Turkey has long considered Western Balkans part of its sphere of influence.
Until 1918, the Ottoman Empire included Serbia, Bosnia-Herzegovina, Macedonia, Albania and Kosovo. A century later The Ottomans disappearance, Turkey once again looks at the region with covetousness.
Turkey’s share of Serbia’s foreign trade is only about 3.5 percent, but it has slipped into Serbia’s top 10 and top three trading partners almost without notice. of Kosovo. Turkish construction companies, for example, are building and will operate 20 power plants in Serbia.
The emerging economic relations between Turkey and Serbia will indeed likely be focused on energy, with the centerpiece being Turkish feed gas pipeline run by Russian energy giant Gazprom.
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The Western Balkans represent only a fraction of Turkey’s foreign trade, while trade with the European Union amounts to around 145 billion euros ($165 billion). But President Recep Tayyip Erdogan recently spoke of increasing Turkish investments in Serbia to $5 billion in the long term, from around 1.7 billion euros in 2017.
Yet with the Turkish lira down 42 percent against the dollar this year, it is questionable whether Ankara will be able to deliver on its investment promises in the EU’s southeast.
“We fear that the crisis in Turkey cannot be without repercussions for us,” Serbian Trade Minister Rasim Ljajic recently declared.
Internal problems stimulate external pressures
Analysts agree that the weakening of the Turkish lira will have a negative impact on Turkish government spending, meaning that fewer funds will be available for Turkish state activities in the Western Balkans.
“But that doesn’t necessarily mean that Turkish private sector investment will decrease,” Gareth Jenkins, a senior fellow at the Institute for Security and Development Policy, told DW.
In fact, over the past 18 months, Turkish private sector investment abroad has increased significantly, driven by shrinking profit margins inside the country and concerns over the rule of law.
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“Keeping money in safe accounts in the Balkans might be considered relatively stable by many Turkish companies,” Poland-based Balkans expert Jan Mus told DW. He mentions the $400 million loan granted by Serbia to the Turkish bank Exim to develop infrastructure.
“Due to the current difficulties in the Turkish economy, we have not seen any negative developments in Turkey’s economic relations in the Western Balkans so far,” said Alper Ücok, representative of TUSIAD Berlin, the Turkish Industry and Commerce Association, to DW.
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“The volume of investment and trade is simply too low to have a significant impact on these markets. In this regard, for the Western Balkans, the best is yet to come from Turkey,” said council member Aleksandar Medjedovic of directors of the Turkey-Croatia association. DEIK Business Council in Istanbul, told DW.
“My estimation is that in the long term we will see more investments from Turkish companies, not only in the Balkans but also throughout Europe,” he added.
EU ambivalence
And the EU is the desired destination for many Turkish companies investing in Serbia.
“Turkey has a rapidly evolving economy, strong manufacturing sectors and global trade relationships and is in constant need of new markets and production sites. In countries like Serbia, Croatia or Slovenia, it sees a ‘gateway’ to EU markets, producing closer to European customers,” says Medjedovic.
However, it is sometimes unclear whether the EU is more concerned about Turkey’s apparent advance in the Western Balkans or the effects of its apparently rapid exit on the geopolitical balance in an area watched by Moscow, Beijing and others.
In the first such meeting in 15 years, EU leaders met their counterparts from Serbia, Albania, Bosnia, Montenegro, Macedonia and Kosovo in May and agreed to establish more energy ties and to work more closely to combat radicalism and control migration.
But European leaders also said the region could not expect accelerated accession to the bloc. Serbia’s planned accession date is now 2025, 12 years after Croatia and two decades after Slovenia joined the bloc.
Some in Turkey say their country’s role in the Western Balkans does not compete with EU projects in that region, but instead complements them. “Turkey is not Russia,” said Sinan Ülgen, a former Turkish diplomat and visiting fellow at the Carnegie Europe think tank. Policy. “Turkey’s mission is not to dissuade Western Balkan countries from converging with the EU, quite the contrary.”
Ankara’s recent moves, however, have sparked renewed EU interest in its often-neglected southern backyard, which is also driven by fears about Moscow’s role in the region – selling of fighter jets to Serbia for an alleged role in an attempted coup in Montenegro.
Speaking to the European Parliament in May, French President Emmanuel Macron put Ankara and Moscow in the same box, saying he did not want the Balkans to “turn towards Turkey or Russia”.
China and Russia
China views the region as a corridor to Europe, as part of its Belt and Road Initiative. Projects include a sea bridge in southern Croatia, while Huawei Technologies will upgrade the Serbian telephone company and build a highway in Montenegro to connect Belgrade to the Adriatic.
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Russia, for its part, is investing massively in major projects, particularly in the energy sector. There are around 1,000 companies in Serbia partially or entirely owned by Russians, with an estimated turnover of 5 billion euros.
To put things into perspective, four of the five biggest investors in Serbia are from the EU and Serbia trades far more with Germany and Italy individually than with Russia, despite a free trade agreement between the two countries. The EU estimates that last year it accounted for 73 percent of trade with third countries in the Western Balkans, while China and Russia each had a share of around 5 percent.
A report from the Center for the Study of Democracy that tracks Russia’s growing involvement in the region concludes that the Western Balkans remain vulnerable to Russian pressure due to the presence of its companies in strategic sectors like energy, banking, metallurgy and real estate.
In Serbia, the Russian presence is officially estimated at around 10 percent of the country’s GDP, mainly in the energy sector, although this probably underestimates the true value of Russian investments. “A large part of Russian foreign direct investment in the country comes from Russian companies with offices in EU member states, such as Austria and the Netherlands,” the report notes.
