SIM Report: Southern Europe, Issue 3
The publication of the latest version of Transparency International’s (TI) Corruption Perception Index (CPI) in January indicates that despite some progress, countries in the Western Balkans are continuing to experience high levels of corruption. Albania, Kosovo, Montenegro and Serbia performed especially poorly in the annual survey, which ranks jurisdictions ‘by their perceived levels of public sector corruption’. Scores close to 100 are considered positive, while a 0 indicates a country is ‘highly corrupt’.
TI said that despite EU requirements for potential members on tackling corruption and preventing political interference in institutions, governments across the region have not taken enough measures, including implementing reforms, to address the issue. This come amid region-wide social unrest in recent months over a series of grievances, including corruption. In Serbia, a series of protests took place in Belgrade over allegations of government corruption as well as claims that President Aleksandar Vučić and the ruling SNS party have consistently undermined media freedoms. Similarly, in Albania occasionally violent protests targeting perceived corruption in the government prompted the main opposition party to boycott local elections in June 2019. The ensuing political deadlock in the country stalled a series of planned anti-corruption reforms.
Widespread and systemic corruption also means that newly elected governments that promised to address the issue face structural constraints in limiting the influence of corruption on politics when assuming power. In Bosnia, reforms have been almost at a standstill in part due to governance issues arising from the county’s complex political system. In Kosovo, the formation of a new government can provide a strong enough impetus to intensify anti-corruption measures. Indeed, TI said that Kosovo could improve its ranking by ending the practice of political appointments to state-owned companies. However, the new government’s agenda will likely prioritise normalising relations with neighbouring Serbia, in light of growing US and EU political pressure, over domestic issues.
Government efforts are also stymied
due to the strong level of influence private interests have on elected
officials. This partly explains the strong public mistrust towards elected
representatives, which in turn undermines their credibility and the normal
functioning of political institutions. Indeed, fragile political institutions
will also be put to the test as opposition parties have threatened to boycott
parliamentary elections planned in Montenegro and Serbia later this year.
High corruption levels can have multiple implications on a country. Beyond an adverse impact on the countries’ EU membership bids, reputable international indicators such as CPI can also deter foreign investment across several sectors. Entrenched local interests can mean that foreign market entrants are at a strong disadvantage, particularly if projects require the support of local or national governments.
High levels of corruption in the region are also indicated in the World Bank’s Worldwide Governance Indicators, a project that includes both aggregate and individual indicators of governance for more than 200 countries between 1996 and 2018. For instance, in its ‘Control of Corruption’ indicator, Albania had a score of 41 per cent in 2016, compared to a Europe & Central Asia average of 64 per cent. Similarly, in the ‘Rule of Law’ indicator, Albania achieved a 39 per cent rating compared to a Europe and Central Asia average ranking of 66 per cent in the same year.
For emerging countries in the Western Balkans, corruption remains a key impediment towards attracting foreign investment and growth. For potential investors, the risks – both regulatory and reputational – from any adverse exposure to corruption, this current state of play is highly discouraging, and damages the region’s overall competitiveness. While the election of a new government could change this dynamic, incoming administrations inherit both systemic challenges and established perceptions that can impede any meaningful anti-corruption achievements. The EU can play a key role in providing incentives for countries to address structural corruption, however repeated delays in the process considering applications for aspiring members could diminish the bloc’s influence in the region and present yet another obstacle towards meaningful progress.
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