Critical Raw Material Deals in the Western Balkans: Short-Term Profits, Long-term Consequences

For readers not on Twitter/X, DPC is making threads available here. This thread was posted July 18.

1/ For decades, one of the #ResourceCurse vectors propping up unaccountable governance in the #WesternBalkans has been infusions of funds from IFIs, IOs, and bilateral donors. These continue.

2/ But as several, including @DPC_global’s own Valery Perry have highlighted recently, there is a new factor feeding into the insulation of Balkan oligarchs, autocrats, and their business models: pursuit of Critical Raw Materials (#CRM).

3/ The scheduled visit of @Bundeskanzler Olaf Scholz to Serbia regarding Rio Tinto’s planned Jadar lithium mine, to attend the signing of an EU-Serbia MoU on cooperation…

4/ …on Critical Raw Materials (CRM), battery supply and electric vehicles, is but the latest datapoint – but a highly indicative one.

5/ As we’ve noted previously, the need for a “green transition” is real, as is the geopolitical competition aiming at making the West independent from authoritarian competitors, particularly China.

6/ But the process of pursuing said transition needs to be transparent and participatory to have depth and durability, let alone contribute to the region’s democratic transition.

7/ @avucic’s approach to #GeopoliticalArbitrage is as openly transactional as his governance model is autocratic, with a Potemkin democratic veneer. Scholz’s own government said so after the December electoral fraud.

8/ But business is business – the EU deal will be complemented tomorrow by a letter of intend between the Serbian government and several Western automotive companies, the future beneficiaries of lithium and batteries, among them @MercedesBenz –…

9/ …bypassing any misgivings about democratic prospects for #Serbia.

10/ There are three basic questions about any extractive projects that ought to be answered in the affirmative if there is any interest in support democratic transition as well as green transition.

11/First, do the communities affected & the wider polities have the opportunity to give – or deny – informed consent? Is there participatory deliberation undergirded by transparency? If not, it will be a net loss for society; and a gain for corruption and aspirational autocrats.

12/ Second, under what standards will this extraction take place? The EU’s? Existing local? And are the standards monitored by independent bodies (with whom citizens can interact) to protect local human, animal, plant life and air/water quality?

13/ Finally, where do the proceeds from these resources go? Who is the prime beneficiary? Do the local communities and wider publics benefit substantially?

14/ NONE of the #WesternBalkan 6 could currently clear these reasonable good governance hurdles. This is as is obvious to people in Berlin as it is in Brussels, London, Washington, Canberra, and so on.

15/ However, given the gravitation toward #LizardBrainGeopolitics” (as per @KurtBassuener), and seeking short-term alignment or material benefit alone, considering Western Balkan 6 “partner” adherence to democratic standards or accountability under law is seen as a distraction.

16/ This hypocrisy has compelled wide swathes of publics in the region to give up entirely on the EU, US, UK and wider West as values allies and champions – or at a minimum, dramatically reduce their expectations of being on the side of citizens rather than oligarchy.

17/ DPC will continue to press established democracies to apply their massive potential leverage in the WB6 & elsewhere to support democratic values as a core element of a strategic posture of comprehensive security.  

18/ But in addition, a much more assertive, strategic, and forward-looking popular demand side in these countries is needed. Not just to oppose assaults on their rights, #dignity, and health, but to propose alternatives to institutionally defend and further develop them.

19/ The EU enlargement process OUGHT to be a tool cued precisely to these goals. But if left on #BureaucraticAutopilot it cannot deliver transformation (as the past two decades demonstrate); …

20/ …instead, it has become an enabler, not opponent, of protracted malgovernance.

21/ Energetic and clever activism at the local level – with strategic networking among them – is needed to build constituencies of resistance AND visions of democratic systemic alternatives. But this terrifies investors, who want stability for their extractive projects at all costs.

22/ As of now, valiant resistance is increasingly visible in locales on both sides of the Drina and beyond, not only to exploitation of Vardar Zone’s lithium seam, but other CRM efforts. And there is active interchange among activists.

23/ What remains to be seen is an alternative vision of accountable democracy and society – defined INSIDE, by those who need to live with it. The EU’s acquis cannot substitute for a domestic recipe for democracy – but such a system, once envisioned, CAN be compatible with it.

24/ As of now, @avucic has to be delighted with what he is getting away with, even as he eagerly waits a potential Trump presidency; he parlayed financially profitable arms sales into a far more valuable political insurance policy with the West…

25/ …further securing it with the potential lithium mining deal. He’s also demonstrated just how far his indulgences will go after his #UNGA genocide-denying victimhood spectacle. No Western government feels confident enough to level criticism of THAT, let alone…

26/ …electoral fraud and deepening state capture, the irredentist, Moscow-aligned #SrpskiSvet agenda, and his partnership with illiberal actors in the EU and beyond. He enjoys total immunity from consequences; the citizens in his own country and the region suffer the consequences.

27/ The Chancellor’s visit revalidates Vučić’s autocracy and kleptocracy license, and makes it easy for other aspirational autocrats in the region to determine how they can personally profit too.

28/ Extraction without democratic process will mean that either the region will move further from an EU-minded future; or that more of the EU will increasingly itself become more distant from its founding values.