This Policy Brief was prepared for the Symposium on “16+1 Cooperation” in Synergy with the “Belt Road” Initiative”, organized by Chinese Academy of Social Sciences in Beijing 25 June – 1 July 2017.

The current text is an updated and adapted version of March 2018 for publication under the Berlin Process Series. The Berlin Process Series is an initiative started by Cooperation and Development Institute, in November 2015, in Tirana, and supported by Friedrich Ebert Foundation, Konrad Adenauer Foundation and Hanns Seidel Foundation.

It consists in:
a) Research on the Berlin process and its priority areas;
b) monitoring of progress in Connectivity Agenda and in WB6
Regional Cooperation; and
c) Annual conference on the Berlin process”, followed by publication of conference proceedings.

Tags: China, Connectivity, Economy, Transport, Western Balkans

How does China’s growing global role affect the current dynamics of the Mediterranean region? This report aims to answer this question by exploring the most recent trends in the relations between China and the countries in the greater Mediterranean region.

Tags: China, Connectivity,  Mediterranean, Western Balkans

In 2018, Chinese investment in the Western Balkans shifted from infrastructure towards mergers and acquisitions (M&A). Two such M&As took place in the mining and rubber sector while a Chinese-owned steel mill in Serbia jumped from bankruptcy in 2016 to the 66th biggest company in Southeast Europe in 2018. Speedy loan procedures and the revitalization of “lost” cases characterize the Chinese involvement in the region. But Chinese companies are absent from regional cooperation thus limiting the expansion of “China Inc.”.

Moreover, when compared with investment volumes by the EU in the region, China’s resource commitment still remains small. The “Berlin Process” in the region focuses on connectivity and regional cooperation. This may provide the launching pad from which “China Inc.” and corporations in Europe can connect. It could be a win-win- scenario starting from the Western Balkans.

Tags: China, Connectivity, Economy, Transport, Western Balkans

The Belt & Road Initiative has spurred the production of a large number of data, information on and research into Chinese endeavors in the Western Balkans (WB). This existing body of knowledge has created the base from where further and more focused research can be carried on, and relevant information needed for decision-making can be produced.

In the Balkans, the main challenge of the region remains the ever-lasting transition towards European standards of democracy, institutional efficiency and a market economy, as well as the gaping need for significant investment in infrastructure and production facilities. Lately, Chinese companies have been increasing their investment and involvement in the region.

The main pull factors in the Balkans are the region’s huge investment needs in infrastructure, re-industrialization and the improvement of public goods and services, exacerbated by the lack of access to the EU Structural Funds. The main economic push factors for China relate to the availability and competitive prices of Chinese technology; the Western Balkans geographical location on the BRI road- and maritime corridors; a decent return on investment (ROI) rate; and the WB access to EU market quotas.

This report is a written version of the contributions made during the international seminar organized by the Cooperation & Development Institute (CDI), in partnership with Hanns Seidel Foundation (HSS) and the Southeast Europe Association (SOG), held under the title “Corporate China in Western Balkans”, on 16-17 May 2019 in Tirana, Albania. The report has been prepared by Ardian Hackaj, Research Director at Cooperation and Development Institute based on seminar notes and recordings, and enriched with additional data provided from the participants after the seminar, and / or references of their previous research and / or publications.

Tags: China, Connectivity, Economy, Transport, Western Balkans

In October 2019, the 5^th Tirana Connectivity Forum ended with a roundtable where a dozen participants gathered to discuss what we had learned from two intensive days of talk. The debate focused on connectivity’s contribution to SEE6 growth and on the hindering factors. Infrastructure financing, quality of institutional framework, political will, short-term vs. long-term perspective and availability of human resources were among the factors identified as conditioning the impact of connectivity on growth.

The creation of a methodological framework that links the local infrastructure, domestic institutions and the people, allows us to understand the dynamics and complexity of sustainable and resilient development paths, as well as identifying entry points for SEE6 and EU policy-makers.

While studying the interaction between connectivity and the development of a territory, three systemic elements appear. First is “space”, as defined by the endowment of the territory in production capability and in connective infrastructure (transport, energy and data). Second is the local “institutions” which in a simplified definition would be the “structures and mechanisms of social order and cooperation governing the behavior of a set of individuals” materialized in the array of both public and privately owned organizations. The third element is the local “people”. As workforce they are a key factor to growth while as citizens they keep local institutions accountable and efficient.

In a schematic presentation we group those three elements in a triangle where space, people and institutions permanently interact and impact each other. In the next challenge we try to identify actions that induce a “Pareto improvement” in the space-institutions-people system in the long term: i.e., a positive improvement in one node without negatively impacting the rest of the triangle. In this picture, we also bring in “other triangles” in the form of third actors such as China, Russia or Turkey to illustrate other forms of interaction and impact with SEE6 space, people and institutions.

By deconstructing space, people and institutions in the SEE6 and putting them in one system, we underline their inherent interconnectedness. By analyzing their links and the multitude of actors involved, we shed light on the complexity of each decision-making process aiming to impact them. By bringing in an analysis of availability and suitability of resources we point out the efficiency and sustainability of any change dynamics.

Our aim is to argue that to be sustainable, virtuous and resilient, the development scenario chosen to sustain the convergence dynamic towards the EU must happen in all three nodes of the SEE6 triangle.

Tags: Berlin Process, Connectivity, Convergence, Tirana Connectivity Forum, Good governance, SEE6, EU Membership, Development.

Is connectivity between the Black Sea and the Adriatic coast viable? Is there an economic rationale for enhanced connectedness stretching from Varna and Burgas in Bulgaria over Plovdiv-Sofia-Skopje-Tirana to Durrës in Albania and Bari in Italy?

At first glance, economic rationale is discussable since economic exchange between Albania, Bulgaria and the Republic of North Macedonia remains relatively modest. However, enhancing connectivity can foster economic relations not only between these countries but also serve as a boost for intensifying economic relations that go beyond the boundaries of the three states and eventually can bring benefits to stakeholders in Italy, Kosovo, Montenegro, Romania and Turkey.

There is an economic rationale behind the possible benefits for each and every one of them. For instance, Italy has been among the three biggest trade partners of Bulgaria for years – in 2019 alone, in the year before the pandemic, bilateral trade reached EUR 4.7bn. Therefore, one can assume that the availability of easier and faster connections will further positively impact bilateral trade. Improved connectivity will offer an easier access to companies from Romania to the Western Balkan countries as well.

To demonstrate that potential, it comes as no surprise that in 2019 Romania was the second biggest trade partner of Bulgaria with a total trade volume of EUR 5bn after Germany (EUR 8.5bn). Besides, Corridor VIII might provide Turkey, as a major regional economic powerhouse, whose trade volumes only with Bulgaria reached EUR 4.4bn in 2019, with an alternative route. Last but not least, Corridor VIII will increase directly or indirectly regional connectedness of Montenegro and Kosovo.

This Policy Paper was prepared in the framework of the online event “Corridor 8 – East Gate: Promoting Flagship 1 “Connecting East to West” organized by Cooperation Development Institute in partnership with Economic Policy Institute in Sofia and supported by Hanns Seidel Stiftung.

Tags: Connectivity, Corridor VIII , Regional Cooperation