by Nadina Ronc, London
Last months venture between the Bosnian-Serb gas company, Gas-Res, and Russia’s Gazprom came at a cost of 70 million euros most which will be financed and majority owned by Gazprom’s financiers. The gas plant will be based in Zvornik, situated in Republic Srpska (RS), a Serb dominated part of the country.
With Russia’s recent victory in gaining footing in the Western Balkans, this deal is more political than it is economical. Russians have tried to gain footing in Bosnia for many years now, and while they do provide gas to the entire Bosnia, they have no other investment in the country.
“Russia is still trying to make Balkan’s dependant on their sources of energy. They are filling in the gap that was left by the US and the EU, and it is not difficult for Russia because these Balkan countries are very fragile,” said Sonja Biserko, Chairwoman of Helsinki Committee Belgrade.
The Russian economy has not been stable for many years, but the only asset they have and which they use for political gain is their gas, but Gazprom itself has also been short of cash. Russia’s priority is in Nord Stream 2, an offshore natural gas pipeline starting in Russia and ending in Germany. Continued Western sanctions against Russia have limited its access to financial markets.
“Russian energy companies are often driven by business considerations but they are ultimately dependent on the Kremlin. Southeast Europe is seen as a transit route to EU, bypassing Ukraine. Energy is the most important power asset Russia has, as its footprint in other sectors of the Balkan economy is limited,” added Dimitar Bechev, Senior Fellow at Atlantic Council and author of “Rival Power: Russia in Southeast Europe”.
Bechev added that as Bosnia does not offer good investment opportunities, Russians will not look further afield in the country specifically as costs are higher than gains and there is a significant corruption factored in. So investing into refineries in the RS is a lot more appealing as is politicly motivated.
But other Russian investments are also energy-related in the Western Balkans, and especially in Serbia where Russia acquired Petroleum Industry of Serbia at a very low cost and have “surprisingly managed to make a profit from this very limited source in the country while also inheriting the infrastructure like petrol stations making them deeply involved with local municipalities” said Biserko. She also added that China is penetrating the market economically faster than the Russians and this is creating a threat to the EU as China is bypassing any tenders which are one part of main criteria of the EU membership.
But in the RS, Russia’s presence has been even more significant than in Serbia, and gas diplomacy is seen by President of the RS, Milorad Dodik, as his winning ticket in the upcoming 2018 general elections and he will use everything he can get from Russia. But Russians are not doing this because they like him, but because the RS is the only opportunity they have and they are investing strategically, in this case with gas as they have no other entry anywhere else in Bosnia. Russia has already tried the same game in Montenegro where they helped stage a Russia-backed coup to prevent NATO membership.
“This move appears to be part of a pattern by Russia to destabilise Bosnia and the current Balkan situation in order to undercut NATO and US interests and to promote Russian influence, as we have already seen in Montenegro, Macedonia, and Serbia. Making Republika Srpska energy-dependent on Moscow will make it more likely to follow Russian interests, and also encourage it to try to break away from the rest of Bosnia and create a crisis in which Russia can play a role in,” said Dr Norman Cigar, Senior Fellow at the Potomac Institute, a think tank in Washington, D.C.
Bosnia, a country divided into two entities where there is no rule of law has been left by the EU to its own demise, leaving an open door to Russia to infiltrate the country. EU and NATO have succeeded in blocking Russia within Eastern Europe, but not in Bosnia, where the West has given a clear indication how wrapped up in their own problem they really are. But Gas-Res and Gazprom deal is in place until 2030, which gives Russia enough time to completely destabilise what’s left of Bosnia and distance it further from both the EU and NATO, while its neighbours in former Yugoslavia, enjoy those memberships. But this comes at a cost to the EU as well, as migration from Bosnia, and even Kosovo, Macedonia and an EU Member State Croatia, sees a massive brain drain as enormous numbers of most skilful, motivated people leave the country because there is no economic perspective and they are headed to parts of the EU where anti-migrant sentiment is on the rise.
“Russia is now looking more with focus on RS because Dodik is totally politically and economically a disaster for the entity (RS). Federation of Bosnia is much better off. So Dodik’s only way out is Russia. And he allows them to do everything, he is the one who is the only destabilising factor,” said Biserko. Bosnian government, on the other hand, is too busy arguing amongst themselves to do anything about this problem but they also have no power to do much since promises made by the EU in the past few years that any interference in Bosnian politics will see the RS leaders with sanctions have never materialised. And not to mention that yesterday the RS marked its statehood day despite the fact that it breaches Dayton Peace Agreement and defies a court ban, proves further how little power Bosnian government has in their own country. As Biserko said “Dayton Agreement and the Constitution of Bosnia was designed back then with a lot of loopholes for those who don’t want integrated Bosnia. And of course, many segments of Serbian elites are perceiving RS as a military gain, they aren’t going to give up on easily.”
Speculation is also ripe that Russia wants to infiltrate security services of Bosnia something that Biserko also mentions in relation to Serbia, “I would say they are penetrating in our security services, but it is not quite clear yet, this is a grey zone.” She also added that there is the talk of Russia looking to build a Humanitarian Centre near Banja Luka, capital of the RS. This centre already exists in Serbia, and in 2017, the US administration criticised it for being a spy outpost for Russian agents, which if built in the RS could probably have the same function.
As for the RS, Dodik is the mouthpiece and a puppet of Kremlin in Bosnia, who uses energy as a facade in order to cling to power. While Serbia’s president Aleksandar Vucic, plays both sides, and often runs to Germany to show he is pro-EU membership and to Washington to show he is pro-West, his policies always tilt towards Moscow.
The only thing left for Russia is to prevent Bosnia from joining the “EU and more so NATO, and encouraging RS to create problems would make it unlikely for the EU to take in an unstable Bosnia. If RS succeeds in joining Serbia, this would encourage Belgrade to also pressure Kosovo. Russia no doubt would have liked to have access to Montenegro’s Kotor port for its navy, but in the case of BiH, it’s more a case of playing a spoiler role against Europe and the U.S.,” said Dr Cigar.
About the Author
Nadina Ronc is a Bosnian-born Journalist based in London and who has covered energy security, Western Balkans, produced stories on wars in Afghanistan and Iraq and has worked for CNBC, Fox Business Network and freelanced for Turkey’s Anadolu Agency. She also comments for TV networks on post-conflict resolution.
© Copyright 2018, Nadina Ronc.
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