Western Balkans

2030 Trends

Alba Çela Spasimir Domaradzki Balsa Lubarda Ivana Radić Milosavljević Ivan Stefanovski Naum Trajanovski Authors Adnan Ćerimagić Naum Trajanovski Alba Çela Spasimir Domaradzki Marcin Zaborowski Spasimir Domaradzki Donika Emini Kelmend Zajazi Balsa Lubarda Gersi Gashi Natalia Żaba Ivana Radić Milosavljević Magda Jakubowska Tomasz Żornaczuk Ivan Stefanovski Zana Karkin Naum Trajanovski Roman Kowalski Published by the Res Publica Valon Kurhasani Foundation Project Coordinator Balsa Lubarda Magda Jakubowska Sandra Maksimović December 2020 Jovana Marović Editing and Layout Bledar Milaqi Public task co-financed by the Quincy Cloet Silvana Mojsovska Ministry of Foreign Affairs of Sašo Ordanoski Poland in the competition "Public Workshop Participants Nermin Oruč Diplomacy 2020 - New Dimension" Igor Bandovic Tetyana Poliak-Grujic Tomasz Bańka Wojciech Przybylski The publication only expresses the Eroll Bilbani Ivana Radić Milosavljević views of the author(s) and cannot be Patryk Błaszczak Marko Savković equated with the official position of Alba Çela Ivan Stefanovski the Ministry of Foreign Affairs of the Quincy Cloet Marta Szpala Republic of Poland. Danilo Curcic Vessela Tcherneva Western Balkans 2030 Trends

Introduction

ver the last two decades, the Western European Green Deal as well as the quest for Balkans region has become an indis- innovation clash with the daily challenges of pensable part of the European Union the ordinary people, there is a need to map the Oagenda. Promised the perspective of key triggers that in various combinations can membership, the countries from the region steer the region in different directions. move towards joining the block at an uneven The point of reference for this report is and uneasy pace. the future of European Union relations with The Union’s experience with the West- the countries that are now locked in the po- ern Balkans is an ambiguous one. On the one litically convenient term Western Balkans. The hand, the European Union plays a crucial role main conceptual difficulty lies in the fact that in the reconstruction, support and reconcilia- both the Union and the countries from the tion of these countries, promotes regionalism region are dynamic political entities. Despite and local ownership of cross-border initiatives, the fact that they develop with a different pace, provides for security and promotes western they are exposed to a wide variety of internal values. On the other hand, the sluggish en- and external factors which can create a myriad largement paths with unexpected stops and of alternative constellations with an impact on detours, an endless brain-drain, flirting with mutual relations until 2030. local autocrats and a growing gap between the Hence, we decided to follow a differ- Union and the candidate-states trigger frustra- ent pattern. In order to identify the trends and tion and exasperation. triggers that have the potential to impact the While this love-hate relationship en- region’s European perspective, we decided to dures, other players leave their footprint on explore the existing reality in search of dom- the region. The limits of the Union’s soft power inant patterns and existing trends. Grounded are cyclically tested by Russia. China, Turkey in the contributions of experts from the region and Saudi are making inroads while the Unit- that not only know but also ‘sense’ the region, ed States' approach to the Western Balkans is we seek to identify possible conflations. At the reduced to piecemeal efforts and inconsisten- same time, we do not exclude the possibility cies. These external factors reach the ground of that these trends can lead to Nassim Taleb’s a region locked between nostalgia for the past ‘black swans’ which can also have an impact on and uncertainty for the future. At a time when European Union relations with the non-Mem- demographic trends are discouraging and the ber States from the region.

3 Western Balkans 2030 Trends

Introduction 3

The Grid 5

Politics, Democracy & Security 6

Energy, Environment & Economy 12

Demography & Society 16

Digital & Information 19

EU & the Western Balkans 22

4 The Grid

Visual representation of the dynamics in EU-Western Balkans relations.

5 Western Balkans 2030 Trends

Politics, Democracy & Security

he growing intertwinement of the (EU) Stabilisation and Association Process, EU and the so-called Western Bal- including Albania, Bosnia and Herzegovina, kans has become commonplace. Croatia, Kosovo, Montenegro, North Macedo- Not only was the regional denomi- nia, and Serbia. After Croatia became an EU Tnator given in the course of the EU integra- Member State in 2013, the rest of the region tion process, but the EU has held an active has been frequently called the "WBS-6" (which and ever so changing role in the political, will be abbreviated as WB throughout the text). economic and societal stability and pros- Except for Albania, these countries perity of the region in the last decades. came out of the dissolution of the Socialist This is and certainly has not been a uni- Federal Republic of Yugoslavia (SFRY), as they form process: the six countries, with all previously were its federal units (republics), their democratic deficits, are vulnerable while Kosovo was one of the two Serbia's au- to wider, transnational illiberal tenden- tonomous provinces. Yugoslavia's violent dis- cies. Following on from the Berlin pro- solution has conditioned the European Un- cess and the most recent bilateral break- ion's approach towards the region in terms of throughs in the region, the EU should act its primer orientation towards stabilisation, as a greater pull factor for these countries which remained in the EU's focus until today. in the future. At the end of the 1990s and early 2000s, stabilisation predominantly meant actions to The Western Balkans is a political rath- maintain the absence of violent conflict. Now- er than geographical concept that refers to the adays, it has changed to denote political sta- region encompassed by the European Union's bility in these countries, meaning among other

6 things, a pro-EU government in power. This introducing the narrative of the Union's "stra- position of the EU has considerably influenced tegic interest" or "geopolitical interest" in the the politics and political processes in the WB. Western Balkans. Declaratively pro-EU, but at This closer or accelerated integration the same time, authoritarian political leaders could trigger a new trend – a differentiated and their parties have been ruling these coun- integration of non-members from the WB. tries, sometimes openly supported by the EU Even though this might be viewed as a posi- and its Member States that was being labelled tive trend because this could be an excellent as a "stabilitocracy". opportunity for candidate countries to partic- Although violent conflicts are not a ma- ipate in the EU's policies and better prepare jor concern of the EU's stabilisation politics in for the full membership before it occurs, there the region, there are still bilateral disputes that might be a danger coming with this kind of remain to be resolved between some of the relationship. Differentiated or flexible integra- WB countries. The WB countries are far from tion might end-up in remaining a permanent the old nationalisms present during the 1990s. status or at least a very lengthy one. Following But some nationalistic undertones occasion- the new methodology, the EU would be able ally occur in the correspondence between the to either halt or reverse the negotiations pro- national political leaders, and these are only to cess in some chapters or suspend it entirely if it warn that the old nationalisms might resurface finds that a country is not making progress in if the right conditions were met. the fundamental reforms. Contrary to the EU's politics of non-in- When observed in combination with volvement in the so-called frozen conflicts in the EU's newly-found commitment to focus the Eastern Partnership countries, the EU plays on the region's economic recovery and trans- in the WB one of the major roles in their res- formation, the new enlargement methodology olution. The EU not only sets the resolution of might be positioning EU-WB relations as a these conflicts as key priorities of the region's new version of an enhanced or privileged part- enlargement process, but it has been actively nership. This partnership would be covering engaged as a mediator in some of them. predominantly economic integration, allowing With this understanding, it could be ex- access to the EU's Single Market but postpon- pected that the EU will try to beat the other ing the full membership status for an indefinite powers' influence and maintain its leading role time. in the WB by moving in two directions. First, The EU insists that the political and the increasing its communication activities to rule of law conditionalities remain key prior- make its investments in the region and trading ities in the WB association or accession pro- benefits more visible to the ordinary people. cesses. The lack of progress on the so-called Second, and more importantly, it is expected ‘fundamentals’ might be used to halt a candi- that the EU would enhance its actual activities date country's accession negotiations. These to boost economic investments, financial help remain the first issues to open and the last to be and regional economic integration. This does closed in the negotiations process. The threat not mean that the political aspects of the re- that these kinds of conditionalities might be gional stabilisation would disappear. Political used to postpone enlargement indefinitely is conditionality would undoubtedly remain an more than realistic because any of the 27 EU important element of the EU's policy towards Member States might raise its objections to- the region. wards the state of political and legal reforms. Instead, the economic criteria and de- Moreover, all WB countries have similar, not velopment of the region, with a view of catch- very positive trends in the fields of democracy ing-up with the EU's average, might move up and the rule of law. slightly on the EU's list of priorities since it has One reason is that the influence of the been neglected in the previous decade. European Union on the developments of the The European Commission has been Western Balkans has notably faded over the trying to keep the enlargement agenda alive by last couple of years. The Berlin Process, in-

7 Western Balkans 2030 Trends

itiated in 2014, is likely to run out of steam following the personal and political changes The Berlin Process, happening within the EU. With the poor im- plementation record of the ongoing projects, initiated in 2014, is but also the internal hardships the EU has been facing due to Brexit and the pandemic, likely to run out of the EU presence in the Western Balkans will have to be increased in order for any substan- steam following the tial changes to be made. The formal process with North Macedonia began in March 2020, personal and political with no chapters opened at the moment. In other countries, such as Montenegro, the ne- changes happening gotiations seem to have stalled with respect to chapters 23 and 24 (related to the rule of law), within the EU. but the next decade may finally lead to a con- clusion of negotiations. However, the recent decade has shown the outcome of these processes is not only de- pendent on the progress the candidate-states in the region which have not become part of make, but more fundamentally on the political NATO. will of the EU. After Brexit and in the shadow Out of these three countries, the posi- of the refugee crisis and COVID-19 pandemic, tion of Serbia will be particularly important, the integration process is at a crossroads and given the attempts of its current leadership to its future will have a direct impact on the re- navigate between its ‘Western’ allies and other gion. important actors – most notably Russia. Re- EU-enlargement fatigue has been also gardless of the (limited) potential for demo- induced by the ambiguous presence of the US cratic change in Serbia, this is hardly going to in the region. Although the Trump adminis- affect the question of NATO membership over tration has brokered the hastily framed eco- the next decade, as the status quo is likely to nomic normalisation deal, for almost decade persist in the next ten years. Serbia’s negative the region was deprioritised by the Obama attitude towards NATO can be compensated and Trump administrations. A continuation of only by swift integration into EU structures. this trend by the future administration of Pres- Illiberal trends became commonplace ident-elect Joseph Biden will encourage the in the Western Balkans. Even if democracy is assertiveness of other players like China, Tur- defined in a minimalist fashion, as a procedur- key and Russia. Although it is clear that this in- al democracy (not democracy in substantial volvement will not be comparable to the extent terms), it remains questionable whether it was of some of the previous (Clinton, Bush) admin- ever adequately established in most WB coun- istrations, determination of the US in the re- tries. gion will have a tangible effect on the nearest All of the WB countries have estab- future. Through its Belt and Road Initiative, lished formally democratic institutions, elec- China has greatly expanded its presence and tions, and mostly the relevant legal frameworks influence in The Western Balkans, most often have been set up to support them, although through capital and hi-tech investments (e.g. improvements have been necessary for many highway in Montenegro, which has increased of these. However, constant abuses of the de- the country’s national debt or the 5G network. fined procedures, the institutions' usurpations, This may also affect the geopolitical considera- and even human and minority rights violations tions and security debates in the region. After have made nonsense out of these institutional the accession of North Macedonia, signed in and procedural frameworks. Non-implemen- February 2019; Serbia, Bosnia and Herzego- tation and the lack of enforcement have been a vina and Kosovo are the remaining countries continual phenomenon even nowadays.

8 Rule of Law Index 2020 for South-Eastern Europe and Central Asia (source: World Justice Project)

Most WB countries have been suffering tablishment of strong public broadcasters and from deep political and societal divisions and, regulation of beneficial ownership of media consequently, from a lack of dialogue. These would probably improve the state of affairs in tendencies have reflected on the work of na- areas of freedom of expression and right to in- tional parliaments, transforming them into the formation in the region. governments' voting machines, which end- Overall, the media freedom has de- ed up with opposition parties boycotting the clined in the region. Media has been captured parliaments in WB countries in various peri- by either the outright political majorities or ods (for example, in Serbia during 2019-20, in by a combination of commercial interest and Montenegro in 2017 and 2019, in North Mac- political influences. Market pressures have fa- edonia in 2011 and 2014, in Albania in 2019, voured a tabloid-style print, focusing on con- in Bosnia and Herzegovina in 2015 and 2017). troversial, inaccurate, exaggerated and sensa- Authoritarianism, populism, state cap- tionalist reporting often drum-beating to the ture, media control and corruption scandals tune of nationalism and right-wing extremism. have triggered the boycotting of elections This, in turn, has significantly affected in the WB as well as massive protests in the the quality of democracy and also increased streets. Systems of democratic elections are social polarisation. The few resisting points are not trusted; their results are often disputed. a couple of regional media platforms whose Access to media, vote-buying (in its many credibility is always under attack from politi- forms of which ‘Bulgarian carousel’ is the most cians because their operating model is funded popular), misuse of public resources and unre- by international donors. liable vote registers are some of the common The fact that such negative phenomena issues of elections in the WB countries. The are becoming more palpable worldwide and foreign mediators (mostly the EU) are a com- observed in some of the EU Member States, mon feature of pre-election periods speaking such as Hungary, makes efforts against them of immature political systems in place. more vulnerable. The media picture complements the Going forward, the pressures against overall picture of the highly politicised public conventional media are bound to rise and the sphere. Relevant recent indices and analyses ever intertwined interest of business owners report on the regress of the freedom of expres- (so-called ‘oligarchs’ who often are media own- sion in the region. Media are often controlled ers) and politicians do not spell a very opti- directly by political actors and are treated as a mistic scenario. However, there exists also the mere instrument of political rule. Editors and potential of online media, independent media journalists are often threatened and not rarely content producers (supported by the civil soci- assaulted. Media independence is undermined ety) can become a counterweight and a point through advertising since the most promi- of reference especially for the young public. nent advertisers are state-owned enterprises Related to this, a political grip over the and private companies close to ruling political economy is visible in a still massive public sec- elites or directly owned by politicians. The es- tor with major public enterprises ruled by po-

9 Western Balkans 2030 Trends

Perception of corruption: categories of the economy affected by corruption , respondent agreement/share of total, % (source: Balkan Barometer 2019, Regional Cooperation Council

litical elites. Major state-owned enterprises are that further decentralisation is needed, as well treated as political parties' prays, resulting in as capacity-building in the lower tiers of local severe public funds leakages to private pockets. government, especially in terms of absorption Such state-owned enterprises' position delays of funds and expansion of competencies. their corporatisation and overall transition of WB countries will need to invest more countries' economies toward full-fledged mar- in fiscal and financial decentralisation, as well ket economies. Regional integration with the as in anti-corruption practices on the local EU's support in some sectors such as the Ener- level. Empowering the levels of government gy Community of Southeast Europe has set the which are closer to the citizens aims at chal- integration pattern enabling acceleration of re- lenging the process of silent power concen- forms. However, incentives for preserving the tration that develops in stabilitocracy. In this status quo are still prevailing with the ruling regard, networking and twinning between cit- political elites. The ability to oil ruling parties' ies and municipalities in Central and Eastern machinery and deploy parties' cadre to public Europe (e.g. Poland) and those from the WB positions is an essential source of their power. can additionally contribute to improving the It will persist in obstructing public sector re- capacities of the latter. forms in the region. Another trend in regional democracy One watermark of the democratisation concerns entangled histories and the national process is the introduction of decentralisation, institutionalisation of history-related issues. as an antipode to the former highly central- History is usually considered as a tool for stir- ised socialist states. Ranging from political to ring unease and conflict in WB countries. It is fiscal, decentralisation has been a long and evident that political elites in the region still time-consuming process, which calls for con- cannot fully understand the meaning of the cessions from the central government in fa- word reconciliation and base many of their po- vour of lower tiers of government. Many of the litical actions on nationalism and self-centred WB countries have already done much in this political perspectives. The examples of North regard, albeit results vary. One should expect Macedonia’s difficulties with its neighbours on

10 The Western Balkans are the base of One watermark of some powerful mafia groups controlling a sig- nificant portion of the cocaine smuggling from the democratisation Latin America to Western Europe. Although those groups are dominantly operating outside process is the of the Western Balkans, their operations bring substantial reputational risks for the Western introduction of Balkans countries, causing a slowdown of the EU integration process. decentralisation, The region is known for being a mon- ey-laundering destination as well. The efforts as an antipode to are made to align the legislation with the EU law, but implementation and enforcement the former highly are significantly lagging as in many other ar- eas. Corruption-torn institutions are enabling centralised socialist these practices primarily through the con- struction sector and public contracting. Weak states. and politically controlled judiciary and police in all countries are coping with petty corrup- tion while the grand corrupting remains most- ly intact. The region is also not immune to rad- icalisation. The existence of former foreign the way to the EU show that a new approach fighters presents a continuous challenge for to integration (putting bilateral issues aside) national intelligence and counterintelligence is more than needed. In the near future, WB agencies. What is also becoming problematic countries, as well as the EU Member States will in relation to the issue are the prospects of re- need to change the approach to dealing with integration of radicalised individuals. historical interpretation and nationalism in The prolonged tension in relation to the the region. Exacerbated nationalism can often recognition of Kosovo, ethnic-related issues result in right-wing mobilisation and radicali- in North Macedonia, Bosnia and Herzego- sation leading to violent extremism. This can vina and Montenegro can easily uphold such be expected more in multiethnic societies such claims. However, it is also important to under- as North Macedonia, Bosnia and Herzegovina stand that most of these developments should and Kosovo. be situated in the broader trends. For instance, Widespread corruption and organised right-wing radicalisation is enhanced by inter- crime are common features when discussing national developments such as the electoral the security situation of the region. Coun- successes of radical-right parties across the tries have a proven track record of failures in world, much like the terrorist organisations combating organised crime, flourishing since that claim to act on religious precepts. Radi- the post-Yugoslav territorial conflicts. The re- cal-right terrorism is unlikely to develop over gion is at the crossroad for heroin trafficking the next ten years, although the number of rad- and trafficking in human beings from the Mid- ical-right political organisations (parties and dle East and North Africa. As the demand for movements) will continue to rise in the next narcotics grows in Western Europe and the decade. migration pressure from the East and South increases, it might be expected that traffick- ing will be on the rise in the WB region. Such trends, paired with endemic corruption in the region, might further destabilise WB countries and undermine sustainable development.

11 Western Balkans 2030 Trends

Energy, Environment & Economy

ajor challenges in the energy ruptions occurring generally every other year and environment sectors of the (2012, 2014, 2017, 2019, and most likely 2020). Western Balkans are mirroring Even though Montenegro and Kosovo have larger trends, trajectories and long been the fastest-growing economies, by Mdevelopments in Europe. Critical short- 2019 Serbia took over. Obviously, GDP is not comings can be found in areas such as air the only (perhaps not even a sufficient) meas- quality and waste management. The re- ure to portray the complexities of economic gion is still to catch up with regard to its development in the WB over the last decade. infrastructure, energy efficiency and cli- In addition, as scholars have pointed out, the mate targets, while investments should level of the national savings in the region is not comply with the EU's ambitious policies sufficient to finance transformative changes. and positions. The COVID-19 pandemic Thus, external sources, such as foreign direct opened up some latent issues in the region investment and official development assis- and points to a need for decisive action on tance, are perceived as prerequisites for eco- the economic recovery and the investment nomic development, likely to define the future agenda. pathways with regard to the energy transition. The countries of the WB region account Investments in the domains of ener- for approximately one-quarter of the total con- gy and environment have been dependent on sumption in the energy community. In 2020, broader economic trends. The growth of gross the coal still remains fundamental to the ener- domestic product (GDP), generally higher than gy sector, accounting 70 per cent of electricity that of the EU average, is interrupted by dis- produced in the region. The WB’s significant

12 Electricity produced from renewable energy sources, 2013 and 2018 (source: Eurostat)

potential for an energy transition towards low gy imports, as compared to the EU countries. carbon economies has remained somewhat The solar and wind potentials of the region are underdeveloped in light of both the econom- vastly underdeveloped (with Serbia and Mon- ic situation and the lack of commitment of the tenegro being the regional exceptions for the relevant stakeholders. While resource availa- latter ), a trend which is going to be difficult bility in the individual countries of the region to change given the investments needed in the is significant, the renewable energy mix almost pandemic-defined era. The efforts of the EU in exclusively consists of biomass and hydropow- the domain of promoting the circular econo- er. Albania is the regional leader in produc- my, partially through sustainable food systems, ing energy from renewable energy sources, could be one (among many ways) in which the with more than 90 per cent of its gross energy WB countries will attempt to address these in- consumption produced by hydropower. Com- terconnected and salient issues. pared with the EU, the contribution of renew- Issues concerning the environment are able sources to electricity consumption was arguably one of today’s most salient challenges. higher in 2018 in two countries of the region Consequently, the role of the EU in developing (Albania and Montenegro). green policies in the WB is gradually increas- However, the prolonged use of thermo- ing, as their implementation is often a financial electric plants is a question that remains to be burden. The WB, much like the surrounding addressed – possibly also in the forthcoming regions, is heavily reliant on fossil fuels, a trend decade. Likewise, the situation is rather dis- which will undoubtedly continue until 2030. tressing in terms of energy poverty and ener- As a consequence, the energy transition gy efficiency. The outdated rail network, with is likely to become a serious political issue in more than 30 per cent of the Trans-European most of the WB countries. While this is gener- Transport Core Network and approximately ally recognised as a salient issue – something 50 per cent of the Comprehensive Networks which all political actors agree with, this may not electrified, signals the need for major tran- change due to the importance of the topic sitions in this domain, outlined also in the EU paired with the costs such a transition induc- Green Agenda for the Western Balkans (envis- es. This bears major implications for environ- aged by the European Green Deal). mental politics in the region since the political In a similar vein, air pollution report- parties and movements willing to implement ing in the WB countries has been perceived as ‘green’ policies will face serious competition unsatisfactory by the European Commission. from populist parties opposing such policies However, a positive finding is that the WB in the name of ‘the people’ and because of the countries are generally less dependent on ener- cost such a transition entails.

13 Western Balkans 2030 Trends

The issue of energy poverty paired with the insufficient or malfunctioning infra- The issue of energy structure are acknowledged as not only en- vironmental but also as major health issues. poverty paired with Likewise, the electricity consumption per household continues to be almost 50 per cent the insufficient greater than the EU average: a trend which has to be seriously addressed in the upcoming dec- or malfunctioning ade. What is also missing is greater region- infrastructure are al coherence with regard to environmental policies and climate targets – amid obvious acknowledged as not contextual differences, this may also increase the international credibility of the WB coun- only environmental tries in environmental politics. Support for an ecological modernisation logic, epitomised by but also as major carbon taxes and an unfettered belief in tech- nological solutions to environmental changes health issues. (signalling a more profound understanding of the problems behind all human influence on the environment) seems to be missing among stakeholders and decision-makers. As waste management is considered as an important infrastructural issue, it is likely and potentially challenging improvement is that projects related to this will also gain trac- the electoral system, which once again shows tion. This is all the more important in coun- how technology devoid of democratic ac- tries such as Montenegro, which is heavily countability is not going to bring about sub- dependent on tourism and brands itself as an stantial change. ecological destination and state. While a push As a developing region, the countries for privatisation may have an impact on the belonging to it do not have the luxury to refuse speed of these changes, the upcoming decade or avoid foreign actors' investments, includ- has the potential to introduce some important ing from those that the European Union, as a processes and improvements with respect to major trading partner for the region, is uneasy this. with, i.e. Russia, China and Turkey. Apart from All the above issues are, in their own economic interests, some of the WB countries ways, signalling also the need for greater in- also seek political support from these coun- vestments in technology as well as the overall tries to uphold their interests within the inter- economy of the WB countries. These are like- national fora. Russia is also an essential provid- ly to happen in the upcoming years, although er of weapons and military equipment in some the scale of investments is probably going to be region's countries (i.e. Serbia). These multiple impacted by the current pandemic. The reduc- ties preclude the WB countries from aligning ing gap in digital literacy and the wave of digi- with the EU's policies and positions, especially talisation induced by COVID-19 will foster re- its foreign and security policy. gional integration and cooperation in this field. The COVID-19 pandemic might be the However, there are considerable obstacles pre- new trigger working actually in the direction venting this from happening at this moment: of finding a more tangible EU's strategic inter- restricted access to e-services is becoming an est in an economic sense. The pandemic re- issue that does not seem easily solved in indi- vealed that the Union is dependent on its long vidual countries. Digitalisation is also a very and hardly accessible supply chains running important challenge for the school system, as through China, India, and elsewhere in Asia. the pandemic has shown. Another significant The COVID-19 crisis brought the realisation

14 GDP annual growth (%), 2010-2019 (source: World Bank)

that the supply chains should be diversified The regional common market is seen as a ‘step- and moved to closer and more reliable regions; ping stone’ for the region towards the EU's Sin- the WB might be just that region, contributing gle Market. in the long run to the EU's strategic autonomy. Although these new initiatives seem This understanding might prompt the promising, at first sight, they carry some de- EU to invest more in the region and focus more ficiencies and threats. First, they set a very on transforming and boosting the region's ambitious economic recovery and investment economy in the next decade alongside working agenda, which is not followed by a substan- on its rule of law reforms. Some steps in this tial amount of money. The proposed funding regard have already been taken. First, the EU's is not considerably higher than the one avail- “Economic and Investment Plan for the West- able through the previous programmes, and ern Balkans”, proposed by the Commission in the effectiveness is still to be proven. Second, October 2020, affirms exactly the region’s sup- the shift towards regional economic integra- port to the EU's strategic autonomy rationale tion imposes the question of whether the EU as an inspiration for the proposal. The plan is moving its focus away from the enlargement relies on new funding for the next seven-year narrative and whether the regional integration period. Estimated at 9 billion euros, the fund- should be an alternative to the EU member- ing should be capable of supporting economic ship. convergence with the EU primarily through These concerns seem particularly rele- investments and support for competitiveness, vant if observed in conjunction with the new inclusive growth and sustainable connectivity enlargement methodology proposed by France as well as the twin green and digital transitions. and developed by the Commission in 2020. The plan also envisages a new Guarantee Facil- The new methodology's major innovation ity for the Western Balkans with the ambition was to introduce the clustering of negotiating of attracting up to 20 billion euros of invest- chapters. This means that the accession ne- ments in the region in the next decade. gotiations will not proceed through the indi- Second, the new initiative agreed in vidual chapters anymore but rather through November 2020 within the Berlin process the groups of similar chapters that would be framework aims to create a regional common opened for negotiations one after another. market aligned with the EU acquis commu- nautaire, which should also attract investment.

15 Western Balkans 2030 Trends

Demography & Society

ow fertility rates and emigration are broken down into two important categories: responsible for the region’s con- a low fertility rate and substantial emigration. tinued demographic decline. The The low fertility rate is a problem which ex- democratic transition and consol- pands beyond the WB, but in the region, the Lidation in the last three decades has not figures are critical. For example, in 2019, Bos- lowered unemployment rates and, instead, nia and Herzegovina (BiH) had a fertility rate widened the social equality gap, which of just 1.26. On the other hand, emigration cross-cuts the ethnic, religious and minor- rates are also staggering. In the 2010s, BiH has ity lines in the region. Even so, the coun- lost 20 per cent of its population, Albania 18 tries of the Western Balkans are pushing per cent, while North Macedonia around 12 policies which target youth unemployment per cent. Furthermore, an even greater prob- and gender empowerment, although a sub- lem is the lack of precise and reliable data. stantial step forward is yet to be made. The Sometimes countries tend to hide or tweak history of violence is still present in the the official numbers, while in other cases, like public sphere – as promoted by certain so- North Macedonia, the country simply has not cio-political actors – even when cross-bor- conducted a census for nearly two decades. In der reconciliatory initiatives are aiming to terms of the European integration of the re- close societal gaps. gion, a positive impetus might stall the decline of the fertility rate, but it will also likely trigger Demographic decline is one of the most further emigration from the region. burning policy issues in the Western Balkans. Emigration means also a brain-drain, Recent trends regarding demography can be depriving societies of their most educated and

16 skilled citizens. This is another policy issue to further disillusionment and apathy of young with significant implications for fields such as people in the region that are expected to be the healthcare, engineering and education, which engine of the region’s faster integration in the requires a coordinated approach in order to be EU. In this regard, continuous worrying policy halted. Since there is no greater capital than trends in this field can fundamentally hamper human capital, the impoverished countries the EU integration process of the WB coun- of the WB have become weaker and poorer tries. while providing skilled human capital to more In addition to emigration and unem- developed countries at no cost. According to ployment, there is also a multi-faceted urban- a recent study produced by the World Eco- isation trend that needs to be considered. On nomic Forum, on the scale from 1 to 7 (where the one hand, in weak economies, job opportu- 1 is when all talented people leave the country, nities and perspectives are available in the big- while 7 is when all talented people remain in ger urban centres but, on the other hand, villag- the country), BiH ranked 1.76, North Mace- es become more and more depopulated, which donia 2.13, and Serbia 2.31. This depicts the diminishes opportunities for agriculture, rural urgency and the need for a structured policy development and alternative tourism. It is fair approach in order to put brain-drain under to expect that this trend will remain steady in control. Regarding the demographic decline, the following decade unless WB states intro- the WB’s integration in the EU cannot do duce some dramatic interventions in order to much to keep the best people in the region, break this trend. In regard to the prospect of although it might provide better opportunities the WB joining the EU, governments need to for at least some of them. draw on positive practices from Central and The relatively high unemployment rate Eastern Europe, especially practices in Poland in the WB countries is just one of the major of dealing with the development of rural areas push factors that contribute to worrying levels and sustainable economic growth. of demographic decline and the brain-drain. Stemming from the protracted eco- There is a clear correlation between these is- nomic, democratic and social transition of the sues. The problem of unemployment is even recent decades, social inequality in the WB more exacerbated when young people are at countries is a key side effect that requires thor- stake. Data coming from the Balkan Barome- ough consideration when it pertains to soci- ter conducted in 2019 shows that a significant ety. Generations which are currently in their portion of the working force between 15 and late thirties witnessed how a vast majority of 24 in the WB is unemployed. For example, the their peers rapidly drowned in poverty, while unemployment figure stands at more than 55 an insignificant minority became wealthy per cent in Kosovo, almost 40 per cent in BiH, overnight. The GINI inequality-coefficient is and slightly below 40 per cent in North Mac- high for the WB countries and social inequal- edonia for this age category. This contributes ity is to be considered as an impediment for

Emigration rates, 1980, 1990, 2000, 2010 (source: Institute for Employment Research)

17 Western Balkans 2030 Trends

accession to the EU. women will most likely be heavily engaged in While social inequality has already been the process, both within and outside the nego- underlined as one of the gravest policy prior- tiation structures, which will additionally con- ities for all six WB countries, this does not tribute toward greater empowerment. Some mean that the countries are ready to step in positive examples can be already drawn from and deal profoundly with this issue. The trend- the accession negotiations of Serbia and Mon- ing is not very promising, but certain countries tenegro. try to adopt and implement policies which A more general societal issue is the di- could shrink the inequality gap. Working with visive public discourse since the dissolution of youth, especially in terms of tackling youth un- the Socialist Federal Republic of Yugoslavia. employment is one of the main tools in order One will rarely find politicians that are pre- to counter rising social inequalities. pared to discuss openly, with empathy and One element of social inequality links based on historical facts among each other with the marginalisation of social, ethnic and in the region. In fact, politicians often have religious groups, a well-known characteristic made political careers because they previously of the Western Balkans region. Marginalisa- climbed the military ranks. Kosovo and North tion mainly stems from the turbulent and vio- Macedonia are vivid examples where paramil- lent recent past, which was marked by several itary commanders became prominent political inter-ethnic and inter-confessional conflicts. leaders by continuously reviving the memory Yet, in many aspects, substantial efforts have of the war in Kosovo and conflict in North been made both by governments and non-gov- Macedonia. These examples also remind us ernmental actors as well. For example, policies that the societies of the WB are far from pre- favouring affirmative action towards smaller pared to reach a consensus on these issues. communities, as well as linguistic rights going Each of the parties participating in the con- beyond the internationally prescribed and rec- flicts had, has and will continue to have its own ognised norms recently adopted in North Mac- version of truth regarding the events. In this edonia, show that a favourable eco-system for regard, this trend will continue to shape the re- marginalised groups can be developed. Many gion’s future, at least for a decade or more, and protective mechanisms also exist in Bosnia and has the potential to undermine economic and Herzegovina and Kosovo, but their implemen- cultural cooperation, experience sharing and tation should inevitably improve on the path similar positive impulses. to European integration. The region needs to, However, a more positive trend in the and probably will do much more in terms of region concerns cross-border reconciliation protection of marginalised groups, primarily initiatives, led by civil society, which tend to because this is clearly stipulated in the funda- act as counter-narratives to the revamping mentals of the EU acquis communautaire and of war-related discourses. With regard to the therefore not up for negotiation. WB, an initiative called the Regional Commis- Additionally, female empowerment and sion for the Establishment of the Facts about gender equality should be policy priorities of the War Crimes and other Violations of Hu- WB governments in the next several years, tak- man Rights Committed in the Territory of ing into consideration that women are largely the Former Yugoslavia (RECOM) has gained underrepresented on many, if not most deci- prominence. It is rather positive that such a sion-making levels. Achievements in terms of regional initiative can be brought forward by female representation in politics vary across non-state actors, which adds elements of au- countries, but, in general, all six WB countries thenticity, activism and sincerity. In terms of need to do much more in terms of empow- the Europeanisation of the WB, the RECOM erment, equality and engagement of women. cross-border initiative strengthens tolerance, Gender-responsive budgeting is a topic that acceptance and memory, European values has attracted greater prominence in some which need to and probably will be strength- countries, for example, in North Macedonia. ened in the future. With regard to the region’s EU integration,

18 Digital & Information

he region is characterised by low cy between generations. To some degree, the digital literacy rates. With the COV- socio-economic status of families also creates ID-19 pandemic acting as a facili- gaps in access to the digital and online world. tator, this shows the urgent need Projects to provide schools and families in Tfor substantial work in this area. Reforms rural areas and in marginalised communities in the digital sphere should not only re- with the necessary hardware and software duce the divides, but also work in favor of have been either very limited in their reach or, combating corruption, improving the rule even worse, vulnerable from the point of view of law, facilitating online commerce and of corruptive deals. raising awareness over the multilayered The COVID-19 pandemic stresses the challenges of disinformation and social necessity for the Western Balkans to narrow radicalisation. the digital divide. The process of digitising services and providing online platforms for an The Western Balkans region and espe- array of administrative tasks came to the fore- cially its considerable youthful population have front of the public attention once citizens were embraced the technological and digital up- asked to stay home. In this regard, there is a heaval of the last decade while still struggling new opportunity for countries to invest in ef- with a digital divide comprising issues of ac- ficient and transparent platforms that can pro- cess, quality of infrastructure and development vide documents, fulfil request procedures and of necessary skills to transform opportunities other pertinent services of central and local into concrete benefits. administrations. Because of the COVID-19 pandemic, This opportunity has the potential to online education, remote work and e-com- reduce corruption and improve the rule of law merce have been brought to the forefront of in the long run since it reduces contact with daily life and governance but access to these is officials therefore incentives on both sides and also likely to have an impact on future gener- eliminates futile administrative costs. Howev- ations of citizens. The digital divide in the re- er, this requires investments in high quality, gion is not only in comparison to the European user friendly, transparent platforms as well as Union but has also many internal variations. political will and decisive actions with active There is a contrast of Internet access between civic participation. urban and rural areas and a skills discrepan- Online commerce in our region did not increase in levels seen in Western Europe and

19 Western Balkans 2030 Trends

the United States, where sites such as Amazon ments but also businesses will need to agree on saw their traffic explode. However, at a smaller a plan to keep valuable expertise at home, be- and more local scale, online trade saw a sig- yond offering a better salary. People with digi- nificant development with small and medium tal skills manage to get higher-paying jobs but businesses exploring whatever possibility that still prefer to emigrate for the sake of having the online world offered in order to overcome better living standards and access to adequate their risk of bankruptcy. This trend can be education and healthcare for their families. strengthened by assisting businesses to be dig- Next, the pandemic has also exposed the ital-savvy in the context of assistance given to vulnerabilities of the countries in the region to SMEs for the pandemic situation and the re- disinformation campaigns. Access to reliable sults can be beneficial in the long term. information is crucial but disinformation and The raising of media and digital liter- its related hybrid threats are slowly but defi- acy overall is an urgent necessity in the WB nitely becoming a security issue, recognised region, which has no tradition of promoting even by the intelligence services. Therefore, critical thinking. The past legacy of commu- international cooperation in the framework of nist regimes has created a dramatic dichotomy security alliances will be necessary to be able of either refusing information as propaganda to face its full force in the future. During 2020, or admitting it without any questions. So far the pandemic has created an ideal ecosystem there are attempts by civil society, media de- for disinformation, conspiracy theories and velopment regional organisations to tackle this fake news to thrive. Disinformation campaigns issue, however, a more systemic intervention were oriented towards dismantling trust in in- in school curricula is necessary since the disin- stitutions, both medical and security ones. As formation wars are becoming more prominent a result of these campaigns, there has been a and detrimental at a global scale. reduction in the number of people following This lack of access or limited IT skills is public health guidelines and even some small very important when we consider education, scale protests against the government issued both in the conditions of the pandemic, when mandatory rules. its need was more eminent, but also in the long Even prior to the pandemic there have term when e-learning is becoming a crucial been signs that certain countries are becom- part of lifelong formal and informal education. ing hubs of engagement for the disinformation People that have limited or no opportunities to industry. An example was the thriving of bots take advantage of this trend will feel disenfran- and trolls in North Macedonia, which engaged chised, leading to more discontent in the social in the US presidential campaign in 2016 and sphere. in the dynamic related to the name change The importance of access and skills referendum (this was widely denounced in pertinent to the digital world goes beyond the several media). North Macedonia serves as necessities dictated by the pandemic. The real an example of hybrid threats where ‘computa- potential of employability of people with good tion propaganda’ has done plenty of damage to degrees and skills in these fields makes the is- the objective of Euro-Atlantic integration and sue a Gordian knot: on the one side it assists risked to upset the country’s overall stability as the economic development of the region and well. on the other speeds up youth migration out- Going forward and considering the po- wards. Perhaps the Western Balkans can trans- tential introduction of digital systems in po- form themselves into something like the Indian litical processes such as electronic voting and or, even closer, the Belarussian example, pro- counting, security concerns come to the fore- viding services in the digital field at low cost. front. Proponents of the introduction of digital On the other hand, the high demand for these systems believe it will eliminate manipulations skills in the EU makes young people invest in and unfair incumbent advantages whereas op- acquiring this expertise and then emigrate to ponents are worried about the weak points this Germany and the other EU Member States. might provide for outside actors to meddle. Moving forward, the region’s govern- Social harmony within societies is an-

20 Proportion of households having access to the Internet, 2014 and 2019 (source: Eurostat)

other field where disinformation and fake benefit to all the countries in the region. news and the use of online tools for recruit- Finally, digital infrastructure and de- ment are very damaging: radicalisation and vi- velopment are not beyond geostrategic rival- olent extremism have been on the rise in the ries when it comes to the region. The debate region and have been fuelled by the world of surrounding the 5G technology and who gets fake news, conspiracy theories and online hate to develop it in certain countries in the region speech propaganda. was very prominent during this year. Giving At the political level, the Western Bal- access to China through companies such as kans have agreed in cooperation with the Eu- Huawei was a matter of contention between ropean Union on a joint digital agenda and countries with different positions. The deterio- plans to improve broadband infrastructure rating relations between the US and China has all across the region over the medium term. been the key factor in this controversial item in In 2002, the EU earmarked significant funds the political and public debate. for what it identifies as a digital infrastructure On one side countries such as Albania, flagship project. This entails expanding and Serbia and Kosovo participate in the initiative improving broadband access, increasing safety Clean Network, made up by countries which and positive impact in education, development have chosen to include in their 5G infrastruc- and situation of minorities. ture selected vendors based on the EU 5G tool- At the Sofia Summit of the Berlin Pro- box. cess, this year, the region’s leaders discussed However, opportunities for collabora- and adopted the plans for a Common Region- tion with China have not been excluded en- al Market, whose objective is also to create a tirely. In Serbia, Huawei collaborates with the regional digital area and to integrate the WB municipality of Belgrade to install 1000 CCTV region into the European digital market. cameras and increase safety in the city, a move The region sees real potential in using that has been widely commented on as a po- the opportunities offered by technology and tential risk. data. For this, it is important to make use not only of the EU funds but first and foremost of the EU’s expertise and experience. In this field, the best practices and lessons learned from the Visegrad Group countries can be of specific

21 Western Balkans 2030 Trends

EU & the Western Balkans

he future trends in the relations be- will endure in the stabilitocracy type of relation- tween the EU and the Western Bal- ship with the EU. This approach prescribes future kans will depend on the attitudes of problems since the membership of some and Tboth sides (see The Grid). not of others can lead to repetition of the Greek- North Macedonian dead end, making the EU en- The EU as a trigger largement a prisoner of regional animosities. Regional enlargement with a sound EU This scenario carries the most significant commitment would mean a substantial redefini- geostrategic risks for the EU’s interests. It would tion of the current country-by-country model. leave the laggards open to the unwanted influ- Although this would be difficult due to the dif- ence of other global actors. ferentiated relations of countries with the EU, Remaining in an endless enlargement such an approach can be triggered through the process for everybody is a possible outcome of achievement of a joint position among the EU the individual enlargement trend because it has Member States concerning the importance of the potential to turn into a repetition of the EU’s enlargement and the separation of the economic experience with Turkey. The endless addition and stabilisation demands. of criteria, resulting from the EU’s internal dis- This development could be triggered by agreements, will lead to a further consolidation the EU’s perception of a ‘malignant’ influence of of the stabilitocracy. National political elites will other global actors in the WB region. It would use the EU enlargement both as a source of eco- take a unanimous political decision by the Mem- nomic support and as a threat against which they ber States, which seems to be an impossible mis- stand. The EU, led by short term priorities, will sion. In economic terms, the incorporation of postpone the perspective of enlargement beyond some 18 million inhabitants is not an obstacle, the point of no return. The social disappointment but the tricky part is that the region is still eco- will be contrasted by active government demands nomically weak, and that EU membership would for financial support, which will remain the sole mean six more voices in the Council. tangible proof of EU-WB cooperation. The rela- Even if this scenario would be realistic, tionship with the EU will silently be supplanted this would be a milder form of a differentiated by the growing presence of other regional players, membership because it would probably involve thus weakening the EU’s leverage over the WB. considerable and maybe lengthy transition peri- Differentiated integration without ods for different WB countries in terms of their membership or an attempt to reduce relations participation in various EU policies. to the Eastern Partnership formula is not a realis- Individual enlargement with a sound tic option for enlargement. In such a scenario, the EU commitment seems to be the most efficient countries from the region are offered compre- one, but caries many traps. A piecemeal enlarge- hensive free trade agreements and access to EU ment becomes an easy victim of regional tensions programmes, based on bilateral agreements. In- because states compete rather than cooperate. ternal factors would largely determine the nature An ambiguous membership perspective would of the relationship with the EU, but the disap- be demotivating, and the national political elites pearance of the membership perspective would

22 substantially weaken EU conditionality and lead expectations to more down to earth and local to a withdrawal from the region. The negative conflicts. Such a steered management of conflict demographic processes would continue, and the would allow national political elites to postpone countries might abandon regional rapproche- eternally the implementation of EU policies. ment since there will be no longer a perspective Last but not least, there is a growing de- of a shared future. mand for positive social radicalisation that If membership would be no option, rela- will return the sense of ownership of the political tions with the EU could be also regulated through and economic reality in the countries from the bilateral agreements or a multilateral trade region. The EU should concentrate its efforts on agreement. However, such a model will harm the the further promotion of grass-root civil activi- WB states, due to their economic underdevel- ties and local ownership. While circumventing opment, which will determine their continuous central stabilitocratic authorities, the EU should trade deficits with the EU. There certainly exists encourage interstate reconciliation by reinvigor- the threat of disenchantment or disappointment ating self-government initiatives. among the region’s populations. Depending on the incentives given in the agreements, the ar- Conclusions rangement could perhaps work in the direction The EU needs a clear vision of the en- of boosting regional development and stability. largement perspective for the Western Balkans. Additionally, the WB countries would have to Despite a new methodology and tangible finan- implement EU law without the possibility of hav- cial commitments, the EU lacks a sound and ing a voice in the legislative process. consistently pursued policy towards the region. Entangled between its internal problems, en- Triggers in the Western Balkans largement fatigue and interactions with nomi- Despite the intensive relations over the nally pro-EU political elites and dependent on last decade, the WB continue to circulate in the the goodwill of its all 27 member states, the EU EU’s orbit. However, keeping the process going is unable and unwilling to make a decisive step on has become a goal in itself. The lengthy and towards the region. bumpy road to the EU is now a constant part of The regional weaknesses are well known the political landscape in the WB states. Despite to politicians, diplomats and experts. A frank de- its central role, it is overshadowed by internal re- bate is necessary to establish a more tangible and alities. From the vast variety of potential triggers most importantly reachable membership per- identified in this report, three seem to be of par- spective that will reinvigorate local communities ticular importance. and strengthen pro-EU activists. The perspective Increasing inequality has far-reaching of another decade of negotiations and adoption economic, social and political implications. In a of EU requirements will lead in the best case to former socialist environment growing inequality the maintaining of the current stabilitocratic sta- triggers bitter disillusionment and search for in- tus quo and the worst case will push the countries dividual solutions. The pursuit of better perspec- into the abyss of further autocratic consolidation tives in a more predictable environment leads with all its consequences for the countries, the to adjustment to dominant political practices region and the EU. or demographic decline. The persistent popular There is a demand for internal regional protests across the region are voices of discontent empowerment beyond the executive-dominant with the existing political order. Their potential relations between the EU and the Western Bal- for change, although largely disregarded by the kans. A civic awakening paired with decentral- governments, should not be underestimated. On isation has the potential to defuse regional ten- the other hand, growing inequality fuels tensions sions, weaken external players narratives and and animosities that can easily be channelled into undermine captured states. Importantly, it can ethnic or religious conflicts. also provide some lessons for the EU's own in- Social tensions can also be easily instru- ternal clashes and the stumbles on the pathway mentalised as a source of substitutive narratives to democratisation as part of the European inte- that will divert public attention from the EU gration process.

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