied in President Erdoğan, a patron-client environment is emerging in the private sector. The President has secured a new loyal group of businessmen in his circle – in exchange for preferential access to state resources, these private sector players support Erdoğan and the AKP in any form required.
In all probability, Serbia’s President Vučić is set to maintain his political influence by leveraging his ability to manipulate a variety of formal and informal mechanisms of power in the state. All things being equal, Vučić is well on the road to becoming the most powerful figure in the country.
Erdoğan’s ability to manipulate the Turkish system to his favour is building a system governed by loyalty to the President. In fact, ongoing reshuffles will see even more loyalists brought in to secure him; and are important to monitor to understand how they will impact the country’s short to medium term political and investment environment.
Recent purges in Turkish academia are likely to have a devastating impact on society in generally, but also on industry as Erdogan’s purges threatens to create an intellectual desert that will inadvertently diminish the quality of the country’s innovative workforce.
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Greece is under pressure to embark on a privatisation programme to help feed financial stability. Despite rhetoric that the country is committed to a privatisation programme, the Greek government is showing signs of hesitation. With investment opportunities to be had, risks still abound for those that do not have the time or patience to navigate negotiations.
Current tensions in Macedonia are contributing to an environment of political uncertainty. Although some are espousing concerns that Macedonia’s plight is contributing to greater regional instability, there are more convincing indications that recent developments are being driven by the former government to delay SJO investigations.
Although Romania has been an EU member for 10 years, the degree of transparency and privatisation of its energy sector fall well below expected EU standards. As a result, Romania’s energy sector remains largely opaque and politically exposed.