ECONOMIC DEVELOPMENT AND DEMOCRATIZATION IN THE WESTERN BALKANS Valeska Esch Olga van Zijverden Tina Bories (eds.) In cooperation with: The Aspen Institute Germany wishes to thank the German Federal Foreign Office for its sponsorship of the “Aspen Regional Dialogue Western Balkans 2019“ through the Stability Pact for South Eastern Europe. The mission of the Aspen Institute Germany is to improve the quality of leadership through dialog about the values and ideals essential to meeting the challenges facing organizations and governments at all levels. Over its forty-five-year history, Aspen Germany has been devoted to advancing values- based leadership – to creating a safe, neutral space in which leaders can meet in order to discuss the complex challenges facing modern societies confidentially and in depth, with respect for differing points of view, in a search for common ground. This publication includes conference papers and proceedings of Aspen Germany’s Western Balkans conferences in 2019. The Aspen Institute’s role is limited to that of an organizer and convener. Aspen takes no institutional position on policy issues and has no affiliation with the U.S. or German governments. All statements of fact and expressions of opinion contained in all Aspen publications are the sole responsibility of the author or authors. For further information about the Aspen Institute Germany, please write to Aspen Institute Deutschland e.V. Friedrichstraße 60 10117 Berlin Germany or call at +49 30 80 48 90 0 Visit us at www.aspeninstitute.de www.facebook.com/AspenDeutschland www.twitter.com/AspenGermany Copyright © 2019 by The Aspen Institute Deutschland e.V., all rights reserved. Responsible Editor: Valeska Esch Aspen Institute Deutschland e.V. Friedrichstraße 60 10117 Berlin Germany (printed by Druckzuck GmbH, Berlin) TABLE OF CONTENTS FOREWORD BY AMBASSADOR SUSANNE SCHÜTZ 03 INTRODUCTION 05 SUMMARY AND RECOMMENDATIONS 07 SYNOPSIS OF THE WESTERN BALKANS PROGRAM 2019 09 CONFERENCE I: STRENGTHENING PARLIAMENTS AND THEIR ROLES IN THE WESTERN BALKANS REFORM PROCESSES 15 AGENDA AND PARTICIPANTS 16 CONFERENCE REPORT 21 CONDITIONALITY IN THE WESTERN BALKANS – IS THE EU’S APPROACH STILL DELIVERING? 27 1. Adnan Ćerimagić Magic Potion, Heroes and Villains: Boosting EU Attractiveness 27 POLITICAL POLARIZATION, PARTY POLITICS, RADICALIZATION, AND THE ROLE OF OPPOSITION 32 2. Vedran Džihić Nationalist Polarization in the Western Balkans and Its Institutional Consequences. A Fate That Can Be Changed? 32 3. Shpend Emini Polarization of Party Politics in the Western Balkans: Limping Towards Stability 35 STRENGTHENING PARLIAMENTARY OVERSIGHT 40 4. Alexander Strelkov, National Parliaments and the Reform Process in the Western Balkans: Is there Room for Cautious Optimism? 40 5. Jeta Krasniqi A New Approach for the EU Reform Process in the Western Balkans: Strengthening the Role of Parliaments 44 ELECTORAL LAW AND PARTY FINANCING 51 6. Nađa Mićić, Vukosava Crnjanski, Tamara Branković The Sources of Party Loyalty as Obstacles to Parliamentary Accountability in Serbia 51 THE ROLE OF THE COMMITTEES ON EUROPEAN INTEGRATION IN THE WESTERN BALKANS PARLIAMENTS 56 7. Vlora Rechica The Committees on European Integration and the Questionable Separation of Power in the Western Balkans 56 TABLE OF CONTENTS CONFERENCE II: THE WESTERN BALKANS BETWEEN ECONOMIC DEVELOPMENT AND EMIGRATION 61 AGENDA AND PARTICIPANTS 62 CONFERENCE REPORT 67 EMIGRATION: WHY ARE PEOPLE LEAVING? HOW CAN THEY BE CONVINCED TO RETURN? 75 1. Alida Vračić Western Balkans Emigration and Its Consequences in the Region 75 ECONOMIC DEVELOPMENT AND JOB CREATION 81 2. Vladimir Cvijanović A New Industrial Policy Approach as a Way Forward in the Western Balkans 81 3. Ivan Žilić Skills, Jobs, and Education in the Western Balkan Countries 85 CRITICAL INFRASTRUCTURE, PUBLIC PROCUREMENT, AND INTERCONNECTIVITY 90 3. Ana Đurnić Critical Infrastructure and Public Procurement: The Case of Montenegro – Eight Years of Back and Forth 90 4. Aleksander Kovačević Critical Infrastructure in the Western Balkans 95 REGIONAL ECONOMIC COOPERATION AND INTERREGIONAL MOBILITY 102 5. Silvana Mojsovska Regional Integration of the Western Balkans: The Shift from Political to Policy Content as a Precondition for Results 102 WESTERN BALKANS WORKING GROUP 2019: 107 AGENDA AND PARTICIPANTS 108 CONFERENCE REPORT 111 LIST OF ABBREVIATIONS 116 ABOUT ASPEN 117 FOREWORD 2019 was a very challenging year for the Western Balkans. Recent events, namely the failure of the EU to take a decision on opening accession negotiations with Albania and North Macedonia in October, have instigated a discussion on the strategic importance of the Western Balkans for the European Union. There cannot be any doubt: Negative and positive developments in this region – which is entirely surrounded by EU countries – have a direct impact on the Union. The challenges and security risks of today’s world are highly globalized and do not stop at borders. Countering phenomena like organized crime and cor- ruption, coping with the challenges of irregular migration and checking adverse influences from third actors requires a strong EU-Western Balkans partnership for effective and resilient justice systems, administrations and economies. The right framework for bringing about the reforms that ensure a positive development in Western Balkan countries is the EU accession process. It is this perspective which mobilizes the necessary political will to undergo difficult reforms or even over- come longstanding bilateral disputes. North Macedonia has shown this with the Prespa Agreement with Greece. While EU Member States still have to find a common position on enlargement, the Western Balkan countries must accelerate their reform efforts. Good governance, the strengthening of the rule of law, the effective fight against organized crime and corruption – all these are areas where much remains to be done. Regional cooperation and the solution of bilateral issues must be brought forward. This is first and foremost in the interest of the Western Balkans countries, which are in need of economic growth and must give a perspective to their citizens, if they want to keep them from emigrating. The sustainability and quality of reforms also depends on the inclusiveness of the reform process. It is a process which needs the support of the societies in the countries concerned. It is therefore of key importance that Parliaments and civil society develop ownership and contribute to shaping the necessary legislation. I am very grateful to the Aspen Institute for having provided an excellent forum for in-depth discussions on the role of parlia- ments in reform processes and the manifold reasons for the phenomenon of mass emigration with last year’s conferences. The meetings strengthened the dialogue between Germany, the EU and our Western Balkan partners. They contributed to better understanding of the issues and the various positions. Respectful dialogue leads to better understanding, which is needed to jointly tackle common challenges. I would like to thank the Aspen Institute Germany for its important work and am looking forward to new inspiring meetings and discussions. Ambassador Susanne Schütz Director for South-Eastern Europe, Turkey and the EFTA States German Federal Foreign Office INTRODUCTION Dear friends of the Aspen Institute Germany, The European Union and its member states have been confronted with major challenges this year. While undergoing European Parliament elections and slowly transitioning to a new Commission under Commission President Ursula von der Leyen, Eu- rope’s neighborhood has been increasingly troubled and geopolitical challenges have been on the rise. There are no lasting solutions in sight for the wars in Ukraine, Libya, Yemen and Syria, the situation in Iraq and Afghanistan, and relations with Iran have been anything but stable. In addition, the difficult relationship with Russia and the continued rise of China as an economic, technological, intelligence, and security power are posing further challenges to the EU. While these challenges call for unified Euro-Atlantic responses, the US-European relationship has seen better days as well. Even NATO’s role as the key transatlantic organization has divided EU actors against the backdrop of Turkey’s intervention in Syria and a European debate about more strategic autonomy. Internally, the EU will have to weather the consequences of Brexit and deep divisions over common values and standards, a joint refugee policy, future priorities, and a new multi-annual financial framework that will provide the EU with sufficient funds for its policies and accounts for the loss of the United Kingdom. Where does all of this leave the Western Balkans? Ever since the Thessaloniki EU Summit in 2003, the countries of the Western Balkans have had a clear perspective of joining the European Union. At the same time, the region has been less and less a political priority in EU capitals, opening the door for some Western Balkans governments’ geopolitical maneuvering between the EU accession process and Russia’s and China’s engagements. The failure of the October 2019 European Council to agree to the opening of accession negotiations with Albania and North Macedonia despite substantial progress in both countries has come as a deep shock to the Western Balkans, leading to the questioning of the credibility of the region’s membership perspective and the EU’s overall commitment to the region. In this context, France’s demands for a reform of the