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November 6, 2009 |  9 comments |  Print | E-Mail Your Opinion  

The Big Bear's Tight Embrace

Sonja Davidovic: President Medvedev’s generous offers during his state visit to Serbia indicate a strengthening of bilateral relations between Russia and Serbia. This generosity should not blind Serbia on its path towards EU membership.


Russia's package of presents to the Serbian people include a loan worth one billion dollars including the financing of important highway and railroad projects, investments in the national oil and gas industry, within Serbia's participation in the South Stream gas project as well as several agreements in the domain of parliamentarian, police, disaster relief and cultural cooperation.

The fact that Medvedev is the first Russian president to hold a speech in the Serbian Parliament, with a clear message directed to Washington and Brussels, further underscores the significance of this visit. Seemingly in response to President Obama's reset policy towards Russia, Medvedev expressed his country's readiness to harmonize relations with the US and seek peaceful and constructive cooperation with NATO. At the same time, President Medvedev reiterated the need to modernize the existing European security structure with the strategic partnership between the EU and Russia as its founding pillar.

The establishment of a disaster relief center in South Serbia will give Russia an important regional logistical base for operations ranging from humanitarian relief to anti-terrorist interventions. It has not been revealed what type of equipment and weapons will be transferred to that base. Out of the countries that participate in the South Stream project, Serbia is the first to enter a joint venture agreement with Gazprom for the construction of underground gas storage. By making Serbia a pivotal energy player for the transportation and distribution of natural gas, the country would become another dependant and loyal friend who could help assert Russian influence within the EU, particularly with regard to the European security concept. In this context, it does not come as a surprise that Russia supports Serbia's EU membership.

For Serbia, the "no-strings-attached" Russian loan might appear more attractive than the conditionality of IMF, World Bank or EU loans. Yet, in the long-term, it impedes the implementation of sound fiscal and monetary policies and encourages corruption and nepotism. The estimated half a billion Euros in annual transit fees from South Stream are certainly most welcome in the Serbian cash-strapped state budget.

But Gazprom's unchallenged position in the Serbian gas and oil industry increases Serbia's vulnerability towards Russia and, as the Serbian newspaper Politika reported shortly after Medvedev's visit, already begins translating into higher gas prices for Serbian consumers. Serbia appreciates Russia's unwavering support with regard to Kosovo. Russia's recognition of South Ossetia and Abkhazia, however, undermined Serbia's diplomatic battle for Kosovo. No surprise, Medvedev suggested that there is a difference between the conflicts on the Balkans and the Caucasus, which lies in sharp contrast to statements made by Russian state officials and scholars after the recognition of Kosovo.

Serbia also runs the risk of misinterpreting the message between the lines. Public statements that contain highly personalized and emotional language such as "natural partnership", "brothers" or "one people" can create overly optimistic expectations and unsubstantiated hopes. Thus, these words should only be used if they have actual grounding in reality.

Serbia should keep a right balance in its international relations. An open-door policy should include good relations with Russia, but not at the expense of Serbia's vital national interests such as the democratic reform process and the successful integration into the European and the Euro-Atlantic security structure.

Serbia's dance with the bear could actually be a signal to the EU to accelerate the country's accession process. Therefore, the EU needs to make unequivocally clear that Serbia, together with the other former Yugoslav republics, belongs to the European family and a common European identity. The approval of visa-free travels to the EU Schengen area and a one-million Euro credit line for infrastructure projects in the next five years are steps in the right direction. NATO should encourage closer cooperation between Serbia and other Partnership for Peace member countries. At the same time, the EU should facilitate cultural, scientific and especially student and youth exchange initiatives so that the 70 percent of Serbian citizens, who have never left the country, gain the opportunity to embrace the European idea and Western values. Ultimately, it is only the Serbian people who can ensure that "Serbia will tie its small boat to the great European ship" as suggested by the early 20th century Serbian Foreign Minister Milovan Milovanovic.

Sonja Davidovic is a graduate from Georgetown University's School of Foreign Service. She is currently working as an Independent Consultant for Castalia - Strategic Advisors in Washington, DC.

 

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Member deleted

November 6, 2009

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One would tend to disagree with Sonja over a few assumptions. The idea of an antagonism between the EU and Russia on the lines of some kind of a mutually exclusive relationship is a fallacy.
The strengthening of relations between Serbia and Russia can not be and should not be interpreted as a natural disadvantage for Serbia for its relations with the EU. Nor does Russia's developing closer relations with its neighbours a threat for the EU. The very idea of such an antagonistical imagination goes against the very grains of the EU and the various exercises that the EU is engaged in globally - of fostering regional co-operations to encourage a growth like that of the EU. Secondly, Russia-EU co-operation is vital for both their strategic security and stability in the region. The EU is quite keen to expand its zone of peace and that does not necessarily mean an acceleration in its expansion or the expansion of the zone of peace as meaning an expansion of the EU. The EU would be happy to see similar regional co-operations in place in various parts of the world - of what it itself symbolises: Institutional and Structural integration and inter-dependence that peace easier to envisage than conflict.
The idea of looking at EU-Russia relations through the cold war logic is self-defeating and not pragmatic - though one would agree with concerns that a lop-sided dependence does. That is precisely where the EU would be keen to offer its expertise as well as present itself as model for regional co-operations that do not mean a multi-polar world in the 'realist' sense.
Russia's endeavours to move towards achieving a societal growth that is compatible and competitive with EU standards (if not the Nordic standards) should not be discouraged or misunderstood even as Russia should not be mistaken to be the new saint. It merely is moving away from such conceptual traps and looking at the issues more pragmatically in a changing and evolving world.
It would be a fallacy to envision the expansion of the EU on such logic. The EU is not a competitive power in the realist sense and presents a promise of the feasibility of institutional-structural arrangements between states that can foster both peace and development. It would be a fallacy to look at the EU as a state in terms of a unit within certain discourses in International Relations that so bind or rather blind certain views.
It would be more prudent to look at the possible development of similar co-operation between the states of eastern europe or even encourage such developments that can look at institutional-structural arrangements for co-operation on the lines of the EU than looking at the EU as the new el-dorado. It is not.
Tags: | Russia | EU | Serbia | EU Expansion |
 
Goran  Radakovic

November 6, 2009

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"Yet, in the long-term, it impedes the implementation of sound fiscal and monetary policies and encourages corruption and nepotism"

How? The loan has to be paid off.
 
Jakob  Schirmer

November 6, 2009

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Thanks for this perspective Sonja. I agree with Amarjyoti that Serbia is not at a parting of its ways - either EU or Russia - but should find its own way respecting its own and beneficial relations to the EU as well as to Russia.
 
Sonja  Davidovic

November 10, 2009

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Ladies and gentlemen,

Thanks for your comments.

I suppose we can all agree that the basic characteristic of just any loan is that it needs to be repaid. The more interesting questions refer to the terms of a loan such as the interest rate, the tenor or the grace period. Until this date, the Serbian public has not received any information on the terms of Russia’s loan. The terms of the loans issued by international financial institutions (IFI) are known in advance. After the individual terms have been negotiated, they are disclosed to the general public. This should be common practice, since we are talking about the state budget i.e. the Serbian taxpayers’ money. The loans of IFIs come with a set of conditions. IMF loans require financial austerity, the reform of state bureaucracy and overall adjustment of economic policies to overcome the problems that led it to seek financial aid in the first place. World Bank loans are tied to specific projects and their output e.g. output based aid. In addition, World Bank loans are subject to rigorous environmental and social standards. Now, although the fulfillment of these conditions might appear challenging, they help to restore or maintain balance of payments viability and macroeconomic stability, while setting the stage for sustained, high-quality growth. Sound macro-economic policies and steady economic growth ensure a high living standard and promote the emergence of a healthy middle class – the fundamental pillar of a democracy. The project and output based nature of World Bank loans contribute to ensuring that the funds reach the people in need and that they are issued under “arms-length” principles. Loans that are not tied to any kind of conditions or standards can threaten Serbia’s economic development and democratic reform. This is what I mean by "impeding sound fiscal and monetary policies and encouraging corruption and nepotism”.

Precisely because the EU is not the new El Dorado, Serbia, like any other EU accession candidate country, has to do its homework before joining the European family. This does not include only tracking down the two suspected war criminals, but also fulfilling all the necessary Copenhagen Criteria. Part of these are already contained in the conditionality of the financial arrangements discussed above. By accepting these conditions, Serbia will undoubtedly stay on the European path.

My article does not suggest that good bilateral relations between Serbia and Russia hinder Serbia’s EU membership. I explicitly mention that Russia supports Serbia’s EU membership. Also, EU officials do not see the strengthening of these relations as an obstacle for Serbia’s path towards the EU. If you read my article again, you will see that I have not interpreted the strengthening of Russia-Serbia relations as a natural disadvantage. I argue that Serbia should continue to have good bilateral relations with all countries, especially its neighbors. By neighbors I mean its Balkan neighbors in particular. Neither Russia nor the Soviet Union has ever bordered Serbia, so I do not see why arguments that allude to “Russia developing closer relations to its neighbors” are being used here. In my article, I have merely cautioned that Serbia should not allow the emergence of asymmetric constellations in its foreign relations - asymmetry that could force Serbia into extreme dependence, isolation or to policies harmful to a very young and fragile democracy.

You should bear in mind that there is huge percentage of the Serbian population that does not wish to see Serbia in the EU. Just to give you one example: during a trumpet performance in Belgrade, organized in honor of President Medvedev, there was a large group of people who chanted “Down with the (European) Union” and “Long live the Russian Federation”. It is not my article, but these people on the streets and their political representatives that see a mutually exclusive constellation between Serbia’s relation towards Russia and the EU respectively.

But it is more than about just chanting, it is about the conscious decision for a system of values and norms. Above all, the EU stands for freedom, tolerance respect of human and civil rights, the rule of law, an independent judiciary etc. If Russia wanted to prove its genuine interest in a European Serbia, it would hand over Mira Markovic, Milosevic’s widow, their son Marko, and their shady associates who face serious criminal charges in Serbia. Anyone who has spend only one day under the oppressive Milosevic (or a similar) regime or who has experienced the burden of international isolation will understand my point.

It should never be forgotten that people including Prime Minister Zoran Djindjic and the journalist Slavko Curuvija have sacrificed their lives for a modern, democratic, European Serbia. They gave their lives for the vision of a better Serbia – a Serbia their children could be proud of. And, while European countries honor the assassinated Prime Minister, the Russian state television calls this assassination justified: http://www.youtube.com/watch?v=Toud_hHFSgg

I do not know how I can be clearer than that.

Pardon my bluntness, but I have started forming my political ideas after the fall of the Berlin Wall, so characterizing my arguments as Cold-War logic would be a fallacy. I would prefer calling it post-Cold War logic. I agree with the argument that Russia and the EU should have good relations. I also believe that it is absolutely vital to have constructive and friendly relations with Russia. Yet I disapprove of any European security arrangements that exclude the United States. That is not only my opinion, but the opinion of any EU decision maker. Again, it is not about excluding Russia, but making sure that we keep the right balance in our international relations.

 
Jeff  Hathor

November 15, 2009

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Russia Short term Protectionist Bear or long term Global Snuggle Bunny?

Moscow Analysis
According to Yury Shcherbanin a Moscow analyst the growth of trade and product will normalize the global market. So of course Russia is going to reach out like any other corporation to establish regional offices and factories in other countries IF the plan is to promote long term business partnerships. This is a natural process and has been since ancient times. Here is the link to the video: http://russiatoday.com/Top_News/2009-11-14/development-trade-apec-p...
Modern Russia has become quite the smooth operator in trying to establish itself as business partners with Europe. I would be surprised if they were not trying to co-ordinate storage depots and transportation routes for product headed to Europe customers. Logistics is one of the primary concerns in the global market.

Corporate Security
Providing extra security forces or training in country security forces to protect the individual company employees and products is also a proper course of action.

European Union
The Example set by the EU is to establish corporate centers and factories in other countries to improve business relations. Examples: French company Rhone Poulenc has a facility in North Carolina, United Kingdom company Quintiles has a company in North Carolina, and German company GEEP Inc. has a facility in North Carolina. China has a Lenovo factory in North Carolina. The world does not take this to mean the EU is taking over North Carolina.

Conclusion
Individual states and corporations from many countries take initiative to expand into a global team to improve the company’s chances of survival long term. This also improves communication and co-ordination for product marketing and distribution. Russia is adapting to the new global market. They study the market and plan for the logistics required to supply the demanded products to their customers.
 
Forrest  Kilimnik

November 16, 2009

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The Big Bear’s Den

With both Ms. Davidovic and the subsequent comments, a lot of important issues have been raised concerning the triadic relationship shared between Russia, Serbia and the European Union, particularly with respect to energy policy and EU membership. As Serbia vies for joining the regional organization together with Russia’s seemingly supportive position, one must ask what has changed that would make Moscow shift this once strong disapproval for enlargement. While there are many affairs that could be discussed, I would like to highlight the circumstances coming from the Caucasus. As a result of Turkey and Armenia’s recently momentous agreement to reopen relations after a long standoff, Russia has begun to shift relations in the region in a way to sideline Georgia, as noted by Sabine Freizer, director of the Europe Program of the International Crisis Group. In this way, Yerevan’s close embrace with Moscow has also been extended to Baku, which has resulted in a natural gas deal with Azerbaijan. To this effect, the Kremlin has made moves in securing another ally in the South Caucasus, which ties directly into Russia’s desires for energy dominance.

In turn, these altered relations reflect back on Serbia, which has already given the go-ahead for the South Stream project. Consequently, Azerbaijan’s energy deals with Gazprom and talks of support for the Russian endeavor in lieu of the Nabucco pipeline, only strengthens the South Stream, which has received another boost with Slovenia’s final agreement for participation. With the competition between the South Stream and Nabucco pipelines rising over the years, the former is prevailing over the latter. Accordingly, Serbia represents an influential partner for the distribution of Russian resources. For this reason, with Serbia being the only state of the South Stream project not in the European Union (together with Russia), it’s membership represents a way to ensure Moscow’s influence in the region and throughout the organization. With Russia’s substantial loan to the Serbian government, Belgrade will continue on its path to European Union membership with cheers from Moscow, who finds its pipeline shored up in the Balkans just as Nabucco loses support in the Caucasus. In this way, as former Chancellor Schroeder stated that Serbian membership would be a bridge into Russia, so would it in reverse be a link for Russia into the European Union. This being the case, Serbia will remain one of Russia’s many dens where it may influence the European Union, specifically through energy policies.
 
Unregistered User

November 17, 2009

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Sonja wrote:

"Serbia's dance with the bear could actually be a signal to the EU to accelerate the country's accession process. Therefore, the EU needs to make unequivocally clear that Serbia, together with the other former Yugoslav republics, belongs to the European family and a common European identity."

Geography and history courses I took clearly said that Russia is a part of Europe.
So, Sonja should have written "... the EU needs to make unequivocally clear that Russia belongs to the European family and a common European identity."

Oh, I forgot The Empire wants to conquer the planet and all "free media" are in the service to The Empire.
 
Sonja  Davidovic

November 17, 2009

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Gentlemen,
thank you for even more comments.

Kazomierz,

In her comment, Sonja also wrote: "Above all, the EU stands for freedom, tolerance respect of human and civil rights, the rule of law, an independent judiciary etc. If Russia wanted to prove its genuine interest in a European Serbia, it would hand over Mira Markovic, Milosevic’s widow, their son Marko, and their shady associates who face serious criminal charges in Serbia. Anyone who has spend only one day under the oppressive Milosevic (or a similar) regime or who has experienced the burden of international isolation will understand my point.

It should never be forgotten that people including Prime Minister Zoran Djindjic and the journalist Slavko Curuvija have sacrificed their lives for a modern, democratic, European Serbia. They gave their lives for the vision of a better Serbia – a Serbia their children could be proud of. And, while European countries honor the assassinated Prime Minister, the Russian state television calls this assassination justified".

I am sure the EU would be pleased to offer Russia support in its efforts to achieve full protection and respect of human and civil rights. The new Eastern Partnership could be an important step forward.

Forrest,

you raise a very interesting point. The Caucasus is definitely part of the greater picture. This would be the topic of another article or research paper:-) In my opinion, Azerbaijan's gas deal with Russia is just a measure of retaliation that shows the country's disapproval with the beginning normalization of relations between Turkey and Armenia. In the long-term, however, we can expect that Azerbaijan will remain committed to Nabucco. I think that the country's leadership understands the need of diversifying supply routes to Europe. The normalization of the Turkish-Armenian relations is not only critical for Nabucco, but also for ending Armenia's isolation and promoting economic development in the entire region. If you do not mind, I would contact you exchange some more ideas on this topic. Thank you for raising this point.
 
Ari  Rusila

November 17, 2009

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From Serbian point of view I could imagine that they are considering following questions in their heads: Are European perspective and EU membership the same? Are benefits from joining to EU bigger or less than being outside it? Is there any alternative strategic alliances to EU?

EU is today already so big that democracy and efficiency are in constant conflict; even after Lisbon Treaty one could claim EU structure, visions and actions to be paralysed. If EU is enlarging even more the decision making mechanisms and maybe the tasks of EU should be reconstructed again – it should find the core functions again and cut off extra branches, trim the budget and administration. Today EU member states are paying more or less their taxpayers money to common budget and are receiving more or less back through some 500 different EU programmes. When common bureaucracy, Puppet democracy and corruption are taking increasing share so on the field one sees less money and actions. The bottom line is that EU´s ability to absorb enlargement is questionable and even if it could come bigger what´s the idea to join to it.

Serbia has been following last ten years how EU has implemented its “European values” and standards in their neighbourhood. Experience about that is not so promising. Promoting a culture of coexistence, a multi-ethnic society or at least ethnic tolerance is not an easy task, not even in Europe, not even with help of billions of aid or with “best” western practice. This can be seen especially in Balkans where regions supervised by foreign “expertise” have worst record while regions without these outside high-flown ideas perform relatively better.
Good examples for “worst practice” are Bosnia-Herzegovina and Kosovo, where international community has implemented its huge missions over ten years. Both cases have had modest development of civil society but in reality the progress of some original multi-ethnic ideas is going backwards.

It’s said that The Balkans are a graveyard for foreign ambitions. This could be the “lessons learned” to both USA and EU. Some more sustainable solutions could be implemented in Western Balkans. The key question from my point of view is whether western Balkans really needs outside advice or not. The other option could be that instead to be the mastermind of Balkan policy the EU and USA should be facilitators for regional initiatives. More about this topic one may find from my article “Bottom-Up Approach needed for multi-ethnic society - http://arirusila.wordpress.com/2009/09/11/bottom-up-approach-needed...

All Balkan countries have their own development paths – some countries are going to join fast to EU (Croatia), some are going to do it later (Macedonia, Albania), some are maybe looking alliances from other directions (Serbia), Kosovo will be international protectorate also next decade; Bosnia will totter between breakup, federation/confederation, state, protectorate depending inner politics and exterior influences. One question is what is the added value for part of Bosnia-Herzegovina and Serbia to be a EU member state; most important pragmatic benefits can be achieved through visa-liberalization and free-trade agreements.

My estimation is that there will be also some grey area between non- and full EU membership. During next few years Turkey will come an energy hub through implementation of Blue Stream pipeline from Russia and South Stream, possible implementation of Nabucco and planned import of gas from Iraq and Iran. So in energy game Turkey will have some aces; if not membership EU must offer very attractive “third way” solution for Turkey, why not do the same with some states of the Western Balkans if needed.

The big energy game which now is ongoing and Serbia's role in that play will in my opinion balance Serbia's positions. Now the European perspective can can be seen not only in West but also in East. And like recent cooperation and plans are showing this perspective is also gaining speed on the ground not only in high-flown statements.

An outstanding document named as “National Programme for Integration of Serbia into EU” has been published on Serbian government´s web-site. This massive work – total 817 pages – outlines activities which Serbia is planning to undertake in all sectors of it society politics and law in order meet challenge/goal to integrate EU. Although the document was inspired due the EU I think that Serbia should implement this document or parts of if because of their own needs, not because of EU.

More about this also in my article “West Balkans soon ready for EU – at least part of it” http://arirusila.wordpress.com/2009/10/24/west-balkans-soon-ready-f...
 

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