U.S. Strategy and Foreign Policy throughout the Balkans

By Richard McManamon

Introduction

With the election of a new U.S. president comes a new foreign policy strategy. While the U.S. continues to manage the recent evacuation of forces and allies from Afghanistan, monitors the volatile situation between Israel and Hamas, and carefully listens to North Korea’s aggressive rhetoric, it must not lose focus on Russia and China. At a time when both countries continue to expand their presence in eastern Europe, it becomes evident that the U.S. must have a focused strategy within the Balkans. The recent build-up of Russian forces along the Ukrainian border in April 2021 reinforces the idea that Russia will continue to destabilize the region while China’s Belt and Road Initiative (BRI) has found its way into eastern Europe, specifically to the Balkan countries. China’s dangerous lending practices and infrastructure projects can put Balkan countries at increased risk and provide China a backdoor into Europe. The U.S. benefits from a strong E.U. and NATO as well as sustainable stability throughout Europe. Targeted support for European allies is a strong incentive for U.S. involvement in the region as the U.S. can benefit from increased stability and stronger trading partners. This was highlighted by President Biden’s recent signing of an Executive Order on June 8, 2021, that provided additional sanction authority, efforts to combat corruption, and promote accountability within the Balkans and the former Federal Republic of Yugoslavia.[i] Lastly, the Balkans present a unique challenge for western allies as this region simultaneously displays global competition from both Russia and China, which will require a comprehensive approach to counter their expansion effectively. 

The State of the Balkans

            Today, multiple Balkan countries have joined NATO and/or the E.U., positioning many countries to an increasingly western-leaning mentality. Bosnia and Serbia present the most significant opportunity for global competition from China and Russia and, more importantly, present the greatest threat to stability in the region. Kosovo is a unique country that declared its independence from Serbia on February 17, 2008, and has been recognized by the U.S., many European countries, and other countries worldwide. However, both China and Russia do not recognize Kosovo and limit their involvement both economically and diplomatically.[ii] This refusal to recognize Kosovo places both China and Russia in better standing with Serbia but potentially restrict their influence in other regions of the Balkans, which the U.S could leverage.

With NATO and E.U. membership comes a level of support from western European countries that can be critical to increasing the region’s stability. Corruption and lack of transparency have been a rising concern as the global competition continues to intensify. The 2020 Corruption Perception Index shows Bosnia, Kosovo, and Serbia scored predominately higher than their fellow Balkan states.[iii] NATO and E.U. membership are not definitive indicators of lack of corruption, but membership does allow for better alignment to western ideology and standards toward increased transparency. Furthermore, corrupt Balkan governments will likely provide opportunities for Russia to take advantage of and align Balkan government officials towards Russia’s views and further expansion for Russia.[iv]

As Serbia positions itself to receive support from China, Russia, and the United States, it can be said that the geopolitics for Serbia is intensifying as the country plays an increasing role in the region. Furthermore, Serbia serves as one of the strongest allies for Russia and China in the area, and their connection will likely increase over the coming years. Highlighting the strengthening bond between Russia and Serbia, joint exercises were recently held in May 2020, bringing their militaries closer aligned.[v] While Russia has strived to maintain positive and growing relations with Serbia, the U.S. has continued to partner with Serbia. Since 2001, the U.S. has provided nearly $1 billion, focusing on good governance, economic growth, and bolstering the country’s infrastructure.[vi] Additionally, the Ohio National Guard has partnered with Serbia since 2006 as part of the State Partnership Program (SPP), where they have conducted joint exercises.[vii] This long-term support emphasizes the importance the U.S. sees in the role of Serbia in the greater Balkan region.

Russia Efforts throughout the Balkans

            Russia has shown in recent years that it is not afraid to pursue an aggressive approach throughout Europe if it believes such actions are in its best interest. The annexation of Crimea and the Georgia-Russian conflict exemplify Russia’s continued pursuit of un-stabilizing efforts within the region. As President Vladimir Putin continues to solidify himself as the ultimate leader of Russia, it can be argued that the country’s approach to eastern Europe is unlikely to soften and could be expected to become increasingly belligerent.

            Russia has uniquely positioned itself to benefit from the Balkans, especially through Serbia and portions of Bosnia such as the Republika Srpska. A weak NATO and E.U. play well for Russia. Any efforts by Russia to slow/disrupt the integration of the remaining Balkan countries can distract western allies from Russia’s more significant priorities like Ukraine and Georgia.[viii] Equally, by Russia maintaining good relations with non-NATO/E.U. countries, it allows them to reap the benefits if/when they join. Russia is pursuing a comprehensive strategy itself that strives to hinder any further integration of NATO but can benefit from the stability it can bring. By positioning themselves as enduring partners to Serbia and Bosnia, Russia can have unfettered access to conduct disruption operations against NATO and be ready to support through trade when these countries join the E.U.

China and the Balkans

China has approached the Balkans primarily through BRI investments, and many of the region’s countries have seized the opportunity of relatively available loans compared to the E.U. As seen globally, China has aggressively pursued many infrastructure projects, and the Balkans are no different. China has provided loans to North Macedonia for energy plants, constructed a coal power plant in Bosnia, a motorway in Montenegro, and various projects throughout Serbia.[ix] E.U. loans to Balkan countries tend to come with specific terms tied to increased transparency and anti-corruption efforts, which significantly lowers their incentive compared to their Chinese counterparts.

Balkan countries may view China as the easy choice for financing, but significant risks can arise by choosing the less restrictive option. Montenegro is a country that took advantage of these loans, where it borrowed over €800 million to fund a motorway from the Port of Bar to Serbia.[x] Consumed by massive debt, concerns arise of countries' ability to repay the loans under the specified terms effectively and what influence will China have over the country. Montenegro is not alone in this case, as North Macedonia has suffered issues of corruption based on Chinese loans. North Macedonia’s government officials were implicated in corruption of over €100 million from Chinese banks, which questioned the transparency of Balkan governments and loose terms of Chinese loans.[xi]

While this is just a small sample of Chinese efforts within the region, a more significant concern is what effects and influence these loans provide China. Support to both NATO and non-NATO countries by Chinese loans has the potential to be leveraged against western allies. Due to China’s lending techniques over the past decade, the concept of debt-trap diplomacy has arisen; this concept is defined as China’s use of loans to countries that make them highly indebted, thus providing China with significant influence and leverage over that country. The idea behind it is that China extends excessive loans to countries at high-interest rates to a point where the government is heavily indebted to China with little chance of effectively repaying the loan, placing enormous Chinese political leverage on the country.

Scholars such as Dr. Deborah Bräutigam, an expert in China-Africa relations, have questioned if China is deliberately pursuing debt-trap diplomacy as a financial tactic or if China is simply protecting its economic investments.  Sri Lanka provides a telling example: Following the end of its civil war in 2009, the country was in need of infrastructure investment, and China quickly stepped in to assist with significant loans. Sri Lanka was then hit with a stalling economy, and the burden of Chinese investments became too much for Sri Lanka. The country was then forced to lease the Hambantota Port, which was already predominately funded by the Chinese, back to China for ninety-nine years.[xii] This example highlights grave concerns for the international community, especially countries engaging in financial loans from China. Moreover, the leverage China had over Sri Lanka to lease the port raises the question of a country’s sovereignty—and if China’s strategy was deliberate.

As the U.S. and E.U. work to bring the Balkans closer aligned, it must consider China’s influence through their robust and unrestricted loans. China’s ability to leverage its influence within the Balkans can provide a backdoor into Europe and further their agenda across western Europe. Conversely, China can be an additional funding source for Balkan countries looking to grow their economy, especially when most of Europe attempts to return their economies to pre-COVID levels, making E.U. loans less prevalent.

U.S. Approach to the Balkans

            To remain competitive within global competition, the U.S. must have a comprehensive foreign policy to address the challenges within the Balkans and Europe at large. The aggressive tactics by both China and Russia should not be shouldered by the U.S. alone, but a consolidated effort by various western countries to include Germany, France, and the United Kingdom. Building a solid coalition to include NATO is critical, and the recent G7 Summit held in June 2021 was a great platform to bolster U.S. relations. While the Balkans countries are not an enormous focus to the U.S. for trade or military support compared to other regions globally, the absence of a clearly defined foreign policy puts western countries at risk.

            The Biden administration has a challenging task before them as they manage the return of Taliban rule in Afghanistan, provide support to African countries, and assess government spending that has ballooned since the start of the COVID Pandemic. Thus, a targeted foreign policy strategy is ever more critical to the U.S. to ensure it can maximize its effects. To do this, the U.S. must place its predominant focus on Bosnia and Serbia in the future. The U.S. can accept the risk of limiting their direct efforts in Kosovo and support mainly through the NATO mission.

            A more focused foreign policy in the Balkans does not mean the U.S. neglects the other countries such as Montenegro, North Macedonia, and Greece. Efforts in these countries should focus on diplomatic efforts by U.S. embassies and limited military interaction to support NATO interoperability. China’s BRI provides them access to many eastern European countries through enticing loans as many of these countries are looking to bolster their economies. While it can be difficult for the West to compete with China’s loan tactics, the West can coach Balkan countries on the dangers of China’s loans and, more importantly, demand fair loan terms from China. Additionally, the U.S. and the E.U. can increase their coordination to provide increased funding to Balkan countries, limiting their need to rely solely on China.

            A new strategy in the Balkans has the potential to maximize U.S. resources in Europe, allowing the U.S. to allocate its assets to other priorities across the globe. Moreover, the E.U. will always have a stronger connection to the Balkan countries, highlighting the need for the U.S. to coordinate through the E.U. to ensure sustainable stability, which should be the ultimate goal within the Balkans. The E.U. dominates trade with the Balkans over the U.S., China, and Russia, which builds a solid economic connection throughout Europe.[xiii] By amplifying this connection to the E.U., the U.S. can bring Balkan countries more closely aligned to western ideology.

            As the Biden administration defines its foreign policy throughout Europe, it must continue to push E.U. and NATO integration. A strong alliance founded on western values provides a strong deterrence and through robust synchronization, the U.S. and its allies can maximize their influence in the region. The U.S. and its allies must ensure that whatever efforts they pursue in the region are adequately sourced and have the governments' full backing. Efforts that falter will only provide opportunities for Russia/China to seize and disrupt stability efforts. Through committed efforts of western allies, the Balkans can increase their stability, strengthen their economic ties to the West, and build sustainable growth.