Last August, a group of U.S. senators, led by Sen. Jeanne Shaheen (D-NH), introduced a bill. new legislation in the American Congress. The primary goal of this legislation is to increase trade and investment between the United States and the six Western Balkan countries and to promote the advancement of democracy.
US senators clearly understand the strategic importance of the Western Balkans region. The clarity of thought throughout the bill is remarkable. The design is remarkable in that it is partly part of a history lesson, heavy on common sense and clear on the strategic actions needed in the future. It superbly sets out a formula for promoting the importance of the rule of law, good governance and the creation of strong institutions to align investment opportunities that will address the region’s many fragilities.
More particularly, this bill does not hesitate to denounce the paralyzing effects of corruption and opaque governance. There is clear language that will guide assistance in developing national anti-corruption strategies – a wake-up call – to all-too-familiar politicians who relish their false notions of impunity. Their time is running out.
Rich in detail on investment opportunities, infrastructure development, outward migration and the essential role of women in society, it highlights the importance of EU integration and NATO for countries that wish to take this path. Simply put, this is remarkable work. If this legislation is passed and adequately funded, it will provide the support needed to start the region on a path that will make the legislation’s very name come true: The Law on Democracy and Prosperity in the Western Balkans.
America seems to be back and this time is playing the role of “economic incubator” for this neglected and poor region of Europe. From a purely economic point of view, neglecting the region’s potential is unwise. The region’s historic geopolitical security dimensions have likely created a sense of tunnel vision and a sense of decision-making paralysis. However, it is easy to feel unease because, collectively, the Western Balkans fall under the Categories “imperfect democracies” and “hybrid regimes”, according to the Economist Intelligence Unit’s democracy index. The circular election of the same type or type of strong men who measure their greatness by their ability to profit from corruption. These same figures excel in the art of skillfully stirring up ethnic and religious tensions to distract the population from understanding their inadequacies as leaders. Political dynamics, combined with vestiges of Ottoman and European cultural practices, create a complex neighborhood.
America’s geographic distance can be a blessing. The role of the United States was vital in ending the region’s bloody conflicts in the 1990s. However, lasting peace and stability in the Western Balkans cannot occur without a strong role in promoting economic development and democratic. The real security challenges in the region come from the endless illusory promises of transition. Once again we return to the toxic combination of corrupt leaders who continue to breed poverty, bias in the rule of law, corruption and organized crime.
With the above as a backdrop, we add the destabilizing effects of various harmful actors: Russia, China and, more recently, Iran with its cyber attacks In the region. Russian and Chinese influence in the region heralds a new era of strategic competition and illustrates that the Western Balkans are seen as the exploitable soft underbelly of Europe.
Russia and China’s relentless disinformation campaigns are just one aspect of their efforts to destabilize the region. Russia’s militarization of its energy supplies and China’s debt trap diplomacy have had a sobering effect on the region. Several key countries in the Western Balkans rely exclusively on Russian energy, giving Moscow remarkable influence, as in the cases of Serbia, North Macedonia and Bosnia and Herzegovina.
The Kremlin’s strategy is to thwart any integration of the region by NATO and the EU. It will continue to use its hybrid warfare toolkit to exploit weak institutions, corrupt politicians, and politicize ethnic and religious tensions.
China adopted a different tactic by approaching the region as a commercial gateway as part of its Belt and Road Initiative. The Western Balkans constitute a key link with Western Europe. Poor infrastructure, lack of capital, lax regulations, lax public procurement rules, poor labor regulations and managers’ comfort with corrupt practices make it an ideal playground for easy loans China’s “strings attached” and its range of soft power methods to gain influence. .
There are currently approximately 122 Chinese projects worth an estimated $31 billion, of which more than 70 percent are in the form of concessional loans. This represents almost 40 percent of the total stock of foreign direct investment (FDI) in the five Western Balkan countries, excluding Kosovo, which is not recognized by Beijing.
Assessing Chinese investment activity is not easy because China typically requires strict confidentiality clauses in its investment agreements – clauses that limit transparency and encourage corruption. That said, the scale of Chinese activity is concerning. According to AidData, approximately 2 billion dollars of Chinese development aid has been spent in the region since 2000, giving China an undeniable foothold. Chinese projects are well targeted, running the gamut from grants to support public administration, to donations for modernizing agriculture, schools, debt cancellation and Confucius Institutes.
Creating opportunities for young people is a prerequisite for slowing mass emigration and brain drain from the region. This situation is driven by simple economic and institutional desperation. In 2021, the average per capita income of the six Balkan countries was around $7,000, not even 15% of the EU average income and just over 10% of the US per capita income. The much-desired economic convergence with the West has clearly not taken place.
Trade between the United States and the Western Balkans is minimal. It was less more than $1.5 billion in 2021according to UN Comtrade, as US-EU trade levels reached 760 billion dollars the same year. Potential free trade agreements between the United States and the Western Balkans would serve as an engine for increased levels of trade and investment and facilitate the region’s integration into the European common market.
A highly literate market of 18 million consumers, with a Total gross domestic product of $132 billionThe Western Balkans have the potential to become a region with fast-growing economies that could easily connect to the 17 trillion dollars EU Common Market. However, the six countries combined attracted less than 0.2 percent of the global stock foreign direct investment, according to the United Nations Conference on Trade and Development.
Likewise, the total stock of U.S. foreign direct investment in the region is only 900 million dollarsaccording to the United States Bureau of Economic Analysis, compared to approximately 4 trillion dollars in the economy of the European Union as a whole. However, the region is very dynamic in its ability to respond quickly, as the case of Albania shows. In 2021, Albania saw a 70% increase in US FDI stock (from $99 million to $168 million) thanks to new investments in the energy sector.
With proper targeting of investments, the Western Balkans could become a key ally-shoring hub, boosting the production of essential goods within the transatlantic economy. This could be a smart way to create redundancy in key sectors of national security and eliminate dependencies on China and Russia. Investments in energy, automation, robotics and artificial intelligence would pay off in the long term and build capacity within the transatlantic community. Investments in these sectors would ultimately revive necessary infrastructure projects and create new employment opportunities.
Ultimately, helping the Western Balkan countries is in the collective national security interests of the EU and the United States. The geostrategic importance of the Western Balkans was clearly highlighted during the US-led Defender-Europe 21 military exercise and demonstrated the critical role NATO and candidate countries play in supporting the transatlantic alliance. Its importance has become even more critical due to Russia’s invasion of Ukraine. The return of conflicts in Europe reminds us that the vision of a Europe free, at peace and able to prosper must remain our common goal. Otherwise, inaction will lose the region to bad actors, both internally and externally.
Reversing the trend will not be easy. It will be hard work. But once the current dynamic of poor governance is reversed and investments are directed towards boosting growth, the magic will start to happen. As proposed, the Western Balkans Democracy and Prosperity Act is a remarkable piece of legislation and could well be the game changer of the century.
Valbona Zeneli is Professor of National Security Studies and Director of the Department of Strategic Initiatives at the George C. Marshall European Center for Security Studies. She is also a visiting member of Europe’s Futures Fellow at the Institute of Human Sciences (IWM) in Vienna.
Joseph Vann is Professor of National Security Studies at the George C. Marshall European Center for Security Studies. He is also a retired Deputy Assistant Director and Strategic Advisor to America’s NCIS.