Over the past four years, Serbia has scrapped visas for more than 20 countries. Despite attempts to describe it as an incentive for foreign investments or political rewards for supporting Serbia’s stance over the disputed independence of Kosovo, the true motives have remained almost completely opaque. Opposition officials have publicly warned that the scheme could, in fact, increase the risk of money laundering and illicit trade deals.
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.
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.
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.
Liviu Dragnea has started a public campaign of defamation against anti-corruption institutions that have accused him of leading a criminal organisation. To legitimise his position, Dragnea is using autocratic methods, whereas he is the protector of the national interests empowering him to manipulate the judiciary and security systems.
The formation of a 4-party coalition in Northern Cyprus aspires to limit Ankara’s influence over TRNC’s political affairs. Despite having the political will, there are major regional political dynamics that might undermine the autonomy of the 4-party coalition; particularly the reality that Ankara has already demonstrated its capacity to use informal mechanisms to alter political behaviour in Northern Cyprus.
There are concerns that a series of reforms that reduce the independence of the Romanian judiciary will impact how international and non-politically exposed commercial players are able to compete in the market. If these reforms are passed, they have the ability to set the stage for the implementation of a de facto system of crony capitalism; a system that would ultimately serve the interests of the political and economic interests of Liviu Dragnea.
In this third part of our series on the effects of Climate Change in the Balkans, future political, economic and social scenarios are summarised from the Report, available through the Shadow Governance Intel Report Store. This summary presents the key scnearios likely to emerge in the region as a result of Climate Change and the impact it is already having. This analysis also highlights how this phenomenon can reinforce, or undermine, the current authoritarian trends amongst the ruling elite in the Balkans.