Institute for Strategic Solutions (ISR) has been applying its propriatory methodology in assessing investment environments in the Balkan countries since 2012. ISR is now happy to announce that the seventh edition of the Strategic Foresight has become part of its new publication – The Adriatic Journal – which will be published on 1 January 2019. The publication will be followed by a launch event at the beginning of January.
For 2019, we identified fIve key risks that corporations will have to take into account when doing business in the region. These are:
1. Increased meddling by global superpowers
As the Western Balkan countries are aspiring to join NATO and the EU, the area is becoming of interest to China, while Russia is amplifying its strategic presence. The Western Balkans are once again becoming an area of contrasting global interests. Hence, we can expect signs of increasing instability, as these outside forces could abuse the fragility of internal politics in the region to foster their own interests.
2. Slowing of Economic Growth
The area has been experiencing high economic growth in the past few years. Although social conditions remain problematic, due to high unemployment and low wages, there has been an upsurge in economic optimism. Due to the region’s dependency on global markets, which are showing signs that could lead to a decline in economic activity, we expect a decrease of economic growth in the region.
3. Conflicts Between Countries
In 2018 several conflicts have erupted in political relations between Balkan countries. We expect tensions between Serbia and Kosovo to escalate further. Relations between Serbia and Bosnia and Herzegovina will also be subject to the policy towards Republika Srpska by the newly elected representatives in the BiH’s presidency. Relations between Slovenia and Croatia will remain under pressure due to disagreements regarding the border arbitration ruling.
4. European elections will set the agenda for enlargement
European Union’s enlargement into Western Balkans remains the focal point for progress and development of the region. If the next European Commission fails to put enough effort and focus on placing the enlargement process on top of its agenda, rise of nationalist policies in the region can be expected, followed by increased instability.
With the European Union closing its borders tightly to prevent further crossings by illegal immigrants, some Western Balkan countries are effectively becoming the final destination for refugees. Increasing frustration amongst immigrants could escalate and cause unrests and riots. The situation is made even more volatile due to poor living conditions, as countries like BiH do not have enough funds to ensure adequate living conditions for immigrants.