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Dark Clouds over Serbia

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Experience shows us, that you can’t be too much optimistic, whilst trying to make proper analyses and right decisions.

Dark Clouds over Serbia

Originally appeared at Politika.rs, translated by Slavko Kovačević exclusively for SouthFront

The term “perfect storm” translates to a set of simultaneously, unfavorable circumstances, which, combined, make a situation extremely tough. By observing the geopolitical winds in the skies above Serbia, we can see that dark clouds have accumulated there, and signal us a possible beginning of this “perfect storm”. However, even in the worst case scenario, in which all of those negative outcomes would coincide, like in this case, the state, or an individual, is never really powerless and it, or he or she, shouldn’t hopelessly watch whatever unfolds in front of their eyes, without lifting a finger. The first step in the preparation of adequate measures, is to sincerely diagnose the entire problem, not a part of it.

The first negative trend for us, is the outbreak of so called ‘New Cold War;’ a return of the geopolitical tensions between the West and Russia. The first friction of those two powerful tectonic plates, spreads north and east of us, over the area between the Baltic and Black Sea, so Serbia is spared a huge amount of direct pressure and thus utter economic devastation. However, a direct consequence of this trend is the loss of being an international gas corridor, which nurtured a big hope for the central and western Balkan region and on which we based our future energy strategies. This fact would not be so tragic, if the regional countries had cranked up their significant resources in renewable energy, agreeing to use these potentials together and play their strongest trump card; hydro energy. But they didn’t.

READ MORE: The SAA And Russians are Unrelenting Against The Militants, Could China Also Jump In?

The second negative trend is the dramatic deterioration of the situation in northern Africa and Middle East. Instead of having the opportunity to use these markets, on which we had certain foothold and a lot of business opportunities, Serbia became part of the main flow for migrants and refugees (and possible terrorists), who are fleeing these areas in order to reach Western Europe. Next to the huge amount of costs this problem causes, the biggest consequence of this trend is the ultimate transformation of an open and multicultural European Union, into “fortress Europe”, in which even the internal Schengen agreement will be questioned, not to mention visas to the citizens of future EU candidates. The current increase of understanding the refugee problem in Europe, will only decrease the tolerance for economic migrants from the Balkans, so we may conclude that support for new member states of the EU won’t actually grow in near and foreseeable future.

The third negative trend represents the announcement of a new, global recession. A recession which is already an important topic in many discussions in various ‘closed’ circles, around the world. It’s indicative of what we already saw in the many speculative bubbles that exploded in the Chinese economy, or in the ending of economic growth in Brazil and the rising interest rates in credits in Europe and USA. This new global recession will have a dramatic influence on international trade, which will trigger direct negative consequences in the aforementioned Balkan countries, including Serbia, which are indentified as links of a great trade corridor. Called, ‘The New Silk Road.’

In the case of intersection of more negative international trends, the question arises about what one small and poor country would have to do, in order to survive and stimulate its own growth.

Primarily, we have to secure our internal stability and ability to reasonably judge. Proposals which are heading to physically isolate country from migrants, or even settling them in Serbia, find themselves on the same (and also wrong) side of common sense.  Then we need to maximize the use of our own resources and eliminate internal illogicalities. In this current situation, Serbia is not using imported gas to produce electricity, but to directly heat big cities, which economically makes no sense. The ex-YU was exporting the over flux of electric energy, because the country correctly recognized the fact that the warm air from the Mediterranean does cool over the Dinaric Alps, and thus creates a potential for the production of hydropower. Today, instead of countries joining for the sake of producing energy, they are announcing plans to create highways over mountains, plans which have no sound economical bearings. The list of absurd moves and decisions is too long to be published in this article.

Considering the international circumstances and dynamics of the EU-China relations, will prove crucial for Serbia. If these two engines, and half of Eurasia, find an agreement about how to improve cooperation, for the sake of preventing new economic crises and possible climate changes, Serbia itself may also benefit, from the preferential financing of merchandise infrastructure to raising energy efficiency. If Serbia, as one of the transit countries in the trade between Western Europe and East Asia, gets material and political support for the development of rail networks and access to renewable energy resources, this might lead to the opening of entire new vectors of growth, even under dire international circumstances, which are far from ideal.

The right combination of foreign and growth policies can prevent Serbia from having to face “the perfect storm.’ If the indications of a new recession are confirmed, the time and space for mistakes will be much more maligned than ever before.

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