The Balkan’s military-industrial complex, noted for its ability to produce both NATO and Soviet standard munitions, has come into focus for its potential to supply Ukraine and the West with much-needed hardware at relatively low prices.
The opportunity for large orders has cut across traditional alliances. Take Serbia, which has close ties to Russia and often engages in performative pro-Kremlin actions (it appointed two US-sanctioned individuals to the Cabinet in May) and yet has sold around $800m of arms to Ukraine since the full-scale invasion of 2022. The companies selling these munitions are government-owned.
After the Cold War, the former communist regimes aimed to create self-sufficient militaries and invested substantial resources in companies to meet their needs. This means the region is rich in the know-how and infrastructure required to produce artillery shells, small arms ammunition, vehicles, and other materiel Ukraine desperately needs.
Bosnia and Herzegovina is the regional defense production leader, followed closely by Serbia and Albania. In this sense, companies like the Bosnian Binas, Igman, or Pretis and BNT, and Serbian Yugoimport, Krušik, and others, dominate the domestic and regional market. These are the firms with the greatest potential for cooperation with Ukraine, due to their dominance in the markets, and the fact they produce Soviet-standard weapons.
Bosnia, like Serbia, has banned exports to war zones or require end-user certificates for the sale to be completed. But despite the legal obstacles, mortars and artillery shells made in both countries have been used in Ukraine as a result of sales to third parties or through direct (but secret) donations.
In the case of Bosnia, this was done via Turkish, Canadian and Slovakian companies, while Serbian arms have passed through domestic and Turkish businesses. Some of this was done through the Czech initiative, which is now sending as many as 100,000 shells monthly to Ukraine, while some was sent through sales to private companies. While this author has learned that meetings regarding such sales took place with Bosnian companies such as Pretis, an artillery shell producer, the details of the sales such as the price and numbers ordered are not public.
By contrast, Montenegro, Albania and North Macedonia, the three NATO member states in the region, have been donating their obsolete Cold War-era weapons, some of which were originally purchased from Ukraine in the late 1990s.
Despite the growing market and sales, there are complex challenges connected to ownership structures and wider geopolitical relations in the region.
Foremost among these are internal relations in Bosnia, where Republika Srpska, one of the two entities that make up the country, is noted for its pro-Russian policies and has a leadership that meets regularly with Putin.
While enterprises outside of Republika Srpska produce shells and artillery pieces which have seen action in Ukraine, Republika Srpska’s defense companies almost exclusively work on maintenance and overhauls of Soviet-era air defense systems and jets.
For several years their main customers have been companies from Serbia and the Serbian Defense Ministry. This has led the Republika Srpska government to transfer ownership to the government of Serbia or the Serbian arms conglomerate Yugoimport, sparking concern that a vulnerable and strategic industry has been left open to Russian influence and investment.
Serbia remains one of the few countries in Europe closer to the Kremlin than to the West, and has failed to sanction Russia over its actions in Ukraine. In practice, this means Russian nationals connected to the regime in Moscow can operate freely in Serbia, and have been doing so through more than 7,000 new companies, some of which were sanctioned by the US OFAC for circumventing sanctions against Russia.
The effect of Russia’s war against Ukraine was felt in the rise of anti-Western disinformation campaigns, Russian support for those undermining democratic processes, challenges to regional security, and the need to resist foreign malign influence.
While the West rallied behind Kyiv with a comprehensive set of economic and political sanctions against Russia, alongside financial and military aid for Ukraine, divisions came to the surface in the Western Balkan states of Albania, Bosnia and Herzegovina (BiH), Montenegro, Kosovo, North Macedonia and Serbia.
This was best seen in the failure by some to introduce sanctions on Russia and mass protests in Belgrade in support of Vladimir Putin’s war. Moscow’s attack on Ukraine, combined with its hybrid activities in the region, also sparked internal political division in Bosnia and Herzegovina, and Montenegro.
The latter, however, along with North Macedonia and Albania, two other NATO members from the region, joined the alliance in condemning the invasion. The three countries also pledged their military support to Ukraine and backing for its membership of the European Union (EU.)
Kosovo’s position was particularly challenging, as the country’s bilateral relations (it is not recognized by all EU states) hindered more substantial support for Ukraine in international forums, but allowed it to become a part of other aid mechanisms such as the UK-led Operation Interflex as well as, accepting some 5,000 Ukrainian refugees in 2023.
Omar Memišević is a Research Fellow at Strategic Analysis focusing on foreign malign influence in the Western Balkans.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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