Despite growing political interference and a substantial presence of money from questionable sources, some investors see Serbia – and especially its capital, Belgrade – as an exciting opportunity to create value. Combined with the fact that political interference and opaque transactions are distorting the real-estate market and creating further problems with the rule of law, a key obstacle to Serbia’s path towards EU membership, the country’s real estate market ostensibly offers a golden cage to foreign investors. In other words, opportunities about, but there is a risk associated with any change in political elite personality or priorities.
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 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 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.
2018 is expected to be a year of consolidation in Bulgaria's banking sector. New laws and transparency requirements have been implemented in this economic sector, with the hope that these initiatives will reduce allegations of questionable activities associated with the country's banking sector. This is particularly the case with locally owned banks as they seek international investment.
Opacity surrounding how EU agricultural funds are distribiuted in Bulgaria is feeding allegations that state officials in the country’s main agriculture state agency and in the Ministry of Agriculture personally benefit from their position. It is believed that these officials distribute EU funds to loyal landowners in exchange for a de facto kick-back.
Turkey’s banking sector is crucial to the success of the AKP and President Erdogan. Although the sector itself primarily functions independently of government interference; there are growing concerns that it is becoming increasingly exposed to informal mechanisms of political influence. This is a summary of a report available in the Shadow Governance Intel Store, that looks at how political exposure plays out in Turkey’s banks, and assesses the repercussions this can have on the future viability and reputation of the sector going forward.
International investment in the TRNC tourist sector is impacted by the fact that the TRNC remains solely recognised as an independent territory by Turkey. In addition to this political factor, scarce energy and water resources increase the costs associated with investing in tourism. This predicament, however, has interestingly facilitated the emergence of informal investment opportunities for smaller entrepreneurs.
There are indications that Turkey’s AKP is utilising the private security sector to reinforce their influence over state security institutions. The desire to exert influence throughout Turkey’s security apparatus is ostensibly driven by the emerging paranoia that the AKP is being faced with internal challengers. Manipulating private security to monitor and/or control state security structures will erode democratic accountability.