Friday, July 14, 2017

The Waning of Nationalist Expansionism: Intra-Regional Economic and Political Cooperation in the Post-Communist Balkans

This is a paper I presented to the 2016 History Graduate Student Association Southeast Conference at Florida State University, on April 19, 2016.

Brutal, ethnic conflict has characterized the Balkans in the minds of many Westerners, primarily because of its persistence into the era of post-communism in a time when many assumed that ethno-nationalism had been wiped away by economic cooperation and neo-liberalism. The secession of Yugoslavian states in the 1990s that led to ethnic cleansing and genocide not seen on the continent since World War II reminded the West that ethno-nationalism had survived quite well on the other side of the Iron Curtain. The violent, nationalist outbreaks over the past two and half decades have been produced by local hatreds, external intervention into the region going back decades and even centuries, as well as the instability and precarious economic situation that the region found itself in after the fall of communism. In this paper, I will focus on how the economic transition of the former communist countries in the Balkans has laid a roadmap for a lasting peace in the region and will look at ways in which the European Union can help the western Balkan states where the danger of ethnic violence still persists to put aside their national differences in the pursuit of economic prosperity.

During the rise of the Balkan nation-states in the late nineteenth and early twentieth century, Balkan intellectuals devoted themselves to state-building, advancing themselves in what William Hagan calls “the nationalist mode of production,” which he defines as “getting richer and accumulating status by serving the burgeoning national state.”[1] Hagan points out that capitalist entrepreneurialism gained very little prestige during this era. It was much more admirable to serve the people through the state than to serve oneself by accumulating wealth through capitalist means. Public or military service with the aims of wresting greater territory from neighbors became the highest national ideal.[2] During this time of rising nationalism of the late nineteenth century, the new Balkan nations were not allowed to work out their borders and their economies on their own. The Great Powers aided them as that aid served short-term gains for them, and likewise, the new Balkan countries allied themselves with whichever Great Power that they believed would help them enlarge their country at the expense of their neighbors.[3] Coming out of communism, it was no easy transition for people to change their ambitions for their countries and themselves from a world of aggressive nationalism with centrally-controlled economies to one of global capitalism.

From a strictly economic standpoint, the infusion of Foreign Direct Investment (FDI) was a key factor in revitalizing the economies of the former communist nations where consumer goods had mostly been state-owned and of poor quality. Coca-Cola was one of the first multinational companies to take advantage of Romania’s Foreign Investment Law, which removed disincentives for foreign investment.[4] Economists Frank Hefner and Douglas Woodward took surveys and interviews in Romanian between July 1994 and January 1995 and found that the company’s success had greatly benefited local entrepreneurialism and increased technological, managerial, and organizational competencies as well as product quality in the country.[5] This was an important factor in a climate where very few understood customer satisfaction as a means to achieving personal, financial success. Job security had been a hallmark of the communist system, but the rising salaries of Coca-Cola employees compared to their national competitors was an eye-turning change in a culture where the expression, “You pretend to pay me and I’ll pretend to work” ruled.[6]

Besides a stable government and capital accumulation, the most important and most overlooked factor of a successful market-based economy is an entrepreneurial mentality among the populace. The quick popularity and influence of Coca-Cola in Romania shows how the removal of a centrally-planned economy was not enough to incorporate the nation into a global market economy. Attractive laws provided the investment incentive, and Coca-Cola provided the capital, but the people had to actually experience capitalism for themselves for private businesses to emerge and flourish. It required foreign business influence to change the socialist economic mentality of the populations of the former Eastern Bloc.

The same holds true of nations where ethno-nationalism reigns in the hearts and minds of their people. Xenophobia often accompanies nationalism, particularly of the variety in the Balkans.[7] Beginning in the 1990s, the infiltration of Radio Free Europe, Voice of America, the BBC, and Deutsche Welle had a liberalizing impact on the population of Bulgaria, causing the people to become much more aware of and influenced by the West. This also caused them to be more democratically-minded, which showed when in April 1997, Bulgarians swept the anti-communist United Democratic Forces (UDF) into power.[8] Since then, Bulgaria has been marked by exceptional minority toleration when compared to the policies of its past. The discriminatory policies of the communist Zhikov regime were undone, and Turks, Muslims, and Roma were allowed to reclaim their real names and those who had property confiscated were compensated. President Petar Stoyanov even apologized during a state visit to Ankara for the mistreatment of Turkish Bulgarians under the Zhikov regime.[9] Unlike the countries of former Yugoslavia, Bulgaria managed to limit its extreme, nationalist elements or channel them into constructive purposes. Its inclusive treatment of minorities has also opened up greater trade and cooperation with its neighbors, most of whose dominant ethnicities are found as minorities in Bulgaria.[10]

Stoyanov brought the country closer to Western Europe and the United States and supported NATO in its bombing of Serbia in 1999. The significance of Bulgaria’s support of the NATO-led bombings should be seen in the context of the post-communist right wing. Instead of supporting Western powers with the hopes of being awarded territorial concessions as had been the strategy a century before when dealing with the great western powers, the UDC’s ulterior motives were economic concessions and investment from the West. At the end of his term, President Clinton visited the country to assure his and the United States’ support of Bulgaria entering NATO and the European Union, in addition to increased American investment in the country. In 2003, Colin Powell later referred to Bulgarian-U.S. relations as “the best they have ever been in the past one hundred years.”[11] Bulgaria even sent an infantry battalion to aid the U.S. in its invasion of Iraq.[12]

The influence of alliance and economic incentives for Southeastern Europeans cannot be underestimated when looking at political developments in their countries as it relates to ethnic relations. In 2015, Romania elected its first ever ethnic minority, German Klaus Iohannis as president over the incumbent Victor Ponta, who waged an explicitly nationalist campaign. 300,000 Romanian expatriates contributed significantly and were possibly the deciding factor in Iohannis’ victory.[13], [14]

Even in poverty-stricken, nationalist-bent Albania, that country’s president, Edi Rama, declared in 2013, “We cannot preach the peace of the new times for the region, and nourish the old ghost of Balkan nationalism.”[15] The promise of entry into the European Union, the economic benefits of interregional cooperation, and the effects of nationals living abroad for whom economic gain trumps national chauvinism has produced political leaders like Iohannis, Rama, and Croatia’s Ivo Josipovic.[16]

The improved relations and cooperation with one another have not eliminated legitimate historical, ethnic, and border disputes between the Balkan nations, but they have greatly reduced the possibility of another genocidal war one day breaking out among them. Bulgarians still support the Treaty of San Stefano which incorporated the dream of nineteenth-century nationalists of a Greater Bulgaria that included huge portions of territory currently owned by all of its neighbors more so than Treaty of Berlin which established the country’s borders more in line with how the country looks today. However, the Bulgarian government holds no pretensions of one day reclaiming that land today.[17][18]

One major dispute that Bulgaria and Macedonia have put aside for mutual economic benefit is the ethnicity of the Slavic people of Macedonia. At the turn of the nineteenth century, the region of Macedonia turned into a bloodbath as Greece, Bulgaria, and Serbia all claimed it and its people. Ethnic missionaries and priests were sent to set up schools and educate the Macedonian children of their true ethnic heritage who often traded their Bibles and readers for guns and ammunition. The people speak a dialect of Bulgarian, but having been submerged for so many centuries in the Ottoman Empire, the people did not have any natural sense of belonging. Yugoslavia gained the region after World War I and after two decades had failed to convince the people that they were Serbians, so the communist resistance leader, Josep Tito, who eventually became the country’s dictator for three decades, created the state of Macedonia and pushed the claim that the Macedonian Slavs were their own separate ethnic group. This ensured loyalty to the new multi-ethnic state that he created after the defeat of Nazi Germany.

Nevertheless, Bulgaria announced as early as 1991 that if Macedonia declared independence it would recognize it. The government followed through and became the first country to recognize Macedonian independence when it declared it later that year. This did not mean a recognition of Macedonians as a people and intellectual squabbles over ethnicity and language continue to divide the two nations. Bulgaria did, however, come to the small nation’s aid when Greece slapped an embargo on it over the use of the name ‘Macedonia.’ Increased economic cooperation has not ended the heated debate over whether or not Macedonians are Bulgarians with a different dialect or a separate ethnicity, but it has continued despite the fact, thanks to the mutual benefit of both countries. In 2000, the two nations signed a free trade agreement that makes almost 90 percent of the industrial goods traded between the two countries tariff-free.[19]

Bulgarian socialists supported the Serbs in the Yugoslav wars and wanted a greater Yugoslavia to remain, while the UDC and the political right largely supported independence and self-determination of the various Yugoslav states. In a move that demonstrates its economic hopes for the future were pinned to NATO and the EU, Bulgaria supported sanctions on Serbia even when those sanctions hurt Bulgaria. However, the government was very adamant that other Balkan nations should not get involved in the conflict. This was seen as the best way to avoid spillover.[20]

Since the Holocaust removed the country’s sizeable Jewish population, the most glaring ethnic conflict in Romania has remained that with the country’s sizeable Hungarian minority. Transylvania belonged to Hungary before World War I and was returned to that country briefly during World War II. To this day, fervent, Hungarian nationalists on both sides of the border continue to call for a return of their former territory to their country. From 1952 to 1968, the Szekely region which is predominantly Hungarian experienced a period of autonomy within the communist system. Once Nicolae Ceausescu took over, however, that era ended and the Romanian government began a campaign of aggressive, cultural repression and assimilation of its minorities.[21]

In May 2010, Hungary granted citizenship and voting rights to ethnic Hungarians living abroad, which caused tensions with both Romania and Slovakia. In the past few years, Romanians and Hungarians have squabbled over the display of the Szekely flag and Hungarian autonomy, with Romanian officials in Hungarian-majority counties banning the flag from public buildings. This has often escalated to the level of both national governments but has not hindered trade or cooperation between the countries. Hungary supported Romania’s entry into the European Union and as long as neither descends into an economic depression, there is little chance of this issue turning violent.[22]

The common goal of joining the European Union caused Bulgaria and Romania to cooperate economically in order to meet the EU’s goals. Both the Bulgarian government and Bulgarian chambers of commerce have cooperated in several all-Balkan initiatives. Romania and Bulgaria both joined the EU in 2007.[23]

The economic progress gap has widened between the Balkan nations that have not joined the EU and those that have.[24] Four of the five non-EU Balkan nations are of the former Yugoslavia and two of them, Montenegro and Kosovo have been created just since the turn of the century through secession from Serbia. In these countries and Albania, a persistent, bitter nationalism has persisted along with stagnant economies.[25] There, the civil war of the 90s and its aftermath have continued to haunt the prospects of former Yugoslavian states in joining the EU.

One thing to consider is whether foreign occupation by those who hold no stake in the region and are not held accountable when their policies fail have actually helped democratize and liberalize Bosnia & Herzegovina and Kosovo. The presence of international governmental bodies such as the High Representative in Bosnia and the Representative of the Secretary-General in Kosovo imbued with power to veto local laws have often created confusion among locals about who is really in charge. This has led to rampant corruption, one of the major barriers to FDI in the region.[26] It has also created an atmosphere of dependence. The average income in Bosnia-Herzegovina is about 400 Euros a month, and unemployment is rampant. If it were not for payments and loans from the international community and especially the EU, the government would have trouble paying its bureaucrats. But, not only do the international governors in these propped up states exercise executive, legislative, and judicial authority, but the EU gives money to the separate Bosnian states with little visible economic improvement, and then expects the local elites to behave properly.

In 1995, the Dayton Accords, which brought a cease to the fighting between Bosnian Christians and Muslims, created three partitions for the Serbian Orthodox, the Serbian Muslims, and the Bosnian Croats. In April 2015, the Republika Sprska’s president, Milorad Dodik proposed a referendum for 2018, which would allow a “peaceful dissolution” of the arrangement fostered in the Dayton Accords, which would essentially be secession from Bosnia Herzegovina. The government has also proposed a referendum on rejecting the common court system for the two sections of the country. In addition to dependency, the meddling of international actors seeking to improve the nation has borne resentment that has the potential to bring the country right back to where it was in 1992 by 2018.[27]

Nationalism developed late among the Albanians, mainly because the population was divided with about 70% Muslim, 20% Orthodox Christian, and 10% Catholic, and most Albanians were loyal to the Ottoman Empire. The country was recognized by the Great Powers after the First Balkan War in 1913, and the current borders were established in 1926. These borders though were organized though for geopolitical reasons and left about half the Albanian population outside in Yugoslavia. Their descendants still live in today’s Kosovo and Macedonia.[28] This was the story of most Balkan countries as the Great Powers divided them up as they saw fit. However, since the fall of communism, most of them have limited themselves to calling for equal treatment and at most local autonomy for their ethnic brethren in neighboring countries. However, in the more underdeveloped nations, territorial expansion is still viewed favorably. An insurgency by ethnic Albanians in Macedonia who make up about 30% of the population nearly broke into civil war. Since then, there has been sporadic violence between the Albanians who feel marginalized and Slavic authorities.[29] There is still a great amount of support in Albania and among Albanian Kosovars for a ‘Greater Albania’ encompassing all ethnic Albanians in the region.[30]

The ethnic problems facing those in the Balkans go back centuries but as Romania and Bulgaria have demonstrated, they are not insurmountable. The benefits of individual profit and capitalism have been experienced by expatriates and infiltrated their countries the same way Eastern Europeans in the nineteenth century learned the ideology of nationalism in the West and tried to build nation-states around their own ‘Volk.’ The hopes of enhanced security through NATO and economic development through the EU have given these nations powerful incentives for putting their ethnic hatreds aside in order to be accepted in the West.

But, bullying these nations into accepting Western values is not the proper way to smoothly bring these nations into the world of soft borders and global capitalism that has helped break down so much of the ethnic animosity that existed in Western Europe before the Cold War. The EU should be prepared to see further fragmentation and ethnic conflict, but hold the olive branch of EU membership to those states who protect human rights and resolve their conflicts peacefully. This will lead to greater security in these tiny, poor countries, as all of them want to eventually join. Any other intervention into these peoples’ problems, including economic support to their corrupt governments will only prolong the process of ethnic healing and European integration.

The “Balkans,” as they have been known in the pejorative sense, has shrunk in the past two and a half decades to the betterment of its peoples. The only areas of significant conflict potential are in the Western Balkans of former Yugoslavia and Albania, and even here, economic cooperation has improved. Beginning in the mid-nineties, Greece has conducted workshops on urban development, as well as professional and military training in Albania. The two nations have also signed numerous bilateral police agreements in order to increase stability in the region. This has especially become important as the number of illegal Albanian immigrants into Greece has increased in the past fifteen years.[31]

In order for the people of the Balkans to eliminate ethnic violence, they must have common economic and security goals. The trade volume with Turkey, whom the Balkan peoples view as their former imperial oppressor, increased sixfold from 2.9 billion dollars in 2000 to 17.5 billion dollars in 2012.[32] The establishment of the Regional Cooperation Council (R.C.C.), an international framework to promote cooperation in South-East Europe, in 2008 was a major step forward. These achievements are significant, and a level of cooperation considered normal now would simply have been impossible 17 years ago.[33] However, this like other initiatives and proposals for greater economic integration among the former Yugoslavian states and Albania have prompted fears of Serbia or Albania exerting too much influence and using it as a means of accomplishing their respective nationalists’ goals of a ‘Greater Serbia’ or ‘Greater Albania.’[34]

NATO and the EU must resist the urge to replace the empires of the nineteenth century that picked allies based on who could maintain the balance of power or give them an edge and in return engendered a mentality of dependency on them without the Balkan nations having to rely on one another for trade. Successful economic integration for the Balkan nations with the West must also be horizontal with each other in the interest of peace and security in the region.


Blitz, Brad ed. War and Change in the Balkans: Nationalism, Conflict, and Cooperation, Cambridge:           Cambridge University Press, 2006.

Gallagher, Tom. “Folly and Failure in the Balkans,” HistoryToday 49 September 9, 1999.

Hagan, William W. “The Balkans’ Lethal Nationalisms.” Foreign Affairs. July/August 1999.

Kaplan, Robert D. Balkan Ghosts: A Journey Through History. New York: St. Martin’s Press,                       1993.

Kütük, Dilek. “Deepening relations between the Balkans and Turkey: Economic growth and                         patterns of development.”, May 11, 2015.

Milloja, Genc. “For Peace to Last, the Balkans Need, September   5,               2013.

Pavloudis, Christos. “Nationalism and Ethnic Conflict in Southern Balkans” master’s thesis,                         Naval Postgraduate School, 2002.

Schierup, Carl-Ulrik. review of Scramble for the Balkans: Nationalism, Globalism, and the                           Political Economy of Reconstruction, by Carl-Ulrik Schierup. Europe-Asia Studies 51, 7                     Nov 1999: 1310-1312.

Schmidt, Caroline. “Corruption, no freedom of speech and dubious referendums: Is Republika                        Srpska getting an easy ride?” Deutsche Welle. February 3, 2016.

“The Balkans in Europe’s Future.” Report of the International Commission on the Balkans.                            Centre for Liberal Strategies, Sofia.

Zahariadis, Nikolaos. Geopolitical and Economic Changes in the Balkan Countries. London:                         Praeger, 1996.

Zakaria, Fareed. “Breathing Room in the Balkans.” Newsweek April 2, 2001.

[1] William W. Hagan, “The Balkans’ Lethal Nationalisms,” Foreign Affairs, July/August 1999,
[2] Ibid.
[3] Tom Gallagher, “Folly and Failure in the Balkans,” HistoryToday 49 (September 9, 1999),
[4] Frank Hefner and Douglas Woodward, A Better Red: The Transformation from Communism to Coca-Cola in Romania, Quarterly Journal of Austrian Economics, (Summer 1999), 45.
[5] Ibid, 44-48.
[6] Ibid, 48.
[7] Harry Booty, “Was Nationalism the Primary Cause of the Wars in the Former Yugoslavia?” E-International Relations Students, February 28, 2011,
[8] Blitz, Brad ed. War and Change in the Balkans: Nationalism, Conflict, and Cooperation, (Cambridge: Cambridge University Press, 2006), 197.
[9] Blitz, War and Change, 212.
[10] Ibid, 197.
[11] Ibid, 209.
[12] Ibid, 209.

[13] “Klaus Iohannis wins Romanian presidential election,” The Guardian, November 16, 2014,

[14] Valentina Pop, “Romanians Elect First Ethnic German President,” euobserver, November 17, 2014,

[15] Gena Mlloja, “For Peace to Last, the Balkans Need Pragmatism,”, September 5, 2013,

[16] Ibid.
[17] Zahariadis, Geopolitical and Economic Changes, 75.
[18] Pavloudis, “Nationalism and Ethnic Conflict in Southern Balkans,” 36.
[19] Blitz, War and Change, 213-214.
[20] Blitz, War and Change, 214-215.
[21] “Hungary and Romania Face off over an Ethnic Dispute,”, February 21, 2013,
[22] “Hungary and Romania Face off.”
[23] Blitz, War and Change, 212.
[24] “The Balkans in Europe’s Future,” Report of the International Commission on the Balkans, Centre for Liberal Strategies, Sofia, 12.
[25] “The Balkans in Europe’s Future,” 17
[26] Ibid.

[27] Caroline Schmidt, “Corruption, no freedom of speech and dubious referendums: Is Republika Srpska getting an easy ride?” Deutsche Welle, February 3, 2016. Web.

[28] Christos, Pavloudis, “Nationalism and Ethnic Conflict in Southern Balkans” master’s thesis, Naval Postgraduate School, 2002, 38-39.

[29] Matt Robinson, “Gun battle in ethnic Albanian region deepens Macedonian crisis,” Reuters, May 10, 2015,

[30] “The Balkans in Europe’s Future,” 17.
[31] Nikolaus Zahariadis, Geopolitical and Economic Changes in the Balkan Countries, (London: Praeger, 1996), 74.

[32] Dilek Kütük, “Deepening relations between the Balkans and Turkey: Economic growth and patterns of development,”, May 11, 2015,

[33] Genc Milloja, “For Peace to Last, the Balkans Need, September 5, 2013.
[34] Kütük, “Deepening relations between the Balkans and Turkey.”

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