WEST BALKANS - Special Report - April 2019

I.          EBRD, World Bank and Exim Bank’s (China) investments in the Western Balkans
EBRD president (European Bank for Reconstruction and Development), S. Chakrabarti, stated that the institution he is leading plans to invest about 1.1 billion euros, this year, in Western Balkans’ region, focusing on private sector’s development, connectivity and the transition to green economy. In 2018, more than 1.1 billion euros were invested in 67 projects. Therefore, in 2019, EBRD plans to significantly increase its investments in Kosovo from 52 million euros, in 2018, to 100 million euros.
S. Chakrabarti underlined that "In total, we have invested 363 million euro in 63 projects in Kosovo to date. The challenges we want to tackle are similar to those of the wider region: foster the private sector’s potential, strengthen integration and address the energy challenge."

In North Macedonia, which is about to access NATO, over 1.8 billion euros have been invested in various projects (164 million euros in 2018 only). EBRD’s president said the bank is committed to increase its investment and political counseling efforts to support Skopje’s authorities, adding that “he believes already this year they will be able to contribute even more," to support this entities from the Western Balkans.

Region’s priorities are the following: private sector’s development as driver of economic growth, employment and innovation; connectivity, a concept that supports both region’s integration process (infrastructure) and the regional investment and creation of conditions for harmonization with the EU; moving to a green economy by addressing the urgent environmental challenges and increasing the use of renewable energy sources as well.

EBRD’s President stated he is confident that EBRD’s annual meeting, from Sarajevo (8^th and 9^th of May), will lead to increasing the investments across the region, connectivity being one of agenda’s priorities.
Another objective EBRD has is targeting 40% of its new annual green economy commitments by 2020, seeking to achieve this goal "through a two-line approach: investing in renewable energy and investment in energy efficiency."
Another key player in region’s investments seems to be the World Bank (WB), which, through its board of directors, has approved a $ 90 million funding to help Western Balkan’s countries in reducing costs trade and increasing transport effectiveness. This is the first phase of a $ 140 million project for the design, development and implementation of initiatives’ funding to improve transparency and integrity, to reduce transaction costs, increase the level of coordination between businesses and reduce the necessary time for cross-border trade.

This phase’s investments resources will be allocated to Serbia ($ 40 million), North Macedonia ($ 30 million), and Albania ($ 20 million), aiming at reducing the annual cost of export-import activities with more than 10%.

The Serbian government signed a Memorandum of Understanding (MOU) with China to set up a working group on investment cooperation. The Working Group will address the advancing economic cooperation between Serbia and China and will support the launch of joint projects on third markets. Besides infrastructure, the group will coordinate bilateral cooperation in industry and finance and ease new investment and regional cooperation activities.

Joint investment projects’ total value in the transport sector is worth 7.5 billion euros, the accelerated process Serbia-China cooperation development being also confirmed with the participation of a Serbian delegation, led by President Aleksandar Vučić, in Beijing, on 24.04.2019, for the Second Forum on International Cooperation.

Given Western Balkans’ competitive environment, China, through Exim Bank, signed a loan agreement with Serbia, to finance the construction of a highway section connecting Preljina to Požega, part of the Pan-European Corridor XI. The 450-million-euro project, which aims at building a 30.9 km highway section, will be built by China Communications Construction Company (CCCC).

Considering international players’ competition intensity in the Western Balkans, EBRD is a long-term partner dedicated to both supporting local economies and financing region’s entities needs. In line with this vision, EBRD is hosting a regional investment summit every two years, with the participation of all leaders of the six Western Balkan entities.

EBRD is firmly committed to Western Balkans’ integration into EU, being a major investor in most of the transport and energy infrastructure projects that connects the region to Europe. Moreover, EBRD is also significantly involved in providing the necessary consultancy to support the implementation of economic and institutional reforms.

Even if Western Balkans’ entities can export products to the European Union (EU) having favorable conditions, only 10-20% of region’s companies are using this chance. Following the verification procedures and customs formalities, plus the time spent at borders and crossing points are diminishing commercial activities’ efficiency and increase the cost. According to data published by WB, "in Albania, for example, 87% of Albanian firms sell entirely on the local market, 10% export to EU, and only 3% sell goods to the rest of Western Balkans’ countries."

The additional environmental benefits generated by this WB-funded project include reduced paper use through digitization, increased energy efficiency in new and upgraded buildings and the introduction of quick warning systems to track climate changes risks and prevent road network’s disruptions.

So far, no details have been revealed about Serbia's loan agreement with Exim Bank (China), but it is noteworthy that since March 2018, Infrastructure Minister Zorana Mihajlovic stated that Belgrade’s government wants to sign a loan agreement worth of $523 million to finance the construction of a highway section.

According to Serbian Infrastructure Minister, Z. Mihajlović, "preparations for the highway section to be built are in process, the state has completed the expropriation of land and has prepared the technical documentation, while camping sites for workers are being built near Lučani”.

According to Serbian government’s plans, the Belgrade (Serbia) -Sarajevo (BIH) and Pan-European Corridor XI will pass to Požega, while the upcoming Morava Corridor highway will link Corridor X to Corridor XI in Čačak. The Preljina-Pozega highway is part of Corridor XI, a highway section that links Bari (Italy) to Bucharest (Romania), via Bar port (Montenegro) and Belgrade (Serbia). Corridor X will link Salzburg (Austria) on Thessaloniki port (Greece), passing through Slovenia, Croatia, Serbia and North Macedonia.

II. ISIL fighters, repatriated in Kosovo and Bosnia and Herzegovina (BIH), investigated by authorities

110 Kosovar citizens were repatriated from Syria to Kosovo, among them four supposed ISIL fighters, who were immediately arrested.

Three adults, Arijanit Kryeziu, Visar Qukovci, Agon Misini, and a young man were detained by the police immediately after their return and sent to the high security prison in Dyz. Arijanit Kryeziu, a native of Ferizaj / Uroševac (a city in southeastern Kosovo), is investigated for participating in terrorist actions in Syria. An international mandate was issued, since 2018, for his arrest. Kosovo’s police received proofs from FBI (US) at the time of his repatriation to Kosovo.

The chief of the Kosovo police, Rashit Qalaj, stated, during the press conference from 20.04.2019 that 32 women and 74 kids were among the repatriated people.

After landing in Pristina’s Airport, the group was led, for medical check-ups, to a detention center usually reserved for migrants. Given the context, medical service’s director, Naser Ramadani, stated that "women and children have suffered from serious trauma." According to statements made by the special prosecutor, Syle Hoxha, all 32 repatriated women have been subjected to interrogation and prosecution investigations. According lawyer Fehmie Gashi Bytyci’s statements, who is one of the investigated women, she has decided to place home arrest for all repatriated women, given that they all have children and receive accommodation from relatives.

Also on 20.04.2019, according BiH Prosecutor's Office information, the 24-year-old Bosnian citizen Ibro Ćufurović, who left for Syria in 2013, to join ISI, was repatriated as well. He is on a 25-Bosnian-citizens traced by Interpol list.

The repatriation actions of Western Balkans’ entities citizens, who were part of Syria and Iraq’s armed actions along with ISIL, are being made in cooperation with the American authorities.

Starting with 2012, about 400 Kosovar citizens, mostly Muslims, went to Syria and Iraq to fight alongside the ISIL terrorist group. More than 70 of them were killed, while many remained in the region. Since 2014, the Kosovar Prosecutor's Office has filed charges against 119 Kosovar citizens for terrorism, while another 156 Kosovar citizens are under investigations.

They do not know yet the exact number of jihadi fighters’ kids who participated in ISIL’s actions in Syria, but the Save the Children NGO estimates that currently around 3,500 children in 30 countries are in refugee camps.

In February 2019, the Kosovar police announced that 44 Kosovar women and 48 children were still in the conflict area, in Syria. According to data released by the Kosovar Police, 56 Kosovar citizens are still in the region fighting alongside ISIL. Hence, it is noteworthy to say that following the Kosovo regulations, anyone who takes part in external armed conflicts can be sentenced to 15 years in prison.

During a press conference in Pristina, Kosovo’s Justice Minister, Abelard Tahiri, pointed out that Kosovar authorities have been working for several months to repatriate the 110 Kosovar citizens from Syria. The US Embassy in Pristina welcomed the action with a statement made on 20.04.2019, describing Kosovo as an example for all member states of the Global Coalition to Defeat ISIL.

Also then, Justice Minister Abelard Tahiri stated that these people "deserve rehabilitation and hope for a peaceful life away from conflict," and Kosovar President Hashim Thaçi, urges, in a Facebook post, for their relatives to "help them reintegrate into society as quickly as possible."

Following so-called Caliphate’s official defeat statement, after killing or capturing a significant number of ISIL fighters, their return home has raised significant concerns amongst those states’ officials, including the Western Balkans. The main concern is that the repatriated people will try to create new radicalized groups, capable of launching terrorist attacks. France already took a first measure, as the State Council, the Supreme Court for administrative justice, rejected, on 23.04.2019, the requests made for the repatriation of French citizens and their children who are currently in Syria, reasoning that such a process involves "negotiations with foreign authorities or intervention in a foreign territory". Similar to other states, due to a hostile public opinion, the French authorities are moving slowly with the repatriation process of their own citizens, who participated in armed actions in the Middle East, getting to repatriate only five children of some French citizens who fought alongside ISIL, in the middle of March 2019.

III. Local anticipated elections in Serbian provinces in North of Kosovo
The four mayors in the "Serb municipalities" in North of Kosovo, Leposavić (Zoran Todić), Mitrovica Nord (Goran Rakić), Zubin Potok (Stevan Vulović) and Zvečan (Vučina Janković) resigned, on 27.11.2018, as a protest against Pristina’s authorities’ imposition of a 100% over tax on goods imports from Serbia and Bosnia and Herzegovina (BiH). Since then, the local councils of the four municipalities have ceased the cooperation with Pristina authorities.

After nearly five months wherein Pristina’s authorities refused to accept the resignations and tried to push Serbian List’s mayors to take back their positions, on 08.04.2019, Kosovo’s President Hashim Thaçi, issued a decree for early mayoral elections in all four municipalities, on 19.05.2019.

At the end of candidate lists’ deadline (18.04), only three parties made some proposals: LS, the Democratic Party of Kosovo (PDK, Albanian) and the Movement for Self-Determination (VV, Albanian).

The decision for LS’s participation or not at the 19.05 elections was a great challenge for the “Serbian side”, as any other option that has advantages and disadvantages.

The decision to participate can be considered as Pristina authorities’ legitimation because the elections are following Kosovo’s law, including for a municipality that does not exist in Serbia’s Republic administrative system: North Mitrovica. Furthermore, in this entire time, Pristina not only refused to cancel the "over tax", but also deprived several members of Kosovo’s government nominated by LS.

The absence at the elections was, however, a worse option since it would have given Pristina the chance to name ethnic Albanian mayors or "Serbian servile" (most likely belonging to the Independent Liberal Party / SLS, led by Slobodan Petrovic).

After the VV call, on 24.04, the Central Electoral Commission of Kosovo (CEC) rejected the LS candidacy and VV further requested Kosovo’s Constitutional Court’s (CCK) assessment of three LS candidates. The VV's reasons were: Three candidates, for Leposavić (Z.Todić), Mitrovica Nord (G.Rakić) and Zvečan (V.Janković) municipalities are the mayors who resigned back in November 2018, announcing that they would resign again, if they will be reelected. LS appealed the decision to CEC’s authorized body and, on 25.04, CEC admitted LS’s candidates for all four municipalities, despite VV's opposition, which maintained its requests for CCK's assessment of the case.

Most likely, CEC’s approval of LS candidates comes after the West pressured Pristina. It may also be possible the scenario VV prefigured: LS candidates will win the election and will either remain in office and reject the collaboration with Pristina, or they will resign from office.  

The 19.05 elections are far more than just local elections.  Although LS's participation at the elections and subsequent scenarios suggest a new blockage, LS’s absence from the elections and Albanian parties (PDK, VV) winning mayoral posts could lead not only to "Belgrade-Pristina Dialogue" further stagnation, but also to violence, with unpredictable effects including on the regional stability (if Serbian defense and security forces and KFOR will join the conflict).

IV. Serbian-Russian collaboration. “One-to-one” discussions between president Putin and Vucic

The Serbian-Russian collaboration follows the Strategic Partnership Statement framework, from May 2013 (signed by Presidents Tomislav Nikolić and Vladimir Putin), and basically covers all areas. This collaboration’s "cornerstones" could be the Russian support for Serbia's sovereignty preservation over Kosovo. Also important is the economic cooperation (especially for gas and oil industry, namely Serbia's energy security) and the defense and security ones (high-level meetings, joint military exercises, donations and modernization of the military equipment provided by the Serbian army, training and collaboration for humanitarian actions, cooperation in military field, education and training).

In April 2019, there were many important developments for the "political and military" pillar: Serbian President Aleksandar Vučić met with his Russian counterpart, V.Putin, on 26 April 2019, at the second “Belt and Road Initiative” International Cooperation Forum, in Beijing, and Defense Minister, Aleksandar Vulin, met, in Moscow, with Russian counterpart Sergei Soigu, on 24-26.04.2019.

The A. Vučić -V. Putin meeting is the second for this year (the first taking place when the Russian President's visited Serbia, on 17.01) and it took place after the Serbian President confirmed his participation at the meeting held on 29.04 .2019, in Berlin, by German Chancellor Angela Merkel[1]and French President Emmanuel Macron, with Western Balkans’ state leaders (including Kosovo). The Serbian leader has talked with the Russian leader, especially in terms of the dialogue between Belgrade and Pristina and the "Kosovo file" as a whole, on the agenda, of course, being included also the Serbian-Russian bilateral relations (increasing the trade volumes, the construction on the Serbian territory of a "Turk Stream 2" gas pipeline branch, etc.). Belgrade's biggest concern is that the West will increase its pressure to restart the dialogue with Pristina, even if the Kosovo’s authorities will not cancel or call off the "over tax" for Serbia's goods imports. Also, Belgrade is concerned with West’s possible agreement on Pristina taking over the control on the majority of Serbian municipalities, in northern Kosovo, and then on an "ultimatum" for R. Serbia and Kosovo to sign an agreement that would enshrine both the independence and sovereignty of the former Serbian province, as well as this new state’s territorial integrity. The also, the Serbian president consulted with his Chinese counterpart (25.04.2019).

After meeting V. Putin, Serbian President, A. Vučić, stated that he informed him about the developments in Kosovo and he convinced him that he would help and support Serbia, and Russia would not allow anyone, in any way, to interfere or attack Serbia other than politically. The Serbian President congratulated the Russian one on the Russian Orthodox Easter and, after plenary meeting, they had another five-minutes meeting.

 After meeting the Russian Defense Minister (April 24, 2019), Minister A. Vulin met four Serbian officers, that have Lieutenant Colonel ranks, who are on a 10-months strategic course, within "Military Security of the State" profile. The officers are part Information and Research Division of the General Staff of the Serbian Army (J-2), the Military Security Agency of the Ministry of Defence / R Serbia’s Ministry of Defence (VBA), the Department for International Military Cooperation in the Serbian Ministry of Defense and the Military Academy in Belgrade. At the end of the course, Serbian students will have the opportunity to meet with President V. Putin in Kremlin (27 June 2019).

V. Talks about Serbia’s “military neutrality”
In April 2019, Serbia showed, once again, its "military neutrality," following to its own vision. Precisely, Belgrade rejects the accession to any of the existing North Atlantic Alliance / NATO and Collective Security Treaty Organization/ CSTO and promotes defense collaboration with all interested states that have also high standards in the field.

Hereof, Army General Serghei Soigu, at the invitation of the Russian Defense Minister Serbian Defense Minister, Aleksandar Vulin, participated at the eighth International Security Conference in Moscow (MCIS), between 24-26.04.2019 and, on 04.24.2019, in Belgrade, were held two joint NATO activities: the annual plenary meeting of the Serbia-NATO Defense Reform Group (DRG) and Serbia-NATO meeting to prepare the assessment on the partnership or peace planning and review process 2019 (PARP 2019).

Serbia uses DRG’s activity to increase the interoperability with NATO’s member states’ armies and NATO’s Program Partnership for Peace (PfP) states, as well as to implement NATO's standards in its own defense and security system, through its "Partnership Objectives" "(for the defense planning policy, human resources defense management, logistics system, operational capabilities, medical health insurance system and public diplomacy). DRG’s plenary meetings aim to evaluate Serbia's progresses following the concrete bilateral support given by NATO and PfP’s member states. For Serbia, PARP works closely in cooperation with DRG and focuses on building and increasing the interoperability of the Serbian army with NATO’s member states' armies, without meaning that Serbia wants to join the Alliance.

Also considering the collaboration with NATO’s most important member, in March 2019, Minister A. Vulin met with the Deputy Secretary of Defence for Russia, Ukraine and Eurasia, Laura Cooper, in Belgrade. At the end of March, Belgrade organized a regional public diplomacy conference, with the support of United Kingdom.

On the other hand, Serbian defense ministers (after 2012) regularly participate at Moscow’s Security Conference and cooperate with the Russian Federation and ODKB. Moreover, during the April 2019 conference, Minister A. Vulin met not only with his Russian counterpart (a meeting that could be considered "normal"), but also with a number of counterparts from states which can possible oppose NATO: the Chinese defense minister and the Iranian defense minister. Last but not least, the Serbian Minister also met with ODKB’s acting secretary, a military successor to the former Warsaw Treaty, seen NATO's main potential enemy. In the first half of this year (most likely mid-June), in R Serbia, it will take place the (already traditional) exercise of the special operations forces in the Serbian, Belarusian and Russian armies, "The Slavic Brotherhood 2019".

Minister A. Vulin used his participation at the MCIS 2019 to reiterate his country's "military neutrality" option, but also to condemn NATO's military intervention against former Yugoslavia, back in 1999, which he described as "aggression", ended with "killing the international law". At the same time, the Serbian Minister reiterated that Kosovo's unilateral declaration of independence, its international recognition, the efforts for building "Big Albania" and Kosovo’s leadership by "terrorists" re the greatest threats against Balkan’s security”.

Translated by Andreea Soare