China’s grandiose infrastructure project, the One Belt One Road Initiative (OBOR), has begun to take root in the Balkans, with regional states increasingly looking to jockey for the position of China’s most reliable regional partner. As Chinese investment takes shape, there are indications that the region will continue to slip into an illiberal democracy more akin to today’s Turkey and Russia; with potentially larger repercussions for Western investment.
A complex network of influence has been developed since the early 2000s between the Turkish central government and AKP-controlled municipalities. These opaque power structures have allowed charities linked to the ruling elite to freely operate in these municipalities, essentially operating as informal social co-optation tools used by the government.
Despite his repeated demonstrations of loyalty to the current Turkish ruling elite, businessman Galip Öztürk was recently handed down a judicial sentence that will ultimately expose his assets to the government’s agenda. The case of Öztürk is important because it highlights an emerging trend in Turkey’s business environment - where the assets of even loyal businessmen are being made vulnerable to Ankara’s economic priorities.
A recent arrest in Serbia of Romania’s former senior ruling party official has revealed an intricate mechanism of informal influence in which media and information technology companies are manipulated by politically connected individuals with the aim of spreading fake news. The driving motivation is for the ruling elite to gain leverage to influence election or judicial outcomes.
Recent proposals to reform the legal framework governing Serbia’s defence sector are most likely to empower the Military Police, whilst adding layers of opacity to the country’s weapons production and acquisition plans. Shrouded in high doses of nationalism, these reforms – like many initiated by President Vucic – are yet another example of how the ruling elite are further empowering themselves, largely to the detriment of democratic accountability and an open market.
Although the Bulgarian banking system is generally dominated by international banks, a small part remains under the control of indigenous entities, some of which remain open to allegations of questionable practices and associations. There are concerns that the largest of the country’s domestic banks will contribute to wider industry instability if they continue to be regarded as politically exposed, and open to providing politically influenced loans regardless of their commercial viability.
The tourist sector is a key pillar of Turkey’s economy, as it has contributed approximately 5% of the country’s GDP. Although international investors dominate the most lucrative parts of this sector, they remain vulnerable to the ongoing political decision-making of the ruling elite in Ankara. As a result, Turkey’s tourist sector has felt an impact from decisions such as Turkey’s military intervention in Syria, and the negative diplomatic consequences such actions have created.
The PSD is assessed to be among the most influential actors in state-owned military companies. Not only are there indications that it can influence the appointment of directors, but it has a hand in shaping decisions made throughout the defence sector itself. Although Romania remains somewhat accountable to international defence organisations of which it is a member-state, such as NATO, this has not precluded the amount of influence it has secured over national players.
The fear of losing power and being politically betrayed is motivating President Erdoğan to continue to accumulate influence, now beyond Ankara. After purging key government institutions in the aftermath of the failed 2016 coup, Erdoğan has now set his sites on municipalities, ensuring that loyalty extends beyond the borders of the capital.
Romania has been the target of public allegations suggesting that members of the government have illicitly benefited from EU funds through opaque schemes involving county councils and the Ministry of European Funds. Recent developments have further reinforced these concerns - often driven by the opacity that surrounds the distribution of EU funding.
The ongoing Turkish military operation in Afrin is elevating nationalist feelings in Turkey, spurred by its fight against Kurdish armed groups. Behind this rhetoric, President Erdoğan is further legitimising legal reforms; arguably reinforcing his ability to exert influence - and ostensibly control - the country' defence industry. As his fingerprint is established over the defence sector, this industry joins the many others that are being utilised to distribute resources to loyalists.
A series of anti-terrorist laws proposed by Romania’s President Iohannis appear to be empowering the already controversial and powerful SRI, in part by making it even less accountable to the judiciary. While terrorism has been a national security concern since the 1990s, these reforms are officially being driven by concerns about ISIS and an emerging refugee phenomena.