Saturday, May 25, 2024

Russia in the Balkans: A tiny financial investment for a massive impact

The Russian presence in the Republic of North Macedonia (RNM) is asymmetric compared to the massive influence it’s having in this country. The same discrepancy is present also in other Balkan countries if we analyze the Russian direct investments. This is especially present in Serbia, Montenegro, and Bosnia and Herzegovina.

Russia’s investments are focused only on selected sectors – such as banking, energy, metallurgy, and real estate. Compared with other countries, Russia is nowhere ranked in the top three countries in terms of investments. It is not an important economic partner of any six countries of the Western Balkans. The same situation is with the loans or other financial aid that Moscow provides in the region.

RUSSIA RANKING 13th IN RNM, AFTER ALBANIA WITH INVESTMENTS

According to the official data provided by the National Bank of Macedonia (NBM) and analyzed for The Geopost, in the period of 2010-2020 Russia has had diverse trends in investments, with an average of 26 million euros a year. Currently, it is in 13th place in the list of largest investors in RNM with its peak in 2016, when investments had reached close to 40 million euros.

Russia is far behind the United Kingdom (UK), which has invested in the RNM 759 million euros. Greece follows with 549 million euros of investments, then Netherlands 508, Germany 386, Turkey 376, Switzerland 224, Bulgaria 214, Hungary 192, USA 84, and Albania with 37 million euros of direct investments. China is higher than Russia in the list – ninth with a total of 130 million euros in investments, the same as Serbia, which is tenth with 109 million euros in investments in RNM.

If Russia had reached the peak of investment in 2016, China started that year the “investment offensive” with a threefold increase in capital – from approximately 10 to 36 million euros. A year later, in 2017, Chinese investments reached 110 million, while they peaked in 2019 with 158 million euros.

If we compare Russia’s investments with those of the European Union (EU), then the difference is huge. Compared to Russia, in the same period the EU member states have jointly invested 1.9 billion euros.

Since the independence of the RNM in 1991, foreign direct investment has reached 5 billion euros, while Russian ones account for only 0.5 percent of them.

Compared to other countries, according to the economic figures, the Russian presence in the RNM is the lowest in the region. According to direct investment data per capita for 2017, North Macedonia has the lowest amount of money received. Montenegro has almost 2,000 euros of Russian investment per capita, Bulgaria 300 euros, Serbia 164 euros, Bosnia and Herzegovina 90 euros, Croatia 78 euros and the RNM only 26 euros.

Russia is in 16th place as a trading partner of the RNM, with total exports of 5.4 million euros in 2018, respectively 8.2 million euros in 2019, while imports from Russia were 40.7 million euros in 2018 and 42.8 million euros in 2019. As a trading partner, first on the list is Germany, followed by Great Britain, Greece, Serbia, Italy, Romania, China, Turkey, Belgium, Hungary etc.

Russia does not represent a significant market for the RNM economy either – less than 1 percent of all exports go to the Russian Federation.

MOSCOW RELATIONS WITH POLITICAL PARTIES IN SKOPJE

Russia’s role in the political developments in North Macedonia increased significantly after 2008, when the RNM failed to join NATO at the Bucharest Summit, along with Albania and Croatia. The deflect of then government of Nikola Gruevski from Euro-Atlantic integration and rapprochement with the East caused a deep political and security crisis in the country. In 2015, the leader of SDSM (then in opposition) party Zoran Zaev began to publish wiretapped material, which testified to the corrupt activities of members of the government and senior VMRO-DPMNE figures. This provoked mass protests initiated by civil society, which were supported by SDSM. With the signing of the Agreement with the Russian gas company Gazprom in 2013, the RNM was on the map of the Russian gas pipeline project “South Stream”, so the Kremlin was very interested in keeping VMRO-DPMNE of former Prime Minister, Nikola Gruevski in power to finalize this project.

For this purpose, since 2008 a significant influence of the Russian intelligence services in North Macedonia has been observed. Their activity was in the context of disrupting the country’s Euro-Atlantic integration processes. An increased Russian presence in North Macedonia was aimed at achieving the interests of the Russian Federation to restore its role in the Balkans, to ensure a balance of NATO dominance in the region. Russia’s ambassador to the EU, Vladimir Chizov, told a group of journalists in Brussels at the time that his country could offer the RNM, the Western Balkans and any other country an alternative to Euro-Atlantic integration.

However, the early parliamentary elections of 2016 brought to power a new government, which had as its priority precisely the Euro-Atlantic integration. Attempts to prevent the rotation of power through an orchestrated mob attack on parliament on 27 April, 2017 also failed. There was also an assassination attempt on several members of the new majority. This majority, which consisted of Zoran Zaev’s SDSM, Ali Ahmeti’s DUI, and Ziadin Sela’s Alliance for Albanians, produced the very government that three years later would join the country in NATO. These developments have greatly shrunk the sphere of influence by Russia.

This provoked some harsh reactions from Kremlin. In March 2018, Russia warned the RNM that a NATO membership would have negative consequences for the country, regional security, and relations between the two countries. This was stated by the new Russian Deputy Minister, Alexander Grushko, to the North Macedonian Ambassador to Russia, Goce Karajanov.

To prevent North Macedonia’s integration into NATO, Russia backed political and parapolitical actors in Skopje and Athens to undermine the process of reaching a historic agreement between the two countries that would end the long-running name dispute.

This increased presence shows that the Balkans are becoming more and more attractive to Russia due to its strategic position – access to the Mediterranean Sea and the trajectory of the “South Stream” pipeline gas.

Disproportional impact with the investments

An asymmetric influence of Russia compared to its investments in the RNM is a result of its approach to the region, which is different to the one from the EU and the US. As Euro-Atlantic influence is achieved by applying soft powers, such as direct investment and economic or financial favors for countries in the region, Russia explores pan-Slavic sentiment and identity. So, they do so not by winning their minds, but instead their hearts. The Russian presence in the region is characterized by maintaining a low profile, without transparency in assisting or financing all entities that enable the spread of pan-Slavic ideology, with Moscow emerging as the main protector of all Orthodox Slavic countries.

Hybrid warfare means using all means and forms to achieve the goal. The “Internet Brigades” method also brings Russia a major advantage when it comes to interfering in election campaigns. These “brigades” are present in each of the Western Balkan countries and become active usually before elections if Russia has special interests or favorites in the election race.

In every country in the Western Balkans Russia has its own media used to spread its propaganda. A media outlet within the state-funded project “Russia Beyond the Headlines” (rbth.com) produces articles in Serbian, Macedonian, Croatian, Bulgarian, and other languages, and there are warnings that this content will also be offered in Albanian soon.

But Russia does not have the financial capacity to keep the RNM under its influence, no other Western Balkans countries. In terms of perspective for the region, Russia does not have a long-term offer, such as the EU in economic terms and NATO as a security umbrella. The Eurasian region is not functioning as Moscow wants, so the Euro-Atlantic path remains without an alternative.

 

By: Xhelal Neziri,

Associate of The Geopost from Skopje

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