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Foreign Meddling in the Western Balkans

Guarding against Economic Vulnerabilities

Moderator

Robert Hand

Senior Policy Advisor

Commission on Security and Cooperation in Europe

Witnesses

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Ruslan Stefanov

Director

Bulgarian Center for Study of Democracy

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Milica Kovačević

President

Montenegrin Center for Democratic Transition

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Nemanja Todorović Štiplija

Founder and Editor in Chief

“European Western Balkans” media outlet

Dimitar Bechev

Research Fellow, Center for Slavic, Eurasian, and East European Studies

University of North Carolina – Chapel Hill

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Andrew Wilson

Managing Director

Center for International Private Enterprise

Malign outside influence in the Western Balkans, in particular by Russia, is of increasing concern. The lack of a strong legal framework makes countries in the region especially vulnerable to foreign capital that can be used to sow instability, undermine integration, and delay democratic development.

In the past decade, Russia has exponentially increased its economic investment in Balkan countries.  Without adequate governance and transparency, so-called “corrosive capital” will wield its financial power to distort policy making, lessen the European focus of the countries concerned, and potentially cause instability in the region.

The Center for International Private Enterprise (CIPE) has worked with local private and civil society partners to analyze the economic governance gaps that allow “corrosive capital” to gain a foothold in Bosnia and Herzegovina, Macedonia, Montenegro, and Serbia.

According to panelists, Russia’s economic footprint is most obvious in key strategic sectors, including real estate, banking, energy, and mining.  Russian foreign direct investment stock is close to 30 percent of Montenegro’s GDP and it exerts both direct and indirect control of approximately 10 percent of the economy of Serbia. The dependency of Balkan countries on Russian imports and financial loans is also a prevalent form of indirect power.

As a result, when Montenegro joined NATO in 2017, the Russian Foreign Minister announced that Montenegro had sacrificed its economic relations with Russia. Russia further sanctioned Montenegro by discouraging travel to the country by Russian tourists, characterizing it as a dangerous place.  Although the anti-NATO campaign has not succeeded, it did indicate Russian intentions as well as local vulnerability to outside influence. 

The economic presence of outside actors other than Russia was also discussed.  In general, the panelists emphasized the need to diversify foreign direct investment and reduce reliance on capital from non-democratic countries. Transparency in foreign investment and a depoliticization of corporate governance is also necessary. A free, independent and diverse media also will help ensure greater accountability in both the political and economic sectors.

Helsinki Commission activity regarding the Western Balkans reflects ongoing concern for the countries of the region. With several Balkan states on the cusp of NATO and EU membership, it is particularly important for these countries to strive for greater democratic development and economic prosperity.

The United States has played a significant role in the region, providing political, economic and military support.  If not seen through to completion of NATO or EU membership as desired, these states face the continued risk of backsliding.

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Articles

Helsinki Commission Advances Human Rights, Demands f...

Oct 19, 2023

By Shannon Simrell, Senior Policy Advisor Between October 2-13, 11 Helsinki Commission staff joined approximately 1,400 representatives of OSCE participating States (pS) and civil society representatives in Warsaw, Poland in an annual review of the human rights records of OSCE States. U.S. leadership highlighted demands for accountability from Russia and Belarus for their human rights […]

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Hearings

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Press Releases

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Press Releases

Chairman Wilson and RM Cohen Mark Third Annual Count...

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Press Releases

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Press Releases

Co-Chairman Cohen Calls for the Release of Political...

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Publications

Helsinki Commission Digital Digest July 2022

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Publications

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Publications

Helsinki Commission Digital Digest May 2022

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Briefings

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Press Releases

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Briefings

Russia’s Swiss Enablers

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