[Senate Hearing 115-715]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 115-715

                   SOUTHEAST EUROPE: STRENGTHENING
                        DEMOCRACY AND COUNTERING
                        MALIGN FOREIGN INFLUENCE

=======================================================================
                                 HEARING
                                 
                               BEFORE THE
                               
                      SUBCOMMITTEE ON EUROPE AND 
                     REGIONAL SECURITY COOPERATION
                     
                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2017

                               __________

       Printed for the use of the Committee on Foreign Relations

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                   Available via the World Wide Web:
                         http://www.govinfo.gov

                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
38-365 PDF                  WASHINGTON : 2019                     
          
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                 COMMITTEE ON FOREIGN RELATIONS        

                BOB CORKER, Tennessee, Chairman        
JAMES E. RISCH, Idaho                BENJAMIN L. CARDIN, Maryland
MARCO RUBIO, Florida                 ROBERT MENENDEZ, New Jersey
RON JOHNSON, Wisconsin               JEANNE SHAHEEN, New Hampshire
JEFF FLAKE, Arizona                  CHRISTOPHER A. COONS, Delaware
CORY GARDNER, Colorado               TOM UDALL, New Mexico
TODD, YOUNG, Indiana                 CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               TIM KAINE, Virginia
JOHNNY ISAKSON, Georgia              EDWARD J. MARKEY, Massachusetts
ROB PORTMAN, Ohio                    JEFF MERKLEY, Oregon
RAND PAUL, Kentucky                  CORY A. BOOKER, New Jersey
                  Todd Womack, Staff Director        
            Jessica Lewis, Democratic Staff Director        
                    John Dutton, Chief Clerk        




    SUBCOMMITTEE ON EUROPE AND REGIONAL SECURITY COOPERATION        

                RON JOHNSON, Chairman, Wisconsin        
JAMES E. RISCH, Idaho                CHRISTOPHER MURPHY, Connecticut
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts
ROB PORTMAN, Ohio                    ROBERT MENENDEZ, New Jersey
RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire

                              (ii)        

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Johnson, Hon. Ron, U.S. Senator from Wisconsin...................     1


Murphy, Hon. Christopher, U.S. Senator from Connecticut..........     2


Wilson, Damon, Executive Vice President, Atlantic Council, 
  Washington, DC.................................................     4

    Prepared statement...........................................     6


Ruge, Dr. Majda, Fellow, Foreign Policy Institute; School of 
  Advanced International Studies, Johns Hopkins University, 
  Washington, DC.................................................     9

    Prepared statement...........................................    10


Bajrovic, Ivana Cvetkovic, Associate Director for Europe, 
  National Endowment for Democracy, Washington, DC...............    17

    Prepared statement...........................................    19


Yee, Hoyt Brian, Deputy Assistant Secretary, Bureau of European 
  and Eurasian Affairs, U.S. Department of State, Washington, DC.    31

    Prepared statement...........................................    33




                             (iii)        

 
                    SOUTHEAST EUROPE: STRENGTHENING
                        DEMOCRACY AND COUNTERING
                        MALIGN FOREIGN INFLUENCE

                              ----------                              


                        WEDNESDAY, JUNE 14, 2017

                               U.S. Senate,
                        Subcommittee on Europe and 
                     Regional Security Cooperation,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:00 p.m. in 
Room SD-419, Dirksen Senate Office Building, Hon. Ron Johnson, 
chairman of the committee, presiding.
    Present: Senators Johnson [presiding], Murphy, and Shaheen.

            OPENING STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Good afternoon. This hearing titled 
Southeast Europe: Promoting Democracy and Countering Malign 
Foreign Influence'' of the Senate Foreign Relations 
Subcommittee on Europe and Regional Security Cooperation is 
called to order. Good afternoon and welcome.
    The Senate Foreign Relations Subcommittee on Europe and 
Regional Security is meeting today to examine the threats, the 
problems, and the progress being made in Southeast Europe. We 
will hear from both the administration and outside experts on 
U.S. interests and policy options in the region.
    I was in Europe about 2 weeks ago where I had the 
opportunity to meet with European leaders, including officials 
from Romania, Croatia, Montenegro, Bosnia, and others. Their 
message was consistent. U.S. leadership is needed in Southeast 
Europe. When the U.S. withdraws, the power vacuum is filled by 
countries with malign intent.
    While in Europe, I had the pleasure of visiting Montenegro 
to meet with their prime minister, defense minister, and others 
to discuss their decision to join NATO and the issues facing 
their country. It is a beautiful country with great potential. 
Actually a little off script here, one of my suggestions to 
their government was they really need a ministry of marketing. 
Unbelievable potential that needs to be taken advantage of.
    And yet, just last week, court proceedings began involving 
an October 2016 attempt to overthrow Montenegro's pro-West 
government and assassinate the prime minister. After extensive 
investigation, Montenegro's special prosecutor brought an 
indictment against the individuals believed responsible. 
According to that indictment, a high-level official of the 
Russian main intelligence directorate instigated the plot, 
which was to be carried out by Serbian nationalists. 
Thankfully, the coup was foiled, but this should serve as a 
stark example of the seriousness of the Russian threat in the 
region.
    Last week on June 5th, Montenegro, undeterred, deposited 
its instrument of accession to NATO officially to become the 
29th member of the Alliance. This was an important milestone 
for both Montenegro and NATO, and it sends a clear message that 
NATO's doors remain open for those wishing to join and willing 
to make the required reforms.
    It is also an opportune moment for the U.S. to recommit 
itself to the stability and prosperity of Southeast Europe. The 
United States and our European allies played a crucial role in 
crafting the post-Yugoslavia map. But U.S. engagement in the 
region is not what it once was. In recent years, Europe has 
taken the lead in the region promoting political and economic 
reforms through the incentive of EU membership.
    Unfortunately, successive crises have created fissures in 
the European Project and led some EU members to balk at further 
expansion. The resulting political vacuum in Southeast Europe 
has led to some backsliding on institutional reforms and 
created an opening for destructive foreign influence, namely 
destabilizing Russia, disinformation, and propaganda, and 
radical Islamists from the Middle East.
    Ultimately U.S. policy in Southeast Europe must be shaped 
by our vital national interests. The wars of the 20th century 
made clear the importance of a peaceful and prosperous Europe 
to U.S. security and economic prosperity. Those conflicts are 
similarly clear about the perils of ignoring political and 
ethnic tensions in the Balkans. We all want to see a Europe 
free, whole, and at peace.
    This hearing aims to refocus U.S. attention on this 
important region, to examine our long-term aims, the means 
required to achieve them, and the threats that could frustrate 
them.
    I would like to thank our witnesses for joining us today. I 
look forward to the testimony.
    And I would like to turn it over to my distinguished 
ranking member, Senator Murphy, for his opening remarks.

                STATEMENT OF HON. CHRIS MURPHY, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Murphy. Thank you very much, Senator Johnson. I 
want to thank you and the Senate Foreign Relations Committee 
for convening this hearing to consider current challenges in 
Southeast Europe because, frankly, this is a region that 
deserves much more of our attention from both sides of the 
aisle.
    I think of it in this way. I think three of the greatest 
challenges that U.S. foreign policy faces come to a head inside 
the Balkans. First, the challenge of covert and overt Russian 
influence that undermines support for Western institutions and 
further degrades democratic governance. Second, the persistent 
scourge of corruption that is holding back economic progress 
and destabilizing governments throughout the region. And third, 
the rising radicalization of Muslim youth and a relatively 
large number out of this region who have traveled to Syria to 
fight with ISIS.
    The good news, though, is that every single one of these 
problems that confronts the region that will be the subject of 
our hearing today is solvable if we just apply a bit more 
effort and are willing to devote some new resources to the 
region. As a recent example, a concerted U.S.-led effort to 
address the foreign fighter issue has led to every country in 
the region passing legislation to criminalize the participation 
of their citizens in foreign wars.
    But in the absence of clear U.S. and EU policies, internal 
vulnerabilities are being exposed and external actors from 
outside the region, namely Russia, are exerting influence to 
destabilize the region. Russia's presence is increasingly felt, 
and every single leader from the region that comes to talk to 
us--this is what they want to talk about. They want to talk 
about Russia's increased focus on the region.
    This is happening at a time that the United States, quite 
frankly, is simply not showing up in the way that we once were. 
There is great concern in the region about the massive 
withdrawal of the United States from the Balkans and from the 
Western Balkans. Not having an assistant secretary for the 
region makes our efforts in the region very difficult. We will 
hear from Hoyt Yee on our second panel. He does great work, but 
he cannot do it alone.
    Democratic progress has stalled in many of these countries, 
and their citizens, are still grappling with corruption, high 
unemployment, and the lack of opportunity. There is now a real 
fear that renewed nationalism and ethnic tension could throw 
back parts of this region into crisis. And this is not 
something that we should take for granted. Right? We have all 
celebrated the relative degree of stability that has come to 
that region since the time in which this Congress was obsessed 
with conflict there. But there is a real danger of renewed 
physical violence in the region between the coup attempt in 
Montenegro, organized violence in the Macedonian parliament, 
increased radicalization, as I mentioned, of ethnic Albanian 
youth, and Dodik's national agenda in Republika Srpska. The 
region is a potential tinderbox that could ignite over any 
number of simmering conflicts. Understanding the domestic and 
international drivers of these conflicts is crucial to 
determining how they can be addressed.
    So the United States should step up our engagement in the 
region, and we should have a discussion today to understand how 
we can better assist our many partners, our increasing allies, 
now with the accession of Montenegro to NATO, with the 
challenges that they face.
    And I look forward to our first and second panel today 
discussing all of these issues with you.
    Senator Johnson. Thank you, Senator Murphy.
    Our first witness is Mr. Damon Wilson. Mr. Wilson is 
Executive Vice President of the Atlantic Council. I am not 
reading my script.
    Before I introduce our witnesses, I would like to note that 
our panel order has flipped due to a scheduling conflict. This 
is not a new precedent. You can expect administration panels to 
be first in future hearings. We are grateful for the 
administration Deputy Assistant Secretary Yee's flexibility 
being able to testify later this afternoon.
    Now I will introduce Mr. Damon Wilson. Mr. Wilson is 
Executive Vice President of the Atlantic Council. He has served 
as both Senior Director for European Affairs and Senior 
Director for Central, Eastern, and Northern European Affairs on 
the National Security Council, and was Deputy Director of the 
private office of the NATO Secretary, assisting Lord George 
Robertson. Mr. Wilson?

 STATEMENT OF DAMON WILSON, EXECUTIVE VICE PRESIDENT, ATLANTIC 
                    COUNCIL, WASHINGTON, DC

    Mr. Wilson. Thank you very much, Mr. Chairman and Senator 
Murphy. Thank you for this opportunity.
    And I want to start by thanking you in particular your 
leadership on Southeast Europe and particularly the Senate's 
role in acting decisively to ratify the protocols of accession 
welcoming Montenegro as our newest ally. That is some good 
news.
    The Western Balkans were supposed to be a problem solved. 
Or at least a problem that the Americans could hand off to the 
Europeans, so the saying went. But sadly, as you have laid out, 
that is not the case.
    Witness October 16th last year in Podgorica. On that 
election day, Montenegro's authorities disrupted a plan by 
Russian-backed Serbian nationalists to enter parliament dressed 
as security officers and to open fire on opposition supporters. 
The plan was to assassinate the prime minister and declare the 
election invalid or orchestrate the Russian-financed opposition 
taking power.
    As you mentioned, Montenegro's independent special 
prosecutor has now identified two Russian military intelligence 
officers as masterminds. These two individuals fled Serbia 10 
days after the failed coup attempt to return to Moscow just as 
Nikolai Patrushev, former head of the Russian Federal Security 
Service and current head of Russia's Security Council, arrived 
in Belgrade.
    Contrast that spy-like novel story with October 2001 in 
Moscow when a then nervous President Trajkovski of Macedonia 
visited Russia to inform President Putin that his nation would 
pursue NATO membership in earnest. And Putin brushed it off, 
replying, ``Macedonia is not Ukraine.''
    Putin's ambivalence about a Balkan nation pursuing NATO 
membership more than 15 years ago and the Kremlin's willingness 
to back a coup attempt last October underscores how much the 
geopolitical situation has changed.
    As Washington turns its attention elsewhere, the EU 
strategy has given way to bureaucratic process increasingly 
detached from political vision. The consensus in the region 
about its future has frayed. Short-term political costs of 
reforms at home seem to outweigh the ambiguity of long-term 
benefits, and we see that stagnation actually is giving way 
potentially to backsliding. It is this lack of a North Star 
that has opened a tempting new front for the Kremlin's efforts 
to rewrite the rules of the post-Cold War era.
    So my central message is that a little bit of effort in 
this region pays great dividends. Alternatively, American 
ambivalence today may engender a crisis tomorrow, which in turn 
would demand a far greater degree of American engagement than 
would have been required to avoid a crisis in the first place.
    So, of course, there is no bright future in the region 
without EU leadership. However, the United States retains a 
special authority given its central role in ending the fighting 
and stabilizing the region.
    Moscow's objectives are simply to disrupt the region's 
integration into NATO-EU. We have seen it finance a campaign to 
turn public opinion against NATO in Montenegro, to destabilize 
Bosnia's central government, to intervene cynically in 
Macedonia's contested elections, nudging that country to the 
brink of conflict, and to operating intelligence services in 
Serbia without hinder bolstered by the presence of a 
humanitarian base. Moscow seized a low-cost opportunity because 
of a strategic vacuum.
    For the United States, we have learned that regional 
conflict in the area can lead to great power conflict. The left 
unaddressed radicalization of Muslim populations can fuel a 
foreign fighter population flow. The unmitigated population 
flows through the region into EU states can pose a challenge to 
our security for countries that have a visa waiver program on 
their borders. And the instability in Southeast Europe risks 
depriving the United States of a strategic partner in the EU.
    So, therefore, it is a time for us to engage with a bit 
more of coherent strategy, first, by establishing a sense of 
clarity in our common goal that results of reform at home mean 
that all Balkan states can be a part of a secure, prosperous 
transatlantic community, clarity of vision.
    Second, to ensure that we make Montenegro's membership a 
success, the short term.
    And third, that we should think about committing an 
enduring U.S. security presence in the region. A permanent 
military presence as part of a NATO force in Kosovo could serve 
as a deterrent force and guarantor in the region.
    And fourth, we should consider the historic rapprochement 
with Serbia as part of this process.
    We also have an opportunity to foster reconciliation and 
reform in Macedonia, lead efforts to resolve the name dispute 
and pave its way, its entry into NATO.
    But I think one of the most important things is that we 
take a bet on the people of the region. Our objective is not 
simply stability. We should avoid reinforcing cozy political 
patronage networks often run by national forces. Working with 
our EU partners, we should pursue a concerted effort to provide 
opportunities for youth and entrepreneurs to thrive and use our 
leverage to create public-private partnership opportunities 
within these countries.
    So our priority is to put an end to drift. A small show of 
commitment now will shore up an order painstakingly put 
together in response to the bloodletting of the 1990s. These 
measures will help grow an independent constituency for a 
democratic prosperous future across the region. Locals need to 
be reassured that new ethnic hostilities are not around the 
corner and that borders are not about to be redrawn under their 
feet. And in the same vein, Russia must be made to understand 
that there is no easy path for it to sow chaos in the region.
    I believe now with your leadership the U.S. Senate has a 
unique opportunity to help drive a renewed American strategy 
towards the region, and we welcome the opportunity to support 
those efforts.
    [Mr. Wilson's prepared statement follows:]


                 Prepared Statement of Damon M. Wilson

    The Western Balkans were supposed to be a problem solved. Or at 
least a problem the Americans could hand off to the Europeans to finish 
the job of completing Europe. Sadly, that is not the case.
    We can celebrate the fact that since the Yugoslav succession wars 
have ended, Slovenia and then Croatia earned both NATO and European 
Union membership, and Albania and now Montenegro have joined them in 
NATO. Recent developments however underscore the fragility of our 
investments in the region nearly 22 years after the Dayton Peace 
Accords, 18 years after the Kosovo air campaign, and 16 years after the 
Ohrid Accords stabilized Macedonia ending the last violent conflict in 
a bloodied region.
    Over the past decade as Washington turned its attention elsewhere, 
and European Union (EU) strategy gave way to a bureaucratic process 
increasingly detached from political vision, the consensus in the 
region about its future has frayed. To those in the region, EU 
membership is a distant prospect, if viable and desirable at all. The 
short-term costs of reforms at home, including risking the forfeiture 
of patronage networks, outweigh the ambiguity of long-term benefits. 
Stagnation is giving way to backsliding.
    This dynamic is exacerbated by the uncertainties at the heart of 
Europe and the transatlantic relationship itself. When there is trouble 
in our core transatlantic community, its periphery is vulnerable to 
centrifugal forces.
    This lack of a North Star has opened a tempting new front for the 
Kremlin's efforts to rewrite the rules of the post-Cold War era.
    Witness October 16, 2016 in Podgorica. On that election day, 
Montenegro's authorities disrupted a plan by Russian-backed Serbian 
nationalists to enter parliament dressed as Montenegrin security 
officers and then open fire on opposition supporters who they had 
orchestrated would gather outside parliament. The plan was to 
assassinate the Prime Minster, and declare the election invalid or 
orchestrate the Russian-financed opposition taking power.
    This is not a plot line from a fictional spy novel. Montenegro's 
independent special prosecutor Milivoje Katnic has identified two 
Russian military intelligence officers, Eduard Sismakov and Vladimir 
Popov, as masterminds. These two individuals fled Serbia ten days after 
the failed coup attempt to return to Moscow just as Nikolai Patrushev, 
former head of the Russian Federal Security Service (FSB) and current 
head of Russia's Security Council, arrived in Belgrade.
    This story, which Western authorities and open source information 
validate, illustrates the brazenness with which Russia is willing to 
operate in a region it once considered no longer core to its strategic 
interests.
    Contrast this with October 2001 in Moscow. Then-President Boris 
Trajkovski of Macedonia was visiting Russia with the aim of informing 
President Putin that, having achieved peace in Macedonia, the nation 
would now pursue in earnest membership in NATO and the EU. According to 
Macedonians present, this was President Trajkovski's principal message, 
making him nervous about the encounter. But Putin replied, ``Macedonia 
is not Ukraine,'' making it clear that Macedonia's pursuit of NATO 
membership did not concern him.
    The contrast between Putin's ambivalence about a Balkan nation 
pursuing NATO membership more than 15 years ago and the Kremlin's 
willingness to back a coup attempt last October to derail Montenegro's 
path to NATO underscores how much the geopolitical situation has 
changed.
    No doubt today the European Union is the major player in the 
region, committing far more resources, tools, human capital, and 
political attention to the region. For this, Americans should be 
grateful. There will be no bright future for Southeast Europe without 
EU leadership. However, the United States retains a special authority 
given how central its moral voice and hard power were to ending the 
fighting and stabilizing the region.
    My central message is that continued American ambivalence today may 
engender a crisis tomorrow, which in turn would demand a far greater 
degree of American engagement than would be required to avoid any 
crisis in the first place.
    Don't get me wrong; professional American diplomats continue to 
play a central role in resolving regional problems. In fact, Deputy 
Assistant Secretary (DAS) of State Hoyt Yee who will testify today, 
along with our ambassadors on the ground, have been central to recent 
political breakthroughs in Kosovo, Albania, and Macedonia. Montenegro 
would not have entered NATO this month without the unrelenting efforts 
of Ambassadors and DAS-level officials over the past few years.
    But that is not enough.
    We need to give our frontline diplomats a bit of backup, given 
Russian mischief-making can easily exacerbate Balkan vulnerabilities 
and escalate into full-blown wild fires. After all, Moscow is not 
aiming to build anything in the region. Rather Moscow's objectives only 
require that it disrupt the region's integration into NATO and the EU.
    This environment has fostered a sense of backsliding. And yet in 
the most Russia-friendly populations support for Europe remains strong. 
Even as the EU's fortunes have declined, Serbs opt 48 percent to 35 
percent in favor of Serbia joining the EU. In past years, the margin of 
support for EU membership has been as large as 40 points in favor.
    Similarly, the economic center of gravity for the region is clearly 
the EU. In Serbia, which has the largest proportion of trade with 
Russia, only 9.6 percent of its imports are from Russia compared to 
62.5 percent from the EU. Serbia exports only 5.4 percent of exports to 
Russia compared to 65.8 percent to EU. These figures are even more 
lopsided in favor of the EU in the cases of Bosnia and Herzegovina, 
Macedonia, and Montenegro, according to figures from the European 
Commission and UNCTAD.
    Yet Russia maintains strategic leverage through concerted 
disinformation and influence campaigns, and its ability to play the 
energy card. Bosnia and Macedonia consume 100 percent of their gas from 
Russian sources; the figure is 80 percent in Serbia, according to the 
International Energy Agency.
    Indeed, Russia has used its leverage to advance its interests in 
the region. Russia has financed a campaign to turn public opinion 
against NATO in Montenegro, and Russian resources helped turn a fringe 
anti-NATO, pro-Moscow party into the leading opposition party. Russia 
has financed Milorad Dodik giving him the means to destabilize Bosnia's 
central government and advance the independence of Republika Srpska. In 
Macedonia, Russia cynically came to the defense of former Prime 
Minister Nikola Gruevski in the wake of a massive wiretap scandal and 
contested elections, nudging the ethnically divided nation to the brink 
of conflict.
    Russian intelligence services have been operating without restraint 
in Serbia, going so far as to plan the attempted coup in Montenegro 
last fall from Serbian territory and without the knowledge of Serbia's 
elected officials. Russia's influence is bolstered by the presence of a 
``humanitarian center'' rapid response base in southern Serbia, poised 
to threaten Kosovo and Macedonia. Even overwhelmingly pro-American 
Kosovo has been subjected to an onslaught of fake news and inflammatory 
antics aimed at stirring tensions between Albanians and ethnic Serbs in 
Kosovo's north.
    Russia has gone on offense as it sensed that the United States was 
all but withdrawing from the field. Moscow saw a low-cost opportunity 
because of this strategic vacuum. But before considering how to counter 
these disruptive and dangerous tactics, it is critical to understand 
why it is in U.S. interests to care in the first place.
    Even the casual observer of European history understands that the 
continent's great power conflicts started with smaller conflicts, 
frequently in the Balkans, which metastasized, drawing in outside 
powers. Russia is stoking the flames of this historic pattern.
    The dog that has not barked is the radicalization of the Muslim 
populations of the region. Yet it could become a serious security 
threat. These populations remain deeply pro-American, but over time, 
U.S. disengagement and lack of opportunities at home could accelerate 
radicalization and grow the foreign fighters pipeline, sending 
disenchanted recruits into the civil wars of the Middle East with the 
potential to return home as security liabilities.
    The Balkans have also been one of the leading routes for migrants 
and refugees to leave North Africa and the Middle East and enter 
Europe. The massive refugee flows have strained local security capacity 
and social services. Unmitigated population flows into European Union 
states which participate in the Visa Waiver Program pose threats to 
U.S. security. We therefore have a strong interest in helping these 
nations secure their borders, and properly regulate refugee and 
migration flows.
    Finally, the Western Balkans remain the unfinished business of a 
Europe whole and free. This concept has been at the heart of U.S. 
strategy toward Europe, precisely because a whole, free Europe removes 
the continent as a conceivable future battleground and maximizes the 
likelihood that the United States will have the kind of capable, 
coherent partner we need to address global challenges. Instability in 
Europe's Southeast could deprive the United States of a strategic 
partner on facing challenges further afield.
    Therefore, the United States should first help re-establish a 
clear, common vision for the region. Our message should be that as a 
result of reforms at home, all Balkan states can ultimately be part of 
a secure and prosperous transatlantic community. The United States 
needs to join with the European Union to re-establish clarity in our 
common goal at the political level.
    Second, in the near-term, we must work to make Montenegro's NATO 
membership a success. This means working closely with our newest ally 
on a common security agenda, but also to help it accelerate domestic 
reforms, bolster the rule of law, advance its EU negotiations, and help 
foster a loyal opposition that takes its seats in parliament. With 
presidential elections in 2018, the Russians will look to leverage 
their success in creating the Democratic Front as an obstructionist 
political force by promoting an antiNATO candidate for president.
    Third, the United States should commit to an enduring U.S. security 
presence in the region. Specifically, the United States should shift 
away from a mentality of progressively decreasing its security 
obligations to KFOR to help sustain peace in Kosovo to viewing our 
security presence in Kosovo as a stabilizing force and guarantor for 
the region. Much like the deployment of U.S. and other NATO forces in 
Poland and other eastern flank allies serves as a deterrent to Russia, 
a permanent U.S. military presence as part of a NATO force at Camp 
Bondsteel in Kosovo could serve as a deterrent force in the Western 
Balkans, a rapid reaction force as need, and provide a regional 
capacity-building capability.
    Fourth, any move to transform our security presence in the region 
should be coupled if not preceded by an effort to pursue an historic 
rapprochement with Serbia. Serbian politicians hedge between an 
assertive, unappealing Russia and an ambivalent, but appealing West. 
The legacy of the 1999 NATO air campaign shapes public perceptions. We 
should both compete for Serbia and its people, as well as make clear 
that hedging is a dangerous course. To do this, the United States would 
need to develop and pursue a consistent effort in concert with key 
European allies.
    Fifth, the United States should assume a more prominent role in 
fostering reconciliation and reform in Macedonia in the wake of the 
most recent government formation, and in doing so become a leading 
stakeholder in resolving the name dispute with Greece. Restoring 
confidence in the central government, improving interethnic relations, 
and creating an investment environment attractive to Western investors 
would complement our efforts to restore the viability of Macedonia's 
NATO membership and ensure the long-term security and prosperity of the 
region.
    Sixth, we need to take a bet on the people of the region, 
particularly the next generation and an independent, entrepreneurial 
class. We need to make it clear that our objective is not simply 
stability. Therefore, U.S. policy must avoid reinforcing cozy, 
political patronage networks often run by nationalist forces like an 
organized crime racket. Working with our European Union partners, we 
should pursue a concerted effort to provide opportunities for youth and 
entrepreneurs to thrive outside traditional patronage networks, and use 
our leverage to create opportunities for them within their countries. 
Much like the United States has used public-private partnerships and 
modest public financing to attract larger numbers of students from 
Latin America to study in the United States, we should do the same in 
this region.
    These measures will help diminish nefarious Russian influence in 
the region, begin to tip Serbia into the European camp, and grow an 
independent constituency for a democratic, prosperous future across the 
region.
    Once these measures take hold, the United States could join its 
European partners in considering more fundamental measures to ensure a 
unified Bosnia. Reopening Dayton would require a level of political, 
diplomatic, and security engagement which neither the United States nor 
the EU are yet prepared to provide however. We need momentum first 
before we tackle head on this complex task, and we need forces inside 
Bosnia to lead the charge.
    In the coming years, the priority of the United States must be to 
firmly put an end to the drift. A relatively small show of commitment 
now will shore up an order painstakingly put together in response to 
the bloodletting of the 1990s. Locals need to be reassured that new 
ethnic hostilities are not around the corner, and that borders are not 
about to be redrawn right under their feet. In the same vein, Russia 
must be made to understand that there is no easy path for them to sow 
chaos in the region.
    I have come to these conclusions through our work at the Atlantic 
Council, which over the past year has sent delegations to nearly all 
the countries in the region as part of our effort to help forge a 
renewed U.S. strategy with and for the region. In the coming months, 
the Council intends to consult on and share its findings, and help 
galvanize a renewed push for reform at home and integration as desired 
into our transatlantic community.
    Many members of this committee have visited Southeast Europe, and 
met with national political leaders, members of civil society, and 
entrepreneurs. This committee has a strong track record of spotlighting 
American interests in the region. I believe the U.S. Senate has a 
unique opportunity to help drive a renewed American strategy toward the 
region, and we welcome the opportunity to support those efforts.


    Senator Johnson. Thank you, Mr. Wilson.
    Our next witness is Dr. Majda Ruge. I know I am supposed to 
roll that ``R'' but I am just not capable of doing so. Dr. Ruge 
is a fellow at the Foreign Policy Institute at Johns Hopkins 
University School of Advanced International Studies. Previously 
she was a research fellow at the Gulf Research Centre and 
worked as an advisor for the Delegation of the European 
Commission and the OSCE mission to Bosnia and Herzegovina. Dr. 
Ruge?

STATEMENT OF DR. MAJDA RUGE, FELLOW, FOREIGN POLICY INSTITUTE; 
    SCHOOL OF ADVANCED INTERNATIONAL STUDIES, JOHNS HOPKINS 
                   UNIVERSITY, WASHINGTON, DC

    Dr. Ruge. Thank you, Mr. Chairman and distinguished Ranking 
Member Murphy. It is a real honor to be here.
    I was asked to talk about the radicalization among Muslims 
in the Balkans. I have covered the issue in more detail in my 
written testimony, and what I would like to do now is zoom out 
a bit and look at the context in which this radicalization is 
happening.
    So what is the big picture? We see that radicalization is 
currently confined to a tiny minority of Muslims in the 
Balkans, the vast majority of whom are moderate and European in 
outlook. In Bosnia, the overwhelming majority of Muslims oppose 
ISIS and support the United States. In Kosovo, in certain 
places you will see more U.S. and NATO flags than Kosovo ones. 
And in Montenegro, it is thanks to votes of the 20 percent of 
the Muslim population that we have a pro-NATO government in 
place.
    We also see that a small fraction of Muslims have 
radicalized by adopting a very rigid interpretation of Islam 
and non-pluralistic views that are inconsistent with local 
traditions. While this is a significant societal problem, a 
majority of those radicalized are nonviolent.
    Finally, we see a violent fraction of those already 
radicalized departing to Syria or Iraq and plotting attacks at 
home. The foreign fighter trend has been worrying, yet less 
turbulent than the Franco-Belgian phenomena: an average Bosnian 
Muslim is five times less likely to volunteer to be a foreign 
fighter than is an average Belgian Muslim.
    The threat should not be downplayed as even a single person 
can implement a devastating attack. However, we need to 
acknowledge the vast majority of moderate Muslims in the region 
who represent a key constituency for detecting threats and 
preventing further radicalization.
    Now, I would like to single out a few structural issues 
which foster radicalization in the Balkans and which need to be 
urgently addressed in order to stop this problem from 
spreading.
    One, the autocratic rulers who siphon off public funds, 
cripple the economy, and leave populations disillusioned and 
susceptible to extremist ideologies. We should remember that 
groups promoting radical ideologies fill not just spiritual 
gaps but also gaps in health, social services, and education.
    Secondly, the use of nationalism and fear-mongering by 
these same rulers to divert from their shortcomings in 
governance, which deepens divisions in society. If you look at 
ISIS propaganda videos that are targeting Balkans, the 
victimhood of Muslims in ethnic cleansing campaigns in the 
1990s is at the center of their message. The continued denial 
of war crimes and the celebration of war criminals reinforces 
this perception of victimhood and directly helps the jihadi 
recruitment drive.
    And third, the very institutions that were built up with 
U.S. and EU assistance to protect the society from criminal 
threats and terrorism are being actively undermined by the same 
autocratic leaders who see them as threats to their own power. 
Just to give you an example, for the past 10 years, Bosnian 
Serb leader Milorad Dodik has been undermining all national law 
enforcement agencies set up by the U.S. and the EU, partly to 
fight terrorism.
    For instance, in the beginning of the last year, he has 
banned SIPA, the Bosnian version of the FBI, from accessing RS 
territory. This is like the Governor of Georgia banning FBI 
from his State. It is only due to international pressure that 
he was forced to back off.
    Much of this dynamic has developed since the U.S. has 
disengaged from the region. Left unchecked, the prospect of 
state failure, at least in one of the Balkan states cannot be 
ruled out. And this would massively fuel radicalization among 
Muslim populations. So this is certainly not the time for the 
U.S. to disengage further. And the type of engagement that is 
mostly needed is political and requires only a modest 
investment of time and attention.
    In conclusion, to strengthen the resilience against further 
radicalization in the Balkans, the U.S.should pursue a two-
pronged approach. One, help contain the further spread of 
radical ideas. Here we need to identify all extremist 
ideologies as a key driver for radicalization and mobilization 
to violence. While Islamist ideologies act as pull factors, 
extremism by non-Muslims definitely act as push.
    Second, continue to counter politically motivated 
challenges to democratic institutions in the Balkans. Macedonia 
was just pulled back from the brink of conflict in large part 
due to U.S. diplomatic pressure to form a new democratic 
government. And this shows that even limited U.S. engagement 
can pay dividends.
    [Dr. Ruge's prepared statement follows:]


                  Prepared Statement of Dr. Majda Ruge

   introduction: defining the problem in a historical and political 
                                context
    Radicalization is understood as a process by which an individual or 
group comes to adopt increasingly extreme political, social, or 
religious ideas that reject or undermine the status quo in a society in 
terms of existing ideas, norms and practices. By this definition, what 
is considered quite normal in one society can be considered radical in 
another. Dress code and legal restrictions for women in Saudi Arabia 
would be a symbol of radicalization in Balkan societies, where 
traditionally European legal and dress codes apply. Radicalization 
therefore can take different forms, is not always violent, and does not 
necessarily serve a particular political goal. In the Balkans it has 
manifested itself in a diverse array of conservative Islamic movements, 
usually referred to as Salafis, that are far from being a homogenous 
group in their orientation or aims. While the majority of these groups 
are non-violent, several are considered a potential security threat by 
government agencies and some of them have members turned foreign 
fighters in Syria and Iraq or have plotted terrorist attacks at home.
    Radicalization of Muslims in the Balkans has to be understood 
within the context of the recent history of armed conflicts in the 
1990s, which opened a window for outside proselytizing influences on 
Muslim communities. It did so in two ways. First, the inflow of the 
foreign Mujahideen from the battlefields of Afghanistan introduced 
various ideologies initially foreign to the Balkans, a trend that 
continued in the post-conflict era through foreign (or foreign-
educated) clerics, NGOs and Internet-based platforms. Secondly, the 
extreme form of violence used against Muslims during the conflicts of 
the 1990s, including the campaigns of ethnic cleansing and genocide, 
have colored the postwar perceptions of the Muslim population, in some 
cases creating a fertile ground for the recruitment into radical 
beliefs and practice of Islam. While all ethnic groups suffered losses, 
Muslim communities in Bosnia and Kosovo were disproportionally affected 
by campaigns of ethnic cleansing, with the highest numbers of civilian 
casualties.\1\ Given that the majority of Muslims in the prewar era 
were not deeply religious, the notion that ``their lack of true belief 
was to blame for ethnic cleansing and genocide'' is often used by 
radical clerics to strengthen their recruitment narrative in the 
Balkans.
---------------------------------------------------------------------------
    \1\ In Bosnia, 64,000 Muslims were killed, out of which 33,000 were 
civilians). The Srebrenica genocide, in which over 7,000 Muslim men and 
boys were killed and about 20,000 more expelled from the area, was the 
worst episode of mass murder in post-WWII European history. Over 600 
mosques were destroyed in Bosnia between 1992-1995.
---------------------------------------------------------------------------
                   radicalization: trends and issues
    Generally speaking, we can distinguish between two forms of 
radicalization taking place among Muslim communities in the Balkans:


  Non-violent radicalization, which some scholars refer to as 
        ``radicalization of belief and behavior.'' \2\ Since the Balkan 
        wars in the 1990s, a small percentage of Muslims in the region 
        have, via external influences, adopted a very conservative and 
        rigid interpretation and practice of Islam often seen in Salafi 
        tradition, built on denial of local traditions and practices, 
        and contradicting local laws on family, gender equality and 
        education.\3\ Although most of the ``converts'' in this 
        category are non-violent, the spread of the Salafi ideology 
        introduces additional tensions in the already fragile and 
        socially divided societies of the Western Balkans. Furthermore, 
        the groups spreading the ideology are anti-pluralist in their 
        orientation and often promote a very rigid and uncompromising 
        Muslim identity, based on transnational rather than local 
        allegiances. Combined with other push factors, this disconnect 
        from local identity and traditions may play a determinant role 
        in motivating foreign fighters to Iraq and Syria.
---------------------------------------------------------------------------
    \2\ Edina Becirevic. Salafism vs. Moderate Islam: A Rhetorical 
Fight for the Hearts and the Minds of Bosnian Muslims. Atlantic 
Initiative, 2016.
    \3\ Ibid.

  Radicalization linked to violence has been observed among a small 
        fraction of the population, whether through participation in 
        terrorist attacks at home or abroad, or as combatants in Syria 
        and Iraq. In the Bosnian context, at least 1/3 of foreign 
        fighters had prior criminal backgrounds, and represent about 1 
        percent of those already considered radicalized.\4\ While one 
        should not underestimate the threat emanating from violent 
        extremists, it is important to keep in mind that these groups 
        represent a small percentage of the total Muslim population. 
        There are approx. 6.4 million Muslims spread around the 
        territory of Bosnia (approx. 1.9 million), Kosovo (approx. 1.7 
        million), Albania (approx. 1.7 million) Macedonia (approx. 
        809,000) and Serbia (approx. 229,000). It is estimated that 
        between 800-1000 individuals from these six states have gone to 
        Syria and Iraq between 2012-2016. This represents approximately 
        0.015 percent of the total Muslim population of the countries 
        covered. If we compare foreign fighters as a percentage of the 
        total Muslim population rather than per capita of the entire 
        population, then the Muslim population in the Balkans produces 
        a smaller percentage of foreign fighters (0.011 percent-0.018 
        percent) than, for example, France (0.04 percent). In 
        comparison to Belgium, an average Bosnian Muslim is 4.7 times 
        less likely to become a foreign fighter than is an average 
        Belgian Muslim.\5\
---------------------------------------------------------------------------
    \4\ ISIS propaganda in the Balkans has targeted criminal 
individuals with tailor-made messages promising redemption from their 
sins.
    \5\ Vlado Azinovic, Ed. ``Between Salvation and Terror: 
Radicalization and the Foreign Fighter Phenomenon in the Western 
Balkans." Atlantic Initiative, 05/25/2017.


    Yet as even a small number of well-organized individuals can 
implement a devastating attack, the risk of terrorism in the Balkans 
should not be underestimated. Given the loss of ISIS territory in Syria 
as well as more effective monitoring by local security agencies, no 
departures to Syria and Iraq from the region have been documented in 
2016.\6\ Instead, the ISIS propaganda arm has called on its Balkan 
followers to carry out attacks at home--a reason for more vigilance. 
Regional experts expect no foreign fighters to return to the Balkans 
from those still remaining in Syria.\7\
---------------------------------------------------------------------------
    \6\ Ibid.
    \7\ Ibid.
---------------------------------------------------------------------------
    To date, security agencies in the region have been able to contain 
the threat relatively well, taking into account the general weakness of 
state institutions in the region. A number of planned terrorist attacks 
were thwarted; a number of returnees from Syria and Iraq were arrested 
and charged and many more were prevented from leaving in the first 
place.\8\ Each country in the region has adopted a counterterrorism 
strategy, criminalized the recruitment and participation in conflicts 
abroad, and issued sentencing guidelines, which range from 5 to 15 
years of imprisonment, and in the case of Kosovo, potential loss of 
citizenship.\9\ In Bosnia, 42 individuals have been sentenced so far to 
150 combined years for acts of terrorism, recruitment of foreign 
fighters and departure to Syria.\10\
---------------------------------------------------------------------------
    \8\ Ibid.
    \9\ For a detailed discussion of Balkan countries' counterterrorism 
strategies and approaches see Vlado Azinovic, Ed. ``Between Salvation 
and Terror: Radicalization and the Foreign Fighter Phenomenon in the 
Western Balkans.'' Atlantic Initiative, 05/25/2017
    \10\ https://www.klix.ba/vijesti/bih/za-terorizam-u-bih-do-danas-
optuzene-42-osobe-izreceno-ukupno-150-godinazatvora/170524029
---------------------------------------------------------------------------
                         push and pull factors
    Several sociological and political phenomena have combined in the 
post-conflict period to compound the problem of radicalization. These 
include both ``push'' and ``pull'' factors. The first category 
occurring within the Balkans includes the postwar trauma, mistrust and 
prejudices among ethnic groups, broken and dysfunctional families, and 
mental health issues. As important are political and economic push 
factors, most notably unaccountable and corrupt governments, general 
lack of economic prospects and high youth unemployment. Combined, these 
factors have yielded significant segments of the population lacking any 
positive vision about their future and disillusioned with their 
political (and sometimes religious) leaders, whom they view as 
politically and morally corrupt. The external pull factors of radical 
ideology, proselytized by foreign or domestic clerics, NGOs, charities 
and radical internet platforms, are likely to be more effective among 
these segments of the population.
    While there is no single explanation behind the trend of violent 
radicalization, regional experts have identified some patterns, such as 
preexisting criminal backgrounds, links to extremist Diaspora groups in 
the EU, unemployment, family problems, and mental health issues.\11\
---------------------------------------------------------------------------
    \11\ Ibid.
---------------------------------------------------------------------------
    An important push factor in the Balkans is extremism and fear 
mongering by non-Muslim groups. Given the recent history in the 
Balkans, denial of war crimes, celebration of war criminals, and 
occasional incidents of violence will reinforce fears among Muslims 
that the experience of the 1990s may be repeated.\12\ Besides radical 
nationalist groups who engage in military parades and commitacts of 
violence, there is also a proclivity of authoritarian politicians to 
use nationalism to distract from their failures in governance, further 
deepening the divisions in society and fueling the process of 
radicalization. It is precisely such perceptions that facilitate 
jihadist recruitment, as ISIS propaganda targeting the Balkans places 
the victimhood of Muslims in the 1990s at the center of their campaign. 
Similarly, some non-violent Salafis build their Muslim followings by 
pointing to continuing dangers of Serb aggression that will not 
disappear until Bosnian Muslims embrace ``true Islam.''
---------------------------------------------------------------------------
    \12\ The provocative acts which celebrate war criminals or acts of 
violence include opening of a student center named after Radovan 
Karadzic by the RS leader Milorad Dodik, parades by ``Cetnik'' 
batallions in Visegrad where about 3,000 Muslims were killed by Serb 
paramilitary brigades, and attacks on the ceremony of laying the 
groundstone for the reconstruction of a Ferhadija Mosque in Banja Luka.
---------------------------------------------------------------------------
    Therefore, all extremist ideologies, whether Salafism, Jihadism, 
political manipulation of nationalism, and non-Muslim extremism, drive 
radicalization and can mobilize to violence. While ``Islamist'' 
ideologies act as a pull factors, the continued extremism by non-
Muslims against Muslims operates as a push factor.
                 structural problems and future trends
1. Authoritarian nationalist rule as the single most important domestic 
        driver of future radicalization
    Several structural issues, which foster radicalization in the 
Balkans need to be urgently addressed to keep this problem from 
spreading. Domestically, most of these issues can be traced back to one 
core problem: unaccountable rule by nationalist authoritarian leaders. 
While this problem is present in all states of Western Balkans, in 
states divided by ethnic lines it creates a particularly dangerous mix 
of authoritarianism and nationalism, as unaccountable rulers exploit 
nationalist discourse to cover up their failures in governance. This 
produces two mutually reinforcing trends unfolding in parallel: 
deepening of societal divisions and weakening of democratic 
institutions. Several examples of how the authoritarian elites increase 
the prospects of radicalization and cripple the capacity of government 
institutions to deal with the problem are worth highlighting:


 1. Autocratic rulers siphon off public funds, cripple the economy and 
        leave populations disillusioned and susceptible to extremist 
        ideologies. Given that groups promoting radical ideologies fill 
        not just spiritual gaps, but also gaps in health, social 
        services and education, these groups are more likely to gain 
        foothold in societies with weak economies and inadequate 
        medical and social services.

 2. The very institutions that are meant to be responsive to society 
        and protect it from criminal and terrorist threats are those 
        being actively undermined by authoritarian leaders, who see 
        them as threats to their own power. The law enforcement 
        institutions in Bosnia were built up through considerable U.S. 
        and EU investment of political capital and funds, in part to 
        fight terrorism in the aftermath of September 11, 2001.\13\ 
        These agencies have so far been effective in containing the 
        terrorist threats. However, as they also have jurisdiction over 
        corruption and crime, they have been the object of attacks in 
        places like the Republika Srpska, given several corruption 
        investigations against its political leader Milorad Dodik. The 
        attacks on law enforcement institutions can be seen in the 
        context of a decade long campaign to undo reforms that were 
        built up since 1996 with EU and U.S. assistance, giving the 
        extremely weak BiH government under Dayton a small number of 
        additional competencies.
---------------------------------------------------------------------------
    \13\ Key institutions in Bosnia include the State Investigation and 
Protection Agency with jurisdiction to investigate terrorism, the BiH 
Prosecutors Office and the BiH Court with jurisdiction to prosecute and 
adjudicate such cases.

 3. In Macedonia, the authoritarian leaders prevent reconciliation by 
        manipulating societal divisions in order to distract from 
        failures in governance. In parallel, they engage in relentless 
        branding of the opposition as national traitors. While the 
        nationalisms promoted by VMRO-DMPNE leadership in Macedonia and 
        Milorad Dodik in Bosnia are quite different (one is state 
        centric, the other secessionist), in both cases Albanians or 
        Bosniaks (predominantly Muslim groups) are often used to create 
        the image of an enemy, a strategy feeding Muslim victimhood 
        perceptions that may yield dangerous consequences. The recent 
        attack on the Macedonian parliament is a case in point, where 
        an organized mob was let into the parliament by VMRO MPs, 
        attacking members of the opposition and the leader of an 
        Albanian party, who barely survived his injuries. In Bosnia, 
        denial of war crimes, glorification of war criminals feed the 
        Bosniak victim complex. In Serbia, 2017 presidential election 
        campaign has been loaded with Kosovo-related provocative 
        rhetoric and actions, the train- turned-nationalistic billboard 
        being only one example. Furthermore, Bosniak and Albanian 
        nationalisms tend to be reactive, sometimes misusing the 
        narrative of victimhood and in the latter case, promoting the 
---------------------------------------------------------------------------
        idea of greater Albania.

 4. Finally, the authoritarian leaders actively undermine EU 
        membership, currently the only external stabilizing factor in 
        the region. Nationalist parties in several states in the region 
        have a long record of blocking EU-related reforms, dismissing 
        EU integration as only one possible path among others and 
        opposing the NATO membership. Macedonia has just managed to 
        form a new democratic government, in large part due to U.S. 
        diplomatic pressure. While the new government has immediately 
        set the EU and NATO agenda as its priority, they will have to 
        surmount a number of challenges, including the politicized 
        administration and judiciary they have inherited from 11 years 
        of authoritarian rule.
          Therefore the greatest threat to U.S. interests is the 
        continuation of radical politics embraced by corrupt 
        politicians in the Balkans who employ divisive nationalist 
        rhetoric to weaken the rule of law, state functionality and 
        fragile agreements brokered under the tutelage of the U.S. and 
        the EU. Given these trends, the threat that urgently needs to 
        be addressed is the prospect of state failure in Bosnia, and 
        possibly renewed violence in the Balkans. This would no doubt 
        fuel radicalization among Muslim populations on a much more 
        serious scale.
2. Foreign Influences: Saudi Arabia and Gulf
    There are many media reports regarding the influence of Middle East 
based religious institutions and charities spreading a conservative and 
rigid interpretation of Islam in the Balkans and promoting social norms 
which run counter to local legislation and tradition. In these reports, 
the Gulf States, in particular Saudi Arabia, have in the past been 
singled out as key actors, financing new mosques, educating clerics who 
are then sent back to promote the Saudi version of Islam, and 
supporting NGOs and humanitarian organizations addressing social needs 
while spreading the faith. There is much anecdotal evidence of Gulf 
money being used to encourage Balkan Muslim communities to convert, 
leading to radicalization of belief and behavior.\14\ It is not easy to 
establish the exact extent to which Gulf States (rather than individual 
nationals of those states) have engaged in such activities in the past 
decade, particularly after 2001. Saudi Arabia has rejected such claims 
repeatedly. More recently, Riyadh has underlined its determination to 
work with the U.S. Government in fighting both terrorism and violent 
extremism. The Saudis can point to a number of deradicalization and 
counterterrorism measures that have been initiated by the Saudi 
government over the last decade. These provide a sense on how Saudi 
Arabia and other Gulf states can be engaged more constructively in 
working against religious radicalism in the Balkans. The following 
initiatives are worth highlighting:
---------------------------------------------------------------------------
    \14\ Edina Becirevic. Salafism vs. Moderate Islam: A Rhetorical 
Fight for the Hearts and the Minds of Bosnian Muslims. Atlantic 
Initiative, 2016.


  In 2014, a number of anti-terror laws were passed, listing several 
---------------------------------------------------------------------------
        organizations and groups as terrorist organizations

  Support for and joining jihadist organizations has been 
        criminalized, and the authorities have cracked down on 
        individuals supporting ISIS and AQ, be it financially, 
        ideologically (in particular online support) or preparing to 
        join jihadist groups. The number of convictions for such 
        offenses have gone up.

 Creation of a Media Centre in the Royal Court including the Digital 
        Extremism Observatory (DEO) which monitors online content and 
        utilizes sophisticated software to engage in real time analysis 
        of Jihadist social media content.

 Creation of the Global Center for Combatting Extremist Ideology 
        which was opened during the visit of President Trump to Riyadh 
        in May which has partly incorporated the DEO structure.

 Creation of a Center for Ideological Warfare at the Saudi Ministry 
        of Defense

 Establishment of the Islamic Military Alliance to Fight Terrorism 
        (IMAFT) along with a multinational CT Center at the Alliance's 
        HQ in Riyadh.


    Critics of these efforts assert that these new developments lack 
substance and are part of a strategic communication campaign designed 
to highlight Saudi efforts while blaming other countries in the region 
for supporting radical groups. Taking the Saudis and other Gulf states 
at their word could open space for concrete initiatives to counter a) 
radical rhetoric of imams or individuals b) abandon efforts to 
proselytize an Islam incompatible with local traditions c) assist with 
digital counter- radicalization initiatives.
                         policy recommendations
    If we define U.S. interests as creating conditions that will 
strengthen resilience against radicalization in the Balkans, then these 
should be pursued through a two-pronged approach.
    First, the U.S. is well advised to invest political and diplomatic 
capital to counter politically motivated challenges to state 
structures, democratic institutions, and civil society.
    Second, it should assist where it can to contain the further spread 
of radical ideas, including those promoted by extremists belonging to 
other national groups.
    Some detailed ideas are outlined below:
 1. Countering politically motivated challenges to state structures and 
        democratic institutions requires U.S. and EU political 
        engagement and the willingness to sanction political 
        provocations against the state and radical rhetoric against 
        other ethnic groups, civil society and opposition parties. 
        Here, the U.S. policy should not be to support individual 
        actors, but defending democratic principles and institutions 
        regardless of the party in power. Cooperation and coordination 
        with the EU and its leading member states is of critical 
        importance.


        Macedonia was--in part due to U.S. engagement--pulled back 
            from the brink of the conflict, mobilized across ethnic 
            lines and regained its democracy. The U.S. should support 
            all initiatives aiming to reestablish rule of law in 
            Macedonia. Furthermore, fast invitation to Macedonia to 
            join NATO will have a calming effect on the region and 
            boost the efforts of the new reform government.

        In Bosnia, the U.S. and EU should maintain strong focus on 
            consolidating state (national) structures in context of EU 
            integration and encourage the EU, IMF and World Bank to do 
            the same. They should also address the post-war 
            manipulation of nationalism and inter-communal fears in a 
            more direct manner. Politicians should be called out for 
            their behavior (named and shamed). Credible threat of 
            sanctions can sometimes be more useful than sanctions 
            themselves.

        Support retention of High Representative and EUFOR until 
            significant improvement in functioning of state 
            institutions and political rhetoric aimed at 
            reconciliation.

        The success of U.S. (or EU) policy objectives will depend 
            on the strategies through which the available tools are 
            used and the skills of the personalities appointed in key 
            positions (for instance, various Special Representatives). 
            As the EU contemplates closing EUSR missions in several 
            Balkan states, it is of utmost importance to communicate 
            that instead of closing these missions, Brussels should 
            devote more attention and resources to appoint 
            personalities with a vision, strategy and skills to 
            negotiate and communicate political messages that back up 
            the EU agenda.

        Insist on and support better cooperation between law 
            enforcement agencies at all levels of government with state 
            in coordinating role. Ensure that functioning institutions 
            and agencies remain in place and that challenges to these 
            institutions do not go unsanctioned.

        Keep the three international judges on the BiH 
            Constitutional Court.


 2. Containing the spread of radical ideology requires acknowledging 
        and engaging the large majority of moderate Muslims in the 
        region.\15\ Building a counter-ideological narrative is crucial 
        to prevent further spread of radical ideology. Rooting Bosnian 
        Muslims in their local customs and traditions can strengthen 
        resilience against external influences, such as Salafism. 
        Moderate imams in Kosovo teach schoolchildren how to anticipate 
        and build a counter-narrative to the arguments extremists may 
        use to entice them. Similar projects should be encouraged 
        elsewhere in the Balkans, constructively engaging local 
        religious leaders and counter terrorism experts. Here, one 
        should keep in mind that there are certain areas where America 
        is not the best ``frontline'' messenger. An American touch to 
        anti-extremism counter-narrative may in some cases be 
        counterproductive.
---------------------------------------------------------------------------
    \15\ The EU is already entering into cooperation with the Islamic 
Community in Bosnia to work on deradicalization.

---------------------------------------------------------------------------
    Some ideas of additional measures are listed below.


        Encourage Islamic Communities in the region to open up to 
            more liberal interpretations of Islam, promote moderate 
            Imams and avoid entering competition with Salafi influences 
            by becoming more conservative.

        The reinvigorated relationship of the U.S. with Saudi 
            Arabia could be used to encourage the GCC governments to 
            undertake several steps in countering any radicalizing 
            influences. In particular, encourage the Saudis and other 
            Gulf states to launch concrete initiatives to counter a) 
            radical rhetoric of imams or individuals b) abandon efforts 
            to proselytize an Islam incompatible with local traditions 
            c) assist with digital counter-radicalization initiatives.

        About half a million Americans are of Bosnian origin. 
            Plenty of IT businesses are run by first generation Bosnian 
            Americans, who are also present on the Bosnian market. 
            These businesses could be incentivized to get engaged in 
            digital initiatives similar to Jigsaw, the Google owned 
            tech incubator that developed programs targeting 
            individuals watching online ISIS propaganda and placing 
            links to Arabic and English language video clips which 
            would counter such propaganda. These included testimonials 
            from former extremists, imams denouncing ISIS's corruption, 
            ultimately dissuading them from responding to the group's 
            calls for violence. Combining the IT expertise of these 
            businesses, their knowledge of the language, and access to 
            moderate Imams in the region could produce a version of 
            such software which could target the populations in the 
            Balkans more effectively than many conferences and 
            workshops that western funds are currently being spent on.

        Support community programs where imams and psychologists 
            could be the first to answer voluntary hotlines to be used 
            family members of those radicalized. In the U.S., in over 
            fifty percent of the cases the family knew that their 
            family member was radicalizing. While they will often not 
            make a call to a security agency, they might call a hotline 
            that provides rapid intervention by a psychologist or an 
            Imam, to talk to their children.

        Draw on lessons learned in the U.S. from projects such as 
            Cure Violence to the field of preventing violent 
            radicalization. Many foreign fighters return disillusioned 
            by what they have seen, these individuals can and should be 
            used to prevent future radicalization.

                                 Tables

    Source [Tables 1, 2, and 3]: Vlado Azinovic, Ed. ``Between 
Salvation and Terror: Radicalization and the Foreign Fighter Phenomenon 
in the Western Balkans.'' Atlantic Initiative, 05/25/2017

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    Senator Johnson. Thank you Dr. Ruge.
    Our final witness is Ms. Ivana Bajrovic. Ms. Bajrovic is a 
senior program officer at the National Endowment for Democracy 
overseeing the democracy assistance program in Southeast 
Europe. Prior to joining NED, Ms. Bajrovic trained U.S. 
soldiers deploying to the Balkans and supported the NATO 
peacekeeping mission to Bosnia. Ms. Bajrovic?

 STATEMENT OF IVANA CVETKOVIC BAJROVIC, ASSOCIATE DIRECTOR FOR 
   EUROPE, NATIONAL ENDOWMENT FOR DEMOCRACY, WASHINGTON, D.C.

    Ms. Bajrovic. Thank you, Chairman Johnson, Ranking Member 
Murphy, for this opportunity to address you today and discuss 
the challenges facing Southeast Europe and how to best respond 
to them. And on behalf of the National Endowment for Democracy, 
I would like to thank you for ongoing support and commitment to 
the region.
    I would like to maybe outline some of the democratic 
declines that you have already sketched out, as did my 
distinguished colleagues here, and that have been characterized 
by weak and compromised institutions, autocratic strongmen, 
growing media capture, lingering ethnic grievances, and 
worsening regional relations. All of these conditions 
unfortunately open a lot of space for external actors to misuse 
them and exert their influence.
    Russia, in particular, is exploiting these weaknesses in an 
effort to gain greater geopolitical influence, and, even though 
other authoritarian actors are standing in the wings, I would 
single out Russia as the most concerning external threat, 
having expanded its influence to a greater degree here in 
Southeast Europe, the region that we are discussing today, and 
more than anywhere else in Europe, save for Ukraine.
    Mr. Wilson has already outlined some examples of how far 
this reach and how extensive this reach is, but I would just 
like to point out this June 4th article in ``The Guardian'' 
which was penned by several NED grantees and alleges that 
Russia has carried out a decade-long campaign to, ``spread 
propaganda and stroke discord in the region with the goal to 
create a strip of militarily neutral countries that would 
include Bosnia and Herzegovina, Macedonia, Montenegro, and 
Serbia.''
    Montenegro's successful bid last week presents a major blow 
to this plan, and just how big of a blow I think is best 
illustrated by the Russian Foreign Ministry's tweet in response 
to the announcement that Montenegro has become a NATO member 
state, which says that Montenegro's anti-Russian hysteria and 
hostile policy--in response to it, Russia, ``reserves the right 
to take reciprocal measures.''
    I draw your attention to this tweet because such brazen 
language emboldens illiberal elements and extremist radicals in 
the region to attack those advancing and defending democratic 
principles, including civil society groups and media supported 
by the Endowment.
    I will give you one example. In January this year, the 
Youth Initiative for Human Rights, one of the leading pro-
democracy groups in the region and a longtime NED grantee, was 
attacked by a gang of six men who labeled the group's activists 
traitors and foreign mercenaries. It will turn out later that 
at least two of these assailants are identified as being 
affiliated with a pro-Russian nationalist group and had fought 
in eastern Ukraine.
    Other activists, human rights defenders, and journalists 
have also come under heavy attack for their work in promoting 
democracy and fundamental freedoms in their countries, 
including the grantees I mentioned have contributed to ``The 
Guardian'' article. It is precisely this type of groundbreaking 
investigative work that they are doing that strengthens 
democracy in the region and presents the best defense against 
disinformation and malign foreign influence.
    Mr. Chairman, as both of my colleagues have mentioned, any 
extended political crisis, economic downturn, or foreign 
meddling could easily push the region towards instability and 
even renewed conflict. The best case scenario we can hope for 
at this time, without greater Western attention, is the 
preservation of an illiberal status quo with increasingly 
autocratic leaders who continue to weaken democratic 
institutions, restrict media freedoms, and worsen ethnic 
tensions, while offering the international community short-term 
deliverables in the name of maintaining stability.
    For far too long, stability has been the principal goal of 
Western policy in the post-conflict Balkans, and lowering the 
bar on democratic progress has weakened the transformational 
power of the EU and we need to recognize that. Together with EU 
disengagement, this has left a vacuum that other external 
players are eager to exploit.
    Therefore, Western governments need to recognize the 
urgency of the situation and the potential costs of the crisis 
the region might be facing. They should press for real 
democratic progress, which is the key to regional security and 
long-term stability.
    In my written testimony, I have provided a more extensive 
list of recommendations. Here I would like to focus on just 
three, those that are particularly focused on strengthening 
democracy through the support of civil society, the type of 
groups that NED is working with.
    One, challenge undemocratic practices and trends especially 
in direct communications with the region's leaders. Those who 
are fighting for democracy can and do suffer when the West is 
inconsistent and does not provide political support for the 
work that they do. They deserve our solidarity and the 
unwavering support of the American people, for they defend not 
only their own fundamental values but also ours.
    Two, adopt a more pluralistic approach to promoting reform 
by reaching out to a diversified group of political, civic, and 
media actors. Self-proclaimed ethnic leaders and factors of 
stability should not be allowed to monopolize and manipulate 
important reform processes. We should recognize those pro-
democratic opposition leaders, civil society activists, and 
independent journalists for the contributions they are making. 
And here I would like to make a personal appeal that when you 
visit the region, you really make sure, if it is possible, to 
find some time to meet with some of the brave individuals who 
are doing this excellent work.
    And third, continue to provide democracy support to civil 
society organizations, independent media, and moderate 
political parties. And this does not necessarily require 
increased assistance, but what it does ask for is a 
rededication to the values that will help to achieve meaningful 
democratic progress.
    Mr. Chairman and Ranking Member Murphy, let me conclude by 
just noting that as a Bosnia native and a person who was 
personally affected by the war in the 1990s, I have a special 
appreciation for the bipartisan support in Congress which 
helped to end the conflicts in the 1990s. Reinvigorating this 
support for the region's full democratic progress would leave 
absolutely no room for interpretation regarding American 
values--or misinterpretation, rather--and therefore no space 
for dangerous alternatives that are advocated from the East.
    Thank you very much. I look forward to your questions.


    [Ms. Bajrovic's prepared statement follows:]


             Prepared Statement of Ivana Cvetkovic Bajrovic

    Chairman Johnson, Ranking Member Murphy, distinguished members of 
the subcommittee:
    Thank you very much for holding this timely and important hearing 
on the challenges facing Southeast Europe. I welcome the opportunity to 
speak to you today on how to best respond to them. And on behalf of the 
National Endowment for Democracy (NED), I would like to thank you for 
your ongoing support and commitment to the region.
    With Congressional funding, NED has supported democratic 
development in Southeast Europe since the early 1990s, providing 
steadfast support to civil society organizations in their efforts to 
address difficult post-communist and post-conflict challenges, and 
advance the region's democratic transition and Euro-Atlantic 
integration. Today, we work with over 80 civil society and media 
organizations across the region, from Croatia to Albania.
    Thanks in great part to international support, the Western Balkans 
have made notable progress, especially during the first decade 
following the U.S.-led intervention to end the war in Bosnia and 
Herzegovina. The last ten years, however, have witnessed a democratic 
decline across the region. Despite the region's proximity to the 
European Union, and some noteworthy progress towards accession, the 
countries of the Western Balkans have moved away from democratic 
consolidation. The current situation--characterized by weak and 
compromised institutions, autocratic strongmen, growing media capture, 
lingering ethnic grievances, and worsening regional relations--is 
increasingly perilous.
    Russia is exploiting these weaknesses in an effort to gain greater 
geopolitical influence. The Kremlin seeks to weaken democratic 
transitions in the region, curtail Euro-Atlantic integration, and 
undermine NATO and the EU. Other authoritarian actors with interests in 
the region--Iran, the Gulf States, and China--stand in the wings, 
though their political influence currently is marginal. Turkey is an 
exception: like Russia, it also is using a mix of investment, media 
influence, and direct support to like-minded political forces to 
increase its authority.
    Still, Russia remains the single most concerning external threat in 
the region, having expanded its influence to a greater degree there 
than anywhere else in Europe, save Ukraine. It currently operates a so-
called ``humanitarian center'' in southern Serbia, near the border with 
Kosovo; and there are rumors that it plans to establish another in the 
north. Russia may have been involved in the attempted overthrow of the 
government in Montenegro last year. It recently began including Serbian 
children in paramilitary camps for youth, which include weapons 
training.
    Just how far Russia's meddling in the region goes is best captured 
by the June 4 article in The Guardian, which was penned by several NED 
grantees. Based on leaked intelligence documents, the article alleges 
that Russia has carried out a decade-long campaign to ``spread 
propaganda and stroke discord'' in the region with the goal to ``create 
a strip of militarily neutral countries'' that would include Bosnia and 
Herzegovina, Macedonia, Montenegro, and Serbia.
    Montenegro's successful NATO bid last week presents a major blow to 
this plan: immediately following the announcement of the transatlantic 
Alliance's new member state, the Russian Foreign Ministry's tweeted 
that, in response to Montenegro's ``anti-Russian hysteria'' and 
``hostile policy,'' Russia ``reserves the right to take reciprocal 
measures.''
    Such brazen language emboldens illiberal elements and extremist 
radicals in the region to attack those advancing and defending 
democratic principles, including civil society groups and media 
supported by the Endowment.
    In January this year, the Youth Initiative for Human Rights 
(YIHR)--one of the leading prodemocracy groups in the region and a 
long-time NED grantee--was attacked by a gang of six men, who plastered 
the group's Belgrade offices with messages of hate that labeled the 
group's activists ``traitors'' and ``foreign mercenaries.'' At least 
two of the assailants were identified as being affiliated with a pro-
Russian nationalist group and had fought in the Russia-fomented war in 
eastern Ukraine. This attack was preceded by a relentless campaign in 
the government-controlled media that portrayed the YIHR as a U.S.-
funded group and smeared its leader, Anita Mitic.
    Unfortunately, Anita is only one of the many brave individuals who 
have come under heavy attack for their work in promoting democracy and 
fundamental freedoms in their countries. Civic activists, human rights 
defenders, and journalists--including the NED grantees who contributed 
to The Guardian article--are being singled out as ``foreign agents,'' 
threatened, and even physically attacked.
    One of them, Stevan Dojcinovic, is editor-in-chief at Belgrade's 
Crime and Corruption Reporting Network (KRIK) and a winner of the 
Global Shining Light Award for Investigative Journalism. Stevan is 
regularly vilified in the pro-government media and denounced for 
instigating instability with assistance from the West. Yet, it is 
precisely the type of groundbreaking investigative work which Stevan 
and his colleagues are doing that strengthens democracy and presents 
the best defense against disinformation and other malign foreign 
influence.
    The ill-advised and dangerous approach by nationalist governments 
and their proxies not only threatens the activists themselves, but also 
damages real democracy and, consequently, any lasting stability in 
these countries. For without strong rule of law, fully transparent and 
accountable governments, guaranteed fundamental freedoms, and 
unrestricted political and civic participation, both the security of 
the region and the stability of Europe and transatlantic relationship 
will remain at risk.
    Homegrown extremist groups are capitalizing on some of the same 
weaknesses as external actors, especially endemic corruption and a lack 
of economic prospects. While the number of foreign fighters recruited 
in the Balkans to fight in Syria and Iraq seems to have plateaued, any 
extended political crisis, economic downturn, or foreign meddling could 
easily push the region towards renewed radicalization and even 
conflict.
    This, of course, is the worst case scenario. The large-scale, 
protracted warfare that the region witnessed in the 1990s is unlikely. 
However, even an isolated, short-term, or small-scale conflict is 
likely to spill across borders in region still riddled with post-war 
grievances.
    Without greater Western attention, the best case scenario one could 
hope for is the preservation of an illiberal status quo, with 
increasingly autocratic leaders who continue to weaken democratic 
institutions, restrict media freedoms, and worsen ethnic tensions, 
while offering the international community short-term deliverables in 
the name of ``maintaining stability''.
    For far too long, ``stability'' has been the principal goal of 
Western policy in the post-conflict Balkans. Lowering the bar on 
democratic progress has weakened the transformational power of EU 
integration and accession. Looking the other way when alleged aspirants 
skirt difficult reforms and water down democratic institutions has only 
served to delegitimize the EU in the eyes of frustrated citizens across 
the Balkans. Together with U.S. disengagement, this policy of 
acquiescence has left a vacuum that other external players are eager to 
exploit.
    Mr. Chairman, Western governments need to recognize the urgency of 
the situation and the potential costs of the crisis the region is 
facing. They should press for real democratic progress, which is the 
real key to regional security, long-term stability, and countering 
malign foreign influence. This can be done in several cost-effective 
ways:


  Demonstrate a strong and consistent dedication to democratic 
        principles:

        Challenge undemocratic practices and trends in progress 
            reports, public appearances and statements, and in direct 
            communications with the region's leaders. Remember that 
            those who are fighting for democracy can and do suffer from 
            the West's inconsistency and lack of political support. 
            They deserve our solidarity and the unwavering support of 
            theAmerican people, for they defend not only their own, but 
            also our, fundamental values.

        Adopt a more pluralistic approach to promoting reform 
            processes, and empower reformers by reaching out to a 
            broader, more diversified group of political, civic, and 
            media actors. Self-proclaimed ethnic leaders and ``factors 
            of stability'' should not be allowed to monopolize and 
            manipulate important reform processes. Pro-democratic 
            opposition leaders, as well as civil society activists and 
            independent journalists, should be recognized and 
            encouraged for the contributions they are making, 
            especially in important reform processes such as the 
            security sector reform in Serbia or constitutional reform 
            in Bosnia and Herzegovina.

        Insist on regional cooperation and a constructive approach 
            to outstanding issues, especially by countries which are 
            already EU and NATO members. Civil society groups are 
            leading the way in regional cooperation on sensitive but 
            essential issues like transitional justice; governments 
            should be encouraged to do the same. One important effort 
            is an initiative by over 2,000 organizations and 
            individuals to create the world's first regional truth and 
            fact-finding commission--RECOM--an initiative that NED has 
            been supporting since its 2008 launch. With the process of 
            creating the intergovernmental body stalled by politicking, 
            the NGO coalition has redoubled its effort to gather 
            citizens' signatures in support of RECOM, collecting over 
            600,000 to date.

        Continue to provide democracy support to civil society 
            organizations, independent media, and moderate political 
            parties. This does not necessarily require increased 
            assistance, but rather a rededication to the values that 
            will help to achieve meaningful democratic progress.


 Rebuild conditionality:

        Offer incentives, where possible, such as through the NATO 
            accession process and supporting countries' EU progress. As 
            NED grantee Center for Euro-Atlantic Studies argues in its 
            upcoming report, ``NATO can and should be the leading actor 
            of a sustained and comprehensive process of the region's 
            stabilization and democratization.'' Montenegro's NATO 
            membership is an important signal--not just to external 
            actors--that the region is safely anchored with the West. 
            It also provides an incentive to others--especially 
            ordinary citizens--to support sometimes painful reform 
            processes for the benefits that integration can bring, 
            including security and prosperity.

        Engage European partners to use ``sticks'' such as cuts in 
            financial assistance or sanctions. U.S. sanctions on 
            Bosnian Serb nationalist leader Milorad Dodik for 
            obstructing the implementation of the 1995 Dayton Peace 
            Accords had an immediate effect of tampering down his 
            secessionist rhetoric. Similar mechanisms can ensure that 
            those who endanger stability and breach fundamental rights 
            and norms should not and cannot benefit from U.S. or EU 
            assistance and cooperation.


 Boost diplomatic engagement:

        Forge a common policy for the region with the EU, and 
            provide the necessary political and technical support to 
            international partners. It is often said that the Balkans 
            are a ``European problem.'' However, the U.S. still 
            possesses important interests and unrivaled credibility in 
            the region, and should endeavor to help its European 
            partners to formulate a coherent strategy with the 
            political will needed to see through indispensable reforms. 
            o Provide the Balkan portfolio a higher priority in the new 
            U.S. administration as an area of heightened strategic 
            importance. Increased attention to the region tends to have 
            an immediate effect on the ground. This was recently 
            demonstrated by Deputy Assistant Secretary Hoyt Yee's visit 
            to Macedonia, which resulted in the country's president 
            softening his stance on the formation of a new opposition-
            led government, thereby possibly paving the way for 
            resolving a prolonged political crisis.

        Reinvigorate bipartisan support, which helped to end the 
            conflicts of the 1990s, for the region's full democratic 
            progress. Such support leaves no room for interpretation 
            regarding American values and, thus, no space for 
            considering dangerous ``alternatives'' advocated from the 
            East.


    Senator Johnson. Thank you, Ms. Bajrovic.
    Let me start with you being a Bosnian native, and I will 
ask all three witnesses the same question. You have kind of 
laid out the current state of play, the current reality. I 
would like to kind of go back--and maybe you can go back 
further if you would like to--but really from the signing of 
the Dayton Accords. Can you lay out the history of what 
happened? Where was the engagement? When did the engagement by 
both America and Europe start waning? What brought us to the 
current situation? Ms. Bajrovic?
    Ms. Bajrovic. I can begin. I think there is no doubt that 
in the first 10 years following the signing of the Dayton Peace 
Accords, we have seen progress. The Dayton Peace Accords, 
inherently in its structure, provides some constraints for a 
full democratic progress in countries like Bosnia and 
Herzegovina because they really encourage ethno-politics and 
not the real pluralism and accountability of the kind that we 
would like to see in consolidated democracies.
    But that being said, things were looking fairly good until 
probably about, I would say, mid-2000s. And where we definitely 
noticed a downward spiral is from 2008. And this is where we 
also noticed a significant U.S. disengagement. Somebody had 
previously alluded to--I think it was Ranking Member Murphy--
this was due to the fact and the recognition that things were 
fairly stable and that it could be turned over to the European 
Union because the Balkans has often been seen as the European 
problem, and by virtue of being in the EU's back yard, it was 
fairly safe to assume that the anchoring of the region would 
provide a cure in itself, so to say.
    And that has proven not to be the case. I hate to sound as 
a EU skeptic, but in part I personally believe that this was 
due to the EU's misguided approach in using conditionality that 
has worked in Central Europe but has been gambled away for the 
sake of stability that I mentioned in countries like Bosnia 
because I think being afraid of any instability and renewed 
conflict in the Balkans has led primarily EU, but to some 
extent the U.S. as well, to favor stability over real 
democratic progress over the last decade. And this is when we 
really see things backsliding.
    Senator Johnson. Dr. Ruge, would you like to add to that?
    Dr. Ruge. I will answer this question both as a native and 
someone who wrote a Ph.D. thesis on this question.
    Engagement of the U.S. was there from the start. U.S. is a 
member of the Peace Implementation Council.
    I would say that the strongest influence that the U.S., 
together with EU, has exerted in Bosnia was between 2002 and 
2006, which is when we see a period of best coordination and 
cooperation between various actors, U.S., EU, and the High 
Representative, who was back then Lord Ashton. This is the time 
when in Bosnia the largest numbers of EU reforms have been 
adopted by politicians in parliament that normally had 
obstructed even smaller measures. This is a time when Republika 
Srpska had actually come out with a report on Srbenica, when 
Serbs, Croats, and Bosniaks had supported reforms at the 
national level, building up a huge number of institutions in 
rule of law and law enforcement.
    From 2006 on, a new High Representative has arrived, and a 
new policy was announced very loudly and that was a policy that 
Bosnians would take over and the EU agenda would take care of 
the reforms. And from then on, there was much less direct 
confrontation of obstruction. The U.S. has outsourced Balkans 
to the Europeans, and due to the lack of political presence and 
political--or reacting to obstruction, for the past 10 years, 
the authoritarian politicians have been testing their limits 
and obstructing a step further each time.
    Senator Johnson. Mr. Wilson?
    Mr. Wilson. I will just add to that. My career began as a 
student working with refugee projects in the region and seeing 
the direct connection between--the relationship between U.S. 
leadership or engagement and what happens on the ground. And I 
think we have had three markers in the Balkans where each time 
we have wanted to hand over the baton and we failed.
    First, post-1989, I think you remember Secretary Baker's 
famous ``we do not have a dog in this fight.'' Post-1989, the 
sense that now where we were, that this is Europe's moment, 
could be handed over to Europe. And we saw what led to the 
succession wars in Yugoslavia. We were very reluctant to get 
involved. We got involved through the Alliance in Bosnia, later 
Kosovo.
    I think the second era of wanting to hand back over a 
little bit was around about 2005, as my colleagues mentioned. 
This was really driven by the pressures the U.S. military was 
facing in coalition operations, Iraq, Afghanistan, increasingly 
Iraq, and where it was clear that Secretary Rumsfeld set the 
debate and the terms each time NATO ministers met. What is the 
next step of drawdown in our forces? And on the other side of 
the equation, what is the next step in the drawdown in our 
assistance? That was the paradigm, how we draw down. 
Understandable reasons, things at play, but there were 
consequences to that as the region saw the EU increasingly in a 
security role being handed the ball.
    And then in 2008, where we did succeed at the Bucharest 
Summit to welcome Albania and Croatia, not Macedonia into the 
Alliance, but it was a marker because the Alliance failed in 
this strategy on what to do with Europe's east. And this was 
again a beginning of an opening where sort of the overall 
strategy of how we complete a Europe whole and free. 
Essentially the U.S. stepped back in Bucharest, handed the 
baton to the EU, and we have seen the Russians use and leverage 
that moment--the Georgia war followed, but obviously, I think 
this is connected--and opening a strategic vacuum that it could 
exploit.
    So we have had three moments, three markers where I think 
the United States has explicitly sort of handed off. And I 
think it drives home the message that clearly the EU is a big 
player in the Balkans. It does not work without EU resources, 
political capital, vision. But the United States has a special 
role here, and it is the partnership of U.S. leadership in 
terms of vision with the EU, a common vision which has been 
eroded as being credible, a strategy that backs it up, and the 
tools the United States can bring on a security side to match 
the EU.
    Senator Johnson. So let us talk about specifically those 
tools, that cooperation, that coordination, not necessarily a 
whole lot of relative investment, but it is really diplomatic 
engagement. Right? It is being kind of the big dog on the block 
and doing everything we can to pressure anti-corruption 
efforts. I mean, just describe those. I do not want to put 
words in your mouth. But talk about what we actually did. 
Obviously, we are $20 trillion in debt. Money is an issue. But 
if it is diplomatic efforts, that is far more feasible. I guess 
we will start with the same order and then I will turn it over 
to Senator Murphy.
    Ms. Bajrovic. It sounds good. I would definitely agree with 
you that diplomatic engagement is just as important as the 
resources. I think one can definitely cannot go without the 
other.
    If I started giving you examples of when U.S. engagement 
made a difference, we could be here almost all day. I mean, 
certainly starting from the 1995 intervention, the 1999 
intervention.
    Most recently, I really would like to actually commend 
Deputy Secretary Hoyt Yee's reinvigoration of engagement in the 
region and his frequent visits there. And I think somebody had 
mentioned earlier that his visit in Macedonia really almost 
immediately resulted in our country's presence and taking a 
stance on the formation of the new government, and this could 
be paving the way of resolving this very prolonged crisis in 
Macedonia. And I think seeing more of such engagement from the 
U.S. side is going to be absolutely necessary.
    There are other examples, more recent examples, if you will 
allow me to focus on those. For example, the U.S. sanctions on 
the Bosnian Serb nationalist leader, Milorad Dodik, that Dr. 
Ruge had already mentioned, for obstructing the implementation 
of the 1995 Dayton Peace Accords had an immediate effect on 
tampering down his secessionist rhetoric.
    And I think that similar mechanisms should be encouraged on 
behalf of the United States to be used by our European 
colleagues because they were not reciprocated on the European 
side, and they should have been. I think that they would have 
had much greater effect if there was more coordination and 
agreement with our European colleagues on using such 
instruments or other targeted measures that do not have to be 
personal sanctions but could ensure that those who endanger 
stability and breach fundamental rights and norms should not 
and cannot benefit from either the U.S. or the EU assistance.
    Those would be just some of the examples of U.S. leadership 
that I could see.
    Senator Johnson. Thank you.
    Dr. Ruge?
    Dr. Ruge. Thank you, Senator.
    When we talk about tools, I guess we have to think about 
tools for what, and there are two issues here. One issue is 
countering obstruction and countering political behavior which 
undermines everything that the U.S. and the EU have helped to 
achieve in the Balkans. These tools are mostly political. There 
are all different sorts of sticks and carrots. And threat of 
sanctions behind the closed doors has, in my experience, proven 
to be more effective than sometimes sanctions themselves.
    Senator Johnson. What are the best sanctions to threaten? 
Travel to the leaders?
    Dr. Ruge. Personal wealth, personal and informal 
opportunity structures. And this is something that has been 
done from 2002 to 2006 extensively.
    Senator Johnson. So really targeting the leaders, not the 
population.
    Dr. Ruge. Not the population. Targeting leaders, targeting 
their informal networks, which are very often linked to war 
criminals and organized crime, targeting their informal 
financial and enterprise networks. So targeting their 
interests.
    In terms of political tools, obviously there are carrots 
and sticks, and the U.S. should rely more heavily on the 
international financial institutions. IMF has a huge role in 
the Balkans. So does World Bank. EU as well. And so one of the 
things that we have seen in this time period was also better 
coordination of conditionalities, better coordination of what 
these conditionalities are used to back up. And I have provided 
some of the recommendations in my written testimony on that.
    Then the tools for a different sort of objective, which is 
long-term, is obviously rule of law. How do you kind of 
transition from just sanctioning corrupt leaders to actually 
building up states that are based on respect of rule of law? 
And as a friend of mine from the U.S. Institute of Peace 
reminded me recently by quoting Gordon Brown, the problem with 
rule of law is the first 400 years.
    However, what is good news I think is that we are dealing 
with countries with relatively small populations. Some of the 
countries have populations that are smaller than Walmart 
employees. And we are dealing with countries that have 
tradition and experience and legal systems that existed before 
and they do not require as much, I would say, effort as in 
certain places around the world. And there I think both, again, 
EU programs have been very valuable.AID has done a lot on 
building up the rule of law, and I think it is good to rely on 
these agencies.
    Senator Johnson. Mr. Wilson?
    Mr. Wilson. Senator, if I may, I think the premise of your 
question is right, that this is not really just about more 
money, resources certainly from our side. And I would say four 
quick things.
    One is that we have lost the North Star. What is the 
clarity of our goal? I mean, if you are sitting the region, the 
Balkans, you look and you see uncertainty about the future of 
the European Union itself and you see the United States having 
a debate about its own commitment to NATO. So I think we begin 
with the clarity of our goal, that as reforms succeed in this 
region, that we will welcome these countries as part of the 
transatlantic community, period, and to help reestablish that 
sense of North Star.
    Second, the security presence, which is where the U.S. 
comes into play, and it is almost as much perception as 
reality. If we simply stated, Secretary Mattis stated that our 
presence at Camp Bondsteel was not just a part of KFOR and part 
of the perspective on how we maintain peace in Kosovo, but just 
like our deployment of enhanced forward deployment in Europe's 
east, that our presence there was actually part of an enduring 
presence to project stability, provide guaranty for the region, 
I think that immediately would send a signal, a calming signal, 
in the region.
    Third, it is balancing this no free pass for the current 
leaders that we are not just invested in their stability with 
the reality of still competing for these countries and their 
leaders. In many respects, a leader like President Vucic of 
Serbia--he knows where his bread is buttered. Five percent of 
their exports go to Russia; 66 percent to the EU. That is an 
inevitable future. And yet, it is Putin that lavishes him with 
praise and banquets, and we send in our ambassador to tell him 
what he is doing wrong. I think there is an ability for some of 
these leaders, some of them who have a populist bent, to 
compete with their people and with them.
    And the final point is the private sector. One of the most 
powerful things that I have watched at a micro level has been 
the entry of players like Uber into the market in the Balkans, 
a dramatically disruptive private sector force that provides 
jobs outside of patronage networks and provides opportunities. 
While Uber may be involved in corporate leadership controversy 
here, the issue of how you stimulate an entrepreneurship for 
folks to actually make their own futures rather than depend on 
patronage networks is something that we could lend a hand in.
    Senator Johnson. Just to underscore that point, I was in 
Montenegro. I guess a survey provided by one of the private 
sector guys I was talking to said that 50 percent of 
Montenegrin youth wanted to be employed by the government, 
which is not exactly a real entrepreneurial spirit.
    Senator Murphy?
    Senator Murphy. Thank you very much, Mr. Chairman. Those 
are fantastic questions to set the stage here. Let me key off 
of the direction that Mr. Wilson took this and maybe run the 
question back down the panel.
    So I completely buy into the idea that a big piece of the 
story line here is a withdrawal of American leadership. You 
have all plotted that case very clearly and talked a little bit 
about the tools. But it is insufficient as a complete 
explanation. I think Mr. Wilson started to give us the other 
pieces of this.
    So if you are looking at the key time period of 2002, as 
Ms. Ruge put it, to 2007 or 2005, whenever it is, there were a 
couple of other things that were happening at that point too. 
The world economy in about 2007-2008 starts to fall apart, and 
people start questioning the future of Europe and its ability 
to deal with its problems and the period after Dayton. That is 
sort of the golden moment in many ways for Europe. Everybody 
sees this as a path. They are watching the Polish economic 
renaissance explode. Everybody wants in on a piece of that. At 
that time period you are talking about, people's faith in 
Europe starts to wane, faith in it starts to pull apart. And 
Russia is back on the scene. All of a sudden, there is another 
suitor again. In the years after Dayton, as you are making lots 
of progress, Russia is weak. Russia is not interested in being 
involved in the way they are today in other people's affairs. 
Today they are.
    I think Mr. Wilson was starting to talk about this, but 
just I would love to have the two of you talk about those other 
two components, which is that ultimately if Europe is not 
confident about their future direction, can U.S. leadership or 
U.S. reengagement make up for that fact? I mean, I can argue 
that the primary driver of all of that reform was a belief that 
they were going to be a big future part of Europe. If they do 
not believe that, then it is not clear that the U.S. can make 
up for it.
    And two, inside the President's budget is massive cuts in 
the programs that we use to counter Russian propaganda and the 
money that we use to counter Russian energy influence. If we 
are not providing real answers for Balkan nations with respect 
to Russian interference, are we going to get anywhere?
    Those two questions to both of you and then maybe Mr. 
Wilson can finish it up.
    Ms. Bajrovic. Let me first start just by noting that in 
Bosnia--the number that Chairman Johnson mentions in Montenegro 
was 50 percent. In Bosnia, it is 70 percent of youth who 
consider government employment the only employment.
    This question, Senator Murphy, on plan B is something that 
we at NED ask ourselves quite a bit. We have also framed a lot 
of the assistance that we have been providing to the region for 
the past 20 years in EU terms because it is a very useful tool. 
It is the one that touches both the leaders and the citizens 
themselves. And for a number of reasons, some of which have 
been outlined, the pull effect of the EU is definitely waning. 
Part of it was this, as I was mentioning, gambled 
conditionality. Part of it is the ailments of the EU itself, 
both economic and political. The third one, which I think is a 
very important one, is these are a series of important signals 
that place in doubt the EU's readiness to accept these 
countries as full members. And then finally, the fourth 
question and the one that is an elephant in the room is the 
future of EU itself and does it exist X number of years from 
now.
    And so it is becoming increasingly more difficult to incur 
democratic assistance and democratic processes from this region 
even though, yes, this is the most logical and natural thing to 
do because, as I was mentioning earlier, the Southeast European 
region is right there in the EU's back yard.
    If I had the answer to this big question, I would gladly 
offer it. But I think for lack of a better one, I would turn to 
NATO and I think a very important signal that the Montenegrin 
membership has sent. Our grantee from Belgrade, Center for 
Euro-Atlantic Studies, someone that I also know the Atlantic 
Council very closely works with, argues in their upcoming 
report that because of all of these issues with the EU that I 
just mentioned, NATO can--and I am quoting this--NATO can and 
should be the leading actor of a sustained and comprehensive 
process of the region's stabilization and democratization. 
There are tools there. There is a potential there, not to 
replace the EU accession process, for sure, but certainly to 
supplement it and potentially--it will send an important signal 
and not just to external actors, for example, as NATO 
membership has done, that the region is safely anchored in the 
West for as long as the EU accession process itself has 
stalled, but it also provides incentives to citizens because it 
demonstrates to them what some of these integration processes--
what kind of benefits they come with. And in this case it is 
certainly a security prospect when it comes to Montenegro.
    On the second part, on the Russian propaganda, I think that 
the tackling of the malign foreign influence in this particular 
case of Russia and strengthening democracy have to go hand in 
hand because I think as all three of us have outlined, it is 
really these democratic weaknesses and backsliding that have 
opened up the space for malign foreign influence because strong 
rule of law, complete accountability, and transparency--all of 
these are tools that are going to provide the groundwork for 
institutions. I mean, the most important thing here is to 
strengthen the institutions that would provide adequate 
responses.
    I am very well aware of the assistance that is now in the 
works to particularly target this Russian disinformation, and I 
understand you were crucial in passing this legislation. And I 
want to thank you for that. At NED we have used some assistance 
that was provided to us by the Congress last year to 
strategically tackle this problem of what we call the defending 
the integrity of information space. And I could probably go at 
length in what types of programs these include.
    I have to say that the Southeast Europe region, in terms of 
responses to these malign foreign influences and 
disinformation, are lagging behind a little bit in comparison 
to their counterparts in Central Europe and the Baltic States. 
But there is a lot to be learned, and I think that in the 
months to come, we will see more work being done on this in our 
region.
    Senator Murphy. Did you have any thoughts on this?
    Dr. Ruge. I have to say this is the question that I ask 
myself a lot as well. I can just add to the number of issues 
that you have just named by adding Brexit as one further 
complicating factor for the EU policy in the Balkans.
    The time period that I was talking about was also the time 
period when one discussed EU as a non-actor, not able to act 
unified on foreign policy. And it was always a couple of 
driving EU states, UK having played a particular role in that 
time period together with the backing of the U.S. and NATO.
    I think what we can say is that given these additional 
challenges at an international level, it is even more important 
to look at comparative advantages that Europe and the U.S. 
have. If we are talking about U.S. slashing the budget of these 
sorts of assistances, EU is continuing to support the 
institutions in the rule of law sector, and perhaps that should 
be outsourced to the EU. But the U.S. political engagement has 
always been the most important and determining factor even 
during the time period I was talking about. And that, again, 
regardless of what we have described or maybe because of all of 
these factors, is becoming even more important now.
    Senator Murphy. Mr. Wilson, let me ask you to pick up on 
two of these points as part of developing this answer. Part of 
the solution here can be the United States providing real 
support for the continuity of the European experiment. We spent 
a lot of time on this subcommittee over the last 4 years 
talking about a U.S.-EU trade agreement that would have 
increased the attraction of the remaining part of the EU and 
increased the attraction of joining it. So there are things 
that the United States can do. You mentioned making a clear 
argument that NATO is maybe one of the easiest things, but 
there are other pieces of U.S. foreign policy that could add to 
the attraction and the cohesiveness of the EU.
    And then on an ancillary point, I know you said it is not 
all about funding, but here are the numbers in the President's 
budget. He targets this region for specific pain. You can only 
read it as intentional. So here is the governance funding cuts. 
Albania gets an 89 percent cut; Bosnia, in crisis as we speak, 
a 40 percent cut; Bulgaria, a 75 percent cut; Croatia, 60 
percent cut; Kosovo, 48; Macedonia, 40; Montenegro, 34; Serbia, 
31.
    I know it is not all about funding, but if you are an 
ambassador or assistant secretary walking around the region in 
2018 trying to get people to listen to you, and your government 
just cut 60 percent of the money that you have to fund these 
efforts, it is a little bit hard to pull water out of a stone. 
So talk about those two pieces.
    Mr. Wilson. Thank you very much, Senator Murphy.
    A couple points on this. Absolutely it is an expression of 
further disengagement if we were to go through with budget cuts 
of that scale. That would, I think, directly harm our interests 
of what we are trying to achieve in this region. And I think if 
they were to stand in that form, that would cause problems for 
U.S. influence in the region in support of our own interests.
    We are not here to make the case that there needs to be a 
massive new political commitment, a massive new sort of 
security, political, diplomatic, and financial commitments. Our 
case is that with a little bit of effort here, we can go a long 
way in protecting our interests. We just cannot leave it simply 
to excellent ambassadors. We need to give them a little bit of 
backup. And so there is a unique opportunity to use what we 
have to make an impact, I would say, in the western Balkans.
    The big picture is if the EU is no longer attractive or no 
longer committed to the idea of its future expansion, it is no 
longer the driver for the transformation you need in the 
region.
    I think it is important for us to go back again to our 
role. It was always, as we have discussed, U.S. strategy. And 
we have just celebrated the 70th anniversary of the Marshall 
Plan. The brilliance of the Marshall Plan was not the money, 
although that was relevant. The brilliance of the Marshall Plan 
was an American strategy that incentivized in order to get 
American taxpayers' money, these countries had to work 
together, cooperate economically because we wanted them to not 
fight each other again so that we would not have to come back. 
Their security meant we would not come back, our security. 
Their prosperity meant they were buying American goods, our 
prosperity.
    This is at stake right now. Is the United States going to 
be a driver of European integration? We should have a concerted 
effort between Washington and Berlin that is sending a clear 
message to the Western Balkans, not an ambivalent one. And that 
is lacking right now. I think that is one of the formidable 
challenges that we have to get right on the messaging of U.S. 
support for an integration process that is in our interest to 
see the Western Balkans be part of that narrative.
    The last thing I would say is that you mentioned the TTIP 
issue. I am reassured that TTIP had not formally had a stake 
driven through their heart. We certainly need to get through 
German elections. But I would make the case that as we think 
about a deal focused on American jobs, growth, prosperity, 
given the extent of trade investment, supply chain, they are 
doing well with the European Union, which is a bilateral deal, 
after all. It is profoundly in our interests. But in this 
region, if we would negotiate it in such a way that we say we 
are negotiating some kind of new name trade deal, regulatory 
deal with Europe, premised on the fact that those countries in 
Europe with which the EU has these deep and comprehensive free 
trade agreements, that we are negotiating it such that they 
would be part of it. And so with the stroke of that negotiating 
tactic, we are making our negotiations with Europe about 
including both the Western Balkans and countries like Ukraine, 
Georgia in our trade strategy.
    Senator Johnson. Let me just kind of close out this panel 
and make a couple comments.
    First of all, we do have co-equal branches, and we are 
supposed to have the power of the purse. And this is one fiscal 
conservative. The reason I am holding this hearing is to point 
out this unique moment in time. This is no time to abandon 
Southeastern Europe. Let us not be pennywise and pound foolish. 
I mean, that is kind of the whole purpose.
    But also, my guess is there may be citizens of these 
nations watching this hearing. And I want to give them that 
assurance as well. The reason I went to the Brussels Forum, the 
reason I went to GLOBESET, the reason I went to Montenegro was 
to underscore the support--and I would say it is bipartisan 
support. Look what we did in Ukraine, the fact that we had 
bipartisan delegations going to Ukraine to provide the kind of 
support we did unanimously for Ukraine. We do understand in 
Congress here how important our relationship with Europe is. 
You know, from my standpoint, I am all for free and fair trade, 
and we have worked together in terms of certainly promoting 
TTIP as well.
    So I want to thank the witnesses for your testimony, for 
your support of the region. And I certainly want to assure the 
region that they do have a great deal of support in Congress 
for not only the funding but I think the leadership and the 
reengagement to do everything we can to provide what I would 
consider the three pillars--help them provide the three pillars 
of economic progress. And it is security, and it is both 
national and defense security, but also security from the 
standpoint of lack of corruption and the rule of law. And then 
everything we can to try and provide the example of 
entrepreneurial spirit so you have a lower percentage of young 
people in those nations that actually want to get involved in 
companies like Uber, the real things that drive an economy. And 
then capital. The only way you are going to have capital 
flowing to the West is if, for example, American companies 
realize there is not corruption, we can follow the law, and you 
can actually make those investments and realize there is going 
to be some certainty there.
    So, again, this hearing is really all about, first of all, 
understanding what the issue is, what the problems are, what we 
need to do in terms of reengagement, but also hopefully to 
signal to Southeast Europe you got support. We want to 
reengage, and we know that it is important that we do reengage.
    So with that, I want to thank the witnesses, and we will 
call our final witness on our next panel.
    Well, it looks like our next panel of one is seated and all 
supplied up. So I want to welcome Mr. Hoyt Yee. Mr. Yee is the 
Deputy Assistant Secretary for European and Eurasian Affairs at 
the Department of State. Mr. Yee is a career member of the 
Senior Foreign Service and has served as the Deputy Chief of 
Mission at the U.S. embassy in Croatia, Counsel General in--you 
can say that name of the city in Greece--and Principal Officer 
in Montenegro, amongst other assignments. Mr. Yee, welcome.

STATEMENT OF HOYT BRIAN YEE, DEPUTY ASSISTANT SECRETARY, BUREAU 
  OF EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Yee. Thank you very much, Mr. Chairman.
    Let me begin by just expressing, on behalf of my colleagues 
at the State Department, our sympathies, our best wishes to 
your colleagues who were injured in the incident in Alexandria 
this morning. Our hearts go out to the members and also the law 
enforcement officials who were injured, and we wish them a 
speedy recovery.
    Thank you much for inviting me to appear before you today 
to discuss the challenges we see in the Western Balkans and our 
strategy for mitigating them.
    The region is facing its most serious challenges since the 
1990s which, left unchecked, could have grave consequences for 
the Western Balkans, wider Europe, and the United States.
    The Western Balkans face a number of threats. Fragile 
institutions, shortcomings in the rule of law, and unfree media 
have facilitated endemic corruption. This corruption endangers 
these young democracies and opens pathways for destabilizing 
actors, including violent extremists, organized criminal 
groups, and countries seeking to exert malign influence. We 
believe much more needs to be done to mitigate these dangerous 
vulnerabilities.
    Internal problems such as systemic corruption have opened 
the door to external threats such as Russia, which is intent on 
thwarting efforts by countries in the region to pursue a Euro-
Atlantic path. Moscow exploits the region's heavy dependence on 
Russian gas and hydrocarbons, endemic corruption, feeble rule 
of law, a weak media sector, and unresolved political or 
territorial disputes to pressure governments and political 
parties and discourage Western-oriented reform.
    Compounding the external threat posed by Russia is the 
potential growth of violent extremism. According to open source 
reporting, 750 to perhaps as many as 950 foreign fighters have 
traveled from the region to Syria and Iraq since 2012. While 
the number of departing foreign terrorist fighters has 
significantly declined, it is clear that the Balkans remain a 
focus for ISIS recruitment efforts.
    These continued challenges are formidable, but we have been 
active in helping the countries of the region confront them. We 
are taking steps to shore up rule of law and stamp out 
corruption by assisting our partners to accelerate their needed 
reforms. With our assistance, Albania is implementing wide-
ranging judicial reforms. Montenegro is cracking down on 
corruption, and Serbia is closing loopholes that allow for 
public graft.
    Across the Balkans, we are working to spur economic growth 
with programs aimed at integrating and harmonizing regional 
markets and increasing access to capital. We are also urging 
political leaders and criminal justice institutions to show the 
will and courage to aggressively investigate, prosecute, and 
punish corrupt actors and the organized crime groups they 
protect.
    At the same time, we have developed a full-spectrum 
approach to push back against Russian malign influence. To 
combat Russia's aggressive propaganda machine, we are 
amplifying our messages, correcting false narratives, and 
supporting independent media and investigative journalists.
    To make the region more independent, we are promoting 
projects such as the Trans-Adriatic Pipeline, the KrK Island 
liquid natural gas terminal, and the Bulgaria-Serbia 
Interconnector. Through these projects, we will help enable 
Balkan countries to import gas from multiple sources, limiting 
an important source of Russian influence. Additionally, we are 
using our military assistance programs to build up the human 
capital of militaries of the region and offering options that 
allow these countries to move away from over-dependence on 
Russian military equipment.
    We are also working to counter the spread of violent 
extremism and end ISIS' influence in the Western Balkans. As 
Secretary Tillerson has said, ISIS is not more powerful than we 
are when we stand together. Our partners recognize this, which 
is why every country in the region has joined the Defeat-ISIS 
Coalition, criminalized foreign terrorist fighting, and 
established dedicated counterterrorism units. Due to these 
efforts and in part because of our capacity building 
assistance, the flow of foreign terrorist fighters to Syria and 
Iraq has significantly decreased over the past 2 years. As we 
continue to strengthen our law enforcement relationships, our 
partners are also arresting foreign terrorist fighters and 
breaking up ISIS plots in the region.
    In conclusion, creating stability and progress in the 
Western Balkans is not an impossible task. With our and 
Europe's active engagement, over the past month, we have seen 
some real successes as Montenegro has joined NATO with the help 
of the Senate, of course, Macedonian leaders have come together 
to form a new government, the Albanian opposition agreed to end 
its boycott and participate in elections on June 25, and Serbia 
is on track to open two new EU accession chapters this month. 
However, we also know there is much work to be done.
    A stable, prosperous Western Balkans that is integrated 
into Europe and serves as a strong partner on counterterrorism 
will help make America more safe, provide opportunities for 
U.S. businesses, and ensure peace in the region. To accomplish 
this goal, the countries of the Western Balkans need to commit 
themselves to the deep reforms needed to join Euro-Atlantic 
institutions and resist foreign malign influence, terrorism, 
and other external threats.
    Thank you very much.
    [Mr. Yee's prepared statement follows:]


                     Prepared Statement of Hoyt Yee

    Chairman Johnson, Ranking Member Murphy, and members of the 
committee, thank you for inviting me to appear before you today to 
discuss the challenges that we see in the Western Balkans and our 
strategy for mitigating them. I would like to express my sincere 
gratitude to the Senate and this committee for your interest in the 
Western Balkans, where the United States is focused on seeing through 
our shared vision of a Europe that is whole, free, and at peace.
    We have a long history of good relations with the countries of the 
Western Balkans. Each country in the region is a member of the Defeat-
ISIS Coalition, a strong partner on counter-terrorism, and a reliable 
counterpart in efforts to limit the spread of violent extremism. 
However, the region is facing its most serious challenges since the 
1990s, as countries confront both external and internal threats that, 
left unchecked, could have serious consequences for the Western 
Balkans, Europe, and the United States.
Challenges
    The Western Balkans faces a number of threats, as internal 
weaknesses have led to external vulnerabilities. Fragile institutions, 
shortcomings in the rule of law, poor governance, and unfree media have 
facilitated endemic corruption that taints nearly every aspect of 
society. This endangers these young democracies and opens pathways for 
potentially destabilizing actors - including violent extremists, 
organized criminal groups, and countries exerting malign influence, 
like Russia.
    Countries across the region score poorly on Transparency 
International's corruption perceptions index, ranging from a low of 36, 
in the case of Kosovo, to a high of 49, in the case of Croatia - out of 
100. The OECD average is 68. Macedonia is perhaps the best example of 
how weak institutions can breed corruption-in Macedonia's case, 
political corruption resulted in a 2015 wiretapping scandal that was 
the genesis of a two-year long political crisis. Bosnia provides 
another example. Nationalist leaders in Republika Srpska have tried to 
exploit weak state-level institutions in order to advance divisive 
policies that could lead to a return to violence. Bosniak and Bosnian-
Croat leaders often exhibit similarly provocative or unhelpful 
behavior. We believe Bosnia-Herzegovina needs much more political and 
economic reform to mitigate this dangerous vulnerability.
    Internal problems in the Western Balkans open the door to external 
threats, such as Russia, which is intent on thwarting efforts by 
countries in the region to pursue their Euro-Atlantic path. A 
particular concern is Russian malign influence, or RMI, in Europe - the 
covert or semi-covert support for political parties, the use of front 
groups, and low-profile investments meant to build political influence 
non-transparently - all under an umbrella of propaganda and 
disinformation. Some of this is straight from the old Soviet playbook, 
but updated for the digital age, and taking full advantage of new 
technologies. RMI is a key part of Moscow's efforts in the Balkans, 
alongside more conventional diplomatic tools.
    Moscow exploits the region's heavy dependence on Russian gas, 
endemic corruption and feeble rule of law, a weak media sector, cyber-
security vulnerabilities, ongoing reliance on Russian-spec military 
equipment, ethnic differences and unresolved political or territorial 
disputes to pressure governments and political parties and discourage 
Western-oriented reform. Unfortunately, Russia seems less interested in 
promoting economic development and good governance in the Western 
Balkans than in holding back or weakening a region still in a 
precarious state following years of strife.
    Compounding the external threat posed by Russian meddling in the 
region, the Western Balkans faces the challenge of dealing with the 
potential growth of violent extremism. According to open source 
reporting, 750 to perhaps as many as 950 foreign fighters, mostly from 
Bosnia and Herzegovina, Albania, Kosovo and Macedonia, have traveled 
from the region to Syria and Iraq since 2012. While the number of 
departing foreign terrorist fighters has significantly decreased over 
the last two years, it is clear that the Balkans remains a focus for 
ISIS recruitment efforts. ISIS, which, as President Trump has said, 
represents one of the "most vicious and aggressive" threats we face, 
has implemented a propaganda campaign in the region and has encouraged 
those who cannot travel to Syria and Iraq to carry out attacks in their 
home countries or Western Europe.
    The governments of the region are often not fully equipped to deal 
with this challenge on their own. For example, law enforcement and 
border security officials, intelligence experts, and prosecutors 
struggle to work together to identify and disrupt ISIS and terrorist 
plotting. Borders in the region remain porous, and the transit of 
foreign fighters both north to Western Europe and south to Iraq and 
Syria continues to pose a significant vulnerability to our security 
interests in the region, wider Europe, and to the homeland. Several 
countries lack the cyber expertise to analyze seized electronics and 
monitor online activities. Once terrorists are put in prison, many 
countries lack the training and resources needed to rehabilitate them 
and prevent the spread of radicalization to violence. It is also 
critical to identify vulnerable populations and directly address the 
root-causes of extremist ideologies. Finally, many countries also lack 
capacity to counter and prevent terrorist messaging, or to identify 
vulnerable individuals and intervene in recruitment process.
Addressing Internal Challenges
    These continued challenges are formidable, but we have been active 
in helping the countries of the region to confront them. Perhaps most 
importantly, we are taking steps to shore up rule of law and stamp out 
corruption in the region by pressing our partners to accelerate needed 
reforms and providing targeted assistance. For example, with our 
assistance, Albania is implementing wide-ranging judicial reforms that 
will dramatically strengthen the rule of law and reduce wide-spread 
corruption. Montenegro's new Office of the Special Prosecutor has 
cracked down on corruption within the government, bringing charges 
against nine senior officials and opening investigations against 
several dozen more. In Serbia, a USAID program has helped streamline 
business inspections and automate the building permit process, a reform 
that was partially responsible for Serbia moving up 44 spots in the 
World Bank's Ease of Doing Business survey over the past two years, to 
number 47 in the world. We are urging political leaders and 
criminaljustice institutions to show the will and courage to far more 
aggressively investigate, prosecute, and punish corrupt actors and the 
organized crime groups they protect.
    Across the Balkans, we are working to spur economic growth by 
improving the business climate. We are fostering communication between 
the business community and the government, leading to improved 
regulatory systems, decreased red tape, and a more level playing field 
for foreign investors. We are also helping the countries of the western 
Balkans to develop more competitive economies through both regional and 
bilateral assistance. Our assistance is aimed at integrating and 
harmonizing regional markets, with a special focus on bolstering 
linkages with the EU. This will increase private sector competitiveness 
by targeting key regional value chains, such as IT, tourism, and 
agribusiness, and improve financial sector stability and growth, 
notably by expanding capital market integration and increasing access 
to capital for small- and medium-sized enterprises.
    We are also pushing the region to make the needed reforms that will 
transform their countries into stable, prosperous societies. In 
Montenegro, we worked with the government to help it make the reforms 
needed to join NATO. Though Bosnia's political institutions are still 
deeply dysfunctional, we are working with leaders there and with some 
of our European partners to encourage much-needed political reforms 
before the 2018 election. And we have been a strong backer of the EU-
led Serbia-Kosovo Dialogue, with the goal of normalizing and advancing 
each country's progress on their respective European paths.
Mitigating Russian Malign Influence
    We have developed a full-spectrum approach to push back against 
Russian malign influence. To combat Russia's wide-spread propaganda 
machine, we are amplifying our messages, correcting false statements, 
and supporting independent media and investigative journalists. .
    In order to make the countries of the region more independent, we 
are supporting projects and promoting policies focused on energy 
security and diversity. Currently, the Western Balkans is almost 
entirely dependent on Russia for natural gas. This dominance of the 
natural gas market leaves the region vulnerable to exploitation. 
Without alternate energy sources and a more diversified energy 
infrastructure, Russia will continue to hold this powerful lever. By 
supporting projects such as the Trans-Adriatic Pipeline, the Krk Island 
Liquid Natural Gas terminal, and the Bulgaria-Serbia Interconnector, we 
will help enable Balkan countries to import gas from multiple sources, 
limiting an important source of Russian influence. Taking full 
advantage of these investments will require regulatory reforms and the 
construction of regional interconnectors. This will completely 
transform the market, allowing countries to import gas efficiently from 
a variety of sources. Our support toward greater economic integration 
with Europe helps strengthen the relationship of Western Balkan 
countries with the West and limits Russia's ability to manipulate them 
through economic levers. Strengthening the financial sector, improving 
regulation and supervision, and increasing the adherence to 
international standards builds resilience and improves access to 
finance, thus minimizing weaknesses Russia can exploit . We are also 
using our military assistance programs to counteract Russian influence 
by building up the human capital of militaries of the region and 
offering options that allow countries to move away from over-dependence 
on Russian military equipment.
Counterterrorism and Countering Violent Extremism
    We are also working to counter the spread of violent extremism and 
end ISIS's influence in the Western Balkans. The countries of the 
region recognize, as Secretary Tillerson has said, that "ISIS is not 
more powerful than we are when we stand together." That is why every 
country in the Western Balkans has joined the Defeat-ISIS Coalition. 
Each has also criminalized foreign terrorist fighting, developed or is 
in the process of developing national countering violent extremism 
strategies, and established dedicated counterterrorism units. As a 
result of these efforts, and, in part, because of our capacity building 
assistance, the flow of foreign terrorist fighters to Syria and Iraq 
has significantly decreased over the past two years. As we continue to 
strengthen our law enforcement relationships, our partners are also 
arresting foreign terrorist fighters and breaking up ISIS plots in the 
region.
    We appreciate Congress' continued support in providing resources 
for these programs, which enhance our national security interests, and 
help our partners to address today's evolving transnational threats. 
This is a long-term project with no "one-size fits all" strategy. 
However, we are committed to the task, and expect to see continued 
progress in this area.
Conclusion
    It is clear that the countries in the Western Balkans face serious 
challenges. However, creating stability and progress in the region is 
not an impossible task. In fact, with our and Europe's active 
engagement, over the past month Montenegro has joined NATO, Macedonian 
leaders have come together to form a new government, the Albanian 
opposition agreed to end its boycott and participate in elections on 
June 25, and Serbia is on track to open two new EU accession chapters 
this month. Yet, we also understand that there is much work to be done.
    A stable, prosperous Western Balkans that is integrated into Europe 
and a strong partner on counter-terrorism will help make America more 
safe, provide opportunities for U.S. businesses, and ensure peace in 
the region. To accomplish this goal, the countries of the region need 
to commit themselves to the deep reforms needed to make their societies 
a success. But we also need to help them make the necessary reforms and 
push back against foreign malign influence, terrorism, and other 
external threats. Our goals in the Balkans are ambitious, but we are 
committed to seeing the region integrated into the European family of 
democratic, prosperous nations and partnered with the United States in 
advancing our common interests.


    Senator Johnson. Thank you, Secretary Yee.
    When I was in the region, all the meetings I have been 
taking here in Washington, D.C., the theme is very consistent. 
We really are at a moment in time here because of the lack of 
engagement or the reduced engagement, they really are 
concerned. These countries are concerned that you could be at a 
tipping point here.
    I know you were just in the region. Are you hearing the 
exact same thing? Is this something the State Department 
recognizes? Is it something the Secretary and the President 
recognize that we have a moment in time? We cannot allow 
Southeast Europe, the Balkans to slip into the wrong category.
    Mr. Yee. Thank you, Mr. Chairman, for that question.
    Yes, we do hear the same thing, and I hear the same. When I 
was in the region recently, the countries of the Western 
Balkans are very eager for more engagement from America, more 
from the European Union. They believe very strongly in the need 
for additional help in terms of assistance but also political 
support for what they are trying to achieve, which is reform in 
the majority of the countries and also progress towards 
reaching integration with the European Union and NATO.
    As the Secretary mentioned yesterday in his testimony, he 
is aware of a need for engagement in the Baltics and in the 
Balkans particularly with relation to Russian malign influence. 
But in general, the State Department is committed, remains 
committed to helping the Balkans move forward on the goals that 
he has set forward and we are supporting.
    Senator Johnson. Traveling in the region, obviously I was 
concerned about the foreign fighters and influence of ISIS. I 
was actually comforted by--I do not want to minimize the 
problem, but it was not as great a concern to those countries. 
They really think they have it pretty well under control. Do 
you share that assessment?
    Mr. Yee. I believe that most of the countries of the 
Western Balkans still need significant assistance from the 
West, particularly the European Union and the United States. 
One example is in the area of foreign terrorist fighters where 
the region has been successful in reducing the number over the 
last couple of years. But what I tell interlocutors in the 
governments in Bosnia-Herzegovina and Kosovo, for example, is 
that it is no time to be complacent. The problem, the origins, 
the sources of violent extremism and therefore the possibility 
of foreign terrorist fighters still exist and need to be 
addressed. So I think while there is some room for not 
celebrating but I think recognizing the progress made, it is no 
time to be complacent. We need to continue to be vigilant, but 
also active in strengthening the institutions which will push 
back against violent extremism, against Russian malign 
influence, against other actors who are acting against what the 
countries of the region in the Western Balkans are trying to 
achieve.
    Senator Johnson. I think probably the best way to counter 
violent extremism in any of its forms is through economic 
opportunity. When I was in Montenegro--I do not believe you 
were here when I said it--a private survey showed that 50 
percent of young Montenegrins want to work for the government. 
We had a witness, Ms. Bajrovic, who said that in her home 
country, Bosnia, the percentage is 70 percent. To a guy from 
the private sector, an entrepreneur myself, that is shocking. 
It is actually kind of depressing, and it does, to a certain 
extent, point to the lure of what Russia's propaganda is all 
about. They promise falsely some sense of security.
    Can you speak to me? What can we possibly do to help really 
change that dynamic?
    Mr. Yee. Well, Mr. Chairman, I agree the wish of the youth 
of the countries in the Western Balkans for working in the 
public sector, for the government in particular, is not 
sustainable economically. The governments simply cannot have 
the kind of public administrations and state-run enterprises 
that would be able to sustain that many young people. And it 
also, of course, retards innovation and entrepreneurism, which 
is necessary to improve the economies.
    I think the types of remedies, the types of alternatives 
that need to be explored are in opening up the economies to the 
kinds of open markets and economic policies that we see in 
Central Europe and Western Europe where it is possible to start 
a business without being politically connected or having to pay 
a bribe, where young people can get jobs based on merit not on 
affiliation with a particular party. And that is, 
unfortunately, the prevalent basis for getting employment in 
many of the countries of the Western Balkans. It is political 
connections or affiliation.
    So once the standards that the EU requires and NATO, to a 
certain extent, also requires for open democratic-based 
economies and systems of governance, there can be greater 
opportunity. So I think we need to continue the kind of 
assistance we are providing to open up the markets, to bring 
Western standards whether it is judiciary--as you know as a 
business person, it is absolutely essential for businesses to 
know they can have legal redress. In many countries of the 
Western Balkans, it is very difficult. So the level of foreign 
investment, while slowly increasing, is not increasing fast 
enough to create jobs for the young people who are now seeking 
jobs in the public sector. So if we can attract more foreign 
investment, that will address a large part of the problem.
    Senator Johnson. To what extent does the State Department 
sponsor things like trade missions, but also just mentoring 
opportunities? In Montenegro, for example, they produce cheese. 
And I have actually talked to some cheese producers, some 
retired executives who say you want a really nice couple months 
in a beautiful country mentoring young potential entrepreneurs 
and basically conveying your analogy of what it takes to start 
a business. Is the State Department engaged in any of those 
types of activities at all?
    Mr. Yee. Yes, Mr. Chairman. The State Department and the 
Commerce Department are both very interested in attracting 
potential American businesses to do either direct investments 
or ventures with countries in the Western Balkans.
    However, I would say we always inject a note of caution 
when we speak to American businesses because in many cases, the 
environment, the conditions for foreign investment are not up 
to the standards that we feel comfortable promoting. So, quite 
frankly, in some of the countries, our emphasis now is not in 
attracting American companies, but in working with the 
governments to improve the conditions, whether it is rule of 
law, independent judiciary, law enforcement, just basic 
regulation or lack thereof that is necessary for companies to 
succeed.
    In some countries, there is a great deal of foreign 
investment. In Serbia, recently a large investment. In Bosnia-
Herzegovina, there are some slow increases in interest from 
American companies. But these tend to be some of the more 
adventuresome or risk non-averse companies. We would like to 
see the conditions improve so we can attract companies from 
Wisconsin and other States that may be able to do some good 
business in places like the Balkans.
    Senator Johnson. I completely agree with you. The first 
step is you have to make a country an attractive place for 
investing their risk capital.
    Senator Murphy?
    Senator Murphy. Thank you very much, Mr. Chairman.
    Good to see you, Mr. Secretary.
    There is a total disconnect between the case you are making 
and the array of challenges that need increased resources in 
the budget that has been submitted. Before you got here, I laid 
out the cuts that target the Balkans that would effectively 
shut down the State Department's non-consular operations. I do 
not imagine you support those cuts, and I think they are dead 
on arrival. So it is not necessarily worth spending time asking 
you about it. I would just make the point.
    Let me ask you about the trend lines you are seeing in 
Russian interest in the region. I think I have met with a 
representative of every country in the region. And when they 
come to my office, they want to talk about one story line, 
which is rapid U.S. disengagement from the region. You are 
doing yeoman's work, but they are worried that we are sending a 
signal with these budget cuts with our lack of support for 
NATO, with our criticism of our EU allies that we are not 
interested in the region any longer, and a response by the 
Russians to jump in. In every single country, they have very 
concrete examples of places in which the Russians just in the 
last 6 months--in the last 8 months are much more involved in 
message development, in support for opposition groups than they 
were even last year. And they were involved at a very pretty 
fevered pitch the last year.
    Are you seeing increased Russian involvement in media, in 
political activities in many of these countries? Have you seen 
a difference this year compared to last year? What is the trend 
line?
    Mr. Yee. Thank you, Senator Murphy, for the question.
    The answer is yes. We do see increasing Russian interest 
and activity in the Western Balkans. The most obvious example--
I am not sure if other witnesses mentioned it--was in 
Montenegro where October 16th, the election day in Montenegro, 
was severely marred by an attempt, which was foiled, by Russian 
or Russian-supported actors who tried to undermine the 
elections and probably undermine the government, if not 
actually overthrow the government or even assassinate the prime 
minister.
    This is, I think, consistent with where we have seen Russia 
trying to interfere in elections around the world, around 
Europe, including our own country. It is consistent with 
Russia's attempts to prevent countries of the Western Balkans 
from joining NATO, from integrating further with the Euro-
Atlantic institutions. We are seeing through rhetoric, through 
misinformation, through the media supported by Russian attempts 
to spread the kind of ideology or policies that are directed 
against NATO, directed against the West. And I think all the 
countries that are striving to join EU and NATO are aware of 
this. It is not something that anyone is protected from or 
cloistered from.
    So we are working together with the countries of the 
Western Balkans to address the malign influence from Russia. 
This is a wide-spectrum approach to addressing the false 
narratives, addressing the lies that are being spread by 
Russian or pro-Russian media, addressing the kinds of attempts 
with direct attempts to influence the governments through 
either bribery or other means.
    We have to be present, as you said, Senator. Our diplomats, 
our ambassadors and their staffs need to be present with 
meetings with all the members of the government, but also the 
opposition. We need to be present in the media. We need to be 
providing advice, best practices, which we are doing.
    So I think the trend is concerning. I do not think we are 
necessarily losing because I think the Russians are also 
finding that countries are resilient. Montenegro was able to 
resist with assistance from its partners, its friends, and now 
allies. Other countries where Russia is attempting--Macedonia, 
for example, I think is a country that was facing a very 
difficult situation only a few weeks ago, but the political 
parties made the right decision I think with a lot of help from 
us and from the European Union, reached an agreement to form a 
new government.
    Senator Murphy. Let me turn to the question of 
radicalization for a moment from a very widely read ``New York 
Times'' article from last year. That article made the case that 
Saudi Arabia and other conservative Gulf States, ``use an 
obscure labyrinth network of donations from charities, private 
individuals, and government ministries to fund extremist 
clerics and associations in the Balkans.'' Frequent visitors to 
the Balkans will tell you that just visually you can see a 
change in the type of Islam that is being practiced as more and 
more women, for instance, are walking around the streets 
wearing head covering.
    Do you share the concern about funds flowing from the Gulf 
into the Balkans? Do you share a concern about the story line 
that connects the Wahabi influence inside the region to the 
increased radicalization and flow of foreign fighters out of 
the region?
    Mr. Yee. Senator, yes, I am concerned by the presence of 
funding of representatives from countries in the Gulf who 
appear to be supporting their religious schools or actors with 
extremist ideologies. I think it is important for us to be 
vigilant to see what actual effects this achieves. As I 
mentioned, we have to monitor the level of foreign fighters, 
which currently is on the decline and at a low level, but with 
the number of actors, influences from countries that have a 
more radical or extremist ideology, we can expect that there 
will be some challenges.
    What is important I think on the positive side is that 
governments, whether it is Bosnia-Herzegovina or Kosovo or 
Albania, are aware of the risks that extremism places on them, 
on their societies, and they are working with us, with European 
partners as well, to try to mitigate these influences.
    I would mention that in Bosnia-Herzegovina where I was last 
week, many of the interlocutors I spoke to made the distinction 
between a rise in a kind of middle class tourism from Gulf 
States that visit Bosnia-Herzegovina. It is a country they feel 
comfortable in. They are investing in real estate. They come 
for vacation. They are not necessarily engaged in any kind of 
extremism. So there are, I think, some benign trends as well 
that we need to distinguish from the extremists.
    Senator Murphy. Just one last quick question on a specific 
issue. Should we be concerned--this is in Serbia--about the 
Russian-funded humanitarian base in Nis, Serbia? Is this a 
humanitarian base or is this a military base that the Russians 
now have inside Serbia?
    Mr. Yee. Senator Murphy, yes, I am concerned by this so-
called humanitarian center not so much what it is now but what 
it might become if it receives what Russia has been asking from 
Serbia, which is some kind of special status, protected 
diplomatic status, or other immunity.
    We do not believe that Russia has good intentions from our 
standpoint in our context which is trying to help the Balkans 
move closer to its goal of integration with Europe. We believe 
Russia is trying to prevent that path, progress on that path. 
So the creation of some kind of center in Nis, very close to 
the border with Kosovo where we still have over 600 U.S. 
troops--there is a large, over 4,000 NATO-led peacekeeping 
force--would not be a positive development, especially if 
individuals or the facility itself had special immunity. We 
believe it is important--we have shared this with the 
Government of Serbia--for Serbia to be in full control of its 
territory and facilities on its territory. If it allows Russia 
to create some kind of special center for espionage or other 
nefarious activities, it will lose control over part of its 
territory.
    Senator Murphy. I hope all of our friends in the region 
understand that it is in Russia's interest to see conflict in 
that region, to test alliances, to test NATO, to test America 
and Europe's commitment to that region. That ultimately is not 
in our interest or not in our partners' interest there, but it 
unfortunately is in Russia's interest.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Shaheen?
    Senator Shaheen. Thank you, Mr. Chairman, and thank you to 
you and Ranking Member Murphy for holding the hearing today. I 
am sorry I was not able to get to the first panel because of a 
conflict, but I very much appreciate your being here, Mr. Yee, 
and your personal commitment to the Western Balkans and 
everything that you have done to address what is happening 
there.
    I think you were probably very humble about your role in 
the recent political stalemate in Macedonia. I understand that 
you personally helped to bring about a peaceful resolution. And 
I wonder if you could give us a sense of how the crisis there 
was ultimately resolved and whether there are lessons for 
future situations in Macedonia that we can apply both there and 
other countries in the Western Balkans.
    Mr. Yee. Thank you for that question, Senator Shaheen, and 
your kind words.
    I think there are some lessons that we can draw from the 
Macedonia experience, and I think the lessons begin from the 
beginning of the political crisis in that country back over 2 
years ago, early 2015, when the revelations through leaked 
wiretaps came out of widespread apparent government corruption.
    I think one of the first lessons is one of the most serious 
and prevalent problems in the Western Balkans is lack of strong 
rule of law and systemic corruption. And that needs to be 
addressed because it prevents so many other things from 
developing.
    Secondly, I think the lesson that we can draw is how the 
crisis was resolved. It was done in very close partnership 
between the European Union and the United States in helping the 
parties reach an agreement on how to move forward. And this was 
the July 2015 Przino Accord which the four major parties agreed 
as a way forward of how to get out of the crisis, how to hold 
accountable the persons implicated in the wiretapping scandal, 
and also how to hold elections to create a new government. It 
was a cooperative approach with the international community, 
the stakeholders who had the most to lose or to gain, and the 
parties themselves, including the party that was in power 
during the scandal's beginning.
    I think the transatlantic link, the cooperation between 
both sides of the Atlantic was critical, and that is an 
important lesson I think that applies everywhere. Where the 
U.S. and Europe are together, we usually do pretty well in 
handling problems. When we are not together, we have problems.
    Thirdly, I think the lesson I think we can draw from the 
Macedonia experience is that accountability is something that 
is lacking, unfortunately, and needs to be more prominent in 
our approach and I think the approach of the Western Balkan 
governments. And that is to say that not enough times where 
people who are committing crimes, whether it is corruption or 
otherwise, or governments and leaders who are not meeting their 
commitments to the international community, are not held 
responsible.
    And I think this is very important, and this addresses 
somewhat our approach, a new approach, what I believe our new 
approach should be in the Balkans is in ensuring that if 
leaders are violating the law or they are not meeting their 
commitments, whether it is the Dayton Accords or the Ohrid 
Agreement in Macedonia, that there will be consequences. And I 
think we made that clear, both the Europeans and we did, that 
we would not accept crisis lasting forever, that if leaders 
were going to obstruct the agreement, whether the conclusion of 
the agreement or the implementation, they would be held 
accountable. And that was very important in reaching I think 
what ended up being a good outcome.
    And lastly, I think the lesson that we can draw from that 
experience is the importance of standards. We, as you probably 
know, Senator, were faced with a difficult situation last year 
when the Macedonians wanted to have elections. They organized 
elections for April of last year that did not, in the 
international community's view, meet the standards necessary to 
say they were credible. And there were many voices saying just 
let them have the elections anyway. It is important to have the 
elections. And the United States and Europe insisted that the 
conditions be sufficiently credible so that we could afterwards 
say they were credible elections.
    The government backed down and postponed the elections 
until June. And in June, again the same problem because of 
still a lack of transparency, problems with voters lists, other 
issues with the elections. Conditions were not sufficient, and 
the international community held its ground and said the 
standards are not there yet.
    So one of the lessons I think we have drawn is--and 
eventually, of course, in December we had elections that have 
produced now what is a government, which was formed again with 
the help of the European Union and the United States, that it 
was worth waiting until the conditions were met.
    And as we help countries to resolve their political 
difficulties, get closer to NATO or the European Union, it is 
important that we continue to hold them accountable to 
standards. It is important they make the reforms necessary, 
they solve the problems that we all know exist so that they 
will, in the end, be ready to integrate with the West.
    Senator Shaheen. Well, and one of the places where we are 
trying to hold people accountable is in the Republika Srpska 
where the Treasury Department imposed sanctions on Dodik for 
defying Bosnian law and obstructing the Dayton Accords.
    Can you talk about or do we know--I know that his 
leadership in the Republika Srpska has been an issue for a very 
long time in terms of trying sometimes to inflame ethnic 
tensions and talking about separating Srpska from the rest of 
Bosnia-Herzegovina. But are there others encouraging him at 
this point to be even more strident in his efforts to do that?
    Mr. Yee. Thank you, Senator.
    I think one of the major encouragers of the president of 
the Republika Srpska is Russia. I think Russia, along the lines 
I mentioned earlier about trying to prevent countries from 
integrating further with the West, with NATO, the European 
Union, would like to see a situation in Bosnia-Herzegovina in 
which the country cannot move forward. I do not know whether 
Russia would actually like to see Republika Srpska secede from 
Bosnia-Herzegovina because that would probably be a violent, 
disruptive, highly destabilizing event. But I think it is in 
Russia's interest to see the country stagnate and to remain 
more or less where it is right now, which is not moving very 
quickly towards the European Union or NATO.
    But the politicians have to take responsibility. They are 
being encouraged by some outside factors, but I think leaders 
of the Republika Srpska, of the federation in Bosnia-
Herzegovina do have it within their power, within their 
authority, within their capabilities to make the reforms 
necessary to get to the next stage of European Union 
membership. And I think one of the sad facts in Bosnia-
Herzegovina is that many of the leaders, not all of them, but 
many of the leaders do not actually want to join the European 
Union because that would mean, unfortunately, for them an end 
to their way of doing business, of staying in power. So, 
unfortunately, Bosnia-Herzegovina is a bit of a captured state 
in the hands of corrupt politicians who do not want to give up 
power. And what we will need to do I think, so the situation 
does not drag on forever, is to hold accountable the leadership 
to work even more closely with the European Union in applying 
standards, to ensure that the reforms are done, that we are 
providing sufficient assistance because that is essential, but 
that it is used in the right way.
    And one of the highlights, I would say, one of the positive 
developments we have seen in Bosnia-Herzegovina is that the 
International Monetary Fund, with our strong support, has 
insisted that the Bosnian-Herzegovinan leadership make certain 
reforms before the country receives the next tranche of 
assistance. So for the last several months now, Bosnia has not 
received the tranche of IMF assistance because it has not been 
able to agree on the reforms. This is how, I think, we can get 
results if we have conditionality, if we hold the leadership 
accountable.
    Senator Shaheen. Are you going to do another round, Mr. 
Chairman? Can I continue to ask a few more questions?
    Senator Johnson. Go ahead.
    Senator Shaheen. What role has Serbia played with the 
Republika Srpska in terms of what is currently happening there?
    Mr. Yee. Well, Prime Minister Vucic, who was recently 
elected to be President--Prime Minister Vucic did intervene and 
express both publicly and privately to the President of 
Republika Srpska that it was not in Serbia's interest. Serbia 
did not want to see a referendum, an illegal referendum, that 
Republika Srpska did hold last September. It was a referendum 
that was illegal because it was against a constitutional court 
ruling directly, blatantly in violation of the constitutional 
court. But the leadership of Republika Srpska went ahead 
anyway.
    So I think we had assistance support from Prime Minister 
Vucic to try to deter this act from occurring, and I believe it 
is based on interests. It is certainly not in Serbia's interest 
to see a breakaway state and a weak Bosnia-Herzegovina as 
Serbia is trying to join the European Union to attract tourism, 
to attract foreign investment.
    Senator Shaheen. But that kind of effort to help with what 
is going on there is helpful. Would you not agree? I remember 
being in Croatia as they were finishing their accession to the 
EU, and they were talking about ways in which they were trying 
to help some of their neighbors as they were looking at the 
challenges they were facing with accession efforts. And I got a 
very strong sense from others that I visited with at the time 
that that was very helpful to have countries in the region 
trying to support each other.
    Mr. Yee. Thank you, Senator.
    Absolutely the countries of the region and Serbia 
especially I would say, as the largest country in the region, 
need to play a constructive role in trying to mend fences with 
neighbors, resolve bilateral differences, whether it is over 
war crimes or with Kosovo, for example, resolving the status or 
the normalization, as we call it, between the two countries. It 
is vital that Serbia be firmly on the path towards European 
Union membership, closer integration with the West, looking 
forward not backwards. We understand it will always have ties, 
historical, cultural ties, with Russia, but that should not 
preclude it from moving in the direction of where already by 
nature of its trade, all of its commerce, foreign direct 
investment coming from Europe, not from Russia, a difference of 
an order of magnitude more is with Europe. Clearly Serbia's 
future is in Europe.
    It is in our interest for Serbia not only to integrate with 
Europe but also to help resolve problems with neighbors. 
Already with Montenegro now--it separated with Montenegro in 
2006 with Montenegro becoming independent. Croatia now is a 
member of the European Union, in a position to help Serbia we 
hope, as you mentioned, get closer to meeting the standards 
necessary. And in particular, I want to emphasize how important 
it is for Serbia to continue its work with Pristina, with 
Kosovo to find a way to normalize relations so the two 
countries can both move forward on their accession paths to the 
European Union.
    Senator Shaheen. Well, thank you very much. I certainly 
agree with that.
    And I agree with the views expressed by Senator Murphy that 
continued American leadership in the Western Balkans is very 
important and support for what the countries there are trying 
to do and that it is not beneficial in those efforts for us to 
be looking at a budget that would cut dramatically our support 
for those efforts.
    One of the pieces of legislation that I have proposed with 
Senator Wicker is establishing an enterprise fund in Bosnia to 
help leverage our funding to promote private investment. Do you 
think that this is an effort that is helpful as we look at how 
we can contribute to other economic activity in some of the 
countries in the region?
    Mr. Yee. Thank you, Senator, for asking that and also for 
supporting this initiative.
    We believe that Bosnia-Herzegovina desperately needs 
assistance in developing a stronger economy based on a private 
sector as opposed to the public sector. And any initiative, 
including the one that you mentioned, Senator, would be 
welcomed.
    What is particularly important is, as I mentioned earlier, 
that Bosnia-Herzegovina understand that regardless of how much 
assistance we are able to provide, whether EU or U.S., if they 
do not have the conditions, if there is not a functioning 
judiciary--the judiciary is highly flawed now--if there is not 
bureaucratic regulation that permits businesses to open or for 
businesses to function normally, if there is not support from 
the government for businesses to function normally, if there 
are 13 or 12 ministries for every important function in the 
state, it will be extremely difficult to attract enterprises.
    So we welcome this initiative, Senator, and at the same 
time, we urge you to continue interactions with leaders from 
Bosnia-Herzegovina and other countries of the region to remind 
them that if they build the conditions, our businesses will 
come.
    Senator Shaheen. Well, thank you very much again for your 
commitment, for your testimony today.
    And, Mr. Chair and Senator Murphy, thank you both for 
holding this hearing. I think it is very important and it is 
important for us to continue to stay engaged in the region.
    Senator Johnson. I agree, Senator Shaheen. And I appreciate 
you being so supportive of us holding this hearing.
    Secretary Yee, thank you for your testimony. Thank you for 
acknowledging at the onset the event that is beyond disturbing 
at the practice field today. I was remiss in not doing so. I 
opened up my hearing in Homeland Security earlier today 
acknowledging it, offering our prayers to Congressman Scalise 
and the aide and staff member, as well as the two members of 
the Capitol Police who are part of his security detail. It is 
probably not a bad way to close this thing out, an area of 
completely non-partisan support. What law enforcement 
officials, what government officials do for us is so incredibly 
important. So we thank you for their service. We thank the 
Capitol Police and the heroism that truly saved lives today. 
So, again, thank you so much for that.
    The hearing record will remain open for 48 hours until 
Friday, June 16th, at 6:00 p.m. for the submission of 
statements and questions for the record.
    This hearing is adjourned.


    [Whereupon, at 4:40 p.m., the hearing was adjourned.]

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