In recent years, the UAE has become increasingly active as an investment partner in the Western Balkans. Tena Prelect traces the UAE’s involvement in the region and examines how Western actors reacted to its presence. Given the limited geopolitical significance of the country’s involvement, concerns about the UAE’s “taking the EU’s space” have little justification. But the lack of transparency in recent investments should nevertheless be a major concern for policymakers as it could potentially undermine the conditionality of the explicit rules-based approach in the EU accession process.
The planned development of the Belgrade waterfront. Credits: Attila Malarik (CC BY-SA 2.0)
The presence of so-called “foreign actors” in the Western Balkans – that is to say the involvement of states other than members of the European Union – is a subject which is attracting growing interest in recent years. last time. The media carefully cover the Russian, Chinese and Turkish presence in the region, and no political consultation takes place without this issue being addressed in an important way. This interest raises two sets of questions. One is substantial: what are these countries? Really until? Is their interest commercial or geopolitical? Are there any security implications? And the second is reflexive: why We so spasmodically interested in this matter?
A study I conducted research with colleagues at LSE and Zayed University to attempt to answer the substantive questions related to increased United Arab Emirates (UAE) investment in the Balkans. The UAE’s financial involvement in Southeast Europe is not a new phenomenon, but while previous payments to Kosovo and Bosnia in the 1990s and early 2000s were primarily aimed at In post-war foreign aid, the interest that has grown over the past decade – particularly in Montenegro, Serbia and more recently Bosnia – is undoubtedly linked to business investment.
The first UAE embassy in the Balkans was opened in 2012 in Montenegro, two years after the construction of the Atlas Capital Center in Podgorica by the Abu Dhabi Financial Group. Highlighting the close relationship between business investment and political ties, the diplomatic outpost is located within the luxury shopping center itself. The main investment sectors in Montenegro are tourism and agriculture. UAE officials have stressed that they hope Montenegro will be their “gateway to the Balkans”: a region they want to set foot in via niche industries before joining the much larger market of the EU. The geopolitical implications are not hidden (it is good to make “friends all over the world”), but what they highlight above all is a specific investment logic: the final objective of UAE is clearly long term, preparing the country for a post-oil economy within a few decades.
Involvement in Serbia came a little later, but it proved even more important. In 2013, Deputy Prime Minister Aleksandar Vučić (who would later become Prime Minister and then President) announced several large-scale trade deals and a billion-dollar state loan, which were followed by investments in four main sectors: agriculture, construction, air transport and arms production. The overhaul of relations between Serbia and the United Arab Emirates has indeed been quite astonishing: after having been vocal critics of Serbia’s actions during the wars of the 1990s, Emirati leaders are now seen as maintaining excellent relations with their Serbian counterparts. A largely ideological and values-based approach was abandoned, giving way to more pragmatic relationships.
In neither country have UAE investments been made without controversy. What characterizes these transactions is a marked lack of transparency, often accompanied by specialized lex the granting of large concessions to the investor and a decision-making process that occurs almost exclusively at the upper echelons of both parties. The potential avenues of corruption, as well as the allegation that Milo Đukanovic and Aleksandar Vučić are linked to the Abu Dhabi ruling family through Palestinian politician Mohammad Dahlan (who is holding both a Montenegrin and a Serbian passport), were considered absurd by all parties. However, episodes like the one in 2016 overnight demolition of houses by masked individuals never identified, in the same area where the “Belgrade Waterfront” development project, partially financed by the United Arab Emirates, is to be developed, has not contributed to making these companies serious investments supported by a attachment to the rule of law.
This weak commitment to transparent and responsible investment is worrying. In an upcoming book chapter, Will Bartlett and I argue that the political cultures of the Balkan and UAE leaders are compatible in many ways. This is good news for the continued economic engagement of both parties, but potentially bad news for the democratic development of the Western Balkan countries. UAE “sultanism” – personalized power blurring the line between public and private, in which state resources are considered the personal property of the ruler and his associates – has found fertile ground in a region largely characterized by a regression toward (or stagnation of) authoritarianism.
Which brings us back to the second series of reflexive questions: why are Western debates so focused on what “others” are doing in the Balkans? Should they be? As has been demonstrated, at least in the case of the UAE, geopolitical motivations are either weak or non-existent. The threat of another actor “occupying the space” of the EU/West is not justified in this case. However, the warning signs point to a clearly imposed modus operandi, largely non-transparent, and therefore capable of consolidating existing political and business elites through clientelist channels. In this sense, non-transparent investments should indeed be a major concern for policymakers, as they can potentially undermine the conditionality of the explicit rules-based approach in the EU accession process.
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Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy or the London School of Economics.
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Tena Prelect – LSE/University of Sussex
Tena Prelec is a research associate at LSEE-Research on South-Eastern Europe (LSE European Institute) and a PhD candidate in the Faculty of Law, Politics and Sociology at the University of Sussex.
