Ukraine war erodes Russia’s economic clout in Western Balkans

Ukraine war erodes Russia’s economic clout in Western Balkans
The Russia House in Belgrade; Russia's influence is most effective through media and disinformation channels. / Clare Nuttall
By bne IntelliNews August 21, 2023

The war in Ukraine has led to a reduction in Russia’s economic presence in Bosnia & Herzegovina, Montenegro and Serbia – the three Western Balkan countries where it historically has had the greatest influence, according to a new report from Clingendael, the Netherlands Institute of International Relations. 

While Russia still has economic clout in the three countries, notably as an energy exporter and the owner of crucial energy infrastructure, overall its role in their economies has been far outstripped by the EU’s, both before and after the February 2022 invasion, says the report, titled “Little substance, considerable impact”, which looks at Russia’s goals and influence in the three countries. 

Overall, the report’s authors find, there has been only a small impact from Russia’s invasion of Ukraine on its stance concerning Bosnia, Montenegro and Serbia, with its fundamental approach largely unchanged. 

“While the invasion has led to sharper dividing lines between Russia and the West and decreases in Russian financial and diplomatic capacities, we observe continuity in terms of Russian strategies and objectives,” says the report. 

“Russia’s sources of influence in the three countries have been moderately strained, among other causes as a result of BiH and Serbia’s first steps to diversify energy sources and Western pressure to diminish their political and security links with the Russian Federation. For the time being, this has not yet affected Moscow’s ability to act as a spoiler to the Euro-Atlantic integration of the three countries.” 

Russia’s hopes of using the Balkan region as a route to supply its oil and gas to Europe were already dashed back in 2014, when the South Stream project was abandoned. The 2022 Ukraine invasion only confirmed this, with reduced Russian gas supply, lower European demand, and EU sanctions on Russian oil imports cementing the shift.

Russia is, however, still working to maintain its energy-based economic influence in the region. In the energy sector, Russia maintains influence by supplying almost all gas imports to Serbia and Bosnia, where it also owns energy infrastructure. 

“Russia maintains economic clout especially in the energy sector in Serbia and Bosnia and Herzegovina, as it provides nearly 100% of both countries’ gas imports and its energy giant Gazprom owns crucial energy infrastructure in these countries. Russia makes active use of the energy ties to politically influence the region,” says the report. 

However, it points out that the share of gas in each country’s energy mix remains low. Meanwhile, Russia has so far persuaded only Serbia to sign a free trade agreement (FTA) with the Russia-led Eurasian Economic Union (EAEU). 

Moscow’s Balkan strategy 

In the Western Balkans, Russia pursues three key objectives. First of all, it aims to assert global power. Secondly, it hampers Euro-Atlantic integration by opposing Nato and EU involvement and fostering instability. Thirdly, the region, particularly Kosovo, becomes leverage for Russia's broader foreign policy, defending its influence in neighbouring areas.

Its approach to achieving these goals is largely opportunistic. “The Kremlin displays moderate ambitions for building positive relationships with the three countries, which is reflected also in the instruments it uses to influence the region,” the report explains. “It nurtures contacts with, and influence through, a wide range of individual politicians, the Orthodox Church, the media and malign proxy groups, making use of energy links as well as local tensions and historical memories. Moscow pursues this approach deliberately, and it has proved relatively successful.” 

Although after the invasion of Ukraine Western concerns about Moscow's influence in the Western Balkans have grown, the report’s authors argue that the region is not a foreign policy priority for Russia. 

“Russian attention on the Western Balkans as part of its broader foreign policy has faded away over the past few years. Russia is now primarily interested in obstructing EU and Nato integration and projecting its great power status and mostly takes up a spoiler role in the region with attempts at destabilisation,” they explain. This contrasts with the stronger Russian objections to what Moscow sees as Western meddling in the post-Soviet states of Ukraine, Moldova and Georgia. 

“In short, Russia sees the region as a tool that can be used to project its great power status on the one hand, while obstructing the West and sowing the seeds of unrest on the other; however, Russia does not seem to be willing to invest in institutionalised and broader relations with the three countries in the region. The policy that follows Russian goals in the Western Balkans comes across as largely devoid of substance,” the report says. 

Multiple approaches 

Aside from its economic leverage, Russia also seeks to influence the region through political, military and media channels. 

Politically, Russia's influence is most notable among Serb politicians, who employ similar narratives to Russia’s and leverage Russian support. Russia’s support for Belgrade over the Kosovo issue is particularly important. However, the report notes, while portraying itself as a partner, Russia also exploits effective malign tactics to shape the Western Balkan political landscape. “Lacking a military presence in the region, Russia supports far-right nationalist figures and organisations, which generally better resemble organised crime groups than paramilitary organisations, to attain its goal of destabilisation by stirring up polarisation and anti-Western sentiment.” 

In the military sphere, Russia aims to sustain collaboration with Serbia while backing the militarisation of Bosnia’s Republika Srpska. Russia also has no military presence in the region, instead resorting to “other, hybrid, methods to stir up unresolved conflicts and instability”. These efforts have largely failed; most countries in the region, including Montenegro, have become Nato members. 

Russia has, however, been more successful in its media and disinformation efforts. Through Russian-backed portals, local media, and social platforms, Russian propaganda infiltrates Bosnia & Herzegovina, Montenegro and Serbia. This pervasive disinformation has led significant portions of society to hold favourable views of Russia and its leadership.

“Russia employs various narratives in its approach towards Bosnia and Herzegovina, Montenegro and Serbia that resonate well with substantial sections of their populations," says the report. Among these narratives are presenting Russia as the protector of Serbia's interests vis-a-vis Kosovo and as the defender of Christian-Orthodox traditional values. 

Thanks partly to the success of these strategies, Russia’s spoiler role in the region’s Euro-Atlantic integration remains unhampered for now. Overall, as detailed by the report, the Russian invasion of Ukraine has moderately influenced, yet not fundamentally reshaped, Moscow’s stance toward Bosnia, Montenegro and Serbia.