Russia and Turkey have found partners in the Balkans who are accepting of their illiberal democracies, and money from their business elite. While both countries use this leverage to gain increased influence in the Balkans; in all reality, their real economic impact is minimum. In fact, despite indications that Russian and Turkish influence is expanding in the Balkans, the EU remains the most dominant economic actor.
The Balkan region is witnessing changes within state structures. These changes are empowering the ruling elite; and, ultimately, affecting the informal mechanisms used by the government to suppress oppositional voices. As evidenced in Serbia as an illustrative case, violence is steadily being substituted by subtle intimidation methods, previously legalised under the hope of EU accession, and utilised so as not to negatively impact their international image.
The fight against corruption in Romania has been applauded by the West as a model worth emulating throughout the region. Both the country’s main anti-corruption body, the DNA, and its head, Laura Kövesi, have attained notable influence as power players. Recent allegations about questionable practices, and the personalisation of anti-corruption, however, threaten to unravel the progress made.
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Bosnia is witnessing steady political disintegration. A lack of political legitimacy of its borders, an unclear EU policy, and re-emergent nationalist ideologies are aggravating ethnic and religious divisions. On top of all of this sits a murky nexus of rent-seeking political leaders, dependent oligarchs and a commercial environment threatened by corruption and undue political influence.
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Timing in the Balkans is everything, and current developments in Croatia suggest that it is ripe for more careful monitoring. Four years after gaining EU membership, Croatia’s ghosts of its fascist past are creeping out of the closet, and creating an ideological dispute that may put an end to its centre-right, moderate nationalist government. Feeding its wayward trajectory are the ongoing disputes with its neighbours.
The Syrian refugee crisis is worsening the problem of child labour in Turkey. It is believed that as many as 1 million children in Turkey could be exposed to informal labour networks. Expanding concerns about child labour in Turkey are concerns for international investors, further enhancing the need to conduct integrity due diligence on supply chains and partners.
The use of state-sponsored criminal groups is not historically exclusive to Turkey’s ruling AKP, as evident in news that illicit organisations have publically pledged loyalty to President Erdoğan. As a result, elements within Turkey’s ruling political elite can utilise these groups to protect their political interests, further jeopardising political stability.
The failure of the Cyprus peace talks will have a direct impact on the development of the country’s gas market. Given the geographic location of Cyprus, and ongoing territorial disputes, its politics are colouring commercial negotiations in the gas sector, including those surrounding the Israeli Leviathan basin. This is inevitably creating an insecure investment environment.
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Turkish-Serbian business relations are set to enter a new era, with the Turkish President noting his commitment to direct more private Turkish investment to Serbia. There are indications that this is another example of Erdogan dovetailing Turkey’s minor foreign policy with securing commercial opportunities for his loyalists.
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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.
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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Developments in Turkey and Lebanon could impact on the illicit narcotics routes that go to Western Europe. In both cases, the weakening of the security state apparatus will contribute to the expansion of the illicit economic interests of drug trafficking networks.
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