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UAE presence in Balkans; a post-oil era?

Etihad Airways and Air Serbia airlines | exyuaviation

The presence of so-called ‘foreign actors’ in the Western Balkans – meaning the involvement of states other than European Union members – is a topic that has been attracting growing interest of late. Media are keenly covering the Russian, Chinese and Turkish presence in the region, and no policy consultation goes by without this issue being prominently tackled. This interest raises two sets of questions. One is substantial: what are these countries really up to? Is their interest commercial or geopolitical? Are there any security implications? And the second one is reflexive: why are we so spasmodically interested in this matter?

In recent years, the United Arab Emirates has been increasingly active as an investment partner in the Western Balkans.

According to a report published recently, financial involvement of the UAE in South East Europe is not a new phenomenon, but while previous disbursements to Kosovo and Bosnia in the 1990s and early 2000s were mainly intended as post-war foreign aid, the interest that has developed over the last decade – especially in Montenegro, in Serbia and more recently in Bosnia – is indisputably related to business investments.

UAE officials stressed that they hoped for Montenegro to be their “gateway to the Balkans”: a region they are interested in setting their foot on via niche industries before it joins the much larger EU market. The geopolitical implications are not hidden (it’s good to make “friends around the globe”), but what they highlight, most of all, is a specific investment logic: the UAE’s end-game is markedly long-term, preparing the country for a post-oil economy a few decades down the line.

The involvement in Serbia came slightly later, but it ended up being even more sizeable. In 2013, Deputy Prime Minister Aleksandar Vučić (later to become Prime Minister and then President) announced several high-profile business deals and a $1bn state loan, which were followed by investments in four main industries: agriculture, construction, air transport, and armaments production. The overhaul of Serbia-UAE relations has indeed been quite stunning: from being vocal critics of Serbia’s actions during the wars of the 1990s, Emirati leaders are today viewed as having excellent relations with their Serbian counterparts. A largely ideological, value-based approach has been left behind, making space for more pragmatic relations.

In neither country have UAE investments passed without controversy. What characterises these deals is a marked lack of transparency, frequently accompanied by a specialist granting great concessions to the investor, and a decision-making process that occurs almost exclusively from the top echelons of both sides.

The UAE’s “sultanism” – a personalized power blurring the line between the public and the private, in which state resources are viewed as a personal property of the ruler and his associates – has encountered fertile ground in a region largely characterized by a backsliding towards (or a stagnation of) authoritarianism.