Donald Trump is returning to the White House after a four-year hiatus, the same period since he, Serbian President Aleksandar Vučić, and Kosovo’s Prime Minister Avdullah Hoti signed the famous Washington Agreement.
Although legally non-binding, analysts saw this document as a set of promises Serbia made too readily to the U.S. administration, whose policies don’t shift with every new president.
This somewhat forgotten document might come back into relevance now that Trump is “back in the saddle,” both in its political and economic aspects. These provisions included accelerating the construction of a motorway and railway between Belgrade and Pristina and avoiding cooperation with “unreliable suppliers” of 5G networks—primarily targeting Chinese companies, and Huawei in particular. It also envisioned opening an International Development Finance Corporation (DFC) office in Belgrade and diversifying energy supply sources.
In essence, the document signed by Vučić and Hoti was meant not only to normalize relations between Belgrade and Pristina but also to push Serbia, economically and in terms of energy, to distance itself from China and Russia—bringing it closer to the West and the United States.
Forbes Serbia investigated the extent to which Serbia adhered to the commitments made in the Oval Office during Trump’s years in opposition.
None of the Promised Kilometres
The “Highway of Peace,” a route from Belgrade through Niš and Pristina to the port of Durrës, was originally envisioned by the Berlin Process a decade ago, gaining strong support from both Brussels and Washington. The Washington Agreement reiterated Serbia’s and Kosovo’s commitment to this motorway’s construction, as well as to building a railway on the same route.
However, progress has been meagre. So far, Serbia has built only 5.5 kilometres of road, and that, reportedly, incorrectly. The former Minister of Construction, Goran Vesić, said he was unsure how the error occurred. In short, instead of a motorway, a semi-motorway profile was built on the existing road. Since this wasn’t the original plan, Vesić announced a restart of the construction. Earlier estimates suggested the project would cost €1.4 billion.
The completion deadline passed several years ago, with no new one in sight. The revised fiscal strategy, as reported by Forbes Serbia, now plans to allocate only one million dinars to the project next year, down from the originally planned 13.7 billion dinars. Even in 2026, investments will remain modest, making it likely that the motorway won’t be a priority for Serbia anytime soon.
Shifting Priorities
The Fiscal Council’s assessment of the revised fiscal strategy for the next three years highlighted significant cuts to this transport project.
“Niš–Merdare, specifically the Niš–Pločnik section, initially had an allocation of 30.6 billion dinars in the 2024 budget rebalance, aiming for completion by early 2027. However, the revised strategy allocates only 4.7 billion dinars across 2025, 2026, and 2027, deferring most of the investment beyond 2027,” according to the Fiscal Council’s report.
One obstacle could be the lack of financing for this motorway. The promised loan from the U.S. International Development Finance Corporation, mentioned four years ago, has yet to materialize.
DFC Investment Office
The progress of the DFC story hasn’t been much better. Soon after the agreement’s signing, the DFC opened a virtual office in Belgrade, with Serbian Prime Minister Ana Brnabić and DFC CEO Adam Boehler signing a joint statement at Serbia Palace. The public welcomed the appointment of John Jankovic, a Serbian-American, as head of DFC.
The DFC promised to fund various projects in Serbia and Kosovo outlined in the Washington Agreement, along with providing credit lines to entrepreneurs and American initiatives in Serbia. However, in March of the following year, President Joe Biden’s administration replaced both Jankovic and Boehler. According to Forbes Serbia’s sources, the office hasn’t been formally closed, but its operations stalled before they even began.
Stefan Vladisavljev, program director of the Belgrade Fund for Political Excellence, confirmed to Forbes Serbia that the DFC never actually took off. “It was meant to be a hub for American investments and loans. However, that never materialized.”
Hopes for Trump’s Return
“There’s a sense of excitement in the Serbian government over Trump’s return to the White House, partly because of the economic agreements from four years ago. There’s renewed hope for rebuilding the General Staff Headquarters and pushing forward with other investments,” said an insider. However, additional pressure from Washington to economically distance Serbia from China could pose a challenge.
“Siding against China would impact Serbia economically, as Chinese companies currently construct most road networks and manage major capital projects in Serbia. How things unfold will largely depend on Trump’s new cabinet. Should Richard Grenell return, U.S. insistence on implementing the Washington Agreement might intensify,” the source speculated.
Huawei as a Strategic Partner
Judging by recent visits by Serbian officials to Huawei, collaboration with this Chinese tech giant has never been stronger. During recent trips by Interior Minister Ivica Dačić and former Minister of Construction Goran Vesić to Shenzhen, Huawei’s headquarters, discussions focused on continuing smart city and smart road projects.
Serbia’s partnership with Huawei began over a decade ago, with Huawei promoted as a key partner in broadband network development. Huawei also has agreements with various Serbian state enterprises.
In contrast, Serbia lags in launching a 5G network, making it one of the few European countries still lacking this technology. Originally planned for 2020, 5G rollout was delayed due to the pandemic. Meanwhile, Serbia agreed in Washington to “prohibit the deployment of 5G networks by untrusted suppliers” and to phase out existing equipment from such suppliers “within reasonable timelines.”
5G Without Chinese Involvement?
Is Serbia’s delay in launching 5G partly due to its Washington Agreement obligations? Stefan Vladisavljev says it likely is.
“Huawei and other Chinese companies were expected to be the main contenders. The Washington Agreement placed Serbia in a tough spot. Since the Biden administration took office, Washington has continued pressuring Serbia to avoid Chinese suppliers. That’s why it remains unclear who might participate in the 5G rollout tender,” Vladisavljev explained.
Kosovo, unlike Serbia, has joined the Clean Network initiative, which bans the use of Chinese technology from unreliable suppliers.
“The Washington Agreement was a swan song of Trump’s previous term. Future relations depend on Trump’s new administration, the next Secretary of State, and any personnel changes in the U.S. Embassy in Belgrade,” Vladisavljev concluded.
Energy Cooperation
Through the recently signed Strategic Cooperation Agreement in the field of energy between Serbia and the U.S., Serbia has effectively continued to fulfil promises made during Trump’s administration. These commitments primarily involved further diversifying Serbia’s gas policy to reduce its reliance on Russian gas imports.
In addition, the agreement, recently signed by the current Foreign Minister Marko Đurić, also entails cooperation between the two countries in the field of renewable energy sources. Officially, Serbia has pledged to inform interested American companies about planned energy projects within the country. Unofficially, American company Bechtel has shown interest in constructing the Đerdap 3 reversible hydroelectric power plant.
It’s worth recalling that efforts to diversify Serbia’s gas supply have been ongoing for at least two decades, largely prompted by Western initiatives due to Moscow’s influence on Serbia’s energy security.
This diversification involves the interconnector with Bulgaria, gas supplies from Azerbaijan, and links to the port in Greece, which receives liquefied natural gas from the U.S.
(Forbes Serbia, 08.11.2024)
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