economist.com

A pro-Europe prime minister wins a second term in Serbia

Democracy in America | Apr 25th, 19:07

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A pro-Europe prime minister wins a second term in Serbia

 

WITH most of the votes from Serbia's general election on April 24th counted, it is clear that Aleksandar Vucic, the prime minister (pictured), has won another four-year term. From Brussels and other Western capitals, congratulations have been rolling in. Mr Vucic's foreign partners want nothing more than stability in the Balkans, and Mr Vucic can deliver it. Whether he can deliver growth, or help develop Serbia's flawed democracy into a transparent and competitive one, is more doubtful.

Mr Vucic called the election two years earlier than necessary, and his Serbian Progressive Party (SNS) won roughly half of the vote, as it did two years ago. Because more parties will enter parliament this time, the SNS will have at least 20 fewer seats, though still a majority in the 250-seat chamber. The Socialists came second with 11%, while the radical nationalists of Vojislav Seselj, who failed in 2014 to clear the minimum for representation in parliament, will now be the third-largest party, with almost 8%.

Mr Seselj's return to parliament is the second bit of good news he has received this month. On March 31st he was acquitted on war-crimes charges by the UN tribunal on the former Yugoslavia in The Hague. His electoral success means Serbia's parliament will once again include an extreme nationalist party advocating closer ties with Russia. "Russia will be pleased," says Milos Damnjanovic, an analyst at the Balkan Investigative Reporting Network. Mr Seselj's influence, however, will be limited.

Mr Vucic and Ivica Dacic, the leader of the Socialists and foreign minister in the outgoing government, are both ardent exponents of maintaining friendly regional relations and of joining the European Union. This is a dramatic transformation. During the Balkan wars of the 1990s, Mr Vucic was a protégé of Mr Seselj and Mr Dacic was a spokesman for Slobodan Milosevic, Serbia's rabidly nationalist leader at the time. With the SNS, the Socialists and Mr Seselj's party getting most of the vote, the vast majority of deputies in the new parliament will have been hardline nationalists or supporters of Mr Milosevic in the past. The once-mighty Democratic Party, which came to power after Mr Milosevic's fall in 2000, only just scraped into parliament, as liberal Serbs scattered their votes between the Democrats and a number of small parties.

Under Mr Vucic, Serbia is likely to continue gradually to implement the reforms demanded as part of its EU accession process. It will also continue its EU-led talks on normalising relations with Kosovo, which declared independence from Serbia in 2008. Although relations with Bosnia and Croatia are sometimes bad-tempered, no serious ructions are likely.

But Serbia's biggest issues are domestic. In 2015 its economy grew by an anaemic 0.7%. Serbs are scraping by on an average salary of €351 ($395) a month. Many voted for Mr Vucic because he sounds convincing. But unless he can raise living standards, says one Serbian politician, this is the last time he will be chosen to lead the country.

Mr Vucic has projected himself as a strongman who can defend Serbian interests. He has long promised to fight corruption, and claims to be devoted to democracy. In fact, despite many high-profile arrests (especially of politicians connected to the Democratic Party), there have been few convictions for high-level corruption. The media is largely weak and cowed by government pressure; state television unfailingly reflects the government's point of view. Stevan Dojcinovic, a prominent investigative journalist who recently began investigating Mr Vucic's family wealth, found himself attacked in the tabloid press as a "French spy".

Florian Bieber, a professor at Graz University, says Mr Vucic is one of a generation of Balkan leaders with no ideological underpinning, who run their countries through informal networks, by telephone, rather than via proper institutions. "It is all about personal power," says Mr Bieber. As one Serbian official puts it: "The West has been primarily interested in whether these guys are nationalists in an explosive region. They have somehow lost interest in whether they are democrats." 

 

Three years since Brussels Agreement: Everything is even worse

kossev.info

Three years since Brussels Agreement: Everything is even worse | KoSSev

Četvrtak 21. april 2016, 11:55

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Izvor: KoSSev

Autor: Gyorgy Kakuk

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Da pročitate tekst na srpskom, kliknite OVDE 

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Op-ed: Gyorgy Kakuk

During the hot and eventful summer of 1999, a few Serbs from the town of Mitrovica stood next to the highway that leads to Serbia. They stopped all the cars of fleeing Serbs and begged them not to leave. They told them if they leave, the entire Kosovo Serb community will be extinguished in a matter months. These ordinary citizens had all the reason in the world to be concerned. Within a few weeks after the arrival of international forces in Kosovo almost the entire Serbian community of Western Kosovo had disappeared, the Serbs of Pristina fled, and members of the biggest urban Roma community of the Balkans, on the southern shore of the river Ibar in Mitrovica was chased away and their settlement torched. All this happened under the watch of the more than hundred thousand strong NATO forces, the who came into Kosovo to provide a safe and secure environment for all. Ethnic violence was rampant. No one who belonged to a community other than the majority Albanians were safe. 

These people, who tried to convince their fellow Serbs to stay, understood something well: if they do not stick together they will be lost. This is how it started. The unbelievable resistance of the Northern Kosovo Serbs who went against all odds, with one and only one aim: to remain where they belong. 

During all of those years, these people were mistreated by the international community, persecuted, betrayed by their own in Belgrade, but they are still there. No wonder that the Serbs of Northern Kosovo do not believe in the mantras and slogans that the international tried to teach them on the creation of a multi-ethnic society. They not only saw but also felt it in their skin that the international organizations responsible for running Kosovo clearly used double standards. 

The best example of that are the events of March 2004 when Albanian mobs, in a very well organized fashion torched Serbian villages, churches, desecrated Serbian cemeteries on an industrial scale. And at the end of the day they were rewarded. The process to independence was quickened. And the message from the international community was clear; if we consider you our friend you can go and do ethnic cleansing, you have impunity.

Now, after three years of the Belgrade - Pristina deal in Brussels nothing has changed. Actually, this is not really true, it’s gotten worse. The European Union who became the main international actor in Kosovo, after the unilateral declaration of independence, is in worse shape then it was three years ago. The so called refugee crisis gathered dark clouds over the Union, which shows the same symptoms as in the case of Kosovo for years before. A lack of courage, vision, leadership, political innovation. Those who followed the EU's performance in Kosovo are, not really surprised how it acts, when the refugee crisis sweeps the center all over Europe, and pushes the continent towards the far right. In Kosovo nothing demonstrates this better then the verdict given by an EU judge in the case of a Kosovo Serbs politician.

Oliver Ivanovic (I would never hide that he is a friend of mine), was one of the rare Serbian politicians in Kosovo, who could have helped all, the Albanians, the internationals and his own community to bring the situation of the Serbs to a mutually beneficial solution. He was someone who understood that playing zero sum games are never the real deal. He was charged with committing war crimes and got nine years after a dubious trial. (Just remember that the Hague Tribunal acquitted Vojislav Seselj.). If the Oliver Ivanovic case is the biggest achievement of the Brussels process, then I think it is better to start something different.

Unfortunately the prospects are not good. As long as the acting Minister of Foreign Affairs of Kosovo, proudly sends messages around on Twitter that he bans Serbian politicians from entering Kosovo, while members of the radical movement, Vetevendosje can turn trucks transporting Serbian goods to Kosovo (to Albanian customers), while the most expensive mission of the European Union, EULEX, is unable to stand on its feet, the future I as I see it is grim.

And do not forget, the refugee crises which greased the wheels on the so called Balkan route started in early 2014 by Kosovo Albanians fleeing economic hardship. What is happening in Kosovo, driven by all political actors is actually hurting them the most. If anyone could lose all that , its that Albanians of Kosovo and not the Serbs. 

Gyorgy Kakuk
author, journalist
former UNMIK Spokesperson of Mitrovica

 

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Preuzimanje i objavljivanje tekstova sa portala "KoSSev" nije dozvoljeno bez navođenja izvora. Hvala na poštovanju etike novinarske profesije.

IZ UGLA ANALITIČARA

 

chicagotribune.com

Russian influence on the rise in Serbia

Bloomberg

At the end of a busy street an hour from Belgrade, past outdoor cafes, discount clothing stores and second-hand mobile phone outlets, artists at a tiny wax museum worked day and night for two months to complete a tribute to Vladimir Putin.

The figure stands alongside a Yugoslav communist party flag and a panoply of such local luminaries as late strongmen Slobodan Milosevic and Josip Broz Tito, thanks for Putin's support of Serbia's opposition to the Kosovo's independence.

"Around 75 percent of Serb citizens respect Putin and Russia, so we decided to let Putin be the first foreigner," said Dragan Markovic Palma, the mayor of Jagodina, which unveiled the statue last month. "Russia has helped a lot."

As Prime Minister Aleksandar Vucic campaigns before April 24 general elections, his bid to prepare the country for European Union membership is facing a lurch to nationalism. It includes throw-back sentiment for Russia in the country of 7.2 million people as the EU is itself shaking under doubts about its future and resentment lingers over the bloody breakup of Yugoslavia. One of the beneficiaries has been the Radical Party, which wants to end talks to join the trading bloc.

More than two decades after the fall of communism, Russia is once again courting the countries over which it once held sway. In Hungary, Prime Minister Viktor Orban has forged a $11 billion nuclear deal with Putin's government and tried to emulate his model in pursuing an "illiberal democracy." Czech President Milos Zeman and Slovak Premier Robert Fico have said EU relations should not come at the expense of Russia.

In Serbia, only 11 percent of voters said they believed joining the EU and NATO -- which bombed Serbs twice in the 1990s -- is good, while 72 percent saw it as bad, according to an April 10 opinion poll conducted by B92 TV and the Center for Free Elections and Democracy. That's far more pessimistic than the 48 percent for EU entry in a state poll by Serbia's European Integration Office, which doesn't measure backing for NATO entry. Meanwhile, eight of the 18 parties running for parliament are pro-Russian.

What's more, the pressure to veer Serbia's foreign-policy goals eastward comes alongside the creation of a slew of Russian-Serbian friendship societies such as the Association of Russian Descendants and the Strategic Culture Fund, a Russian-Serbian Internet site reporting on events in Serbia, Russia, Balkans and the former Soviet Union.

"A further increase in Russian sentiment is possible," said Jovo Bakic, a sociology professor at the Faculty of Philosophy in Belgrade. "And I wouldn't be surprised to see Vucic, after two or three years, changing his rhetoric if he sees that Russia, and not the EU, is what people want."

Still, with 3 billion euros ($3.42 billion) already allocated from EU coffers, Vucic has made readying Serbia for accession by 2020 his chief foreign-policy goal. Many Serbs see the EU, and not Russia, as a path to raising living standards like former federation partners Slovenia and Croatia, which joined the bloc in 2004 and 2013.

"We want good relations with Russia and we have them," Vucic said in an interview to local TV broadcaster Happy TV on March 21. "But we want and we are heading toward the European Union."

That approach is backed by foreign direct investment, mostly from the EU, which has steadily risen in Serbia over the past five years.

"The EU has been committed in enabling Serbia not only to eventually join the EU, but to make a real difference for its citizens," Michael Davenport, the head of the EU Delegation to Serbia, said in a statement on April 8.

Even so, there is still strong cultural affinity among Serbs with Russia, which helped communists win power under Tito after World War II. Both countries are Orthodox Christian and share the Cyrillic alphabet, unlike most other Slavic nations in the region.

For Russia's part, Foreign Minister Sergei Lavrov said EU talks are the "absolutely the sovereign choice" for Serbia, but he rejected a "destructive either-or logic," which he blamed for "the profound crisis of Ukrainian statehood." The Kremlin denies accusations from the EU and the U.S. that it has backed insurgents with troops and arms to prevent Ukraine from shifting out of its sphere of influence.

Vucic maintains a strong lead in polls, with his Progressive Party showing support of 50.9 percent at end-March, according to a survey by Belgrade-based Faktor Plus published April 11. Still, he's warned that the acquittal of Radical Party leader Vojislav Seselj of war crimes by the United Nations Hague Tribunal last month may undermine his ability to form a government.

Seselj is in third with 7.8 percent in the poll and says he said he may end up with more than a quarter of the vote following his acquittal. Deputy president under Milosevic when NATO bombing helped drive Serb forces out of Kosovo, he's calling for an end to EU talks.

"Our friends can only be those who didn't bomb us," he said at a news conference after his acquittal.

But he and other pro-Russian figures are running out of time to capitalize on feelings of Slavic friendship, especially among those who have suffered hardship since war devastated the economy two decades ago.

"We've got nothing in common with Russia," Aleksandar Radojkovic, a 38-year-old unemployed carpenter, said before jumping on a beat-up yellow bicycle in Jagodina. "Most things that come to Serbia come from the West, and if when we try to run away from here and find work somewhere, it's the West again, not Russia."

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Henry Meyer and Peter Laca contributed.

 

foreignpolicy.com

The Budding Autocrats of the Balkans

John Hudson | 2 days ago

At first glance, especially compared to other parts of the world, the Balkans seem to be in great shape.

The last few years, in particular, appear to have been good for the region’s ambitions to integrate with the West. In 2013, Croatia formally joined the European Union, after nine years as a candidate state. The year before, Serbia became an official candidate for membership in the union. And in 2014 Albania joined the ranks of Montenegro and Macedonia, which have been candidate states for several years. Even Kosovo, whose independence is unrecognized by five EU members, signed a Stabilization and Association Agreement with the EU, paving the way for potential future membership.

Meanwhile, NATO extended an official invitation for membership to Montenegro last December; one month later, without much fanfare, the Serbian government signed an Individual Partnership Action Plan with NATO, which deepens cooperation between the Serbian military and the Western military alliance and grants NATO troops immunity and freedom of movement throughout Serbian territory. Albania and Croatia have been NATO members since 2009, while Macedonia’s bid to join has been impeded by its name dispute with Greece.

The goal of the recent diplomatic push by the West has been to counter Russian influence in the region and ensure the consolidation of democratic regimes and the rule of law there. And the West’s efforts do seem to be bearing fruit.

But a closer look at this presumed success reveals that the fruit may be rotten. A new generation of autocrats has been taking over the region, sometimes with the direct complicity of overzealous American policymakers and distracted EU officials. The apparent Westernization of the region, it’s now clear, has come at great cost.

Both U.S. and EU policymakers have been willing to turn a blind eye to corruption, which plagues the region’s governments, and have either downplayed or ignored the creeping rise of autocratic rulers. These autocrats operate under a different, savvier playbook than those of the 1990s: Internationally, they enthusiastically embrace the EU in their foreign policy. With the exception of Serbia, they express the same fervor for NATO. They are well-coached in telling Western diplomats what they want to hear, while blatantly undermining democratic principles and the rule of law at home.

Domestically, these rulers rely on a tried and tested formula that makes their economically downtrodden citizenries, who suffer from some of the highest unemployment rates in Europe, entirely dependent on state-controlled patronage networks for jobs and other resources. These rulers also undermine their domestic opponents by forging alliances with oligarchs, often dependent on the state for their wealth, and exerting control over the media and the judiciary.

Take Montenegro. A small country of some 650,000, Montenegro has in one way or another been under the rule of current Prime Minister Milo Djukanovic and his Democratic Party of Socialists (DPS) for 25 years. In the late 1990s, Djukanovic broke with the pro-Serbian wing of his party and led Montenegro to independence from Serbia in 2006. Since then, Djukanovic has, in effect, turned Montenegro into his family’s private fiefdom. In 2007, Italian prosecutors charged Djukanovic with leading a conspiracy involving cigarette smuggling and money laundering in the 1990s — charges Djukanovic has vehemently and repeatedly denied while relying on his diplomatic immunity to avoid cooperating with the prosecution. In 2009, a report by the International Consortium of Investigative Journalists found that Djukanovic owned assets worth nearly $15 million — a hefty nest egg for someone earning his reported income, a monthly salary of 1,500 euros. Djukanovic’s brother, Aco Djukanovic, is one of Montenegro’s wealthiest men. Having started off as a concert promoter in the 1990s, he is now — among the plethora of other businesses he’s involved in — the primary shareholder of First Bank, which underwent what many believed to be a rigged privatization in 2006. The privatization involved an open tender producing only a single bidder, a company owned by the prime minister’s brother. The bank subsequently became Montenegro’s largest, with the government becoming its largest client.

In Macedonia, the decadelong rule by the center-right VMRO-DPMNE party of Nikola Gruevski has been accompanied not only by rampant corruption, but also by a thorough and overt undermining of democracy. A wiretapping scandal involving Gruevski exploded last year, revealing the government’s extensive use of domestic intelligence to spy on the opposition and Gruevski’s own political associates. As late as 2014, the EU identified few serious problems with high-level corruption in Macedonia — but after the scandal broke, a European Commission inquiry determined that the government had systematically engaged in “interference in judicial affairs, restrictions of freedom of the media, electoral irregularities, blurring of state and party, as well as lack of oversight over intelligence activities.” The political fallout from the scandal, including the opposition’s boycott of parliament, concluded with an EU mediator negotiating Gruevski’s resignation and the setting of a timeframe for new elections this year. Gruevski’s absence from government seems temporary, however. He is active in campaigning and makes almost daily media appearances, and polls show that VMRO-DPMNE remains Macedonia’s most popular party and is poised to return to power. And just this week, Gruevski’s ally, Macedonian President Gjorge Ivanov, abruptly ordered the end of a criminal inquiry on the wiretapping scandal. This effectively frees Gruevski from the potential prospect of facing criminal charges for his conduct.

From Croatia to Albania, the region has plenty of grim stories of autocrats cloaking themselves in democrats’ clothing.

From Croatia to Albania, the region has plenty of grim stories of autocrats cloaking themselves in democrats’ clothing. Yet credit for the most dramatic political transformation — from ally of a war criminal to darling of the West — no doubt belongs to current Serbian Prime Minister Aleksandar Vucic.

Vucic has quickly become a favorite in the West for his willingness to chip away at Russian influence in the country. Vucic has managed to pull off this remarkable feat despite the resistance of his governing partner and former mentor, President Tomislav Nikolic. Both Vucic and Nikolic spent the late 1990s as allies of former dictator Slobodan Milosevic but have since come a long way in refashioning their images from radical nationalists to reformers. Last year, Vucic was among the few Balkan leaders to be received at the White House, where he met U.S Vice President Joe Biden and National Security Advisor Susan Rice. In a move that likely pleased U.S. officials, Vucic pulled off a major geopolitical coup by signing the controversial agreement with NATO, effectively undermining what many saw as Russian efforts to gain a military foothold in Serbia. Unsurprisingly, Moscow responded indignantly to Belgrade’s agreement with NATO but has so far shied away from any steps to retaliate.

And yet Vucic has not exactly thrown the Kremlin’s phone number into the trash. Last October, he visited Moscow, where he met President Vladimir Putin and signed a deal for the purchase of Russian military equipment. Unlike Albania and Montenegro, Vucic has resisted demands to abide by EU sanctions against Russia, imposed after the Ukraine crisis. He and Nikolic have both made personal efforts to allay Russian fears over Serbia’s NATO agreement and reaffirm its official position of military neutrality.

Last December, Vucic was lauded by EU officials for arresting 80 former officials, including former ministers, on corruption charges. Conveniently for Vucic, most of those arrested were members of opposition parties. Serbia’s independent media have also suffered under his rule: Human Rights Watch has reported that the number of attacks and threats against journalists in Serbia was among the highest in the region. Just recently, a journalist at Serbia’s state television was sacked for asking Vucic “inappropriate questions” about his role in the ethnic cleansing of the 1990s. It was bad timing: Flaunting his reformist and pro-EU credentials is especially important for Vucic these days, as he faces an election later this month, which he is expected to win handily.

Vucic has managed, in part, to endear himself to the West through his willingness to continue negotiations with the leadership of Kosovo, in a bid to “normalize” relations with the nascent country. This “normalization,” however, falls short of any real intention by Serbia to recognize Kosovo’s independence, which Vucic categorically rejects, or dismantle Belgrade’s parallel institutions in the Serbian-controlled north. In fact, under pressure from the EU and United States, late last year the Kosovar government agreed to recognize and incorporate some of these institutions, a move that sparked a political backlash. (Kosovo, less than a decade old, is itself already exhibiting features of a budding autocracy: The Democratic Party of Kosovo, led by former Prime Minister and recently inaugurated President Hashim Thaci, failed to gain a ruling majority in the country’s 2014 elections and held on to power mainly by relying on the party’s control over the Constitutional Court. In response to the opposition’s protests against the agreement with Belgrade, the government has arrested dozens of opposition MPs and the leader of the main opposition party and used antiterrorist police units to ransack the main opposition party’s headquarters.)

For a variety of reasons, U.S. and EU policymakers have shown great tolerance toward the abuses of Balkan autocrats. In the context of the Ukraine crisis, U.S. priorities have shifted toward expanding NATO and preventing, or minimizing, Russian influence in the region, especially in Serbia and Montenegro. This makes leaders like Djukanovic and Vucic especially valued interlocutors. Some observers believe that U.S. support in recognizing Serbian claims in northern Kosovo is partly the result of this shifting geopolitical landscape, in which the United States is willing to pay a price to appease Belgrade. The diplomatic push for Kosovo’s international recognition has also appeared to lose steam: Despite being recognized by more than 100 countries, Kosovo has remained largely shut out of international organizations. Last year, the country launched a failed bid to join UNESCO.

Geopolitics have also enhanced the importance of efficient Balkan rulers in other ways: Today, their ability to deliver immediately on the more expedient demands of Western powers is more valued than success at the long and slow processes of democratic and judicial reform. The refugee crisis has made Macedonia an important frontier state, and the EU has turned a blind eye to the country’s use of violent tactics to keep Syrian and other Middle Eastern refugees from entering the country in transit to such destinations as Austria, Germany, and France. Serbia’s efforts to control the flow of refugees have been equally applauded, especially given the tensions the issue has created in neighboring Hungary. Moreover, domestic crises, including the eurozone dilemma, Brexit, and political fallouts from the flow of refugees, have kept EU officials preoccupied with internal matters, making EU enlargement largely an afterthought.

The overriding concerns with issues of security and political stability are partly responsible for giving free rein to the budding autocrats of the Balkans. Aware of their indispensability to strategic goals and interests beyond democratization and the rule of law, local leaders have masterfully exploited the political and diplomatic cover offered by strengthened EU and U.S. ties to attack and undermine domestic opponents. These ties especially have allowed leaders like Gruevski, Thaci, and Djukanovic to claim that, unlike their opponents, they enjoy the support of powerful Western patrons. And, with domestic opposition weakened, little stands in the way between them and their grand ambitions of power.

The Balkans may provide a buffer to contain Russian influence in Europe and fortify it from the flow of Middle Eastern refugees. Tolerating autocratic behavior and misrule may seem a worthwhile price to pay for stability. But this is a dangerous and costly gamble. Last year, in a visit to Croatia, U.S. Assistant Secretary of State Victoria Nuland gave a speech warning the region’s leaders against threats of “violent extremism, corruption, and criminality and the sleazy autocrats and oligarchs who come bearing gifts that promote their own interests.” The statement was interpreted as a jab at Russia. But U.S. and EU policymakers need to ask themselves if oligarchs, autocrats, and kleptocrats, who happen to be pro-Western, are any better than Putin — or helpful for the West’s long-term interests in the region. The EU must also decide whether it will make the push for reform and meaningful political change or allow the Balkans’ fledgling autocrats to swindle their way into the EU.

Photo credit: ROBERT ATANASOVSKI/AFP/Getty Images

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politico.eu

Serbia's latest would-be savior is a modernizer, a strongman — or both

Matthew Karnitschnig

BELGRADE — Depending whom you ask, Aleksandar Vučić is either Serbia’s last great hope to become a modern European democracy or a strongman-in-waiting whose autocratic tendencies threaten to destabilize the Balkans.

A one-time ultranationalist who played chess with the Bosnian Serb General Ratko Mladić and served as information minister under the nineties wartime leader Slobodan Milošević, the Serbian prime minister presents himself these days as a reformer committed to leading his country into the EU. Europe, tired of the turmoil that rocked the region for the better part of two decades, wants to believe him and has put Belgrade’s membership application on the top of the accession pile.

Vučić is expected to emerge the clear victor in parliamentary elections later this month. The latest polls suggest his Serbian Progressive Party and its allies may even win an outright majority. The big question — for both the Balkans and Europe — is what he plans to do with that power.

His detractors warn that he is building an Orbán-like political machine at both the national and local level, quelling dissent by maintaining a tight grip on the country’s media.

“What’s his game? I don’t know, but it’s not good for democracy in Serbia,” said Jelena Milić, director of the Belgrade-based Center for Euro-Atlantic Studies, a liberal think tank.

Love him or hate him, it’s difficult to deny that the 46-year-old Vučić has become the region’s key political actor. By keeping a lid on regional tensions from Kosovo to Bosnia, Vučić has managed to win the confidence of key leaders in the U.S. and Europe.

‘We are fed up with being the bad guys of the world’

During his visit to Berlin in September, Angela Merkel applauded Vučić’s “courageous decisions” on Kosovo, adding that his openness to compromise had given Serbia’s EU aspirations an “important impulse.”

Sitting in his Belgrade office last week, Vučić, dressed casually in jeans and a sport coat over an open gingham shirt, returned the compliment. “I consider her to be the true leader of Europe and I’m not ashamed to say that,” he said matter-of-factly.

During the lengthy discussion, Vučić, an imposing figure of about two meters, appeared both confident and relaxed. Time and again, he insisted that his only agenda was to firmly anchor Serbia in Europe.

“My political philosophy is to bring the economy to the top of our priorities, which means to have political stability to do all necessary reforms,” he said.

Nationalist roots

Nearly 20 years after NATO bombs rained on Belgrade, the country’s economy remains weak. Economic output per head was just above $5,000 in 2015, putting Serbia, a country of just over 7 million, alongside the likes of Iraq and Libya. Amid the Balkan wars and persistent domestic tensions, Serbia’s economy never completed the transition from the communism of the Yugoslav period to a market economy. Unemployment is about 20 percent and the state sector remains the dominant employer in the country. Though the government is in the process of privatizing state-owned companies, many are too inefficient to attract buyers.

Nonetheless, Serbia has made progress in restructuring its economy to bring its debt under control in recent years, winning high marks from the International Monetary Fund and others. Economic growth, at 0.8 percent last year, is modest but has beat expectations. If all goes according to plan, the economy should grow by more than 2 percent this year, Vučić predicts, above the IMF’s forecast of 1.75 percent.

More important, the changing environment is attracting sorely needed foreign investment, from Ikea to Hilton to Chinese infrastructure companies. Just last week, China made an offer to acquire a state-owned steel plant, a crucial deal that could secure thousands of jobs in the beleaguered sector.

Given that trajectory, it might be difficult to understand why critics both in Serbia and in neighboring countries distrust Vučić’s motives.

“I consider her to be the real leader of Europe”  — Aleksandar Vučić says of German Chancellor Angela Merkel. “And I’m not ashamed to say that.”

The answer lies in his past as an extremist. In his early twenties, Vučić joined the Serbian Radical Party, an ultranationalist group to the right of Milošević that wanted to carve a “Greater Serbia” out of the ruins of Yugoslavia. He became a protégé of Vojislav Šešelj, the party’s leader who just last month was acquitted of war crimes in The Hague.

As minister of information in 1998, Vučić cracked down on critical journalists, imposed hefty fines on publishers that didn’t fall into line and even banned some foreign media, moves he now says he regrets.

Vučić broke with Šešelj in 2008, joining a group of other pro-EU Radical Party officials, including current president Tomsislav Nikolić, to form the Progressive Party.

‘I’ve admitted my mistakes’

In the years that followed, Vučić, who famously declared in parliament in 2007 that his home would always be a “safe house” for suspected war criminal Mladić, gradually became more conciliatory. While he never fully renounced his nationalist ideology, he condemned the Srebrenica massacre and acknowledged Serbia’s shared responsibility for the Balkan wars. He visited Srebrenica for commemorations twice last year, returning for a second visit in November after being forced to flee by a rock-throwing mob during his first trip.

“I do my best to be very realistic,” he said. “I’m not ashamed of my past, but I’ve admitted my mistakes, publicly.”

Today, he credits that metamorphosis for his political success.

“Many people felt the same,” he said. “They believe in me today because they had the same feelings, the same political attitudes, the same political stance and now they are different. We are changed.”

There’s no question Vučić’s conservative pro-EU message has resonated amongst Serbs.

A walk through central Belgrade helps explain why. For all Serbia’s progress, the country still has one foot firmly planted in its past. Reminders are everywhere. Just a block from Vučić’s office stands the bombed out shell of the former defense ministry, a prime target of the NATO bombings in 1999 that successive governments have left in ruins as a reminder of that conflict with the West. Along Knez Mihailova, Belgrade’s main shopping street, vendors hawk pro-Mladić T-shirts that read: “What’s the General afraid of? God and nothing else.”

For more than a decade after Milošević was overthrown in 2000, Serbia was controlled by reform-minded democratic parties. Many Serbs saw the democrats as the country’s salvation after the wars and isolation of the Milošević era.

It was a tumultuous period, marked by the assassination of Prime Minister Zoran Đinđić in 2003 and other crises. Many Serbs were also left disillusioned by widespread government corruption.

In 2012 parliamentary elections, Vučić’s Progressives captured 24 percent of the vote, finishing first. A few weeks later, Progressive party founder Nikolić was elected Serbian president, further bolstering the party’s position.

After another round of parliamentary elections in 2014, the Progressives doubled their support to nearly 50 percent, giving them a majority of the seats in parliament and making Vučić prime minister.

EU or Russia?

Despite his dominant position, Vučić called elections two years ahead of schedule in January, seeking a fresh four-year mandate. Months earlier, he hired another political renegade — former British Prime Minister and Labour leader Tony Blair — to advise him. Vučić’s aim is to secure another full term before he implements the deep job cuts and fiscal measures necessary to retool Serbia’s economy. His hope is that Serbia will be poised to join the EU by the time the government’s next term ends in 2020.

That may be wishful thinking. The Commission has made it clear it’s in no rush to admit new members, but the EU’s general disarray and political infighting may ultimately prove to be the bigger obstacle.

The risk is that keeping Belgrade on hold will push it deeper into the arms of Russia.

Russian investment in Serbia is modest compared to that from the EU. Still, polls show Serbs consistently regard Moscow as Serbia’s most important ally. Russian President Vladimir Putin visited Serbia in 2014 to celebrate Belgrade’s liberation from the Nazis in 1944 by the Red Army. The commemoration, which included the country’s largest military parade in decades, was even pushed forward a few days to accommodate Putin’s schedule.

While Serbs generally have a positive view of the EU, their connection to Slavic, Orthodox Russia has a more visceral, almost mystical quality.

That tendency appears particularly strong among younger people. Though most young Serbs believe both living and democratic standards are higher in the EU than in Russia, a clear majority would welcome a Russian military presence in the country and would support Moscow’s foreign policy, according to a recent Ipsos study of 18-35 year-olds.

Milić, of the Center for Euro-Atlantic Studies, says Vučić does nothing to counter Moscow’s influence. Serbia did not join the EU and U.S. in imposing sanctions against Moscow for its annexation of Crimea. Milić says Russia’s soft power, which she calls the “invisible hand” in Serbian politics, is growing. Šešelj and other far-right groups advocate closer ties with Russia. Their message is transported across Serbian social media by dozens of supposedly grass-roots pro-Moscow organizations that have sprouted in recent years.

Milić says her own institute, which favors a pro-NATO course, has had its servers taken down by hackers. She was recently given police protection after receiving threats.

German Chancellor Angela Merkel and Serbian Prime Minister Aleksandar Vucic | John Macdougall/AFP via Getty Images

“People are sentimental about Russia but are pragmatic,” explains Bojan Klačar, an analyst with the Center for Free Elections and Democracy, a non-partisan group that monitors and analyzes the country’s political scene.

Vučić said he saw no reason why Serbia’s close ties to Moscow should be an obstacle on its way to the EU.

“Yes, we would like to preserve traditionally good relations with Russia …but our priority, speaking about foreign policy, is to be on the EU path,” he said.

‘Self-censorship widespread’

If nothing else, Vučić and his party have brought Serbia a semblance of stability. Though the liberal parties that preceded the Progressives laid the groundwork for Serbia’s EU aspirations, it was Vučić who formally set the ball rolling by beginning the accession process in 2014.

Nonetheless, his detractors say the stability has come at the cost of democratic values, in particular a free press. In recent years, the Vienna-based Organization for Security and Cooperation in Europe has repeatedly complained about physical assaults against critical journalists, as well as hacker attacks directed at a number of media websites.

“Media outlets and journalists continued to face pressure from politicians and owners over content and editorial policies,” democracy watchdog Freedom House concluded last year.

This week, a reporter from Serbia’s public broadcaster in the Vojvodina region was suspended and had her salary cut for asking about Vučić’s ultranationalist past.

Vučić tweeted “all of those who punish journalists, supposedly in my name, should be ashamed of themselves.” But Serbian reporters say such reprisals are far from rare. In Brussels, officials downplay such concerns. Given the continued tumult in the region, Serbia looks to be a relative sea of calm.

“The EU is interested in the stability of the region and he delivers,” said Ljubica Gojgić, a prominent Serbian broadcast journalist. “From the point of view of Brussels, they couldn’t hope for a better partner.”

While acknowledging Vučić’s shortcomings, in particular his sensitivity to criticism, EU officials say they see no viable alternative. By appealing to both nationalists and reform-minded pro-EU voters, Vučić is in a unique position to move the country forward, they argue.

So far, he has given them little reason to doubt his sincerity. Not only has he stayed true to Serbia’s reform course, he has also helped keep the peace in the Balkans. On Kosovo, he proved to be more willing to compromise than the liberals in power before him.

During the refugee crisis in the Balkans last year, Serbia was a model of cooperation. After Hungary closed its border, Belgrade shuttled refugees to the Croatian frontier, ensuring the refugees safe passage.

In the interview, Vučić said his biggest worry was the rise of extremism in the region, especially in and around Bosnia. The recent Hague verdicts have reopened old wounds on all sides.
“Who knows what spark might ignite Bosnia,” he said.

In Serbia, Šešelj’s acquittal has made it all but certain that his Radical Party, which was shut out in the last elections, will win seats in parliament.

On the campaign trail in recent days, Vučić has warned that the nationalists could even regain power. Given his huge lead in the polls, the comments appear to be a spirited attempt to get out the vote.

Some analysts say the return of the ultranationalists could end up helping Vučić by making his party appear more measured.

The risk is that after regaining a platform in parliament, the extremists will return the national debate to a narrative of Serbian victimhood. Vučić said he’s determined to keep that from happening.

“We need a good reputation,” he said. “We are fed up with being the bad guys of the world … we want to just be a normal boring country in 10 or 20 years.”

 

newsweek.com

Panama Papers: Who was behind the investigation into elite's tax havens?

By Paul Lashmar On 4/4/16 at 8:16 AM

This article was originally published on The Conversation. Read the original article.

With the Panama Papers exposé perhaps we can now say the fortress walls of offshore secrecy are finally cracking. Such havens allow corruption and tax avoidance to take place on a massive international scale by some of the richest and most powerful people on Earth. Meanwhile, the poor get poorer.

Western politicians have huffed and puffed about clamping down on offshore havens but in reality their collective breath would not have knocked over a little piggie’s straw house let alone bastions of vested interest. It is thanks to investigative reporters, whistleblowers and unprecedented international media collaboration that the matter is being forced.

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The advocacy group Global Financial Integrity reports that illegal channelling of profits offshore cost developing countries nearly US$6 trillion between 2001 and 2010. As Facebook posters like to remind us, one percent of the world’s population owns half the wealth and they like to hoard it.

But finally things may be changing. We are being treated to the third major offshore data leak in as many years. The first was the Cayman Islands tax leak in 2013 that exposed a huge number of major figures worldwide as holding accounts in the tiny island—a British dependency—in secrecy.

Then there was the great HSBC leak which revealed that the company’s Swiss private bank had helped wealthy account holders from other nations to dodge huge sums of due tax. Now it is the turn of Panama—an excellent place to park large sums of money.

The Panama investigation has again featured a network of like-minded journalists in a range of countries. The network has been built up over a series of multinational collaborations. Among the organisations involved are The Guardian and BBC TV’s Panorama programme, which have a longstanding relationship with the International Consortium of Investigative Journalists (ICIJ) which is at the heart of this operation. The material is reported to have been leaked to the German newspaper Süddeutsche Zeitung from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm.

As the cracks appear in the once invincible wall of tax haven secrecy, it must be dawning on the rich and powerful that their privacy is no longer guaranteed. The opening reports of the Panama Papers focus on a US$2bn trail to Vladimir Putin, the president of Russia. But we can expect coming days to bring revelations about many more people. The last thing the rich and powerful who have offshore bank accounts want is publicity about them. Their questions must be “where next” and “which havens remain safe?”

Secret banking paradise

What is important about Panama’s financial services industry? If you tap “Panama offshore” into Google you get a long list of adverts offering to set up a Panama offshore (secret) bank account for you.

For those wanting to establish a really secret tax avoidance scheme it is not good enough just to pick one offshore tax haven—say the British Virgin Islands or the Cayman Islands. You need a series of interlocking offshore accounts in different jurisdictions to guarantee anonymity. British Virgin Islands is good for setting up companies and the Caymans provides extremely discreet bank accounts. Meanwhile Panama is tax exempt and stonewalls requests for company information from investigators in the rest of the world.

Offshore companies incorporated in Panama—and the owners of the companies—are exempt from any corporate taxes, withholding taxes, income tax, capital gains tax, local taxes, and estate or inheritance taxes, including gift taxes.

Panama has more than 350,000 secretive International Business Companies (IBCs) registered: the third largest number in the world after Hong Kong and the British Virgin Islands. Alongside incorporation of IBCs, Panamanian financial services are proactive in forming tax-avoiding foundations and trusts, insurance, and boat and shipping registration. Violation of financial secrecy is punishable by prison.

Panama ranks at 14th position on the 2015 Financial Secrecy Index. But it remains a jurisdiction of particular concern. The Organisation for Economic Co-operation and Development’s Pascal Saint Amans summed up the problem recently: “From the standpoint of reputation, Panama is still the only place where people still believe they can hide their money.”

The Tax Justice Network says that “until now Panama has been fairly indifferent to reputational issues, but the increased attention that Panama receives will inevitably raise concerns among the punters that Panama is no longer able to effectively protect the identity of the crooks and scammers attracted by its dodgy laws and equally dodgy law firms.”

TJN says Panama has long been the recipient of drugs money from Latin America, plus ample other sources of dirty money from the US and elsewhere—it is one of the oldest and best known tax havens in the Americas. In recent years it has adopted a hard-line position as a jurisdiction that refuses to cooperate with international transparency initiatives.

In Jeffrey Robinson’s 2003 examination of tax havens: The Sink: Terror, Crime and Dirty Money in the Offshore World, a US Customs official is quoted as saying:

The country is filled with dishonest lawyers, dishonest bankers, dishonest company formation agents and dishonest companies registered there by those dishonest lawyers so that they can deposit dirty money into their dishonest banks. The Free Trade Zone is the black hole through which Panama has become one of the filthiest money laundering sinks in the world.

The investigators

The emergence of a multinational network of journalists prepared to take on these secret havens has at its heart the investigative journalist Gerald Ryle, who spent 26 years working as a reporter and editor in Australia and Ireland, including many years at The Sydney Morning Herald and The Age newspapers.

A quietly spoken man, he uncovered some of the biggest stories in Australian journalism, winning four prestigious Walkley Awards including the Gold Walkley, Australia’s highest award for journalism.

While working for the Sydney Morning Herald in Australia, Ryle was told by a source he would receive an significant package which could be the biggest story of his career.

I still remember the day it arrived, there was just the office manager there, I just hugged her and thanked her and walked back to my office. I pulled the package open and there was a hard drive inside.

At first he did not know what it all meant but it became clear that it was an enormous cache of details of confidential emails, documents and files from the offshore world. From what could be made of the scattered and vastly disorganised material, Ryle later recalled his thoughts.

I know it is a potential goldmine but I don’t actually know what I’m looking at, I’m not sure how valuable it is.

Ryle knew it was information from the secretive offshore world, was authentic and that the next step was to organise extracting the data in some kind of meaningful format. A chance to have access to the resources needed for this type of operation became available when Ryle was offered a job heading the International Consortium of Investigative journalists (ICIJ) in Washington DC.

Founded in 1997, ICIJ was launched as a project of the Centre for Public Integrity to extend the centre’s style of watchdog journalism, focusing on issues that do not stop at national frontiers: cross-border crime, corruption, and the accountability of power.

Teamwork

With the consortium’s resources available to him, Ryle started to organise an international effort to structure the information so that journalists worldwide could analyse and find big names and stories from the data on a safe and secure platform in an efficient and ordered way.

Within 24 hours of publication of details of Cayman Island tax havens in April 2013, the Guardian was filled with stories from a collaboration with the International Consortium of Investigative journalists (ICIJ). The tie-up also included the BBC in the UK, Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation (CBC) and 31 other international media partners.

According to the ICIJ, 86 journalists from 46 countries used both hi-tech data crunching and traditional reporting to sift through emails and account ledgers covering nearly 30 years. One of the biggest hits for the ICIJ was on Azerbijan’s president, Ilham Aliyev, after he and members of his family were revealed as shareholders in at least four offshore companies. It is against Azerbaijani law to be involved in business while in power. By September 2013, journalists from 190 countries had produced stories from the database about prominent citizens who had hidden offshore accounts.

HSBC leak

Then in February 2015 a team of journalists from 45 countries opened to public scrutiny secret bank accounts maintained for criminals, traffickers, tax dodgers, politicians and celebrities. Secret documents in the data batch revealed that global banking giant HSBC profited from doing business with arms dealers, the ICIJ reported. The leaked files, based on the inner workings of a Swiss private banking arm of HSBC, related to accounts holding more than $100 billion. They provided a rare glimpse inside the super-secret Swiss banking system.

The documents, obtained by the ICIJ via the French newspaper Le Monde, showed the private banking arm had dealt with clients who were engaged in illegal behaviour.

In February 2015, after being informed of the full extent of the reporting team’s findings, HSBC gave a conciliatory response, telling ICIJ: “We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today.”

Later that year ICIJ was given access to the largest data haul so far—some 11m documents covering accounts held by the rich across the globe. The follow-up stories are breaking now and will fill news bulletins for months—maybe years. It is proof—if any were needed—of the need for investigative journalists to hold the powerful to account.

Paul Lashmar is a senior lecturer in Journalism at the University of Sussex