Expanding influence or rapprochement with the EU

Although Russia, the European Union (EU) and China are mentioned as key players in the region when it comes to economic and political influence, in recent years the old colonial power, Turkey, has also joined the race.

Turkey is increasing investments in Montenegro, which have approached the figure of 300 million euros, but still the largest investments, in the former state enterprises Željezara Nikšić and the Bar Container Terminal and general cargo, have not met expectations and investors are announcing their withdrawal.

Turkish investments are also increasing in other countries of the Western Balkans, which analysts explain as Turkey's desire to strengthen its political influence, especially in areas with a Muslim population, but also to get closer to the EU and improve trade ties, in order to alleviate economic problems.

The sharp decline of the Turkish lira, rising inflation and unemployment have seriously shaken economic and social stability in Turkey, leaving a large number of citizens below the poverty line. Most of them in the Western Balkans and in Montenegro are primarily due to economic reasons and conditions for business. A smaller number of Turks are also believed to have left Turkey for political reasons and fear returning, as they are accused of links to the Gulen movement and the alleged 2016 coup attempt.

From the Embassy of Turkey in Podgorica for CIN-CG said that it is estimated that there are more than seven thousand Turkish citizens in Montenegro in the long-term and short-term in search of business opportunities.

Montenegro became a member of NATO in 2017, which, according to analysts, influenced the growth of investments, but this was only one of the factors in the case of Turkey, which has been in NATO since 1952 and is among the five members that have the most contribute to the activities of that association.

"As Turkish investments in Serbia show, the issue of NATO is not decisive. Turkey is guided by a combination of lucrative criteria and political judgment. Montenegro's membership in NATO certainly helped when it comes to the assessment of political risk by Turkish investors, but it is difficult to say to what extent," he told CIN-CG. Vuk Vuksanovic from the Belgrade Center for Security Policy.

The Embassy of Turkey states that since Montenegro is a member of NATO, its perspective of membership in the EU, its reliable and stable environment undoubtedly lead to an increase in trade and investment relations.

"However, Turkish investors maintain successful trade and investment relations with Balkan or European countries that are not members of NATO," said the Embassy.

The Montenegrin Agency for Investments told CIN-CG that in recent years, Montenegro has become an increasingly popular destination for companies owned by Turkish citizens.

"A significant increase in the interest of Turkish companies in investing in Montenegro has been recorded in recent years, especially after Montenegro joined NATO. This additionally affected the security of Turkish businessmen to invest their capital in Montenegro, especially on the coast. Turkish investors have so far shown the greatest interest in investing in the tourism and catering sector, the construction sector and the energy sector".

Investments around 260 million euros

From 2006 to October 2021, total investments from Turkey, according to the data of the Central Bank (CBCG), amount to about 266,4 million euros and Turkey is among the top ten investors in Montenegro, after Russia, Italy, Switzerland, Serbia. .

The largest amount of investments from Turkey was recorded in 2018, of around 53 million euros. In 2019, when the coronavirus pandemic began to engulf the world, that amount was 34,4 million, and in 2020 it was 18,6 million. Investments rose to 23,5 million euros in the first ten months of last year.

The Investment Agency cites several reasons why Montenegro is attractive to foreign investors - opening a company with an initial capital of one euro, simple business procedures, a nine percent tax rate on profits and income of natural persons, as well as the fact that foreign investors have the same treatment as well as domestic.

"Also, the euro is used in Montenegro, which is especially attractive in periods of instability and exchange rate fluctuations," the Agency says.

In recent years, Turkey has been investing more and more in the other countries of the Western Balkans and, according to Vuksanović, it shows that it is guided by market logic, not just political logic.

"Although Ankara is, as they say, closer to Sarajevo than Belgrade, Serbia has received more Turkish investments than Bosnia and Herzegovina, as Serbia is considered a more reliable market. Of course, Turkish investments should not be overemphasized. Despite the growth of Turkish investments, investments from the EU are leading, and in some cases such as Serbia and Russia, China and the Emirates are leading as investors," Vuksanović says.

When asked whether Turkey wants to get closer to the EU through the Western Balkans or whether it is an attempt to strengthen its political influence in the region, as in the case of Russia and China, he answered that Turkey in principle supports the membership of the countries of the region in the EU.

"However, independently of the EU, Turkey has its own interest in the Balkans. The Turkish political elite believes that Turkey must have a foothold in the Balkans in order to be considered a European player. Much more important than that, there is a thinking that Turkey must have a defense parameter and a sphere of influence in its European (Balkan) hinterland, if it wants to have an effective policy in the Middle East and wider Eurasia," said Vuksanovic.

When asked whether the consolidation of the rule of the Turkish president Recep Tayyip Erdogan after the alleged coup attempt in Turkey, influenced a certain number of Turks who do not agree with his policy to look for security for their capital in the Balkans, he answers that this is the paradox of the influx of Turkish capital.

"The good relations of Erdoğan's government with Serbia and Montenegro helped the inflow of Turkish capital to these countries. However, we also have an influx of Turkish capital that is not favorable to Erdogan. They come to the countries of the Western Balkans in the first place to escape the social conservatism that comes with Erdogan's political Islam. They are also attracted by the fact that they have a high purchasing power in the Balkans, as well as the proximity to the EU and similarities in mentality with the local population," explains Vuksanović.

The Embassy reminds that 251 people were killed during the coup attempt, and more than two thousand of their citizens were injured.

"Turkey continues the fight against FETO (Fetullah Terrorist Organization) in the country and abroad on the basis of fundamental rights and freedoms, as well as the rule of law. It is no secret that our country, especially through high-level contacts of our president, has warned that FETO poses a threat not only to Turkey, but also to the democracy and security of every country in which it is located. We expect the international community to understand that this treacherous structure is not an innocent organization engaged in education and charity, that its existence is a danger to both countries, that it is a terrorist organization with dark political and economic goals, and that therefore the understanding of our friendly countries is necessary for joint struggle", said the Embassy.

Turkey wants to protect Muslims in the region

An analysis by the European Council on International Relations (ECFR) states that Turkey is taking steps to strengthen relations with the countries of the Western Balkans, would like to be taken seriously in the region and maintains its interest in protecting Muslims there.

"But none of this is on a par with the EU's economic and political influence in the region or the threat to it, at least for now," states the analysis entitled "From Myth to Reality: How to Understand Turkey's Role in the Western Balkans", authored by Asli Aydintaşbaş.

The analysis identifies three distinct phases of Turkey's policy towards the Western Balkans under the Justice and Development Party (AKP) government since 2002, charting its shift from: ongoing Atlanticism in the early years of that party's rule; for a long period under the Minister of Foreign Affairs Ahmet Davutoglu (2009-2014) who was also Prime Minister (2014-2016) and emphasized the Ottoman heritage; to a pragmatic shift back under a newly empowered Erdogan, retaining some emphasis on the imperial past but focusing mostly on trade. Erdogan has been Turkey's president since 2014, returning to head the party he founded, the AKP, in 2017 after stepping down when he was elected president.

The analysis highlights particularly good relations between Serbia and Turkey, countries that were considered traditional opponents, especially after Erdogan's visit to Serbia in October 2017.

"It was not the first time that the Turkish leader went to that country. But for the first time, the Serbs received a Turk with such warmth", the analysis concluded.

It is also reminded that the Western Balkans is a region in which Russia has a particularly strong and active interest, but that despite Turkey's growing ties with Russia, there is no Turkish-Russian coordination in the region.

The goal is a trade exchange of 250 million dollars

Erdogan made his first official visit to Montenegro in August last year.

Then, after the meeting with the Montenegrin president Milo Đukanović, said that Turkey is among the ten countries that invest the most in Montenegro and that the goal is for trade between the two countries to reach 250 million dollars in the coming period.

The dynamics of political relations with Ankara have been emphasized since the changes in Montenegro on August 30, 2020, although economic relations began to strengthen during the rule of the DPS, so representatives of the new Montenegrin government often visited Turkey last year.

In September 2021, Turkey was visited by the Deputy Prime Minister Dritan Abazovic, and after him the Minister of Economic Development Jakov Milatović, Minister of Agriculture Aleksandar Stijović, as well as the former president of the Assembly Aleksa Becic who was presented with an award for peace, national and religious tolerance in Istanbul in December. The Minister of Foreign Affairs also visited Turkey last year Đorđe Radulović, Minister of Education, Science, Culture and Sports Vesna Bratic...

According to Monstat data, the total foreign trade exchange between Turkey and Montenegro has increased tenfold since 2006. Montenegro is highly dependent on imports, so the foreign trade balance with Turkey is also negative, that is, Montenegro imports more than it exports to that country. The foreign trade balance with Turkey was 2006 million in 13,3, and 134,7 million at the end of last year. Imports from Turkey amounted to 2006 million euros in 12,8, and 110 million euros last year.

Montenegro mostly imports fabrics and textile products, furniture, non-ferrous metals, watches, jewelry (gold, silver, platinum), cameras... from Turkey.

To Turkey, Montenegro exports iron and steel, aluminum, mineral ores, fertilizers...

The foreign trade balance with Turkey could be even more unfavorable for Montenegro, considering the reduced production of aluminum and steel.

The devaluation of the lira brought the country to its knees

The economy in Turkey has been weakening for years, which, along with the shocks of the covid pandemic and the pan-European energy crisis, led to a record devaluation of the Turkish lira, a significant increase in unemployment and inflation, which in a short period of time pushed millions of Turkish citizens below the poverty line, and brought the country to the brink of economic and social collapse.

Inflation in Turkey, according to the data of the Turkish Central Bank, rose to 48,7 percent in January, after reaching 36 percent in December.

Turkish and global economists and the opposition in that country believe that the real rate could be higher because the cost of living has risen much more.

Erdogan has criticized high interest rates, which he believes are causing inflation, contrary to conventional economic thinking.

Due to the high rate of inflation, some citizens of Turkey are forced to leave the country.

In Montenegro, their number is increasing and now there are already seven thousand of them, while last year, according to the data of the Turkish Embassy, ​​there were about six thousand of them.

In Montenegrin cities, especially Podgorica and on the coast, there are more and more Turkish restaurants, shops, hairdressing and beauty salons...

The manager of a Turkish store in Podgorica told CIN-CG in an informal conversation that she came to Montenegro from Antalya last year and that she likes it here.

He says that he has children and that Montenegro is a good place for them, because above all it is safe.

He explains that the exchange rate difference (Euro-Turkish lira) makes life a little more expensive in Montenegro, but it is still cheaper than in other European countries.

A married couple from Izmir works in a Turkish restaurant in Podgorica. They are satisfied in Podgorica because, as they say, they have good living conditions, and they hope to learn the Montenegrin language soon, because communication is difficult for them so far.

Of the total number of foreign companies, a third are Turkish

According to Monstat data, there were 2020 foreign-owned companies in Montenegro in 11.280. Of the total number, the largest part of foreign companies is owned by Turkish businessmen, 3.250 of them, or 28,8 percent.

"Looking at active business entities by municipality and the country of origin of the owners in the municipalities of Budva, Podgorica and Tivat, the most active business entities are foreign-owned from Turkey," the Monstat report states.

In 2019, there were 3.652 companies in Montenegro whose owners were from Turkey, while their percentage participation in 2018 was 24,4 percent, and in 2017 it was only 8,7 percent.

"The number of Turkish companies in 2017, before Montenegro joined NATO, was 250, while today that number is even 14 times higher, and interest is growing day by day," said the Investment Agency.

Among the larger companies from Turkey, Ziraat banka operates in Montenegro, followed by Tosčelik, which manages the Nikšić Ironworks, as well as Global ports, which bought the former container terminal and general cargo in the Port of Bar.

Also, facilities of major Turkish brands Dogtaş, Waikiki, DeFacto... have been opened.

Turkish companies or Montenegrin representatives operate in Montenegro directly or through representatives, and, as stated by the Investment Agency, Beko company, Enza Home-Yatas, Horoz elektrik, Tudors, La Monte, Pop shop, Ozdilek, Ceyo, Dagi, ADL.

A significant number of Turkish companies are engaged in the construction of residential and non-residential buildings and participate in the construction of large projects (Porto novi).

Turkish businessmen bought the "Fjord" hotel in Kotor, which they demolished and announced the construction of a new one. They (the Boka bay company) are the owners of the Jugooceanija building, which has a special architectural value and which, according to announcements, should soon be protected. The Turkish company "T&T Investments and real estate", based in Tivat, received the consent of the chief state architect for the construction of a luxury residential building in Kotor, on Kavač.

The company Mia investments wanted to build two towers of 15 and 16 floors each with the permission of the former DPS authorities on the disputed plot in front of the Adriatic Fair on Slovenska beach in Budva, but this was stopped due to a lawsuit by the Municipality of Budva.

The Turkish NET Holding, within which the Merit brand operates, has contracts for the management of casinos in the Montenegrin hotels "Hilton" (Podgorica), "Splendid" (Bečići) and "Avala" (Budva).

Gintaš invested in the construction of a green market, the Mall of Montenegro shopping center and the Ramada hotel, which he sold in 2016 to the Swedish company Savana, whose founder is a businessman of Montenegrin origin. Veselin Mijač.

Turkish companies are also interested in obtaining a concession for the management of airports in Tivat and Podgorica.

Global ports and Toscelik invested the most, which announced their departure

Global ports and Tosčelik have had the largest investments, despite the suspicions of the trade union and the opposition at the time that they had not fulfilled their contractual obligations.

In 2013, Global Ports bought 62 percent of the shares of the former Container Terminal (now Port of Adria) from the Government for eight million euros, with the obligation to invest 13,5 million euros in three years, and an additional 7,6 million euros.

The company claims that they fulfilled their obligations, while the company's trade union claimed the opposite. In a statement from February 2021, the company's management stated that as of October 2019, they had implemented a social program of 8,84 million euros and an investment program of 14,15 million.

At the beginning of last year, the company announced on the London Stock Exchange that it is considering the possibility of selling its shares in the Port of Adriatic because they want to leave the companies involved in port business.

The sale has not yet been realized, and the company has not answered CIN-CG's questions about total investments in the Port of Adriatic and further plans in Montenegro.

The Turkish owner of Željezara, Toscelik, part of the Tosyali Group, announced its withdrawal, but did not answer CIN-CG's questions about why and how much they have invested in the factory so far.

Production at Željezara was suspended in March last year. From Tosčelik, they have repeatedly justified the suspension of work with unfair competition, a drop in sales due to the corona virus epidemic. Last year, they asked the Government for multimillion-dollar aid to restore work at the Ironworks, which was not approved.

Turkish investors bought the assets of Željezara out of bankruptcy in 2012 for 15,1 million euros, with the promise that they would invest 35 million euros in three years and employ up to 550 workers. However, as the Turkish management admitted at the beginning of 2019, until then they had invested only ten million euros.

Recently, he is a businessman from Nikšić Miodrag Daka Davidović repeated that he is interested in taking over Željezara, which he managed in 2003, 2006 and in the period 2011/2012, when the Russian owners were leaving the factory. During the election campaign in Nikšić last March, he claimed that he had a plan to recover Željezara.

Montenegrins learn the Turkish language because of the series

In Montenegro, as well as in the countries of the region, the Turkish Agency for International Cooperation and Coordination (TIKA) has been active for 15 years and has implemented numerous projects in education, health, agriculture, and cultural cooperation.

The agency did not respond to CIN-CG's questions about total investments and donations in Montenegro, but Erdogan said during his visit to Montenegro that TIKA has so far implemented 399 projects and activities worth around 20 million euros.

He also pointed out the importance of the Turkish cultural center "Junus Emre" in Podgorica, which started working in February 2014 as a cultural institution operating within the framework of the Turkish Embassy in Podgorica. The "Junus Emre" Institute currently has 64 centers in 53 countries around the world.

V. d. The coordinator of the "Junus Emre Podgorica" ​​Institute, Džan Guraj, tells CIN-CG that in Montenegro, as well as in other countries, they promote Turkey, the Turkish language, history, culture and art, present relevant information and documents, and provide services abroad to those who want to be educated. in the field of Turkish language, culture and art...

"We at 'Junus Emre Podgorica' are very pleased with the interest of the citizens of Montenegro, with whom we share a common history and culture. Since 2014, when we started with the activities, until today, in cooperation with approximately 50 local partners, in almost all cities of Montenegro, we have realized more than 120 cultural and artistic activities attended by thousands of Montenegrin citizens. During the last two years, due to the coronavirus pandemic, our cultural and artistic activities have slowed down, but we continue to try as much as the pandemic situation in the country allows," said Guraj.

As he said, the influence of Turkish series, which have been followed with great interest for the last ten years, both in the world and in Montenegro, as well as the investments of Turkish companies in Montenegro, and the recognition of employment opportunities in them, contributed to the fact that among the citizens of Montenegro interest in learning the Turkish language is growing significantly.

"Since its foundation until today, our Turkish language courses have been attended by approximately two thousand students".

Turkey invested 200 million dollars in Serbia

Turkish investments in Serbia have risen from $200 million to $XNUMX million in ten years, Erdogan announced during a meeting with Vučić in Ankara in January of this year.

"Today, more than 1.300 Turkish companies are operating in Serbia, employing around 8.000 people. "Our entrepreneurs in Serbia have so far implemented and signed 45 projects worth 823 million dollars," said Erdogan.

According to the data of the Statistical Office of Serbia, last year the volume of exchange between the two countries amounted to about two billion dollars.

The most important project that has been talked about for years is the construction of the Sarajevo - Belgrade highway. This road will connect Banja Luka with Sarajevo and Belgrade, but significantly reduce the journey from Sarajevo to Novi Pazar, Pristina, Skopje, Sofia, Istanbul...

The Turks are reconstructing the Novi Pazar - Tutin road in Sandžak, and they are also building the Moravian Corridor (Bechtel-Enka) in a consortium with the Americans.

725 companies from Turkey with a capital of at least 1,2 billion euros operate on the Kosovo market, according to data from the Ministry of Trade and Industry.

According to the data of the Kosovo-Turkish Chamber of Commerce, the investments of the official Ankara in Kosovo from 2009 to 2019 amounted to 450 million euros.

Until last year, according to the data of the Macedonian-Turkish Chamber of Commerce, Turkish investments in North Macedonia amounted to about two billion dollars.

Turkish investments account for 38 percent of total investments, Turkey is the fifth largest investment partner of S. Macedonia and the eighth trading partner, and the current volume of trade between the two countries is about 500 million dollars per year.

The largest Turkish investment in North Macedonia refers to the investments of the company TAV, which has a concession on two airports, in Skopje and Ohrid.

Turkey's direct investments in BiH currently exceed 250 million dollars, Erdogan announced at the end of last year at a meeting with representatives of Bosniak associations and organizations in Turkey.

Turkish investments in Bosnia and Herzegovina were mostly realized through the projects of TIKA, the Directorate for Endowments and other governmental and non-governmental organizations.

The biggest Turkish investments in industry are in Lukavac, Maglaj and Goražde, the banking sector and education.

Turkey's investments in tourism before Croatia's entry into the EU were at the very top in terms of investments. In addition to tourism, Turkish companies are also present in construction. A project more valuable than the Pelješac Bridge was awarded to the Turkish company Cengiz Insaat, which has been involved in the construction of Corridor Vc in BiH for years. In May, the Turks started building another and reconstructing the existing railway track from Križevci to Koprivnica and towards the border with Hungary. This is the single largest infrastructure project in Croatia, worth 321 million euros, of which 85 percent is financed by the EU.

According to data from the Croatian Chamber of Commerce (HGK), trade with Turkey increased by almost 2020 million dollars in 40, from 583,2 to 622,7 million.

Agrogora Organic starts organic fruit production

The Turkish company Agrogora Organic is the user of land in the Mojkovac business zone "Babića polje", where it wants to start an agro business, in order to use the natural stocks of forest fruits and start organic fruit production in the country.

The Investment Agency reminds that the founder of the company, Ahmet Dasman, signed a contract with the Municipality of Mojkovac on a ten-year lease of land of 11.713 square meters, with the possibility of extension for an even longer period, and it is planned to create 25 permanent jobs, as well as hire 120 to 150 seasonal workers. .

Earlier, the Municipality of Mojkovac announced that the investment is worth around 4,6 million euros, and the factory hall should be completed in August this year, and the first phase of the production factory will be fully operational in 2023.

CIN-CG