Almost two decades after the collapse of communism and the end of the Yugoslav civil war, the Western Balkans countries still suffer from economic and security uncertainty –  problems that closer ties with Nato could help address, according to retired US Admiral James Stavridis, dean of the Fletcher School of Law and Diplomacy at Tufts University and the former supreme allied commander at Nato from 2009 until 2013.

Joining Nato has been one of the main political goals for all Balkan countries except Serbia, which declares itself to be militarily neutral. Serbia is now increasing its links with Nato, but faces opposition from large sections of the population who favour traditional ties with Russia.

Stavridis tells bne IntelliNews in an interview that closer ties with Nato can help these countries attract foreign investors as well as to improve their economic and political stability. “Participating with Nato as a partner or ultimately joining the alliance is a way that a nation can enhance its appearance of stability and independence,” he says. “Stability is the key. Investors don’t want to go to a region where there is an eruption of combat, regions with high tensions or barriers to trade and investment between nations.”

“Investors want to be in a region where nations are cooperating with each other, working together. For the Balkans the best course of action is for nations to engage in dialogue with each other and lessen tensions. It is very important for investors to see a stable environment,” he says.

Croatia and Slovenia are already members of both Nato and the EU, and Albania is in Nato. All other countries in the region declare EU integration as their main goal. “Investors want to come to a country which is either in the European Union or has strong ties with them,” Stavridis says.

He compares post-war Yugoslavia to Western Europe after the World War II, where nations, particularly France and Germany, “chose to build strong relationships with each other” to create stability. “Today, Western Europe has the largest combined economic zone in the world of $17 trillion and I think that’s a pretty good example of what happens when nations cooperate with partners in the region... My hope is that over time we will see exactly the same happening in the Western Balkans,” Stavridis tells bne IntelliNews.

As well as EU membership, trans-Atlantic connections are also valuable for US investors. “Nato membership is a significant enhancement from the perspective of the US investors,” the admiral underlines.

Several factors have held back Balkan countries from entering Nato. Macedonia has been in limbo due to the long-running dispute with Greece over the former Yugoslav state’s name.

Meanwhile, Serbia insists on staying militarily neutral, while strengthening its partnership with the alliance. The reasons for this decision are social, political and even economic. Memories of the Nato bombing of Serbia in 1999 are still fresh – partly thanks to pro-Russian propaganda which constantly brings up the subject. Belgrade has also refused to recognise Kosovo, which unilaterally declared its independence from Serbia in 2008.

However, Serbian Prime Minister Aleksandar Vucic said in February that the Nato-led peacekeeping force in Kosovo (KFOR) is a guarantee of peace and stability in Kosovo and a guarantee of safety for Serbs who stayed in Kosovo after 1999. “We need Nato as an ally and to protect our people in Kosovo,” Vucic said February 16, after Serbia’s parliament adopted a law ratifying an agreement between Serbia and the Nato Support and Procurement Organization (NSPO) on logistic support cooperation.

Adoption of the law was criticised by opponents of cooperation with Nato and pro-Russian Serbians, leading to tensions within Serbia. Shortly after the deal with Nato was ratified, Vucic had to assure the Russian Ambassador to Serbia Aleksandr Chepurin that Serbia's official position is to remain militarily neutral.

Tensions have also increased between Serbia and the US recently after two Serbian diplomats, kidnapped by militants in November, were killed in Libya on February 19. There are conflicting accounts of how the two Serbian diplomats died; autopsies carried out in Belgrade’s Military Medical Academy on February 24 showed that the two Serbs died in a US airstrike on the Islamic State (IS) camp where they were being held prisoner, but there are reports in the US media that the US military believes they were killed by a militant group before the strike. “If the Pentagon is saying definitively that Serbs were not killed by the US air strike, I would put faith and trust in the Pentagon, firstly, because it has an access to extremely high levels of intelligence, [and] secondly, there would not be a reason for the US to deny it if we had killed two Serbians through collateral damage,” Stavridis says.

However, both sides appear to want to avoid escalating the dispute. On March 3, Vucic and US Deputy Assistant Secretary of Defence Michael Carpenter agreed that the joint goal of the two countries was to find out the full truth about the circumstances of the deaths, indicating this is not likely to prevent closer relations between Serbia and Nato in future.

For Stavridis, the question of Nato membership is a choice for Serbians to make, taking into account the country’s balancing of its relations with the West and Russia.

“Nato membership is a significant enhancement from the perspective of US investors. But, if you are Serbian you do have to ask that question the other way around which is would that discourage Russian investors… From my perspective, I do hope that it would not have an influence. If Serbia has a good and an open trade relation with Russia, it doesn’t bother me at all. Those are decisions for Serbs to make and I would hope that Russia would take the same view,” Stavridis says. “I would argue that the trans-Atlantic connections and connections with the EU and trade with the Europe are very valuable for US investors as well as decisions our friends in Serbia about organisations they decide to join.”

However, he adds that, “This is a choice for Serbia, which shouldn’t be pro-US or pro-Russian or pro-Nato, but pro-Serbian [and should] make decisions based on what is the best for Serbia.”

EU countries account for 63.8% of Serbia’s total external trade, while Russia is among Serbia’s top five foreign trade partners. Serbia’s exports to Russia stood at $724.8mn in 2015, and imports from Russia hit $1.75bn. The US was 15th on the list of Serbia’s export markets, with exports amounting to $312.5mn, or 2.08% of total exports.