The presence of the United Arab Emirates (UAE) in the Balkans has been the subject of quite intense media attention in recent years. This is mainly due to large-scale investments in the construction sector, the first example of which is the controversial Belgrade Waterfront project – a luxury citadel built on the banks of the Sava River in the Serbian capital. In the context of the declining appeal of the European model in the Western Balkans, the United Arab Emirates began to be analyzed as one of those non-European actors that could “fill the gap” of the value vacuum in the region.
But for the Emirati presence, this initial premise is only partially true: in the recently revitalized interaction between the UAE and Western Balkan countries, ideology is visibly absent. The UAE is not trying to “hijack” the Western Balkans from further integration with the European Union. What is present, however, is a certain convergence of minds when it comes to governing countries. The aim of this article is to provide a brief introduction to the nature and philosophy behind Emirati trade deals in the Balkans, discussing the broader context in which they are taking place.
What is the scale and scope of UAE investments in the Balkans?
The media attention attracted by high-profile projects such as Belgrade waterfrontthe luxury marina Porto Montenegronear Tivat, or the “largest tourist city in southeastern Europe”, Buroj Ozonewhich will be built in the Bosnian mountains, could give the impression that the United Arab Emirates has now become a dominant investor in the region. The situation is not so clear. According to data published by their national chambers of commerce, UAE investments in Serbia reached more than 135 million euros in 2017, compared to less than 500,000 euros in 2012. But this must be taken into account. context: Of the 15 billion euros of foreign direct investment that flowed into Serbia over the past eight years, 12 billion euros came from EU countries. Data for Montenegro (2017) shows the United Arab Emirates in 6th place – after Russia, Austria, Norway, Switzerland and the Netherlands – with 122 million euros invested in 2017. In Bosnia, they reached 15th in 2017, by investing 95 million euros. The United Arab Emirates is therefore not a leading investor in the region, but its importance has increased significantly during the last decade. However, in all Western Balkan countries, the The EU remains by far the dominant investor.
The chosen sectors of economic activity constitute niches in which the UAE has a strategic advantage and/or interest. As explained in our journal article on the subject (Bartlett et al., 2017), the UAE has focused its attention on the issues mentioned above. construction projects, having become capable of building cities from scratch and exploiting what they see as an underexploited niche for high-end consumers (wealthy residents and tourists); but also on Airlines companiesas an extension of theirsuper connector‘strategic, with Dubai and Abu Dhabi airports at its center; on the defense sector, with a buildup of weapons deemed necessary given that the United Arab Emirates is at the center of a very unstable region; and on agricultural landto guarantee the food security of their countries in the years to come.
Their investment philosophy is “geographically agnostic” (with a presence practically everywhere in the world) and it is significantly in the long term, aimed at ensuring the prosperity of the UAE in a post-oil future. As an Emirati official I interviewed as part of a research project supported by the LSE Middle East Center explains, they are also counting on the eventual opening of a wider market once these countries join the EU. In a context like that of the Western Balkans, this long-term vision is particularly welcome: small states in the region have difficulty finding foreign investors, because there is little in the Balkans that can guarantee a strong return on short-term investment.
Relationships at the top
Although the long-term nature of Emirati investments would be a good way to stimulate much-needed economic development in the region, what is troubling is the situation. lack of transparency that surrounds transactions. Transactions are usually concluded without a tender, or with what appears to be a tailor-made tender; it is sometimes difficult to determine who the real investor is; information on contracts is very difficult to obtain; and journalists and activists who investigate these topics are frequently subjected to extreme pressure. Furthermore, Balkan governments often provide very generous subsidies from their state coffers and, in some cases, even oblige themselves to amend legal provisions, promising to implement “all necessary laws which would be suitable for the purpose.” ‘investor’. This is the case, for example, of the aborted privatization of Queen Beach in Montenegro, or of the Belgrade seafront itself, for which a specialized lex was voted on in Parliament, under the pretext that it is a project of national interest. It is pertinent to note that most of these practices are not limited to investments from the UAE. tells us more about the governance of the Western Balkans than on the good or bad influence of a specific “foreign actor”.
These agreements are fueled by the summit relations between the political leaders of the Balkan countries and the rulers of the most powerful emirate of the United Arab Emirates, Abu Dhabi. Far from being a simple business-to-business process, most agreements are discussed directly by the highest decision-makers. Serbian President Aleksandar Vucic and his Montenegrin counterpart Milo Djukanovic enjoy close relations with a key figure in the ruling Al Nahyan family, Crown Prince Mohammad bin Zayed. A relatively small circle of actors in each country is visibly involved in these arrangements, often taking on several roles at once. For example, the former mayor of Belgrade, Sinisa Mali, in addition to being instrumental in the launch of Belgrade waterfront project, served on the board of directors of another Emirati-Serbian joint venture: Air Serbia. Mali is no longer mayor of the capital, partly because of controversies that followed an illegal nighttime demolition of buildings – which he could be involved in – to make room for the luxury construction project in central Belgrade. But the former mayor has not disappeared from the political scene: he is now Minister of Finance.
THE Majlis responds to informal Balkan rule
The informal way of conducting business and politics in the Balkans, whose hierarchical character has been greatly aggravated by rise of authoritarianism in recent years, finds correspondence in the Arab practice of Majlis: semi-informal gatherings where authorities sit down with interested citizens. Speaking of Montenegro, an Emirati official interviewed for my research directly cited the concept of Majlispraising the ease of reaching decision-makers in the region: “Here, when you want to meet with government officials, you can simply pick up the phone and easily reach the minister you were looking to speak with. »
This “meeting of minds” can be a double-edged sword: if informality is not harmful in itself and can positively influence the development of human, commercial and state relations, it nevertheless becomes a problem when the allocation of resources is done on a clientelist and non-transparent basis. Here too, practices align: in the United Arab Emirates, oil revenues support a system of patronage in which jobs in public administration and state-owned enterprises are awarded on a preferential basis to the indigenous population of Emiratis (Young, 2014). To all those who know the Balkans, mutatis mutandis, this will sound familiar. The risk is therefore that such non-transparent agreements (including, but not onlyof the United Arab Emirates) could end up providing the means for a stratum of elite Balkan actors to remain in power, while further excluding civil society actors and citizens at large from the game.
