[Senate Hearing 116-540]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 116-540

                  THE SITUATION IN SOUTHEASTERN EUROPE

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   EMERGING THREATS AND CAPABILITIES

                                 OF THE

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 17, 2019

                               __________

         Printed for the use of the Committee on Armed Services
         
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]         


                 Available via: http://www.govinfo.gov
                 
                               __________
 
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-243 PDF                 WASHINGTON : 2022                     
          
-----------------------------------------------------------------------------------                  

                      COMMITTEE ON ARMED SERVICES
                      
JAMES M. INHOFE, Oklahoma, Chairman	JACK REED, Rhode Island
ROGER F. WICKER, Mississippi		JEANNE SHAHEEN, New Hampshire
DEB FISCHER, Nebraska			KIRSTEN E. GILLIBRAND, New York
TOM COTTON, Arkansas			RICHARD BLUMENTHAL, Connecticut
MIKE ROUNDS, South Dakota		MAZIE K. HIRONO, Hawaii
JONI ERNST, Iowa			TIM KAINE, Virginia
THOM TILLIS, North Carolina		ANGUS S. KING, Jr., Maine
DAN SULLIVAN, Alaska			MARTIN HEINRICH, New Mexico
DAVID PERDUE, Georgia			ELIZABETH WARREN, Massachusetts
KEVIN CRAMER, North Dakota		GARY C. PETERS, Michigan
MARTHA McSALLY, Arizona			JOE MANCHIN, West Virginia
RICK SCOTT, Florida			TAMMY DUCKWORTH, Illinois
MARSHA BLACKBURN, Tennessee		DOUG JONES, Alabama
JOSH HAWLEY, Missouri             
                                    
   		John Bonsell, Staff Director
	Elizabeth L. King, Minority Staff Director

_________________________________________________________________

           Subcommittee on Emerging Threats and Capabilities

    JONI ERNST, Iowa, Chairman
DEB FISCHER, Nebraska		GARY C. PETERS, Michigan
KEVIN CRAMER, North Dakota	JEANNE SHAHEEN, New Hampshire
MARSHA BLACKBURN, Tennessee	MAZIE K. HIRONO, Hawaii
JOSH HAWLEY, Missouri           MARTIN HEINRICH, New Mexico	     
                                   

                                  (ii)

                         C O N T E N T S

_________________________________________________________________

                           September 17, 2019

                                                                   Page

The Situation in Southeastern Europe.............................     1

                           Member Statements

Statement of Senator Joni Ernst..................................     1

Statement of Senator Gary C. Peters..............................     2

                           Witness Statements

Wilson, Mr. Damon M., Executive Vice President, Atlantic Council.     3

Shullman, Dr. David O., Senior Advisor, International Republican      8
  Institute.

Bugajski, Mr. Janusz, Senior Fellow, Center for European Policy      16
  Analysis.

Appendix A.......................................................    40

                                 (iii)


 
                  THE SITUATION IN SOUTHEASTERN EUROPE

                              ----------                              


                      TUESDAY, SEPTEMBER 17, 2019

                  United States Senate,    
                   Subcommittee on Emerging
                          Threats and Capabilities,
                               Committee on Armed Services,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:03 p.m. in 
room SR-222, Russell Senate Office Building, Senator Joni Ernst 
(chairman of the subcommittee) presiding.
    Subcommittee members present: Senators Ernst, Fischer, 
Peters, and Shaheen.

            OPENING STATEMENT OF SENATOR JONI ERNST

    Senator Ernst. The Subcommittee on Emerging Threats and 
Capabilities meets this afternoon to receive testimony on the 
situation in Southeastern Europe.
    I just want to mention to our witnesses as well, at 3:30 we 
do have a series of votes. Senator Peters and I will bounce 
back and forth accordingly. Thank you for your patience with 
us.
    I would like to welcome our witnesses today. We have Mr. 
Damon Wilson, Executive Vice President of the Atlantic Council; 
Dr. David Shullman, Senior Advisor at the International 
Republican Institute (IRI); and Mr. Janusz Bugajski, Senior 
Fellow at the Center for European Policy Analysis.
    The Western Balkans is a region that sits at the crossroads 
of history. The United States and the Department of Defense 
(DOD) must not forget or ignore this fact as we adapt our 
policy and strategy to a new era of strategic competition. The 
National Defense Strategy (NDS) warns that revisionist powers 
are increasing, ``efforts short of armed conflict by expanding 
coercion to new fronts, violating principles of sovereignty, 
exploiting ambiguity, and deliberately blurring the lines 
between civil and military goals.''
    That is exactly what Russia and China are doing in the 
Western Balkans.
    Russia's influence in the Western Balkans is historic and 
longstanding. As we saw in the 2016 coupe attempt in 
Montenegro, Vladimir Putin will use all of his tools and tricks 
to prevent Western Balkan countries from taking the path of 
Euro-Atlantic integration through membership in NATO [the North 
Atlantic Treaty Organization] and the EU [European Union].
    A more recent but equally troubling development in the 
region is the influence of China. Through the Belt and Road 
Initiative (BRI) and other efforts, Beijing is investing 
heavily in infrastructure and technology projects, fueling 
corruption, driving up debt, and corroding democracy. As we 
have seen elsewhere throughout the world, Chinese 
infrastructure investment could have serious security and 
military implications in the Western Balkans and the wider 
region.
    I look forward to hearing from our witnesses about Russia 
and China's objectives in the Western Balkans, their strategies 
for achieving them, and how the United States can effectively 
counter this malign influence and help our allies and partners 
to build resiliency.
    I am also looking forward to discussing regional security 
topics. Fortunately, there is good news to report. I am happy 
that the Senate will soon vote to ratify the accession protocol 
for North Macedonia to join NATO. However, with the name issue 
resolved and North Macedonia on its way to NATO membership, 
there may be a temptation to think these events were somehow 
inevitable. That would be a serious mistake. This took hard 
work and political courage on both sides, and it has provided a 
sign of hope that statesmanship can make the Western Balkans a 
safer and more prosperous region.
    That brings me to the next opportunity for statesmanship: 
the Kosovo-Serbia dialogue. I strongly support diplomatic 
efforts to normalize relations between Kosovo and Serbia, and I 
welcome the President's decision to appoint a special 
representative for the Western Balkans who will provide the 
focus needed to help Kosovo and Serbia embrace this opportunity 
for enduring peace and reconciliation. This will not be easy, 
but the time for serious and intensive effort is now.
    As the dialogue continues, the United States must maintain 
its commitment to NATO's Kosovo force which plays an 
indispensable role in protecting security and stability for the 
region. We must also continue to support the Kosovo security 
force's transition to a multi-ethnic army for the Republic of 
Kosovo that is interoperable with NATO.
    I am looking forward to discussing other topics as well, 
including Bosnia, the EU's role in the Western Balkans, and 
much more.
    Once again, thanks to our witnesses for making yourselves 
available to us today.
    With that, I will turn it over to our ranking member, 
Senator Peters.

              STATEMENT OF SENATOR GARY C. PETERS

    Senator Peters. Thank you, Chairman Ernst. Let me begin by 
thanking you for holding this very important hearing on the 
situation in Southeastern Europe.
    These are frontline states, including some NATO allies in 
the strategic competition with near-peer competitors, Russia 
and China. The security interest and political stability of 
this region needs to be better factored into our larger 
strategic calculations.
    Amongst the important trend in regional dynamics, we have 
seen the proliferation of both Russian and Chinese hybrid 
warfare and malign influence operations in the region. Russia 
seeks shorter-term gains to keep countries in the region from 
integrating with Western institutions such as NATO and the EU, 
and China is seeking to lock countries into a longer-term state 
capture road. They become beholden financially, leading to 
changes in the nation's decision-making as well.
    We have seen Russia deploy these tactics, including 
information warfare campaigns and cybersecurity attacks, across 
Southeastern Europe. A February report by the Carnegie 
Endowment for International Peace deemed Russia one of the 
major threats in these domains and concluded--and I quote from 
their report--``with a potential land swap being discussed by 
Kosovo and Serbia and NATO membership back on the horizon for 
the newly renamed Republic of North Macedonia, malign actors 
could use cyber tools and disinformation to try and to thwart 
this process.''
    China has also sought to capitalize on instability in the 
region. A recent report from the Center for Strategic and 
International Studies assessed that the, ``Western Balkans 
represent fertile soil characterized by economic stagnation, 
weak governance, corruption, and high unemployment rates on 
which the Belt and Road Initiative and Chinese state-owned 
companies can easily put down roots.''
    While the tactics may differ slightly, both the Russia and 
China models seek to take advantage of the fragility and 
division inside and between these countries. The hybrid warfare 
and malign influence operations have implications for our 
political integrity and national security of the region, as 
well as national security for the United States.
    During today's testimony, I hope the witnesses will address 
how China and Russia are taking advantage of the instability 
inside and between these countries and what tools the United 
States can leverage for building the capacity and resilience of 
these nations to better counter these malign tactics.
    Because these operations often occur below the threshold or 
do occur below the threshold of conventional military activity, 
I think it is important to explore how non-military tools, as 
well as military tools, can be effectively leveraged in the 
region.
    I am also interested in the role that NATO and other 
multinational institutions can play in helping to shape our 
relationships in the region and counter the destabilizing 
effects of both Russia and Chinese influence.
    I would also like to thank the witnesses once again for 
being here to share your expert insights in the region.
    Again, Madam Chair, thank you for highlighting this very 
important issue.
    Senator Ernst. Thanks again for being here today.
    We will start with opening statements. Mr. Wilson, we will 
go ahead and start with you. If you would please try and keep 
your comments to 5 minutes, and then we will open up for 
questions. Thank you.

    STATEMENT OF DAMON M. WILSON, EXECUTIVE VICE PRESIDENT, 
                        ATLANTIC COUNCIL

    Mr. Wilson. Thank you very much, Chairman Ernst, Ranking 
Member Peters, Senator Shaheen.
    The National Defense Strategy articulates today's era of 
great power competition clearly. That competition is playing 
out in the Western Balkans, as both of you have just suggested.
    In response, the United States should extend our alliances 
and attract new partners in the region as a key component of 
our strategy to compete effectively.
    Russia seeks to disrupt reforms and enlargement in 
Southeast Europe, complicating in turn the aspirations of 
nations further to Europe's east to chart their own course and 
pursue EU or NATO membership.
    China's approach is more subtle, but its ambitions may be 
more significant: to enter Europe through a region it views as 
the continent's soft underbelly in order to prevent Europe from 
siding with the United States in any emerging global 
confrontation.
    Since the end of the Balkan wars in the 1990s, the West's 
clarity that the region's future would be in the institutions 
of Europe served as an incentive for reform. Despite great 
progress over nearly 2 decades, the transatlantic community's 
conviction in enlargement has waned, commensurate with 
increased doubts within our own societies about our own 
institutions. This ambivalence has provided an opening.
    A revanchist Kremlin has acted to halt the democratic 
advance, to undermine our post-Cold War gains, and to sow 
mistrust within democratic societies. Russia began pursuing 
this strategy perhaps less focused on maintaining its limited 
influence in the region and more disrupting our influence by 
disrupting the process of NATO and EU integration. Russia found 
leverage in exploiting corruption and weak institutions. Moscow 
has used its energy prowess, deployed its intelligence 
services, waged disinformation campaigns, and manipulated the 
Orthodox Church. In Serbia, Moscow has coupled these coercive 
tools with its position on the UN [United Nations] Security 
Council and its exaggerated historic ties to exert influence.
    China is now among the top five markets for imports into 
most of the countries in the region, while Russia enjoys that 
status only in Serbia. China understood that its arrival in the 
region would face little resistance from small states hungry 
for investment and that a foothold would provide a bridgehead 
into Europe. China has secured trade routes and market share 
and diluted European solidarity on issues such as human rights 
in China and Taiwan.
    Ultimately, the Chinese Government aims to prevent Europe 
from joining the United States in any effort to check China's 
global influence. China has used easy money to gain influence 
rapidly, taking advantage of the poor investment climate to 
provide loans ensuring long-term dependency. Beijing has 
coupled its economic influence with soft power to shape a more 
favorable narrative towards China through opening Confucius 
Institutes, launching exchange programs, and deepening its 
media presence.
    The return of Russian influence and the arrival of Chinese 
influence against the backdrop of great power competition 
between a free world and autocratic, kleptocratic powers has 
meant that the Balkans is back in play.
    However, the United States in partnering with the European 
Union, has good options.
    First, we should be explicit that the National Defense 
Strategy's call for strengthening alliances and attracting new 
partners applies in the Western Balkans. Following through on 
this would bolster our comparative advantage over near-peer 
competitors. United States policy should be clear that as 
nations in the region reform and are able to meet relevant 
responsibilities, they will be welcomed into the transatlantic 
community and its institutions. We need to compete for 
influence and reach out to publics and engage at political 
levels throughout the region, including with those with whom we 
sometimes disagree.
    Second, our immediate task should be to secure the gains 
offered by the Prespa Agreement between Athens and Skopje. We 
welcome the United States Senate and other allied parliaments 
welcoming North Macedonia as NATO's 30th member as soon as 
possible. We should also encourage our European friends to open 
EU accession negotiations in October.
    Third and most important is achieving a comprehensive 
historic settlement between Kosovo and Serbia, which would 
include normalization and mutual recognition, paving the way 
for Serbia to advance its EU aspirations and allowing Kosovo to 
join the United Nations and develop as a sovereign nation. 
Without an agreement, Russia has leverage over Serbia and 
therefore the region.
    The absence of a deal fuels nationalist political debates 
delaying the development of democracy in Serbia and allowing 
Kosovo's leaders to avoid tough governance questions. A Serbia 
moving more decisively towards Europe will provide the 
guardrail we need for Bosnia.
    Prospects are not great. Nonetheless, a window of 
opportunity will open after Kosovo's elections next month until 
next summer prior to Serbian elections. U.S. leadership is 
critical to ensure progress, and we also welcome the 
appointment of Matt Palmer as a special representative.
    An often discussed land swap is not viable. However, the 
United States and EU should promote economic integration as a 
means to minimize the relevance of borders in the region. We 
should conclude a free trade area among Western Balkan states 
long before the EU common market arrives. The United States and 
the EU will have to expand the incentives, including offering a 
United States-Serbia strategic partnership, Partnership for 
Peace entrance for Kosovo, and increased financial assistance 
for both parties.
    Fourth, the EU and United States should partner with 
nations in the region to develop regional interconnections and 
transportation, telecommunications, and energy. This means 
creating the infrastructure of Europe in the region well before 
EU membership arrives. We should help our partners pursue smart 
development, including sometimes with Chinese financing, 
without sacrificing their national security.
    Finally, the United States and NATO allies should maintain 
a permanent security presence based in Kosovo, coupled with a 
growing security cooperation with Serbia. Our presence should 
be part of our broader deterrent posture throughout Europe, and 
it should also serve as a catalyst for regional capacity 
building forging confidence among the militaries of the region 
in each other. Ultimately United States support for historic 
reconciliation in Europe following the end of the Second World 
War and then the Cold War in which former adversaries became 
allies is the right blueprint to secure our own interests in 
the Western Balkans today.
    Thank you.
    [The prepared statement of Mr. Wilson follows:]

                 Prepared Statement by Damon M. Wilson
    Chairman Ernst, Ranking Member Peters, members of the committee, 
thank you for the opportunity to testify on the situation in Southeast 
Europe.
    The United States National Defense Strategy articulates today's era 
of great power competition clearly. That competition is playing out in 
the Western Balkans. In response, the United States should extend our 
alliances and attract new partners in this region as a key component of 
our strategy to protect our interests and compete effectively.
    Yet, in the past decade, the United States and the European Union 
(EU) became more ambivalent about our commitments in the Western 
Balkans. Moscow and Beijing, sensing an opening, have become more 
determined in their efforts to gain influence and leverage in the 
region.
    Russia seeks to disrupt reforms and enlargement in Southeast 
Europe, complicating in turn the aspirations of nations further in 
Europe's East to chart their own course and pursue EU or NATO 
membership.
    China's approach is more subtle, but its ambitions may be more 
significant: to enter Europe through a region it views as the 
continent's soft underbelly in order to prevent Europe from siding with 
the United States in any emerging global confrontation.
                                      ****
    U.S. policy in the region today should be informed by how our 
strategy has evolved.
    In the summer of 2001, the United States set the tone for our 
approach to enlargement when President Bush declared in Warsaw: ``We 
should not calculate how little we can get away with, but how much we 
can do to advance the cause of freedom.'' Two years later, EU leaders 
declared in Thessaloniki, Greece that, ``the future of the Balkans is 
within the European Union.''
    These bold statements provided a North Star for a region still 
reeling from the wars of the 1990s. Corruption remained endemic, rule 
of law fragile, and democratic institutions weak, but there was a sense 
of inevitable progress. The West's clarity served as incentive for 
reform.
    Indeed, less than a year after the Thessaloniki declaration, 
Slovenia joined both NATO and the EU. In 2009, Croatia and Albania 
joined NATO. It took another four years for Croatia to join the EU. In 
2015, Montenegro joined NATO. And now, the United States Senate is 
poised to welcome North Macedonia as our next ally.
    Despite this progress, the transatlantic community's conviction in 
enlargement has waned, commensurate with increased doubts within our 
own societies about our institutions. As leaders are grappling with 
divisions within NATO and differing visions for the future of the EU, 
they are skeptical about further enlargement.
    This ambivalence has provided an opening.

                                      ****
    A revanchist Kremlin has acted to halt the democratic advance, to 
undermine our post-Cold War gains, and to sow mistrust within our 
societies. Russia began pursuing a strategy less focused on maintaining 
its limited influence in the region, and more about disrupting our 
influence--by disrupting the process of NATO and EU integration. 
Whereas the integration process is designed to counter corruption, 
bolster rule of law, and build national capabilities, Russia found 
leverage in exploiting corruption and weak institutions. While Moscow's 
strategy is effectively limited to one of disruption, we have seen in 
places such as Ukraine and Georgia that, when Moscow senses success, 
its ambitions grow.
    Russia has used its energy prowess, deployed its intelligence 
services, waged disinformation campaigns, and manipulated the Orthodox 
Church to gain leverage over the region. In Serbia, Moscow has coupled 
these coercive tools with its position on the UN Security Council and 
its exaggerated historic ties to exert influence.
    More recently, China has emerged as a serious actor in the region. 
It is now among the top five markets for imports into most of the 
countries in the region, while Russia enjoys that status only in 
Serbia.
    China understood its arrival in the region would face little 
resistance from small states hungry for investment, and that a foothold 
would provide a bridgehead into Europe. China has extended its Belt and 
Road Initiative, secured trade routes and market share, and diluted 
European solidarity on issues important to Beijing such as human rights 
and Taiwan. Ultimately, the Chinese Government likely aims to prevent 
Europe from joining the United States in any effort to check China's 
global influence.
    China has used easy money to gain influence rapidly, taking 
advantage of the poor investment climate to provide loans ensuring 
long-term dependency. Beijing has coupled its economic influence with 
soft power to shape a more favorable narrative toward China through 
opening Confucius Institutes, launching large-scale exchange programs, 
and expanding its media presence.
    The return of Russian influence and the arrival of Chinese 
influence--against the backdrop of great power competition between a 
free world and autocratic, kleptocratic powers--has meant the Balkans 
is back in play.
    To be fair, we should not overestimate the challenge. Russia after 
all produces little of what the region imports, outside of energy. 
Moscow is notorious for failing to follow through on loans and 
investments.
    And the Kremlin's heavy-handed tactics in the region have created a 
backlash. While Russian disinformation remains potent, leaders in the 
region do not trust Russia's intentions.
    United States and now EU warnings of undue Chinese influence are 
beginning to be heard in the region. But while skepticism of Russia has 
grown, open attitudes toward China remain.
                                      ****
    The United States, partnering with the EU, has good options for 
advancing our own interests in a secure, democratic, and prosperous 
Southeast Europe.
    First, we should be explicit that the National Defense Strategy's 
call for strengthening alliances and attracting new partners applies in 
the Western Balkans. Following through on this would bolster our 
comparative advantage over near-peer competitors. To this end, the 
United States and the EU should return to first principles, 
articulating a vision of a Europe whole, free, and at peace that 
includes all of Southeast Europe. U.S. policy should be clear that as 
nations in the region reform and are able to meet relevant 
responsibilities, they will be welcomed into the transatlantic 
community and, if they desire, into its institutions.
    As part of this effort, we need to compete for influence. This 
means reaching out directly to publics and engaging at senior political 
levels throughout the region, including with those with whom we 
sometimes disagree. We do not want our disregard of local public 
perceptions or isolation of certain leaders to leave them with few 
options other than Moscow or Beijing.
    Second, our immediate task should be to secure the gains offered by 
the Prespa Agreement between Athens and Skopje. This means the United 
States Senate and other allied parliaments should welcome North 
Macedonia as NATO's 30th member as soon as possible. We should also 
encourage our European friends to follow through and open EU accession 
negotiations in October.
    Third, and perhaps most important, is achieving a comprehensive, 
historic settlement between Kosovo and Serbia. Such an agreement would 
include normalization and mutual recognition, paving the way for Serbia 
to advance its EU aspirations and allowing Kosovo to join the United 
Nations and develop as a sovereign nation. Progress in the Belgrade-
Pristina dialogue is the game-changer in the region.
    Without an agreement, Russia has leverage over Serbia and therefore 
the region. The absence of a deal fuels nationalist political debates, 
delaying the development of democracy in Serbia and allowing Kosovo's 
leaders to avoid tough governance questions. In contrast, a deal would 
allow leaders to focus on how better to unlock the potential of their 
citizens. Furthermore, a Serbia moving more decisively toward Europe 
will provide the guardrail we need for Bosnia-Herzegovina.
    Prospects are not great. Kosovo is in the midst of elections that 
could produce a government skeptical of a deal. Nonetheless, a window 
of opportunity will open from this fall until next summer, prior to 
Serbian parliamentary elections. With EU senior leadership positions 
changing this fall, United States leadership is critical to ensure 
progress. I therefore welcome the appointment of a seasoned diplomat, 
Matt Palmer, as United States Special Representative for the Western 
Balkans.
    To convince both sides to return to the negotiations, United States 
and EU diplomacy should advance reciprocal steps to achieve a status 
quo ante: Kosovo would lift its 100 percent tariffs while Belgrade 
would cease its derecognition campaign during the negotiations.
    An often-discussed significant land swap is not viable, even if 
there will need to be a modest border demarcation. However, the United 
States and EU should promote economic integration as a means to 
minimize the relevance of borders in the region. We should aim to agree 
a free trade area among Western Balkans states long before the EU 
common market arrives.
    At the same time, the United States and the EU will have to expand 
the incentives. For Serbia, this means the United States should offer 
the prospect of a United States-Serbia Strategic Partnership to include 
significant new security cooperation, an enhanced political dialogue, a 
concerted strategy to promote investment and trade, and expanded 
people-to-people ties. For Kosovo, this means the United States should 
support its entrance into the Partnership for Peace and becoming a NATO 
and EU aspirant.
    Furthermore, the EU should be prepared to invest billions into 
supporting a comprehensive agreement, and I would suggest that the 
United States Congress should consider committing several hundred 
million dollars to bolster such an historic deal.
    Fourth, the EU and United States should partner with nations in the 
region to develop regional interconnections in transportation, 
telecommunications, and energy. This means creating the infrastructure 
of Europe in the region well before EU membership becomes viable. We 
should seek synergies between the Three Seas Initiative and the Berlin 
Process to accelerate this goal. We should help our partners pursue 
smart economic development, including with Chinese financing, without 
sacrificing their national security.
    Finally, to secure these gains for the future and to hedge against 
Russian efforts to disrupt our interests or Chinese interests to 
displace them, the United States and our NATO allies should maintain a 
permanent security presence in the region, based in Kosovo, coupled 
with growing security cooperation with Serbia. Our presence should be 
part of our broader deterrent force posture throughout Europe. It 
should also serve as a catalyst for regional capacity-building, forging 
confidence among the militaries of the region in each other.
    Ultimately, United States support for historic reconciliation in 
Europe, following the end of the Second World War and then the Cold 
War, in which former adversaries became allies, is the right long-term 
blueprint for security and democratic and economic development in the 
Western Balkans.
    In an era of great power competition, the United States should 
bolster and expand its alliances as a strategic comparative advantage 
over our adversaries. In the Western Balkans, a little effort can reap 
outsized dividends.

                                      ****
    Damon Wilson is the executive vice president of the Atlantic 
Council, home to the #BalkansForward Initiative. The views expressed in 
this testimony are his own.

    Senator Ernst. Thank you.
    Dr. Shullman?

      STATEMENT OF DR. DAVID O. SHULLMAN, SENIOR ADVISOR, 
               INTERNATIONAL REPUBLICAN INSTITUTE

    Dr. Shullman. Thank you.
    Chairman Ernst, Ranking Member Peters, Senator Shaheen, 
thank you for the opportunity to testify today on this critical 
topic.
    China's primary goals in the Western Balkans are economic, 
and Chinese investment through the Belt and Road Initiative, 
China's massive infrastructure and connectivity program, has 
rapidly increased Beijing's economic influence in the region.
    Given this economic focus, China benefits from regional 
stability and, unlike Russia, does not seek to seed internal 
division, undermine accession to the EU, or reduce confidence 
in democratic systems.
    That said, it is also true that as a result of China's 
economic inroads in the Western Balkans, it is amassing 
political leverage, bolstering illiberal leaders, and 
threatening to undermine democratic development and pull 
countries away from the United States and the EU.
    To explain this seeming disconnect, I will focus my remarks 
on China's means of economic influence in the region and their 
effects.
    The Western Balkans is of strategic economic importance to 
China for several reasons. First, China sees the region as a 
conduit to the broader European market and, to that end, is 
financing infrastructure projects such as its high speed 
railway connecting Belgrade with Budapest, which is currently 
stalled. Individual Chinese state-owned enterprises also view 
the Western Balkans as countries which offer opportunities for 
high return investment, given that they face slow economic 
growth, and have poor governance, transparency, and labor 
regulations. Belt and Road projects in the non-EU countries of 
the Western Balkans are not, of course, bound by EU standards, 
making them attractive for these state-owned enterprises.
    The differences in the EU and the Chinese approaches also 
explain the appeal of Chinese loans to Western Balkan 
Governments. Not only does China make no demands regarding 
transparency or reforms, but Chinese funding, unlike that from 
the EU, is dispersed quickly.
    The slow path to EU accession for some Western Balkan 
countries also plays into China's hands. As one local Serbian 
businessman puts it, the EU is telling Serbia you will have 
something tomorrow, but today you must starve while the Chinese 
come with the money right away.
    China's funding also can conveniently correlate with local 
political cycles. The ability to secure financing quickly at 
election times allows local politicians to promote themselves 
to constituents as enablers of Chinese capital inflows.
    Now, there are some undeniable positives for Western Balkan 
countries from Chinese investment. For example, Chinese firms' 
takeovers of a failing steel mill and the only copper mining 
complex in Serbia arguably saved core elements of Serbia's 
industrial capacity from collapse.
    But China's investment and financing practices have 
significant drawbacks for recipients. First, opacity is 
inherent in the deals, and this is by design. Most of the 
commercial contracts with Chinese entities are not available to 
the public. Thus, there are no opportunities for screening or 
for comment. It is also likely that Chinese policy banks insist 
upon an opaque bidding process for projects and the ultimate 
allocation of projects to Chinese state-owned enterprises, as 
they do elsewhere all around the world. This lack of 
transparency creates the potential for massive corruption, 
inflated costs, and for Chinese lending to create unsustainable 
debt burdens, as has occurred in Montenegro.
    Through its economic deals in the region, China is gaining 
political leverage in the non-EU countries in the 16 Plus 1 
mechanism, or now the 17 Plus 1 initiated in 2012 to facilitate 
Chinese engagement with Central and Eastern European countries.
    China is also benefiting from and exacerbating 
authoritarian trends in the region. The increasingly liberal 
government in Serbia, for example, welcomes Chinese investment 
as a boon to its political fortunes and uses its control over 
the media to ensure a positive narrative about China. China, in 
turn, is facilitating the country's authoritarian tilt by 
bolstering the fortunes of leaders who use Chinese financing to 
promote themselves as having delivered needed infrastructure 
regardless of the secret financing terms involved.
    The role of Chinese telecom and tech firms in the Serbian 
market and in the country's surveillance ecosystem presents 
another concern. The Serbian Interior Ministry has contracted 
with Huawei to provide cameras and facial recognition software 
for its Safe City project, with the planned installment of 
1,000 cameras in 800 locations just in Belgrade. Such a 
comprehensive facial recognition database has the potential to 
deter Serbians from protesting their own government.
    China's growing security ties in Serbia are also 
concerning. Just last month, it was announced that officers 
from China would join police patrols in certain Serbian cities. 
The agreement, of course, is not public, so it is unclear 
exactly what it entails, but such cooperation could import 
authoritarian tactics used in China against protestors, 
dissidents, and minorities. News this month that China will 
sell armed drones to Serbia indicates the countries' security 
ties will continue to grow.
    How can the U.S. respond?
    China will not change its approach unless recipient 
countries demand it. Washington, therefore, should focus on 
bolstering Western Balkan countries' resilience to the 
potential malign effects of China's growing role. This can be 
accomplished through two complementary efforts.
    First, the United States, in partnership with European and 
multilateral institutions, should offer Western Balkan nations 
both more easily attainable alternatives to Chinese financing 
and investment and technical assistance on project negotiation 
and evaluation.
    Second, the United States must dedicate resources to 
bolstering the capacity of government officials, civil society, 
political parties, and independent media. China offers better 
deals when recipient countries have better governance. In the 
Western Balkans in particular, local partners need greater 
knowledge about the Chinese Communist Party and the ways it 
exerts influence. Above all, transparency is critical, 
permitting broader public debate about how to deal with China 
in a way that benefits a country and protects its interests.
    For our part, the International Republican Institute is 
already working directly with partners in Serbia to shine a 
spotlight on China's influence efforts and give them the tools 
to protect their democracy, and IRI is set to expand such 
efforts across the Western Balkans over the coming year.
    Thank you.
    [The prepared statement of Dr. Shullman follows:]

                  Prepared Statement by David Shullman
                              introduction
    Chairman Ernst, Ranking Member Peters, distinguished members of 
this subcommittee, thank you for the opportunity to testify today. 
Thank you, also, for organizing a hearing on this topic critical to 
United States interests and the future of democratic governance in the 
Western Balkans.
           china's means of influence in developing countries
    China's economic influence is growing in the Western Balkans, 
saddling some countries with unsustainable debt and exacerbating 
governance problems. As a result, the Chinese Communist Party (CCP) is 
amassing potential political leverage and bolstering China-friendly 
illiberal leaders, threatening to undermine democratic development and 
pulling countries away from the United States and the European Union 
(EU).
    These effects are largely consistent with China's tactics and their 
effects in developing countries around the world. I therefore would 
like to begin my testimony today with a description of China's 
expanding interests and influence efforts across the developing world, 
and then turn to their application in the Western Balkans in 
particular.
    China for decades has gradually increased engagement with countries 
throughout the developing world, seeking critical resource inputs and 
new markets for its rapidly growing economy as well as portraying 
itself as a leader of developing country interests on the global stage. 
However, today, we see China pursuing an unprecedented level of 
influence in developing countries, with decidedly mixed results for the 
recipients of China's attention.
    This uptick can be attributed to China's desire to advance an 
expanding set of interests in the developing world. First, China is 
trading and investing more in the developing world than ever before. 
The overseas component of the Belt and Road Initiative (BRI), China's 
ambitious infrastructure and connectivity program, has significantly 
expanded Beijing's investment footprint abroad despite its small size 
relative to China's domestic economy.
    There is an expectation of economic benefit for Chinese companies--
typically state-owned enterprises (SOEs)--and their workers engaging in 
debt-financed BRI projects in numerous developing countries.
    The CCP also seeks to legitimize its autocratic system of 
governance and development. Chinese leaders recognize that Beijing must 
expand its normative power abroad to achieve China's rise and 
rejuvenation as a great power. They also recognize that to achieve 
global legitimacy as a responsible great power without democratizing--a 
prospect not welcomed by the developed West--they must first popularize 
China's model in the developing world. \1\
---------------------------------------------------------------------------
    \1\ At the 19th Party Congress in October 2017, Chinese President 
Xi Jinping left no doubt that he regards China's illiberal concepts of 
political and economic order as superior to so-called Western models, 
and that we are ``in an era that sees China moving closer to center 
stage and making greater contributions to mankind.'' See Xinhua. ``Full 
Text of Xi Jinping's Report at 19th CPC National Congress.'' 
ChinaDaily.com.cn, updated 4 Nov. 2017, www.chinadaily.com.cn/china/
19thcpcnationalcongress/2017-11/04/content--34115212.htm.
---------------------------------------------------------------------------
    Given these growing interests, it is not surprising that the CCP is 
using multiple means of influence to advance them, in the process 
undermining governance, prosperity and open discourse in a way that 
encourages democratic backsliding in many countries.
    I will focus my remarks on China's means of influence in two key 
domains, the economic and the informational, and their impact on 
democracies. I will then describe how China is using these tactics in 
the Western Balkans in particular, examining the case of Serbia, and 
conclude with some thoughts on how the United States can best counter 
such influence.
Economic Influence
    Much of China's growing global influence can be ascribed to its 
leverage as a $14 trillion economy and the world's largest commodity 
importer. Beijing is expanding trade and investment with countries 
hungry for both. However, there are malign aspects to China's growing 
economic engagement that render its influence harmful for many 
developing countries. In most every case China's economic investments 
involve opaque deals that ensure China lends and is repaid at a premium 
to hire Chinese companies and workers for infrastructure and energy 
projects. BRI projects frequently saddle countries with debt and few 
alternatives to dependence on China to continue financing those debts.
    This lack of transparency sets a foundation for rampant corruption. 
Corruption and elite capture is not a ``bug'' of BRI but an inherent 
feature of the initiative, with the goal of ensuring subsidized Chinese 
SOEs undercut their competition and secure contracts with highly 
favorable terms to carry out projects financed by Chinese policy banks. 
The CCP cultivates ``friends'' among elites in many countries who are 
only too willing to sign up to opaque investment deals that undermine 
their country's long-term prosperity in return for personal enrichment.
Influence over Information
    Such elite capture through corruption also facilitates the CCP's 
ability to exert influence in a second area, the information space. 
Beijing's foreign propaganda and censorship efforts have traditionally 
focused on promoting China's political and economic system while 
suppressing coverage of its domestic human rights abuses and religious 
persecution. But the Chinese Government and its proxies increasingly 
are attempting to tilt other countries' internal debates about their 
relationships with China, including by suppressing criticism of Chinese 
activities within their borders. Many governments, including our own, 
engage in vigorous public diplomacy campaigns, but the CCP's methods 
are frequently covert, coercive and harmful to democratic institutions.
    China's manipulation of the information environment in countries 
around the world, which the National Endowment for Democracy has termed 
``sharp power,'' is critical to the Party's ability to protect its 
growing investments and legitimize China's authoritarian development 
model abroad. Ensuring the presentation of a positive ``China story,'' 
as Chinese President Xi Jinping has put it, helps to smooth the path 
for investments that benefit China's economy. \2\
---------------------------------------------------------------------------
    \2\ Xinhua. ``President Xi Urges New Media Outlet to `Tell China 
Stories Well.' '' CCTV.com, 31 Dec. 2016, english.cctv.com/2016/12/31/
ARTIdbvXHYpQnQ35nWBGttZg161231.shtml.
---------------------------------------------------------------------------
    The CCP recognizes that a more positive perception of China heads 
off criticism of Chinese investments and corruption of a country's 
elites. Through media cooperation agreements with BRI countries, 
Beijing advances information sharing intended to influence foreign 
journalists covering the BRI, including through conferences sponsored 
by the state-affiliated All-China Journalists Association.
    The CCP has a large and growing set of tools it uses to advance its 
narrative abroad and to quiet critics, including pervasive but overt 
official propaganda, investment in foreign media outlets, and funding 
of research and academic institutions. The CCP's more aggressive use of 
so-called ``united front work'' abroad includes more covert efforts to 
cultivate China-friendly elites and squelch anti-China narratives by 
``enemy forces'' abroad. These efforts are conducted through numerous 
Party bodies, including the increasingly powerful United Front Work 
Department (UFWD).
                 negative consequences for democracies
    The CCP's use of these different means of influence simultaneously 
has a pernicious effect on developing democracies. Beijing's 
manipulation of the information space and discourse ensures the 
neutering of institutions such as an independent media and civil 
society which, in a healthy democracy, would expose the negative 
consequences for a country of China's opaque deal making and corrupt 
practices.
    Beijing's influence plays a clear role in encouraging democratic 
backsliding in certain Western Balkan countries, most notably Serbia. 
\3\ China's efforts bolster the fortunes of illiberal actors eager to 
take credit for delivering Chinese investment in much-needed 
infrastructure projects, no matter the long-term costs of deals signed 
behind closed doors. The Party also offers increasingly sophisticated 
surveillance and monitoring technology to governments looking to 
control their populations and is increasing cooperation on domestic 
policing and security. \4\ Taken together, these activities lend 
credence to illiberal actors' claims that they can deliver economic 
development, security and stability through increasingly authoritarian 
policies.
---------------------------------------------------------------------------
    \3\ Freedom on the Net 2018: The Rise of Digital Authoritarianism. 
Freedom House, 2018, freedomhouse.org/report/freedom-net/freedom-net-
2018/rise-digital-authoritarianism#fotn18-section-china-remakes-the-
world-in-its-techno-dystopian-image.
    \4\ This relates to the more fundamental question of whether and 
how China is now proactively exporting authoritarianism to achieve 
acceptance of the CCP's model of governance. See Friedberg, Alan F. The 
Authoritarian Challenge: China, Russia and the Threat to the Liberal 
International Order. The Sasakawa Peace Foundation, Aug. 2017, 
www.spf.org/jpus-j/img/investigation/The--Authoritarian--Challenge.pdf; 
Brands, Hal. ``China's Master Plan: Exporting an Ideology.'' Bloomberg, 
11 June 2018, www.bloomberg.com/opinion/articles/2018-06-11/china-s-
master-plan-exporting-an-ideology.
---------------------------------------------------------------------------
    China's influence tactics and their effects are remarkably diverse 
across different countries, even those within the same region. For 
example, Chinese financing and SOE practices are less consistent with 
accepted international standards in countries with looser regulation 
practices, public procurement rules and labor regulations. 
Understanding the nature of CCP influence in a certain environment is 
therefore critical to understanding the threat to a country and the 
ways in which it can be mitigated. To that end, I will now offer a case 
study on China's particular approach in Serbia.
              case study: ccp influence efforts in serbia
    Chinese leaders view the Western Balkans as a key door to Europe's 
broader market, and Serbia as the geographic and strategic heart of 
this critical region. Analysis of China's approach to influence in 
Serbia is therefore uniquely instructive. \5\ China is investing 
rapidly in Serbia, leveraging a close relationship with Serbia's 
increasingly illiberal leadership. \6\
---------------------------------------------------------------------------
    \5\ Research on China's influence in Serbia was led by Vuk 
Vuksanovic, a PhD researcher in international relations at the London 
School of Economics, and is included in the International Republican 
Institute's recent report on China's malign influence and the corrosion 
of democracies around the world. See China's Malign Influence and the 
Corrosion of Democracy: An Assessment of Chinese Interference in 
Thirteen Key Countries, edited by David Shullman, International 
Republican Institute, 2019, www.iri.org/sites/default/files/chinese--
malign--influence--report.pdf.
    \6\ Serbia's minister of infrastructure recently lauded the 
country's receipt of $5.6 billion in new investment financing from 
China while promising a new influx of funds. See Vasovic, Aleksandar. 
``Serbia Wants Billions in Foreign Loans to Invest in Infrastructure.'' 
Reuters, 12 July 2019, www.reuters.com/article/us-serbia-investment-
china/serbia-wants-billions-in-foreign-loans-to-invest-in-
infrastructure-minister-idUSKCN1U71VG.
---------------------------------------------------------------------------
    The CCP leadership views the current governance in Serbia as 
presenting an ideal opportunity to enhance China's influence. The 
Serbian Government, led by President Aleksandar Vucic, welcomes Chinese 
investment as a boon to its political fortunes and controls the media 
narrative about the bilateral relationship. Vucic and his Serbian 
Progressive Party (SNS) increasingly control government agencies, the 
national security apparatus and the media.
    The CCP also benefits from the fact that it, and China generally, 
remains little understood in Serbia. The public maintains a mostly 
positive view of China, based on Chinese investment in Serbia's 
development and a lack of knowledge about the opaque terms of such 
deals. The public also is largely uninformed about the CCP and how it 
exerts influence abroad.
Rapidly Increasing Economic Influence
    China's economic engagement with Serbia has grown steadily in 
response to Serbia's dire need for financing and infrastructure 
improvement and China's drive for strategic investments in the Balkans. 
China's engagement with Serbia was limited before 2009, when the two 
countries signed a strategic partnership agreement. The relationship 
transformed beginning in the mid-2010s, when Serbia began receiving 
significant Chinese financing for infrastructure projects. The Export-
Import Bank of China financed the construction of the Pupin Bridge 
across the Danube River in Belgrade.
    China's BRI ushered in a major influx of Chinese financing in 
Serbia, particularly following Xi's historic visit to Serbia in June 
2016. Chinese companies now play a significant role in Serbia's 
industrial sector, having taken over or acquired significant stakes in 
major steel and copper complexes. \7\ One opposition politician has 
claimed that ``the entire Serbian mining industry was sold to the 
Chinese for free.'' \8\
---------------------------------------------------------------------------
    \7\ China's Hesteel Group took over a steel mill based in the city 
of Smederevo that was previously owned by U.S. Steel. In August 2018, 
the Chinese mining company Zijin Mining acquired a 63 percent stake in 
debt-ridden RTB Bor, the only copper mining complex in Serbia. See 
Sekularac, Ivana. ``China's Xi Sees Serbia as Milestone on New `Silk 
Road.' '' Reuters, 19 June 2018, www.reuters.com/article/us-serbia-
china/chinas-xi-sees-serbia-as-milestone-on-new-silk-road-
idUSKCN0Z50DV; Vasovic, Aleksandar. ``UPDATE 1--China's Zijin Mining to 
Take Stake in Serbian Copper Complex.'' Reuters, 31 Aug. 2018, 
www.reuters.com/article/serbia-copper/update-1-chinas-zijin-mining-to-
take-stake-in-serbian-copper-complex-idUSL8N1VM2K6.
    \8\ China's Malign Influence and the Corrosion of Democracy.
---------------------------------------------------------------------------
    In September 2018, Vucic met Xi at the World Economic Forum in 
Beijing (their fifth meeting in as many years) to sign commercial 
agreements worth $3 billion, including a deal for the purchase of 
Chinese military drones by Serbia. \9\ Chinese Government and SOE 
engagement with Serbia has raised hopes of improved local 
infrastructure and employment opportunities. However, the opacity of 
these deals has raised concerns among private enterprise, civil society 
and others that Chinese lending could create unmanageable debt loads 
and future Chinese leverage over the country.
---------------------------------------------------------------------------
    \9\ Zivanovic, Maya. ``$3bn Economic Agreements Boost China's Role 
in Serbia.'' BIRN, Balkan Insight, 18 Sept. 2018, balkaninsight.com/
2018/09/18/new-agreements-boost-china-role-in-serbia-09-18-2018/.
---------------------------------------------------------------------------
    Most of the commercial contracts with Chinese entities are not 
available to the public, with little opportunity for public review and 
comment. \10\ According to a local businessman who has worked on 
projects involving Chinese SOEs, Chinese officials in some cases insist 
upon a nontransparent bidding process for projects and the ultimate 
allocation of projects to Chinese SOEs. Unlike in many other BRI 
countries, Chinese SOEs in Serbia have not insisted on using only 
construction material imported from China, probably due in part to 
Serbian Government conditions. \11\ However, Chinese SOEs have employed 
predominantly Chinese machinery and workers, reducing the benefits of 
projects to local employment and the economy.
---------------------------------------------------------------------------
    \10\ Vladisavljev, Stefan. ``Oversight and Control of Agreements, 
between China and Serbia.'' BFPE, 6 Nov. 2018, en.bfpe.org/oversight-
and-control-of-agreements-between-china-and-serbia/.
    \11\ For instance, the contract for the construction of the Pupin 
Bridge mandated that 45 percent of the construction material originate 
from Serbia. See www.beograd.rs/index.php 
?kat=beoinfo⟨=cir⊂=1363983%3f (in Serbian).
---------------------------------------------------------------------------
    The most prominent Chinese project in Serbia is the high-speed 
railway connecting Belgrade with Budapest, Hungary, inked in 2013. 
However, little progress has been made on implementation, raising 
questions about the project's utility and feasibility. The railway 
nevertheless has been touted as ``the signature project of the 16+1 
framework,'' a grouping established by China to facilitate engagement 
between itself and Central and Eastern European countries, including 
Serbia, and increase its influence across the region. \12\
---------------------------------------------------------------------------
    \12\ Ferchen, Matt. ``China's Troubled Hungary-Serbia Railway 
Project: A Case Study.'' Carnegie-Tsinghua Center for Global Policy, 12 
Dec. 2018, carnegietsinghua.org/2018/12/12/china-s-troubled-hungary-
serbia-railway-project-case-study-pub-78100.
---------------------------------------------------------------------------
    Serbian demand for infrastructure financing from China is 
reinforced by delays in Serbia's progress toward EU accession. China 
also gains relative advantage in Serbia because Chinese funding, unlike 
that from the EU, is disbursed quickly. As one local businessman with a 
history of engagement with Chinese SOEs argued, Serbia's economic 
urgency plays into China's hands: ``The EU is telling Serbia you will 
have something tomorrow, but today you must starve, while the Chinese 
come with the money right away.'' \13\
---------------------------------------------------------------------------
    \13\ China's Malign Influence and the Corrosion of Democracy.
---------------------------------------------------------------------------
    China's ability to ensure such funding correlates with Serbian 
political cycles offers opportunities for corruption and enhances 
China's influence with elites. \14\ Serbian politicians able to secure 
Chinese financing around election time can promote themselves to their 
constituents as enablers of Chinese capital inflows. Many of those same 
politicians and elites find the lack of transparency in Chinese funding 
appealing, creating rent-seeking opportunities.
---------------------------------------------------------------------------
    \14\ Makocki, Michal. ``China in the Balkans: The Battle of 
Principles.'' European Council on Foreign Relations, 6 July 2017, 
www.ecfr.eu/article/commentary--china--in--the--balkans--the--battle--
of--principles--7210.
---------------------------------------------------------------------------
Thriving in a Controlled Media Space
    The CCP goes to great lengths in many countries to shape the 
information space to ensure a positive view of China's engagement. In 
today's Vucic-led Serbia, however, China has not needed to aggressively 
influence debate about its impact on Serbia. This is because China's 
activities are perceived as largely benign by the Serbian public, and 
the government--led by Vucic, who has called the friendship with China 
one ``made of steel''--ensures this positive view of China through its 
control over the information and media sphere. \15\
---------------------------------------------------------------------------
    \15\ ``Vucic: Serbia-China Friendship Made of Steel.'' B92, 12 Mar. 
2018, www.b92.net/eng/news/politics.php?yyyy=2018&mm=03ⅆ=12&nav--
id=103685.
---------------------------------------------------------------------------
    Government-friendly media does not report news that critically 
examines China's role in the country. The Serbian media, echoing the 
country's political leadership, typically (and incorrectly) presents 
Chinese financing as ``gifts,'' not loans. Consequently, China can rest 
assured that under the Vucic administration relatively little critical 
information on Chinese activities will surface in outlets that 
influence Serbian public opinion. \16\
---------------------------------------------------------------------------
    \16\ Those programs that do appear on Serbian media concerning 
China are typically overwhelmingly positive. In 2017, the national 
broadcaster Radio Television of Serbia (RTS) ran a series of Chinese 
Government-produced television documentaries on China, including one on 
the Silk Road. See www.rts.rs/page/rts/sr/rtspredstavlja/story/267/
najnovije/2919597/najbolji-kineski-dokumentarci---utorkom-na-
drugom.html (in Serbian).
---------------------------------------------------------------------------
    The CCP has sought to further enhance this positive view by 
cultivating ties with cultural and political elites (including the 
political opposition) and establishing institutions that could help 
shape the narrative about China in the future. China supports the 
Center for International Relations and Sustainable Development (CIRSD), 
a think tank led by a former Serbian foreign minister and opposition 
politician Vuk Jeremic, which holds events and releases publications 
about the benefits of BRI and the expanding China-Serbia relationship. 
CIRSD is partly funded through CEFC China Energy, a CCP-linked 
conglomerate marred in corruption scandals. \17\
---------------------------------------------------------------------------
    \17\ Briefing Paper IV: External Influence in the Cultural & 
Religious Sphere. Western Balkans at the Crossroads: Assessing Non-
Democratic External Influence Activities, www.balkan crossroads.com/bp-
iv-culture-religion; Zhang, Shu and Chen Aizhu. ``China CEFC Founder Ye 
Named in Corruption Case--State Media.'' Reuters, 12 Oct. 2018, 
www.reuters.com/article/china-corruption-cefc/chinas-cefc-founder-ye-
named-in-corruption-case-state-media-idUSL4N1WS26I.
---------------------------------------------------------------------------
    Additionally, Serbia hosts two Chinese Government-sponsored 
Confucius Institutes promoting Chinese culture--and official government 
viewpoints--at prominent universities in Serbia, and China is investing 
45 million euros to build a cultural center on the site of the Chinese 
Embassy building destroyed during the NATO air campaign in 1999. \18\
---------------------------------------------------------------------------
    \18\ Xinhua News Agency. ``Confucius Institute in Belgrade, Serbia, 
Celebrates Its 10th Anniversary of Establishment.'' Hanban, 25 Oct. 
2016, english.hanban.org/article/2016-10/25/content--661564.htm.
---------------------------------------------------------------------------
Benefiting from--and Exacerbating--Authoritarian Trends
    The authoritarian tilt of Serbian politics, characterized by 
Vucic's growing domination of the political scene and its institutions 
since 2012, has facilitated China's integration into the Serbian 
economic and political landscape. Vucic and SNS Government control 
allows for one point of focus for Chinese SOEs' and government lobbying 
resources. Serbia's ``soft autocracy'' provides few roadblocks to 
Chinese influence, with very few institutional or societal checks on 
China's influence or insistence on greater transparency in negotiations 
with Serbian officials. The lack of Serbian expertise in both academic 
and policy circles on China and the CCP's means of influence ensure 
limited public debate about the risks of opaque Chinese investment 
deals and growing coziness with the ruling government.
    China's influence, in turn, has facilitated Serbia's tilt toward 
soft authoritarianism by bolstering the fortunes of illiberal Serbian 
leaders who use the influx of Chinese investment to promote themselves 
domestically as those who can deliver needed infrastructure 
development.
    The growing role of Chinese technology firms in Serbia, 
particularly in the country's surveillance ecosystem, presents another 
avenue of potential CCP influence in the country and a means of 
bolstering government control over the Serbian populace. Chinese 
telecommunications giant Huawei has a cooperation contract with Serbian 
telecommunications company Telekom Srbija, and the Serbian Government 
has signed a contract that would allow Huawei equipment to be used for 
traffic surveillance. \19\
---------------------------------------------------------------------------
    \19\ ``Serbia and China Sign Several Important Documents.'' B92, 18 
Sept. 2018, www.b92.net/eng/news/
business.php?yyyy=2018&mm=09ⅆ=18&nav--id=105087.
---------------------------------------------------------------------------
    The Serbian Interior Ministry has contracted with Huawei to provide 
cameras and facial recognition software for its ``Safe City'' project 
and announced the planned installment of a thousand cameras in 800 
locations in Belgrade. \20\ The Ministry did not, however, explicitly 
cite Huawei as a supplier, possibly to avoid attention given the 
sensitivity surrounding the company and its ties to the Chinese 
Government. \21\
---------------------------------------------------------------------------
    \20\ China's Malign Influence and the Corrosion of Democracy.
    \21\ China's Malign Influence and the Corrosion of Democracy.
---------------------------------------------------------------------------
    China's growing security ties to Serbia also have the potential to 
exacerbate authoritarian trends. In August 2019, Serbia's Interior 
Minister announced that officers from China would join police patrols 
in certain Serbian cities, ostensibly in an effort to help Serbian 
police officers in their interactions with growing numbers of Chinese 
workers and tourists. \22\ It is impossible at this point to know 
exactly what the agreement entails because it is not available to the 
public--a troubling indicator by itself. This police-to-police 
cooperation nevertheless could import authoritarian tactics used in 
China against protesters, political dissidents, and ethnic and 
religious minorities to Serbia and other countries in the region.
---------------------------------------------------------------------------
    \22\ The visa regime between Serbia and China was liberalized in 
2017, contributing to a rapid increase in the number of Chinese 
tourists. See ``Visa Regime for Entering Serbia.'' Ministry of Foreign 
Affairs of the Republic of Serbia, mfa.gov.rs/en/consular-affairs/
entry-serbia/visa-regime/81-consular-foreigners-to-serbia/11411-china-
for-cons.
---------------------------------------------------------------------------
    The CCP's increasingly tight relationship with the current Serbian 
Government points toward potentially negative consequences for Serbia's 
increasingly fragile democracy. The SNS-led government appears inclined 
to pursue even closer ties with China. In 2017, the Serbian Government 
established the National Council for Coordination of Cooperation with 
the Russian Federation and the People's Republic of China, led by a 
former Serbian president. This new government office may represent yet 
another channel of potential influence for the CCP going forward.
        recommendations for countering china's malign influence
    Despite China's growing influence in Serbia and the Western Balkans 
generally, a nascent but increasing awareness of the risks of 
expanding, under-scrutinized economic deals with Chinese entities and 
CCP cultivation of elites provide a foundation for resilience to 
China's influence. Greater knowledge of China's influence tactics and 
the capacity to counter them across civil society and independent media 
in Western Balkan nations is critical to better protect the region's 
democracies.
    The CCP's approach will not change unless it sees fewer benefits to 
aggressively acquiring influence in developing countries. Chinese 
officials and companies take a harder line in countries where 
governance, transparency and the rule of law are lacking. On the other 
hand, there are increasing indicators that China moderates its 
influence efforts in the face of pushback by recipient governments.
    The United States and its partners therefore must invest resources 
in inoculating targeted countries against the malign effects of China's 
influence. This can be accomplished through two complementary efforts: 
1) offering countries alternatives to Chinese investment and assistance 
on how to negotiate and structure future deals with China; and 2) 
building the resilience of developing democracies to the malign effects 
of CCP influence.
    First, the United States and partners in Europe should offer 
Western Balkan countries both alternatives to China's investment and 
financing practices and technical assistance on project evaluation and 
negotiation. The administration and Congress have taken some important 
steps, including the passage of the Better Utilization of Investments 
Leading to Development (BUILD) Act creating the new U.S. Development 
Finance Corporation (DFC). The DFC must not be viewed as directly 
competing with a massive state-financed infrastructure initiative like 
the BRI. Instead, through targeted support for private enterprise in 
critical countries limited in their financing choices, the United 
States can help establish higher common standards for transparency and 
sustainability that both regional government officials and their 
publics may increasingly demand over time.
    The United States should work closely with likeminded partners and 
allies to offer such training and alternatives. Wherever possible, the 
United States should work with multilateral development banks and 
partners such as the EU to offer infrastructure alternatives to 
developing countries.
    Second, the United States must dedicate resources to bolstering the 
capacity of civil society, political parties and independent media in 
developing countries. These democratic institutions are critical to 
recipient countries' ability to monitor and evaluate Chinese project 
implementation practices, expose and prevent instances of elite 
capture, and promote the rule of law. Transparency and investigative 
journalism are essential to ensuring the resilience of recipients of 
Chinese financing, particularly in countries with leaders happy to 
conclude deals behind closed doors.
    The availability of accurate information permits broad public 
debate about how to engage China amongst business, civil society, 
government officials and local communities affected by infrastructure 
projects. In so doing, national interests are protected and equitable 
benefits assured across a society.
    In addition, host governments at the central and local level should 
be encouraged to build greater transparency into economic deals with 
China. Washington should prioritize assistance for government and 
nongovernment actors in Western Balkan countries like Montenegro that 
are deemed particularly vulnerable to CCP influence as a result of 
significant debt owed to China.
    The United States should also work with its country partners to 
raise awareness of CCP influence efforts in think tanks, universities, 
NGOs and media where impartial expertise on China and the nature of the 
Party and its tactics is lacking.
    None of these efforts to counter the malign aspects of China's 
influence in the Western Balkans will be easy or achievable without a 
sustained U.S. dedication to working with and assisting fragile 
democracies across the region. There is no alternative, however, if 
Washington hopes to prevent the spread of authoritarianism in the 
region and preserve the region's ties to the democratic West. The 
United States must recommit to the hard work of defending democracy 
around the world.

    Senator Ernst. Finally, Mr. Bugajski. Thank you very much.

    STATEMENT OF JANUSZ BUGAJSKI, SENIOR FELLOW, CENTER FOR 
                    EUROPEAN POLICY ANALYSIS

    Mr. Bugajski. Thank you. Thank you, Chairman Ernst, Ranking 
Member Peters, and all members of the subcommittee.
    I must commend the committee on the timing of this hearing. 
There are a lot of anniversaries this year, but today is the 
80th anniversary of the Soviet invasion of Poland in alliance 
with Hitler's Germany to carve up central Eastern Europe. And 
80 years later, Vladimir Putin's Russia is still carving. One 
of its targets, as we are speaking today, is the Balkan 
Peninsula. For Moscow, Southeast Europe provides an opportunity 
to undermine Western unity and extend Russia's influences.
    China, as we have heard, is also pursuing a strategy of 
influence expansion by exploiting Balkan volatility, poor 
economic performance, and limited Western integration. While 
Russia remains the main near-term adversary of the West, China 
is developing into a more formidable long-term threat. Russia 
is a revisionist aggressor, but its capabilities will decline 
in the midst of economic stagnation and a potential succession 
crisis. In contrast, China is a steadily growing global 
competitor with a strong economy and a more durable strategy 
designed to surpass Europe and America.
    At present, China and Russia are strategic partners intent 
on weakening Western cohesion, and Beijing benefits from 
Moscow's disruptive actions that distract the United States 
from China's ascendancy, while Chinese economic leverage can 
undermine NATO's collective response to Russia's attacks.
    Moscow's strategic objective is to reverse the 
transformations of the post-Cold War era during which it 
forfeited its regional predominance. A key element of Russia's 
strategy is to expand what they call a Eurasian pole of power 
to ensure primary influence in neighboring states and in 
regions where Russia has been historically active. It seeks to 
weaken NATO, divide the EU, and split the United States from 
its European allies. As we have heard, it deploys a broad 
arsenal of political, financial, economic, and informational 
tools to achieve its objectives.
    The Balkan Peninsula is NATO's internal frontier. The 
Kremlin views the Western Balkans as Europe's weakest flank 
where competition with the U.S. can be intensified, conflicts 
manipulated, new allies found, and economic opportunities 
exploited. Let me just outline five main inroads that Russia 
has in the region. I developed this in the actual testimony I 
submitted.
    One, promoting local nationalism to undermine support for 
NATO and to stir conflicts between rival nationalist projects.
    Two, corrupting politicians and businessmen to enable 
greater state penetration.
    Three, leveraging energy dependence to gain economic and 
political advantages.
    Four, conducting propaganda offenses through local media 
and social networks to enhance Russia's position and undermine 
Western institutions.
    And five, forging inter-societal ties that increase 
Moscow's influence. These include Orthodox churches, political 
parties, cultural organizations, and so forth.
    Beijing has three main goals in Southeast Europe. We have 
heard this. Let me just reiterate.
    Expanding China's economic reach through its Belt and Road 
Initiative. Here the Balkan Peninsula is a focal point for 
maritime and overland routes into Europe. Balkan Governments 
welcome investments that rescue declining industries, but then 
become vulnerable to predatory lending and the surrender of 
national infrastructure.
    Two, turning economic penetration into political influence. 
In exchange for financial investment, Beijing seeks diplomatic 
support for its policies or to neutralize criticisms of its 
policies in international institutions.
    And three, diminishing United States and EU influence. 
China and Russia have developed convergence in such areas as 
anti-democracy promotion, diplomatic offensives, and 
disinformation campaigns.
    Regarding flashpoints--we can talk about this a little bit 
more maybe in questions and answers, but the deadlock in 
Bosnia-Herzegovina, obviously, and the standoff between Serbia 
and Kosovo. Those are the two main areas we should be looking 
at. If the crises escalate, this could pull in neighboring 
countries. I will not talk too much about this at the moment.
    But let me just finish with U.S. national interests. What 
are our interests? I would say this:
          An unstable and conflictive Balkans undermines United 
        States national security, and a diplomatic retreat 
        would be viewed as a major American defeat. If you 
        remember, we have invested over the past 20 to 30 years 
        enormous diplomatic, political, and military capital in 
        the region. For us to sustain any sort of major defeat, 
        a new war particularly in Bosnia or between Kosovo and 
        Serbia, would be a major disaster. Russia and China 
        would not only gain from this, but they would also use 
        that new momentum to subvert other European states.
    To prevent this, Washington must focus on four objectives 
in Southeast Europe. I will be very quick, my last points.
    One, reinforcing security by including the entire peninsula 
inside NATO. I do believe eventually Serbia itself will want to 
be a member.
    Two, resolving the Kosovo-Serbia and inter-Bosnian disputes 
that we can talk about in more detail.
    Three, containing China, as we have heard, limiting its 
investment and increasing ours.
    And four, reversing Russia's influences throughout Europe.
    I have submitted to the committee a recent report I 
published for the Baltic Defense University on conducting an 
extensive strategic offensive against Moscow rather than simply 
playing a static defense. It is entitled ``Winning the Shadow 
War with Russia,'' (please see Appendix A).
    Last point. Moscow's subversion of the Balkans in the wider 
Europe is not simply malign, as I often hear. It is 
destabilizing and it is very dangerous.
    I will stop there. Thank you.
    [The prepared statement of Mr. Bugajski follows:]

                 Prepared Statement by Janusz Bugajski
    russia and china fomenting instability in southeast europe and 
              undermining united states national interests
    Chairman Joni Ernst, Ranking Member Gary Peters, and members of the 
Subcommittee on Emerging Threats and Capabilities, thank you for the 
opportunity to speak with you today about the escalating threats from 
Russia and China in Southeastern Europe.
    I must commend the committee on the timing of this hearing. Today 
is the 80th anniversary of the Soviet invasion of Poland in an alliance 
with Hitler's Germany to carve up Central-Eastern Europe. 80 years 
later Vladimir Putin's Russia is still carving and one of its targets 
is the Balkan peninsula. For Moscow, southeastern Europe provide an 
opportunity to undermine Western unity and extend Russia's influence. 
China is also pursuing a strategy of expansion by exploiting Balkan 
volatility, poor economic performance, and limited Western integration.
    While Russia remains the main near-term adversary of the West, 
China is developing into a more formidable long-term threat. Russia is 
a revisionist aggressor trying to subvert the trans-Atlantic world but 
its capabilities will decline in the midst of internal turmoil and a 
looming succession crisis. In contrast, China is a steadily growing 
global competitor with a strong economy and a durable strategy designed 
to surpass Europe and America.
                     russia-china anti-western axis
    1.  China and Russia are strategic partners intent on weakening 
Western cohesion. Beijing benefits from Moscow's disruptive actions 
that distract the United States from China's ascendancy, and Chinese 
economic leverage can undermine NATO's collective response to a Russian 
attack. In a worst-case scenario, both states may coordinate a 
simultaneous military offensive against neighbors--for instance, 
Ukraine and Taiwan respectively--calculating that this would disperse 
and dilute America's reaction.

    2.  Although predatory powers such as Russia and China may 
cooperate against a third party they are always mindful of competition 
and encroachment on each other's domains. This can turn partners into 
rivals, especially where the weaker party becomes economically or 
militarily dependent. Russia's capabilities will diminish and China 
will present a major threat to Moscow's Eurasian aspirations by 
reorienting Central Asia away from its orbit and challenging Russia's 
territorial integrity in Siberia and the Pacific Coast where the 
Chinese population is growing.

    3.  Washington should not be distracted by China's rising ambitions 
by failing to tackle Russia's current shadow war against Western 
integrity. To secure its national security and defend its allies and 
partners, the United States needs to develop a strategy of leverage 
that promotes discord and division between Russia and China, its two 
major adversaries. A strategy of ``divide and rule'' is long overdue in 
American foreign policy.
                    russia's strategy and objectives
    1.  Moscow's broad strategic objective is to reverse the 
transformations of the post-Cold War era during which Russia lost its 
satellites, forfeited its regional predominance, and relinquished its 
global role. A key element of Russia's strategy is to expand a Eurasian 
``pole of power'' to ensure its primary influence in neighboring states 
and in regions where it was historically active.

    2.  Moscow's strategic objective necessitates weakening NATO's 
security posture throughout Europe, dividing and fracturing the 
European Union, splitting the United States from its European allies, 
and eroding America's global influence by undermining its political 
system and discrediting its leadership role.

    3.  To compensate for its military and economic weakness vis-a-vis 
the West, Moscow deploys a broad arsenal of political, financial, 
economic, and informational tools to achieve its objectives. It 
systematically capitalizes on Western vulnerabilities, whether through 
cyber attacks, disinformation, corruption, blackmail, social 
disruption, or other ``soft power'' weapons.
               russia's offensives in the western balkans
    The Balkan peninsula is NATO's internal frontier where Moscow can 
challenge United States and European interests and project its Eurasian 
agenda. The Kremlin views the Western Balkans as Europe's weakest flank 
and a subversion zone where competition with NATO and the United States 
can be increased, latent conflicts manipulated, potential new allies 
found, and economic opportunities exploited. Russia pursues five main 
inroads in the region.

    1.  Promoting local nationalisms to undermine support for NATO, the 
United States and the EU, to mobilize backing for Moscow, and to stir 
conflicts between rival nationalist projects enabling the Kremlin to 
offer targeted assistance.

    2.  Corrupting national politicians and local businessmen to favor 
Russian economic interests, enable greater societal penetration, to 
support Moscow's foreign agenda, and oppose Western policies such as 
sanctions against Russia.

    3.  Fostering energy dependence by tying Balkan countries into gas 
projects controlled by Gazprom, and buying into local pipelines, 
refineries, and other energy facilities. Energy dependence is exploited 
to gain diplomatic and political leverage. Other economic sectors where 
Moscow seeks influence include metallurgy, arms supplies, banking, and 
real estate.

    4.  Launching propaganda offensives through local media, internet, 
and social networks to enhance Russia's position and undermine Western 
institutions. Various messages are intended to appeal either to anti-
globalist, Euro-skeptic, and anti-American sentiments or to ultra-
conservative and religious orthodox constituencies in which Russia 
poses as the defender of traditional values and the EU and United 
States are depicted as immoral and deviant.

    5.  Forging numerous inter-societal connections that increase 
Moscow's political influences. These include Orthodox Churches, 
political parties, cultural organizations, historical societies, sports 
clubs, and lifestyle groups, including bikers clubs, gun lobbies, and 
paramilitary survivalist groups.

    The Kremlin benefits from frozen conflicts and frozen states. In 
Bosnia-Herzegovina it encourages the Serbian entity to keep the country 
divided and question its future as a single state. In Kosova, Russian 
officials claim the Serbian population is repressed in order to 
undermine Kosova's independence and raise the specter of partition. 
Kosova is blocked from entering the UN, primarily by Russia's 
opposition. Unresolved conflicts and disputed states enable the Kremlin 
to claim that NATO has failed to stabilize the region and slow down 
West Balkan progress toward EU integration. This benefits Moscow by 
forestalling the implementation of the Union's legal standards and 
facilitating the corruption of national leaders.
    The promotion of Balkan instability distracts attention from 
Moscow's offensives elsewhere. Intensifying disputes can preoccupy 
Western diplomacy and give the Kremlin a freer hand to pursue its neo-
imperial objectives in the former Soviet Union. However, Moscow has 
also suffered several significant Balkan defeats, including Kosova's 
independence, Montenegro's NATO membership, the resolution of the 
Macedonian-Greek dispute, and North Macedonia's pending entry into 
NATO. Much of this progress is driven by a consistent U.S. policy to 
bring the entire peninsula into a secure Western alliance.
                china's penetration of southeast europe
    The Chinese regime has no design to capture territory or impose its 
system of government on states outside its immediate sphere of 
influence. Instead, it has three main goals as demonstrated in its 
policy toward southeast Europe.

    1.  Expanding China's economic reach to affect global standards for 
trade and investment that favor Beijing over its competitors. Beijing's 
Belt and Road Initiative linking China with Europe envisages the Balkan 
Peninsula as a focal point for maritime and overland routes into 
Europe. Chinese companies purchase cargo terminals and finance roads 
and railways throughout southeast Europe. Its investments ignore EU 
procurement regulations and its loans and export credits are debt traps 
often tied to the employment of Chinese companies and labor. Although 
Balkan Governments welcome investments that rescue declining 
industries, they are vulnerable to predatory lending and the surrender 
of national infrastructure.

    2.  Leveraging economic penetration into political influence. In 
exchange for financial investments, Beijing seeks Balkan diplomatic 
support for its policies or muted criticism in international 
institutions. Its investments in the Greek port of Piraeus help ensure 
that Athens dilutes EU condemnations of China's human rights record and 
its ambitions in the South China Sea. This formula is repeated across 
Europe with Beijing aiming to divide Europe from the U.S. and prevent 
the emergence of an anti-China front.

    3.  Diminishing United States influence and undercutting EU 
enlargement. China and Russia have developed significant convergence in 
such areas as anti-democracy promotion, diplomatic offensives, and 
disinformation campaigns. China's ambitions are also evident in 
expanding intelligence activities and cyber hacking.
                           balkan flashpoints
    Several flashpoints in the Western Balkans could precipitate a 
wider crisis and are fuelled by a number of destabilizing factors.

    1.  Danger that the deadlock in Bosnia-Herzegovina may spiral into 
a more menacing conflict. Bosnia's status quo is not indefinite and the 
ingredients are present for another violent implosion. There is no 
functioning central government between election cycles, the Serbian 
entity threatens to secede, Croat nationalists are demanding a third 
entity, and Bosniaks are caught frustrated in the middle as the economy 
stagnates. In one scenario, Bosnian Serb leaders may reject key reforms 
that stitch the country together, withdraw representatives from the 
central government, and announce a referendum on independence. Such 
moves could trigger renewed violence.

    2.  The Kosova-Serbia dialogue has stalemated and a process of 
normalization is needed that can lead to bilateral recognition. If the 
current standoff is not resolved it may encourage nationalist and 
irredentist forces on both sides. Belgrade and Prishtina should take 
steps to de-escalate their disputes. For instance, Prishtina can lift 
its tariffs against Serbia and Belgrade can lift its blockage of Kosova 
in entering international institutions. The question of territorial 
exchanges can contribute to domestic and inter-state disputes if its 
feasibility is not openly debated. The new United States Special 
Representative can reinvigorate the Belgrade-Prishtina dialogue, but he 
will face stiff local resistance, weak EU leadership, and Russian 
sabotage.

    3.  The region confronts persistent corroding influences, including 
corruption, clientalism, and partisan polarization. These are flawed 
democracies, whereby a party that wins elections gains control of all 
institutions and unmonitored access to state funds that benefit party 
loyalists. Youth unemployment and out-migration remains high and public 
frustration with corrupt and incompetent governments is rising. 
Conversely, economic growth is contingent on political legitimacy, the 
rule of law, social stability, and investor confidence, all of which 
are lacking in much of the region.

    4.  Blockage in EU membership contributes to regional instability. 
EU entry is widely supported because of the benefits it bestows, 
including accession funds and investments. Although several states are 
EU candidates, the Union has decided on a prolonged pause in its Balkan 
enlargement. The six aspirant states confront an indefinite limbo that 
can discourage reform, stimulate EU skepticism, and boost nationalist 
sentiments. This in turn would provide ammunition for EU politicians 
who oppose further expansion.

    5.  Moscow continues to undermine regional stability and prevent 
Western integration. Russian diplomats, local agents, and 
disinformation activists can engage in various provocations, 
conspiracies, and influence operations. They will encourage 
intransigence in Belgrade and Bosnia's Serb entity and probe for new 
opportunities to create mayhem and test Washington's resolve.
                         impact on u.s. policy
    An unstable and conflictive Balkans undermines United States 
national interests and NATO's future as a provider of collective 
security. Washington has invested substantial diplomatic, economic, and 
military capital in the region and has registered major success in 
ending two wars, building legitimate states, and including new allies 
in NATO. A diplomatic retreat would be viewed as a major American 
defeat and could pull the West into another violent conflict in the 
years ahead. Russia and China would capitalize on any United States 
failures and gain fresh momentum to subvert other European states. The 
U.S. National Defense Strategy specifies that strengthening America's 
alliances and attracting new partners is crucial for an effective 
strategy. By working with allies and partners Washington can focus on 
four objectives in southeast Europe:

    1.  Reinforcing security by assimilating the entire peninsula 
inside NATO, including North Macedonia, Bosnia-Herzegovina, Kosova, and 
Serbia. Serbian leaders and military officers will eventually calculate 
that NATO is the most effective force to enhance Serbia's military 
modernization.

    2.  Resolving the Kosova-Serbia and intra-Bosnian disputes through 
intense negotiations and the offer of concrete incentives and 
disincentives. The appointment of a U.S. Special Representative is an 
important step forward, as long as he has the authority to make key 
decisions.

    3.  Containing China by implementing policies that limit Chinese 
investments but without damaging the economic development of affected 
countries. Western competiveness in foreign markets needs to be boosted 
and alternative sources of infrastructure financing made available. 
China's investments must be made more transparent, adhere to 
international standards, and not push governments into becoming 
indentured debtors.

    4.  Reversing Russia's influences in Europe through an intensive 
and extensive strategic offensive. Moscow's presence is not simply 
malign, but destabilizing and dangerous. I am submitting to the 
committee a recent report I published with the Baltic Defense 
University on conducting a multi-pronged offensive against Moscow 
rather than simply playing a static defense. Entitled ``Winning the 
Shadow War with Russia'' it details six major arenas: Exposing 
Influence Operations; Countering Informational Offensives; Cyber 
Defense and Counter-Attack; Economic and Financial Penalties; Military 
and Security Instruments; and Managing Russia's Dissolution.

    Senator Ernst. Thank you very much to our witnesses.
    Many of you did mention Russia's disruptive actions in the 
Balkans, but we really would like to shed some more light on 
what China has been up to. I will start with my line of 
questioning there.
    Dr. Shullman, what are China's political and security 
objectives in the Western Balkans?
    Dr. Shullman. China's political and security objectives in 
the Western Balkans can be seen as kind of a subset of China's 
broader goals in Europe. Some of these have already been 
covered, but I would say: First is to ensure that there is a 
wedge overall in the transatlantic alliance and that there is 
not a unified European and American approach to China, which 
serves China's interests long-term, whether it is on issues 
such as trade and economics, whether it is on technological 
issues, or whether it is on human rights. That is the first.
    Secondly, there is a goal on the part of the Chinese 
leadership to peel off individual countries as it comes to 
Chinese core interest issues, such as the South China Sea, such 
as what happens at the UN Human Rights Council, whether that is 
individual countries representing themselves or to prevent 
there from being a unified European approach, as happened with 
Greece, as has happened with Hungary, given Chinese influence 
in those countries.
    Lastly, I think I should just underline that there really 
is a normative aspect to this. China is globally trying to 
legitimize its rise as a great power under a Leninist political 
system, and at the heart of this, they need to break down the 
assumption that there needs to be a connection between 
democracy and development. The Chinese have been going around 
now--Chinese leader Xi Jinping at the Chinese Party Congress in 
October was very explicit about the fact that there should be 
an acceptance of the authoritarian path to development. If 
there is not a unified European and United States response to 
this, if there is acceptance in countries in the Western 
Balkans and other developing nations within Europe of the 
Chinese mode of development, that gets China a long ways 
towards its goals.
    Senator Ernst. Can you talk about some of those strategies 
as well? What tools and techniques is China using then to drive 
that wedge between some of these countries to peel them off? 
What would you say some of those are?
    Dr. Shullman. I have not seen in my research evidence yet 
of the fact that China is using the massive amounts of economic 
leverage that it has now built up in some of these countries, 
Serbia being one, Montenegro being one, potentially also 
Bosnia, to use that to achieve political goals against what the 
EU intends or what the United States intends. But the ability 
is there. I think the fact that we see in a country like Serbia 
China bolstering the leadership and bolstering its illiberal 
trends is an indication that China has goals that tend to peel 
these countries away from the democratic West.
    I would say too, some of the tactics that China is using in 
the information domain in other countries around the developing 
world they do not have to use in some of these countries 
because they are basically pushing on an open door. In a 
country like Serbia, which as I mentioned in my remarks, the 
leadership controls the information space, China does not need 
to use what the National Endowment for Democracy has termed 
``sharp power'' because the leadership is doing it for it. This 
is the case in Bosnia and, I would argue, in a couple other 
countries as well.
    That does not mean that they are not building up the 
potential to use that. We have seen China cultivating friends 
throughout--to use Serbia again--Serbian research institutions, 
funding them, also using, potentially, corruption to achieve 
elite capture in some of these countries and ensure that when 
decisions are made, they will go in China's direction.
    There are some of these tools that they have the potential 
to use but which they have not had to use generally in the 
Western Balkans as they have in Asia, Africa, and other places.
    Senator Ernst. Right. Certainly.
    Mr. Wilson, as we are looking at the DOD's China Military 
Power report for 2019, they warned that China's advancement of 
projects, such as the Belt and Road Initiative, will probably 
drive military overseas basing through a perceived need to 
provide security for those projects.
    Should the United States be concerned about security 
implications of Chinese infrastructure in the Western Balkans?
    Mr. Wilson. Yes, I think we should be. I think we have seen 
this trend develop first closer to China, as we saw in the 
Indo-Pacific region in South Asia, continuing along the Horn of 
Africa, as we saw in Djibouti as well. We have seen the 
infrastructure of Belt and Road be followed by an 
infrastructure supported through military support for that.
    We have seen the investments that China has made in Europe, 
whether it is in the Balkans or as far north as the Nordics in 
port facilities. We have also noticed at times very concerning 
strategic decisions of the Chinese to secure locations that 
provide proximity to United States forces, oversight of United 
States forces, whether it has been in Djibouti or in the north 
of Europe.
    I think part of what we are facing is a long game, a long-
term game by Beijing that is, first, looking at how to 
neutralize European hostility to Chinese interests, whether 
Taiwan or human rights, to over time begin to split Europe from 
the United States in any potential confrontation we may have 
and I think, as Dr. Shullman said, ultimately to help make the 
world safe for autocracy and kleptocracy. They lead with the 
economic side, and we have seen a track record of following 
through with military infrastructure to support that.
    Senator Ernst. Right. Thank you.
    My time has expired. We will probably do several rounds 
here, but at this time, we will go to Senator Peters for his 
questioning.
    Senator Peters. Thank you, Madam Chair.
    Dr. Shullman, I want to pick up on something that you 
mentioned in your opening comments and talk about how China 
wants to support illiberal governments and authoritarian type 
governments that may exist in these fragile democracies.
    One area that I have always been particularly concerned 
about is the advance of technology and technology to provide 
surveillance. You mentioned the Safe City initiative, the 
ability for governments now to perhaps exercise influence, 
malign influence, over their populations through the use of 
technology, through social media, through cyber techniques, but 
particularly the Safe City which is going to have facial 
recognition opportunities, to be able to see where the people 
are. You mentioned that people may be afraid to protest the 
government to exercise basic government freedoms.
    Expand on how you see the use of this type of technology to 
undermine Western liberal type principles in these countries, 
and what is it that you are most concerned about?
    Dr. Shullman. Thank you for that question.
    What we have seen globally but also obviously now in Serbia 
and other countries in the Western Balkans is a dynamic where 
China is trying to export surveillance tools. It is also 
sharing these kind of tactics that come with the Huawei Safe 
Cities program, which advances surveillance capabilities. Part 
and parcel of that in many countries is also training on 
cybersecurity in the Chinese fashion, in addition to ensuring 
that countries are trained on how to use the surveillance 
technology to enable them to best control their populaces.
    In a lot of these countries where you have trends that are 
going in an illiberal direction and you have a leader who is in 
power, not only do you have China bolstering that direction by 
funding them and by investing, but by giving them the tools to 
ensure that they are able to maintain that power and to monitor 
their populace and their citizens, much in the way that China 
and the Chinese Communist Party do at home.
    This is not quite what we have seen in western China in 
Xinjiang, which is really an Orwellian state of affairs out 
there and shows how bad it could get, but the fact that China 
is exporting these technologies to these countries and giving 
them the training indicates that we could be going in a 
direction in some of these countries ensuring that autocrats 
not only come to power but then stay in power for a significant 
amount of time.
    Senator Peters. Well, the Chinese are pushing and helping 
autocrats in these countries.
    What should the United States be doing to help pro-
democracy groups within these countries and to strengthen 
democratic institutions? Probably I would like to give it to 
all three of you. We can start with you, Mr. Shullman, because 
you started this, but then if we can get the other two 
witnesses. Should the United States be more actively involved 
in pro-democracy groups within those countries? Are we doing 
enough? Should we be doing more? What is your assessment?
    Dr. Shullman. I absolutely think we should be doing more to 
help them both understand the nature of the Chinese Communist 
Party and how it exerts influence to give them the tools to 
expose what China is doing, to expose what their own officials 
are doing in their name with China, whether it is through these 
opaque deals or in signing up to things like this Huawei deal 
which, by the way, was actually referred to as a confidential 
deal when Serbian citizens had the temerity to actually ask for 
the details of what had happened. Giving them the tools to know 
and to expose what is happening in their own country and then 
giving them also the ability to have a strong civil society 
push to make sure that there is a wide conversation and a 
debate about the wisdom of going down a certain path with 
China.
    As I said in my remarks, it is not the case that China's 
approach in every country under the sun is the same, and China 
behaves better--not perfectly, but better--in countries where 
there is transparency, where there is good governance, and 
where their actions are exposed in sunlight.
    Senator Peters. Mr. Wilson?
    Mr. Wilson. Thank you for that question.
    I would agree that we should continue our support and step 
that up for democratic institutions, for civil society, for a 
free media. But I think we need a more structural strategic 
response because what we are seeing is the mixture of what has 
been traditional endemic patronage networks where political 
forces in the Balkans control their populations through jobs 
and other opportunities and now that being fueled by the advent 
of new technologies and potential financing from other 
autocratic powers like China itself.
    The challenge we face is that for so long our incentive 
that as you reform at home, you gain access to our markets and 
you will join our clubs of NATO and the EU, is being outweighed 
through the short-term gains that can be offered through easy 
financing, easy cash from China. I think this is going to take 
a little bit more of a strategic play of the United States and 
the European Union together to use some of the leverage we 
have.
    If we look at the real numbers, the region is exporting 72 
percent to the EU and 3 percent to Russia, less than 1 percent 
to China. The real economic weight of Europe and the real 
security presence of the United States do outweigh the presence 
of Chinese and Russian forces, and I think we need to use that 
leverage most importantly I think to reestablish the sense of 
movement strategically towards the transatlantic community.
    This is why for me the number one priority is the Kosovo-
Serbia deal. In the absence of that deal, retrograde forces, 
nationalist forces remain somewhat emboldened with a deal that 
drains the oxygen from them, and I think it allows us to 
actually invest more in Serbian democracy and Kosovo civil 
society.
    Senator Peters [presiding]. My time is up. I am going to 
hold off because we are in a vote. I am going to let Senator 
Shaheen go. But I want your answer later. We will hold off that 
later. But Senator Shaheen will go next. I am sure she will 
want to go vote.
    Senator Shaheen. Thank you.
    Mr. Wilson, I just wanted to follow up on what you were 
saying because I very much agree with that, and I agree that a 
settlement between Kosovo and Serbia is very important.
    But I am still back on North Macedonia and making sure that 
it gets entered into NATO. You mentioned in your opening 
remarks how important that is. Because that is being held up in 
the Senate by a small group of people, can you talk how 
important it is for us to get that done and get it done 
expeditiously?
    Mr. Wilson. Yes, Senator. I think this is a number one 
priority. There would be no easier strategic defeat for our 
interests and victory for particularly Russian interests than 
for us to trip up on failing to move forward rapidly with the 
ratification of North Macedonia as the 30th member. We went 
through this a little bit on Montenegro. In the wake of a 
Russian-backed coupe attempt, the greatest strategic win for 
Russia would be for us to lose the confidence in moving forward 
with NATO enlargement to anchor in countries that have made 
tough choices--in this case, North Macedonia. I think that is a 
first order strategic imperative to show confidence in 
ourselves, in our institution, and in the reforms that have 
fueled North Macedonia to join.
    Senator Shaheen. I totally agree with that, and I think 
both the leadership in North Macedonia and Greece deserve a lot 
of credit for approving the Prespa Agreement and for moving 
forward at a time when it was not clear that their populations 
fully supported those decisions. I think they deserve a lot of 
credit, and it is important for us and for the rest of the NATO 
countries to approve those agreements as quickly as possible.
    That leads to the second part of that question, which is 
accession negotiations with the EU, which again I know that 
that is an ongoing issue with Serbia in terms of getting some 
agreement with the EU. Having the ability for North Macedonia 
to enter into accession negotiations I think is very important.
    Can you talk about what the challenge is with the EU and 
their willingness to continue to move forward with that process 
for both Serbia and North Macedonia and for other countries?
    Mr. Wilson. Certainly. I think this is a top strategic 
issue. The challenge is in Paris a little bit and The Hague. 
There were expectations that the EU could have moved forward 
already with opening accession talks certainly with North 
Macedonia, potentially with Albania. That decision in deference 
to some German parliamentary maneuvers, as well as French 
political concerns, has been punted till October.
    I think the only one sitting on the sidelines sort of 
waiting and cheering to see this trip up would be those sitting 
in Moscow, that after the extraordinary political capital and 
political courage demonstrated both in Athens and Skopje to 
come to a deal on North Macedonia, an opportunity to overcome 
some stagnation that resulted from the failure to move forward 
in 2008 at the Bucharest summit, both closing the NATO deal and 
opening accession talks with the European Union are key ways to 
give oxygen to those that are progressive reformers in the 
region. If we want to see kleptocratic networks, authoritarian 
regimes, patronage networks develop, we just need to pull back 
from those that are taking some of those tough decisions. This 
comes to a head right now here in the Senate, but also in the 
EU as it approaches a decision in October for Albania and North 
Macedonia and albeit this is to open accession negotiations, 
which is a very long and tedious process, which serves the 
interests of the EU to bolster rule of law, democratic 
institutions, and prepare them economically for integration 
over years.
    Senator Shaheen. I certainly agree. Given the challenges 
that the EU is going through right now and some of the foreign 
policy challenges we have in the United States, developing that 
coordinated strategy that you talked about is very challenging 
I think.
    I have got a limited amount of time, but I wanted to just 
raise a question--and I do not know who wants to address that--
around the messaging campaigns, the disinformation campaigns 
that Russia is engaged in and that they are doing all across 
the Western Balkans and what we should be doing to counter 
that, what more we should be doing. So Mr. Bugajski. Right?
    Mr. Bugajski. Very good, absolutely, yes.
    Russian disinformation campaigns--we had a lot of 
disinformation campaigns during Soviet times. Now Russia has 
become I think very skilled at, let us say, lower level 
messages to particular populations, to particular ethnic 
groups, to particular political constituencies. The idea on 
their side is basically to divide and rule, to divide societies 
against each other in the Balkans so they can have more 
inroads, but also to divide these countries from the West, from 
Western institutions, from the European Union, from NATO, from 
the United States. They are very systematic because this is not 
just social media. This is not just Russian outlets, but it is 
also the social networks. It is using local proxies. You know, 
we talk about proxies, fighting proxies in Ukraine, but they 
also have media proxies throughout the Balkans.
    How to counter this? First of all, we have to expose, as 
much as possible, what is disinformation and what is the 
purpose of that disinformation. Secondly, we have to send 
messages that are true whether they are positive or negative. 
In other words, we cannot play their games in conducting 
disinformation.
    But the report I actually submitted to the committee also 
talks about another element that I think we could introduce. 
The Russian population itself is not monolithic. The Russian 
population is not Putin. We keep talking about Russia. We get 
drawn into this. But the Russian population is not Putin. We 
have seen this in the past few weeks. We have seen the 
demonstrations against election manipulation, against regime 
autocracy. We have seen this in the regions of Russia which 
oppose Moscow's policy.
    We should be looking at how we get our messages across to 
the Russian public through social networks. I am not talking 
about disinformation. I am talking about real information about 
what is going on in Russia because most people in Russia do not 
obtain real information from their governments or from official 
sources. This is why I talk about more of a strategic offense 
in information influence rather than simply playing defense.
    Senator Shaheen. Thank you.
    Thank you, Madam Chair.
    Senator Ernst [presiding]. Thank you.
    I would like to go back quickly. We were talking about the 
DOD's China Military Power report for 2019, and we just really 
started on that discussion of the security implications of 
Chinese infrastructure and investment, of course. I would like 
to follow on just a little bit for any of the witnesses that 
would like to answer.
    How significant is Serbia's decision to welcome Chinese 
police on its territory to provide security for the growing 
numbers of Chinese workers and tourists? Anyone that would like 
to jump in, please.
    Dr. Shullman. Thank you for that question. I will address 
that.
    As I said in my remarks, it is hard to know at this point 
because the details of the agreement are purposely not public. 
But I would say what we have seen in terms of Chinese 
assistance in other countries, in Asia for internal security 
forces, this is a troubling sign and a potential that it could 
get much worse in some of these countries, in Serbia and other 
countries in the Balkans.
    That said, the ostensible purpose is to protect the growing 
number of Chinese tourists and workers in Serbia. There are a 
growing number of Chinese tourists and workers. The visa regime 
was liberalized in 2017, and there are a lot of workers there. 
But I think we absolutely have reason to be concerned that some 
of the ways in which, as I said, China controls its population 
at home and prevents protests from dissidents, minorities, and 
other troubling elements that the government does not want to 
hear from, that is something that I think we should watch very 
closely and see whether the fact that there is a training and a 
cooperative engagement now with the police could push things in 
that direction in Serbia.
    Senator Ernst. That is the very long arm of the law.
    Dr. Shullman. Yes.
    Senator Ernst. Mr. Wilson, please.
    Mr. Wilson. I just wanted to add to that. We are seeing a 
fundamental strategy of Belgrade to hedge. In the absence of a 
deal looking for leverage over Kosovo, the Serbian authorities 
have flirted too much with Russia and begun to do so with 
China, most concerningly played out with security presence now 
of Chinese police, prior to that Russian members of the 
emergency ministry that has been known to carry out some 
nefarious activities being based in a humanitarian center in 
the south of Serbia.
    At the same time, we have been able to work quietly and try 
to put markers on that. We have been very clear not to provide 
diplomatic status to those Russian forces in southern Serbia, 
and Belgrade has complied.
    In competing for influence, we need to, by pushing 
diplomatically, get to a deal on Kosovo, remove the incentive 
for Serbia to hedge and play this game with China, first Russia 
and now China. I think we need to propose an alternative, a 
United States-Serbia strategic partnership that points to more 
security cooperation on issues like law enforcement that has a 
commercial and economic component and that begins to answer one 
of the great geostrategic questions in Europe, will Serbia 
anchor itself in the West. If you look at the economy, the 
answer is almost inevitable. If you talk to any mother in the 
countryside, they want their child to work for a Western 
company where there is meritocracy and be educated in the West. 
Our hand is strong. We have to close this deal and remove the 
oxygen that the Chinese and Russians have in Serbia today.
    Dr. Shullman. Apologies. If I could just add an addendum to 
my comment.
    I think given that you are talking about the National 
Defense Strategy and China's overarching security approach as 
it relates to the Belt and Road, I think Mr. Wilson covered 
well the fact that we have China now with its first overseas 
military base in Djibouti. We do see China, in part in response 
to internal pressures--the population saying you need to better 
defend Chinese interests and Chinese workers and Chinese 
citizens abroad. We do see China now looking more at overseas 
logistics facilities not just for military strategic purposes, 
although that certainly is there, but also to better protect 
their citizens.
    I think when we look at this police cooperation agreement, 
that is not the obvious and first thought that we think of when 
we see this, but I think that there is also probably an aspect 
of China without establishing a facility in the Balkans, which 
would be a lot more sensitive than where they have established 
it already in Djibouti, having a way in which they can monitor 
and say that they are making sure that their growing number of 
citizens in the region are protected. It is something we are 
going to see more in Serbia, in the region, and I would say in 
Europe generally.
    Senator Ernst. Yes. Mr. Bugajski?
    Mr. Bugajski. I just wanted to add a couple of points on 
the China nexus in the region.
    It is important to bear in mind that China is not just 
active amongst countries that are not EU members. I mean, the 
Belt and Road Initiative includes also EU and NATO members. One 
also needs to look at places such as Greece or Hungary that may 
be more inclined not to criticize China internationally because 
of the investments that are coming in Port of Piraeus, for 
instance, infrastructure in Hungary.
    I do not think it should simply be focused on the Balkans. 
I think it should be a wider EU approach in trying to monitor, 
control, and correct the kind of Chinese investment that is 
destabilizing domestically but could also threaten the unity, 
the integrity of both the European Union and NATO.
    The second point is Russia and China, which I sort of 
mentioned. We also need to monitor very closely where China and 
Russia are actually cooperating. I believe there are points of 
convergence between them, although there are also points of 
potential conflict that we should exploit. But the convergence 
is in terms of disinformation, anti-democracy. It is almost 
like Russia is trying to piggyback on China because China has 
the economic clout and Russia is basically stagnating in terms 
of its economic development.
    I just wanted to add those two points.
    Senator Ernst. Thank you. I appreciate that.
    Mr. Wilson, in your discussion on that topic, you started 
going into ways that we can develop resiliency within some of 
those countries, and I would like all of our witnesses to maybe 
touch on that a little bit more. When we are trying to push 
back against the Chinese malign influence in the Western 
Balkans, then we talked about a number of ways that we can 
insert ourselves or others can insert themselves into the 
situation to push back against that malign influence and offer 
different types of support to those countries in the Balkans. 
If you could touch on some of the ideas, things that we should 
be doing maybe as the U.S. Government or various partnerships 
between businesses, schools, educational facilities, things 
like that with those countries in the Balkans.
    Mr. Wilson. Sure, I can start with that excellent question.
    I think focusing on the resilience of societies in wider 
Europe, whether in the Western Balkans, Europe's east is a key 
priority. We have to help these societies resist this 
penetration and manipulation from external forces.
    It also is related to how to provide alternatives and some 
of the tools. You know, it is easy for folks to point to 
Piraeus Port in Greece, and yet we need to remember that in a 
time of economic crisis, the IMF [International Monetary Fund] 
and others pressed Greece to sell off assets, to privatize, and 
there were really no Western investors to pick this up. China 
showed up at Piraeus and took a port in the top 20 and turned 
it into a top 2 port in Europe.
    How do we provide an alternative?
    One, some of the tools that we have been developing in the 
European Union should be extended to those aspirant countries 
in the Western Balkans. The EU is finally developing a CFIUS 
[The Committee on Foreign Investment in the United States]-like 
procedure to do some reviews of foreign investment in sensitive 
strategic assets. If you aspire to be a member of the EU, we 
should be working with the Balkan countries to develop that 
capacity to mirror image the procedures that the EU will 
develop, modeled after our CFIUS model, for example, to provide 
that technical expertise, that advice, to help navigate where 
to take acceptable financing and where there is a more 
strategic risk.
    Second, on the resiliency piece, we need to show up in the 
game. There is something called the Berlin Process where the 
European Union has focused on infrastructure in the region. The 
Trump administration has been interested in the Three Seas 
Initiative of how to build some of the infrastructure in 
Central and Eastern Europe the seas of the Adriatic, Black Sea, 
Baltic. We should be intentionally building the infrastructure 
of Europe to include the Western Balkans in that 
infrastructure, energy, transportation, digital, long before 
the reality of the EU membership exists so that we are helping 
to bolster their resiliency and provide those alternatives.
    Finally on the information front, which is first and 
foremost Russian, but now increasingly Chinese, we need to help 
identify, expose, and analyze this disinformation, essentially 
over time how to develop more resilient societies so that they 
are more inoculated to this manipulation of the information 
environment and to be able, again, I think to provide the 
positive contrast of what we have to offer.
    Senator Ernst. Very good.
    Any other thoughts on that, on that area?
    Dr. Shullman. I will just add. I agree entirely with what 
Mr. Wilson said.
    Number one, on the alternatives, just in my experience 
traveling to the region--I was in Warsaw last week for a 
conference on Chinese influence, and the response that you get 
from people--and again, it is not just a Balkans question. It 
is a European question, but it is also a Central/Eastern 
European, 16/17 Plus 1 question.
    We talk about the negatives of Chinese investment and the 
dangers and the risks that come along with it. Then the answer 
is, okay, what is the alternative? Are you bringing the 
alternative? Are the Europeans bringing the alternative? That 
really is a critical element to this because if you do not have 
an answer to that, then you are kind of just left saying watch 
out and then people are left without any answers.
    Secondly, I completely agree. I think the way to build 
resilience is to bolster the level of knowledge about how 
China--specifically I will focus on China--but also Russia are 
exerting influence in these countries. In certain countries in 
the Western Balkans, the level of understanding about China, 
the level of understanding about the Chinese Communist Party 
and how it exerts influence is virtually nil. You have to have 
that basic level of understanding before you can then go in and 
talk about how what China is doing, both in terms of its 
economic deals but also its exertion of information 
manipulation, is different than what Western countries do 
regularly through soft power. This is not soft power. That 
understanding is critical. Then you can move on to giving them 
the tools to have investigative journalism, to have a robust 
civil society that, as I mentioned earlier, really keep their 
own officials honest but also monitor what China is doing and 
ensure that it is in the best interest of the country.
    Then lastly, on the Russia-China bit, you know, I think it 
is really important to understand that what Russia and China 
are doing is different. Their tactics are different, but that 
in combination, in a lot of these countries, they are really 
damaging to democracy. Russia will come in with the divisive 
tactics with the disinformation, and then you have China 
bringing money that is untied to any requirements about 
governance reforms, undermining what the EU and the United 
States are trying to do, and bolstering autocrats, not to 
mention having this model of the second largest economy in the 
world which got there through autocratic means, which can be 
very attractive to those who want to believe that that is an 
alternative.
    What the United States and the Europeans need to do in 
order to push back on this in some ways is very simple. It is 
to make the case for democracy and continue to stand up for the 
notion that the best way to develop a country and to achieve 
economic growth is through democratic means and through 
democratic institutions.
    Senator Ernst. Wonderful. Thank you.
    Yes, go ahead, Mr. Bugajski, and then I will turn it over 
to Mr. Peters for his next question. Go ahead.
    Mr. Bugajski. Thank you. I just wanted to add very briefly. 
In terms of resilience, if you really want to build permanent 
resilience or long-term resilience in the region, you need 
stable states with strong institutions. That is why, going back 
to what in particular Damon was saying, the Serbia, Kosovo, and 
internal Bosnian disputes have to be resolved to build to 
functioning states that can then consolidate their institutions 
and do all the right things to move towards both NATO and the 
EU.
    I would say there is one thing I heard today, which is a 
bit disturbing. We have appointed a special envoy, special 
representative for the Balkans, which I think is extremely 
important. But now there are moves not only to appoint EU 
special representatives but also a Russian special 
representative in the Balkans. To me, that is like putting the 
bear in charge of the beehives. It is going to undermine our 
position. It is going to undermine any kind of an agreement, 
and it is going to further destabilize the region. This is 
something I think we should be pushing back on. Just one point.
    Senator Ernst. Senator Peters?
    Senator Peters. Thank you, Madam Chair.
    Mr. Bugajski, we did not get a chance to get your answer on 
the question that I had when I was running out of time about--
you mentioned how we have to stabilize these areas, work with 
small ``D'' democratic institutions. What should the United 
States be doing specifically? Are we doing enough? What is your 
assessment?
    Mr. Bugajski. It is sort of in a bit of the follow-up to 
consolidating and building resilience. Some of the factors have 
been mentioned. The question is how exactly do we do it. The 
big problem in the region, as has been pointed out, is the 
nexus between politics and business, corruption, clientelism, 
nepotism, the spoil system, in other words, the winner takes 
all whenever they get elected. Then we see this in Albania. The 
other side, the other party leaves the institutions when it 
does not get into government.
    How do we resolve this sort of polarization-corruption 
nexus in these countries?
    We need to build stronger institutions particularly in 
terms of rule of law, police forces, better transparency in 
terms of any kind of government contracts. They started in 
Albania to investigate each parliamentarian to make sure that 
they are not involved in any corrupt deals. I think this needs 
to be extended. This needs to be expanded.
    Secondly, I would say the young people. One of the worst 
things that has happened in the Balkans is how many well 
educated, talented young people are leaving for Western Europe 
or for the United States. It is good for Western Europe and the 
United States, but it is not good for the neighborhood. It is 
not good for these countries.
    How do we make sure they stay? How do we make sure these 
countries are attractive? Education, opportunity, investment, 
integration into the EU--I mean, all these are extremely 
important.
    One can go into more detail. I just wanted to outline a 
couple of key questions.
    Senator Peters. Great. Thank you.
    A February report from the Carnegie Endowment for 
International Peace Studies cites fake websites targeting U.S. 
voters in the 2016 election--and I quote them--that were traced 
to domain registration and trolls in Albania, although site 
proprietors denied any kind of Russian sponsorship. This tactic 
and others obviously give Moscow an opportunity to outsource 
disinformation campaigns that they are engaged in not just 
against the United States but in other European states as well 
and certainly can have a real impact on our democracy and 
certainly can have a potential impact on the alliance as well.
    I would like to have each of the witnesses, if you could 
kind of elaborate as to how you see these kinds of operations, 
these warfare operations, elaborate on how they are being 
conducted, how you are concerned about it, and maybe give us 
some idea of how we could work with the Albanians and others to 
break some of these links with Russians that may be engaged in 
these activities. Mr. Wilson, do you want to take the first 
stab at it?
    Mr. Wilson. Thank you, sir, for that question.
    This has been a fundamental element of Russian strategy for 
some time. We have seen an intense chapter in this now, 
facilitated with digital technology, often focused in sowing 
doubt rather than just pushing particular narratives, sometimes 
muddying the waters and instrumentalizing others to do this 
business, most effective when buying into certain cleavages in 
our own democratic societies and leaning in on those cleavages.
    I think part of what we need to do as an alliance and with 
our countries that aspire to be our allies is a more 
coordinated effort on facilitating digital resilience. This is 
not always the effort of governments. For example, at the 
Atlantic Council, we run something called the Digital Forensics 
Research Lab that has researchers across Europe that are 
looking at identifying, exposing, and analyzing Russian 
disinformation in a dispassionate way to bring that to light 
and in doing so, achieving two things: one, building the 
capability of local partners and in civil society to do this so 
that we are building the capability of open source research to 
compete and challenge the authoritarian practice here, not 
depending on the functionality of the Albanian Government but 
on a proliferation of civil society groups and investigative 
journalists as a network of them across the region as part of 
the best defense. We call this creating digital Sherlocks to 
facilitate digital resilience. You do not want to control and 
limit that to government means, but empower many actors to do 
this to expose and to challenge what we see coming from Russian 
state actors.
    We have put digital research units in many of these regions 
themselves, working with the governments and civil societies to 
develop that capacity. I think this is part of where we are. It 
is part of the new challenge.
    We also need to work with the governments to develop what 
we have called democratic defense against disinformation. We do 
not mirror image. We do not use their tactics. We think through 
our response to countering disinformation in a way that builds 
democratic habits and practices in fragile democracies in the 
Western Balkans, strategies we are developing in our own 
country with the European Union, bringing that to our partners 
in the region so they have a democratic capability of defending 
against disinformation.
    Again, I think finally going on offense to expose this as 
the Russian strategy. There has been a backlash in the region 
to heavy-handed Russian tactics. It has not worked all that 
well where people in the region, better than here, understand 
the tools that Russia has used, whether it is the GRU [Russia's 
Main Intelligence Directorate] or disinformation. I think we 
need to help people know about that and come to their own 
conclusion about where they want to see their society develop.
    Senator Peters. Dr. Shullman, do you want to add anything 
to that?
    Dr. Shullman. Well, I would not add anything on the 
specifics of the Albanian and Russian case, although I would 
say in terms of what China is doing in its disinformation 
efforts as it relates to Hong Kong, as it has been doing for a 
long time vis-a-vis Taiwan, this is evidence that China has the 
capacity to do this and probably can do it, if it wanted to, at 
a level at or exceeding what Russia is doing globally. It 
behooves us to keep a close eye on how China is doing this in 
those domains to see whether or not we are going to see more of 
that in a global sense. But I have not seen that yet in the 
Western Balkans.
    I mentioned earlier that there is a certain level of 
information control in the countries in which China is exerting 
influence so it does not have to do what it does elsewhere. But 
it is using so-called united front tactics in a lot of these 
countries' seemingly soft power tactics, but were actually 
Chinese Communist Party-backed institutions and entities to 
push the Chinese Communist Party's propaganda line, to 
cultivate friends, and to capture elites in these countries. I 
think that is something that we need to watch very closely 
going forward in the Western Balkans and in Europe generally.
    Senator Peters. Mr. Bugajski?
    Mr. Bugajski. I just want to add a couple of points on this 
Russia-Albania question.
    Albanian societies have traditionally been not as 
penetrable for Russian influence operations, but I have noticed 
over the past year or so, less in Kosovo, how a very large 
Russian embassy with an enormous staff, which is much bigger 
than it was during Soviet times, as well as many Russian 
diplomats and tourists and others coming into the country, have 
become more active to try and penetrate Albanian society.
    How they try to do it is particularly through money, in 
other words, through corruption, through buying certain 
politicians, through working with young people. For instance, 
they have a program now to attract young people annually to 
come to Sochi to better understand the Russian world. To some 
poor Albanians, this is quite attractive. It is a little bit 
like the tactics that the Salafists were engaging in or 
continue to engage in in the past in the Balkans. Penetrating 
political parties, penetrating media, penetrating business in 
Albania, penetrating criminal networks.
    These things I think we need to very carefully watch. We 
have assumed I think for too long that Albania, other Albanian 
majority regions of the Balkans are not penetrable by Russia. 
We need to think again because they will either do it directly 
or they can do it through third parties and also use, as you 
mentioned at the beginning in the question, those third parties 
against us where we would least expect it.
    Senator Peters. You mentioned it is more difficult to 
penetrate Albania. I have had the opportunity to travel to 
Albania and have a very active Albanian diaspora in Michigan as 
well.
    But one thing that struck me when I traveled to Albania, 
there were so many homes there that were flying both the 
Albanian flag and the United States flag. The feeling of good 
will towards the United States was indeed very strong, which 
may be why you are saying most folks think it is impenetrable.
    From what I hear from your testimony, we should be 
concerned not to look at it that way, and is there something in 
particular we need to do to make sure we continue to harbor 
those great feelings that I think apparently exist there for 
the United States?
    Mr. Bugajski. Well, absolutely, but working both with 
Albania and Kosovo. Remember the Albanian population looks up 
to the United States in a way as helping to create two 
countries, helping the defend their freedoms, their 
independence. We cannot walk away. We must continue to be 
active. This is actually an important time where there is a 
crisis, a political crisis, in Albania because of the 
polarization of the two major parties and one of the parties is 
actually boycotting parliament. We need to be much more active, 
and hopefully the special representative will also engage in 
this to bring these two parties together, maybe to come up with 
some sort of coalition government in the future to prevent 
Albania from sliding into what is the sort of recurrent crisis 
every few years.
    As you said, they show the flag. We need to show the flag 
as well.
    Senator Peters. Great.
    Well, you brought up the special representative. I think 
each of you have as well. If you could talk about what you 
think his priorities should be, what should we be looking for 
coming out of his office. Mr. Wilson, if you want to start.
    Mr. Wilson. Thank you for that.
    I might just first say it is remarkable how pro-American 
Albania is, and we are grateful. We should be so proud that we 
welcomed Albania into the alliance a decade ago. It was the 
right thing to do even as people questioned NATO enlargement. 
We can be proud of what they have contributed.
    What we can do now to help Albania is ensure that its 
institutions, its democracy works. Russia will never convince 
Albanians to think poorly of the United States, but it can 
incentivize dysfunctionality in the country that leads the NATO 
ally to trip up. Strategically right now, it could lead to a 
decision on the EU to pass over opening accession negotiations 
with Tirana, something that we need to help Albania present a 
strong case to the EU, and we need to weigh in with our 
European friends to underscore the strategic imperative of 
keeping the process of accessions moving forward for Albania.
    For the special representative, Matt Palmer, it is terrific 
to have a seasoned diplomat named to this position. I think it 
is important to give the United States a little bit more heft 
and weight in what is unfolding.
    I would say his top priority is to ensure a Kosovo-Serbia 
deal. We want to see North Macedonia come into NATO. We want to 
see EU accession open for Albania, North Macedonia. He should 
work on those issues. The top priority is to be a singular 
focus on getting the two parties back to the table, to remove 
the tariffs, and to stop the derecognition campaign so that we 
can have a serious negotiation that can lead to a historic 
deal. There are not many issues in the world today where we can 
have a true win. We are going to mitigate or manage problems 
around the world. Kosovo-Serbia is one where with a little bit 
of United States muscle with Congress and the administration 
actually perhaps seeing eye to eye, the United States and EU 
actually seeing somewhat eye to eye despite other divisions--
this is where we can have a historic win and where his energy 
is best spent.
    Senator Peters. Thank you.
    Dr. Shullman, your thoughts on it?
    Dr. Shullman. Well, I will defer to the Balkan experts on 
the Balkan dynamics of this.
    But I will say in the China aspect, part of the problem 
with the influence that China has been able to build in the 
region is a product of simple diplomatic attention. I think 
Chinese President Xi Jinping I believe has had at least five 
meetings with President Aleksandar Vucic of Serbia since 2016.
    Senator Peters. Dr. Shullman, I am sorry to interrupt. We 
are in the midst of a vote. I am going to have to run to vote. 
But I want your answer for our transcript. So I will not be 
sitting here, but I will be reading the transcript. I think 
Senator Ernst will be back as well. But if you would continue 
to answer that for the transcript. Sir, if you will do the 
same. But I will leave and you will see the chairwoman back 
here shortly. I apologize for our running back and forth. I 
appreciate your indulgences.
    Dr. Shullman. President Xi Jinping and Aleksandar Vucic I 
believe have had five meetings since the historic meeting they 
had in 2016. There are plans in the works for President Xi to 
go to Serbia again. The Chinese have paid a significant amount 
of attention to Eastern Europe and to the Western Balkans in 
particular. Of course, the 17 Plus 1 mechanism is a sign of 
that. The fact that we now have the special envoy and the fact 
that it represents an increased level of attention from the 
United States Government to this region I think is very much to 
the good and demonstrates that the United States is paying 
attention.
    Part of the problem in the Western Balkans is that there is 
a perception that the greatest amount of investment in the 
country comes from China and also from Russia, that they are in 
the top spots in terms of investment when in fact four of the 
top five biggest investors in Serbia hail from the European 
Union. This perception is very important. I think the more 
attention that the United States and our Western European 
allies can pay to the region, the better.
    Senator Ernst. Mr. Bugajski, any closing thoughts?
    Mr. Bugajski. The question that was asked by the ranking 
member was the role of the U.S. special envoy, what 
particularly he should be dealing with.
    One other thing I would add, of course, is Bosnia-
Herzegovina has not been mentioned very much. This I think is 
the major flashpoint. I cannot imagine, for instance, a Serbia-
Kosovo armed conflict, particularly with Camp Bondsteel and a 
NATO presence in Kosovo and the restraints that are placed upon 
Serbia. But I can imagine a renewed armed conflict within 
Bosnia. Again, I do not think at this point the Serbian 
leadership in the Republika Srpska would want that, but they 
are playing. They are toying with the idea of separation. They 
are toying with the idea of a dysfunctional or failed state. 
Banja Luka has become actually the biggest inroad, I would say, 
for Russia. They are probably bigger than Belgrade into the 
region because why? Because President Dodic is funded by 
Russia. Putin visits. They promise all sorts of things. There 
are all sorts of cultural and social and religious 
intermingling. The possibility that at some point--they have 
been waiting I think in Banja Luka for us to weaken our resolve 
to, let us say, making this a functional state.
    I think we have to now double that commitment to that 
country. I think actually the special rep will be more involved 
in this Bosnia crisis than Kosovo-Serbia.
    Whether he can do the two simultaneously I am not sure. One 
has to be extremely careful, as I mentioned earlier, not to 
allow a Russian voice in trying to resolve something that they 
do not want to resolve in the first place.
    Senator Ernst. Thank you.
    I am going to ask just one final question, and then we will 
close out the hearing. I want to thank all of you so very much 
for participating.
    But as we are talking about Kosovo and Serbia, many folks 
know--I make no secret about it--I am very proud of this 
relationship. But Iowa and Kosovo are partners in the National 
Guard State Partnership program, and I wanted to take a minute 
to talk through some of those issues and to better understand 
the dynamics between Kosovo and Serbia, as well as what you 
just spoke to, the Russian influence that exists in that 
regard.
    If we could, the question is, how would a comprehensive 
agreement between Kosovo and Serbia that achieves mutual 
recognition support United States national security interests? 
Mr. Bugajski, if I could start with you, please.
    Mr. Bugajski. I would say absolutely supports U.S. national 
security interests. We have invested enormous resources and 
time and diplomacy in trying to stabilize the region. Remember, 
this was the first major NATO land operation in its history 
when we helped to liberate Kosovo from a very brutal regime, 
the Milosevic regime that was trying to slaughter or expel the 
majority of the people. We helped build a state.
    But if that state is questioned, if that state is not 
accepted in international institutions, if that state continues 
to be destabilized not only by a neighbor but also a power that 
is trying to destabilize an even broader region, that has a 
very, let us say, negative approach to the West, wants to 
undermine the West, wants to disassemble the West, it is 
incumbent on us to make sure that Kosovo succeeds as a state, 
that it enters international institutions, that it becomes 
eventually an EU member, as well as a NATO member--and 
unfortunately, the EU has not treated Kosovo in the way it 
should. Visa liberalization. Remember, the one country that 
still does not have that visa liberalization, even if Georgia 
and Ukraine do, is Kosovo, which is in the middle of the 
Balkans.
    Five countries, remember, and the European Union still do 
not recognize Kosovo. This is where we should be paying 
attention also. Remember, two of those countries are countries 
that we helped to free themselves from Soviet overlordship, 
Slovakia and Romania. We should be working much more closely 
with these countries. Can you imagine their recognition? What a 
positive boost that would send to Kosovo and to finally 
resolving this dispute.
    I think it is resolvable. Actually there is an article I 
did for CEPA [The Center for European Policy Analysis] on steps 
that could be taken, confidence building steps. Both sides have 
to surrender certain things. Both sides have to offer certain 
things. But ultimately Kosovo's status cannot be questioned, 
which some of the Serb leadership does. Its status is final. 
The question is to accept it. How do you move towards that 
acceptance?
    Senator Ernst. Very good. Thank you so much.
    Mr. Wilson?
    Mr. Wilson. Thank you.
    I do want to echo your kudos. These National Guard programs 
have a fundamental impact in the countries where they operate. 
Kudos to Iowa for doing this with Kosovo. It is very important.
    What I would say is that right now in the absence of an 
agreement between Belgrade and Pristina is the open wound in 
the region that holds back the country's regional development, 
economic development. It also provides oxygen for whether they 
are mafia, corrupt powers locally, or autocratic corrupt powers 
internationally, to play a different game than ours. The 
absence of agreement enables politicians to continue to play 
the drip of the nationalist card and be less accountable to 
delivering for their citizens economic development and other 
opportunities.
    If we could help shepherd an agreement through--an 
agreement will only be shepherded through in my view if the 
United States is heavily engaged and driving this forward--it 
helps resolve one of the fundamental open geostrategic 
questions in Europe. Will Serbia find its place in Europe and 
in the West or not? An agreement will help remove the albatross 
around Serbia's neck, which keeps it trapped by its past and 
which allows the Russians leverage to manipulate the country. 
An agreement will allow Kosovo itself to begin to develop its 
own potential, not just to join Interpol but to join the United 
Nations and to become part of the Partnership for Peace and 
ultimately NATO and the European Union in a way that it can 
unlock the potential of its own people. When you travel through 
the region today, too many of the brightest people, as my 
colleague had said, are trying to find their future outside 
their borders. That is not how this region is going to succeed, 
and I think our leadership and a place where we have a lot of 
political, moral, and security influence to secure a deal in 
our interests can continue our tradition of helping transform 
former adversaries into partners and ultimately allies in a way 
that is good for U.S. interests.
    Senator Ernst. Thank you.
    Dr. Shullman, final words from you.
    Dr. Shullman. Thank you.
    I agree with all of that, and I would just add in the 
context of the Chinese and Russian influence topic that we have 
discussed and have been discussing today, I think this would 
support United States national security interests because it 
removes a key weapon for Russia but also for China in its 
relations in the region.
    China, like Russia, does not recognize Kosovo's statehood, 
and I know from my travels in Serbia, every conversation, no 
matter what the topic is, eventually, even if you are talking 
about China, will get back to, and you know, China gained 
strategic advantage here because of the way they approach the 
Kosovo question.
    I think that this is really going to be a key advantage to 
the United States if such an agreement is signed. China opposed 
Kosovo's 2008 declaration of independence. It is based not only 
on the possible consequences that they feel recognizing 
Kosovo's sovereignty might have on delicate issues inside China 
such as Tibet and Xinjiang and separatism there, but also as I 
have said, because they recognize the strategic value. This 
would go a long way towards bolstering the United States 
position and taking away a weapon from China and from Russia.
    Senator Ernst. Well, thank you so much to our witnesses. 
Again, a very, very healthy discussion about Chinese influence, 
as well as Russian influence in the Western Balkans. It is 
something that we do need to pay attention to. I am glad to 
have that conversation with the three of you today. Again, 
thank you for attending today's subcommittee hearing on 
Emerging Threats and Capabilities.
    With that, we will close out today's hearing.
    [Whereupon, at 4:26 p.m., the Subcommittee adjourned.]

                           APPENDIX A

                      REVERSING MOSCOW'S OFFENSIVE
       A STRATEGY FOR WINNING THE SHADOW WAR WITH PUTIN'S RUSSIA
                       Janusz Bugajski, May 2019
    Western governments have tried and failed in applying various 
remedies to curtail Moscow's neo-imperialist ambitions. Containment, 
appeasement, and engagement have not cured Russia from its imperial 
designs. Indeed, each approach has simply reinforced Kremlin 
perceptions that the West is weak, divided, and incapable of preventing 
Russia's restoration as a major global power. The absence of a 
coherent, dynamic, and offensive Western strategy has encouraged Moscow 
to intensify its anti-Western Shadow War to dismantle the NATO 
alliance, limit American influence in Europe, and further fracture the 
European Union.
    But despite its escalating anti-Atlanticist offensive, Russia is 
facing growing domestic problems on several fronts: economic, 
demographic, social, regional, and ethnic. This provides Western 
governments with a unique opportunity not only to defend against 
Moscow's attacks but also to devise a strategy that reinforces Russia's 
decline while managing the international consequences of its 
prospective dissolution. Such a strategy needs to be multi-dimensional, 
combining the informational, cyber, economic, diplomatic, and military 
domains. Russia pursues a strategy that integrates all elements of 
state power, from ``hard'' military campaigns to ``soft'' psychological 
operations. Washington and its NATO allies will also need to adopt a 
comprehensive approach to capitalize on Russia's vulnerabilities. \1\
---------------------------------------------------------------------------
    \1\ Providing for the Common Defense: The Assessment and 
Recommendations of the National Defense Strategy Commission, Washington 
DC, November 2018, https://www.usip.org/sites/default/files/2018-11/
providing-for-the-common-defense.pdf
---------------------------------------------------------------------------
             decline wrapped in aggression inside a crisis
    To adapt Winston Churchill's memorable insight at the outset of 
World War Two--that Russia's actions are ``a riddle wrapped in a 
mystery inside an enigma''--Vladimir Putin's Russia is a declining 
state, donning the camouflage of external aggression to disguise its 
increasing fragility. Nonetheless, a declining Russian state can prove 
more threatening than a rising power because its leaders calculate that 
time is working against them and may take more risks to pursue their 
objectives. Moscow disguises its decline by projecting itself as the 
key power in Eurasia, mobilizing imperial sentiments among its 
citizens, and engaging in external revisionist offensives against its 
neighbors. The Kremlin's strategic objective necessitates undermining 
NATO's security posture throughout Europe, fracturing the EU, splitting 
the United States from its European allies, and eroding America's 
global influence by undermining its political system and discrediting 
its leadership role.
    Russia's external offensives cloak its internal infirmities. 
Through a combination of low fossil fuel prices, failed economic 
diversification, infrastructural decay, pervasive corruption, and 
Western financial sanctions, state revenues are declining, living 
standards falling, social program diminishing, incomes contracting, 
social conflicts intensifying, and regional disquiet mounting. Russia's 
economy is stagnating. According to World Bank statistics in 2017, its 
Gross Domestic Product (GDP) per capita ranks 60th in the world. \2\ 
The poverty rate is rising sharply and a growing numbers of citizens 
face destitution. Increased defense spending to project Russia's power 
has come at the expense of education, health care, and infrastructure. 
But even military expansion is slowing down as the defense budget is 
shrinking and over the coming decade Russia's armed forces will fall 
further behind that of the United States and China. According to data 
from 2017, Russia's military spending is almost one quarter that of 
China's and only a tenth of the United States military budget. \3\
---------------------------------------------------------------------------
    \2\ https://data.worldbank.org/indicator/
NY.GDP.PCAP.CD?year_high_desc=true
    \3\ Nan Tian, Aude Fleurant, Alexandra Kuimova, Pieter D. Wezeman, 
and T. Siemon, ``Trends in World Military Expenditure, 2017,'' 
Stockholm International Peace Research Institute, May 2018, https://
www.sipri.org/sites/default/files/2018-04/sipri_fs_1805_milex_2017.pdf
---------------------------------------------------------------------------
    Russia's longer-term prospects look even bleaker. Demographic 
indicators underscore a shrinking population with high mortality, low 
fertility, and rising emigration of the best educated. Russia's 
population has dipped from about 148 million after the breakup of the 
Soviet Union in the early 1990s to only 144 million in 2018. Various 
agencies estimate that this total will fall to around 128 million by 
2050 and a steadily increasing percentage will be neither ethnic 
Russian nor Orthodox Christian. \4\ Life expectancy among Russian males 
stands at about 60 years, or 15 years less than the norm in 
industrialized states and lower than in many African countries.
---------------------------------------------------------------------------
    \4\ For a valuable synopsis with detailed statistics see the World 
Population Review, http://worldpopulationreview.com/countries/russia-
population/
    Also check https://yaleglobal.yale.edu/content/russian-
demographics-perfect-storm
    According to the CIA factbook, 78% of the population is estimated 
to be ethnic Russian, although that proportion is steadily declining. 
See https://www.cia.gov/library/publications/the-world-factbook/geos/
rs.html
---------------------------------------------------------------------------
    Russia's economic performance alone is insufficient to measure 
susceptibility to decline and potential fracture, as evident in the 
collapse of the Soviet Union nearly three decades ago. Numerous 
additional factors must be examined, particularly the extent of social, 
ethnic, and regional tensions. The unwieldy Russian Federation consists 
of 85 ``federal subjects,'' of which 22 are republics representing non-
Russian ethnicities and numerous regions with distinct identities that 
are becoming increasingly estranged from Moscow. Instead of pursuing 
decentralization to accommodate their aspirations, the Russian 
government is downgrading their autonomy. This is evident in the 
recently introduced language law designed to promote Russification and 
plans to merge and eliminate several autonomous regions and republics. 
\5\ Pressure is mounting across the country, with growing public anger 
at local governors appointed by the Kremlin and resentment that Moscow 
appropriates regional resources but cannot guarantee stable living 
standards.
---------------------------------------------------------------------------
    \5\ Paul Goble, ``Putin's Language Law Radicalizing Russians and 
Non-Russians,'' Window on Eurasia--New Series, August 1, 2018, http://
windowoneurasia2.blogspot.com/2018/08/putins-language-law-
radicalizing.html and Neil Hauer, ``Putin's Plan to Russify the 
Caucasus: How Russia's New Language Law Could Backfire,'' August 1, 
2018, https://www.foreignaffairs.com/articles/russia-fsu/2018-08-01/
putins-plan-russify-caucasus
---------------------------------------------------------------------------
    To compensate for its military inferiority and economic weakness 
vis-a-vis the West, Moscow deploys a wide assortment of both open and 
clandestine political, financial, economic, cyber, and propaganda tools 
to achieve its objectives. It capitalizes on the vulnerabilities of 
targeted countries, whether through cyber attacks, psychological 
offensives, energy dominance, state corruption, political blackmail, or 
numerous other ``soft power'' tools.
    For the West, a reactive defense toward a declining Russia is 
insufficient to deter Moscow's ambitions. Instead, a broad offense is 
needed to divert Moscow's attention away from external aggression and 
toward its own internal protection. While the Kremlin has opened 
several fronts in Europe and the United States, Russia itself is 
afflicted by many more economic, social, political, cyber, ethnic, 
religious, and regional vulnerabilities than its adversaries. These 
deficiencies and potential pressure points need to be thoroughly 
assessed and exploited.
    The new United States National Security Strategy issued in 2017 
affirms that Russia is a rival and competitor that aims to weaken 
Washington's international influence and divide the U.S. from its 
allies and partners. \6\ Given this astute geopolitical assessment, 
policies need to be developed to capitalize on Moscow's weaknesses. The 
minimum Western objective would be to curtail Moscow's subversive 
assault against the United States and its allies. The intermediate 
objective would be to deflect Russia's external aggression into 
internal turmoil that the Kremlin becomes increasingly focused on 
pacifying. The maximum and long-term objective would be to fracture the 
Russian Federation and manage the country's dissolution, thus 
significantly curtailing if not fully eliminating Moscow's geopolitical 
ambitions. A wide assortment of tools can be deployed to achieve this 
range of goals.
---------------------------------------------------------------------------
    \6\ National Security Strategy of the United States of America, 
December 2017, https://www.whitehouse.gov/wp-content/uploads/2017/12/
NSS-Final-12-18-2017-0905-2.pdf
---------------------------------------------------------------------------
                     exposing influence operations
    The Russian state is engaged in systematic informational warfare to 
undermine Western cohesion and promote Moscow's expansionist 
enterprise. This informational subversion is designed to steer the 
Western media, implant the Kremlin narrative, infect public opinion, 
and influence decision-makers. Moscow's espionage penetration and media 
disinformation networks are supplemented by modern-day ``fellow 
travellers,'' whether duped, manipulated, or complicit, including 
politicians, businessmen, diplomats, academics, lobbyists, and policy 
analysts. \7\ These human assets fall into several categories, 
including those working for the Kremlin but who do not make their 
affiliations public, those who are avowedly independent but support 
Russia's foreign policies, and those who become co-opted and obligated 
through financial and other payments from sources tied to the Putin 
administration and become a conduit for Kremlin disinformation.
---------------------------------------------------------------------------
    \7\ Kateryna Smagliy, Hybrid Analytica: Pro-Kremlin Expert 
Propaganda in Moscow, Europe, and the US: A Case Study on Think Tanks 
and Universities, Research Paper, October 2018, Institute of Modern 
Russia, https://imrussia.org. Kremlin-sponsored foundations have 
established several centers of Russian studies at European and American 
universities to broaden the network of Kremlin sympathizers within 
Western academia.
---------------------------------------------------------------------------
    A number of initiatives could bring significant success in 
combating Moscow's penetration of American and European societies. Law 
enforcement bodies and investigative journalists need to probe and 
expose the wide array of Russian state influence operations. In the 
United States, this would include several former members of Congress 
and the administration, lobbyists, public relations firms, policy 
institutes, and various NGOs receiving funding directly or indirectly 
from Kremlin sources or from oligarchs and foundations working on 
behest of the Russian government, such as Russkiy Mir and Gorchakov. In 
the U.S., campaign-financing laws are inadequate to stymie the flow of 
foreign donations designed to influence national policy. \8\ Urgently 
needed is anti-money laundering (AML) legislation so that hostile 
actors identified by intelligence services or law-enforcement can be 
blocked or apprehended. At the same time, politicians and major funders 
must be required to make full disclosures regarding the source of their 
revenues and assets as well as tax returns and other financial 
documents.
---------------------------------------------------------------------------
    \8\ Neil Barnett and Alastair Sloan, Democracy in the Crosshairs: 
How Political Money Laundering Threatens the Democratic Process, 
Atlantic Council, Eurasia Center, September 2018, https://issuu.com/
atlanticcouncil/docs/democracy_in_the_crosshairs_
---------------------------------------------------------------------------
    In the United States, lax regulations enable lobbyists to operate 
on Moscow's behalf and the Foreign Agent's Registration Act (FARA) is 
insufficiently enforced. The focus must also encompass Putin's 
supporters in the media and academia who receive finances or favors 
from the Russian state. Funding sources, often channeled through shell 
companies or third parties, should also be investigated for potential 
U.S. sanctions busting or financial crimes such as money laundering and 
tax avoidance. To retain credibility, universities and NGOs in the West 
need to screen and investigate their funding sources and whether these 
are connected with Kremlin influence operations or with financial 
crimes perpetrated by Putin's oligarchs. PR campaigns by lobbyists 
seeking to lift sanctions against Russian oligarchs and business 
entities engaged in implementing the Kremlin's revisionist foreign 
policy need to be exposed, particularly those individuals and entities 
already sanctioned by the United States and the EU. One recent example 
has been the attempt by lobbyists to influence the United States 
Justice Department in easing sanctions against Oleg Deripaska, one of 
President Putin's key oligarchic accomplices.
    Benefiting from the extensive evidence unearthed by United States 
Special Counsel Robert Mueller's investigation, the FBI needs to 
conduct probes of all Kremlin-connected business deals and bank use in 
the United States. As of December 2018, Mueller has issued indictments 
against 29 Russian entities and extracted six guilty pleas and a 
conviction. The findings of the Mueller probe, once it discloses all 
the connections between Kremlin agencies, Russian oligarchs, Western 
businessmen, social networks, and American collaborators during 
Moscow's attack on the 2016 United States elections, would be a victory 
in defense of American democracy and sovereignty. This would send an 
important signal to the Kremlin that any future penetration would be 
more effectively combated.
                  countering informational offensives
    Information warfare is a systematic attempt to weaken and defeat 
the morale and resistance of one's adversary. State-sponsored 
information offensives are designed to undermine governments, divide 
societies, debilitate decision makers, weaken national security, and 
strengthen the position of the aggressor state. Compared to its Soviet 
predecessor, the contemporary Russian disinformation offensive directed 
at Western states and societies transmits a broader diversity of 
messages and employs a wider assortment of methods.
    Although Moscow's overriding strategic objective is similar to 
Soviet times--to defeat the West--it has several supplementary goals: 
to confuse and frighten citizens in Europe and America, to delegitimize 
and disrupt Western democracies, to corrupt and corrode state 
institutions, to undermine the credibility of legitimate news sources, 
and to strengthen nationalists and populists who may favor Russia's 
policies. Kremlin disinformation focuses on gullible sectors of the 
Western public to depict Russia as a fully independent state founded on 
traditional values. Such a message has appeal across the political and 
social spectrum in the West--from leftist and rightist anti-American 
Europeans to American nationalists, conservatives, and evangelicals.
    Regarding the means of attack, modern disinformation has a much 
wider and faster assortment of channels for distribution than during 
Soviet times. In addition to standard media outlets, fabricated stories 
can be disseminated through social internet platforms and rapidly reach 
millions of consumers. As with village gossip, many people fail to 
check the source before further spreading fabricated stories. 
Repetitive electronic methods increase the reach of disinformation and 
even infect the more credible mass media with bogus items. To win the 
information war against the Kremlin a multi-national counter-propaganda 
strategy is needed containing several defensive and offensive elements.
    On the defensive front, social internet companies must provide 
greater transparency and data protection from Russian trolls spreading 
disinformation among American and European citizens. \9\ These 
companies can intensify their efforts to eliminate fake accounts that 
spread propaganda. Twitter and Facebook purges of Russian-linked 
accounts have reduced the effectiveness of Moscow's disinformation. 
However, the U.S. Congress should pass the Honest Ads Act, requiring 
political advertising on social channels to have the same level of 
transparency as on television and radio by revealing the funding 
sources of sponsored content. Tech companies must also do more to 
protect the private data of users, as this can be exploited to 
manipulate public opinion or even blackmail and recruit foreign agents.
---------------------------------------------------------------------------
    \9\ James Lamond, ``The Origins of Russia's Broad Political Assault 
on the United States,'' Center for American Progress, 
www.americanprogress.org/issues/security/reports/2018/10/03/458841/
origins-russias-broad-political-assault-united-states
---------------------------------------------------------------------------
    Russia's state or oligarch-funded media outlets, including 
television, radio, internet, and print media should not be presented as 
legitimate media sources but as propaganda arms of the Kremlin. This 
does not mean that they should be outlawed or banned but closely 
monitored, exposed for the most egregious falsehoods, and where 
possible labeled as spreading fabricated news or propaganda. 
Simultaneously, media literacy among Western publics has to be 
enhanced, or at least the capability to distinguish between credible 
and fraudulent media sources.
    Anti-disinformation initiatives can be more substantially funded 
and expanded both in the United States and Europe. The Polygraph 
initiative launched by Voice of America and Radio Free Europe/Radio 
Liberty serves as a valuable means to verify the increasing volume of 
disinformation. \10\ In order to expose the most blatant political 
fabrications, VOA and RFE/RL journalists research and analyze 
statements and reports distributed by government officials, government-
sponsored media, and other high-profile individuals.
---------------------------------------------------------------------------
    \10\ https://www.polygraph.info/p/5981.html
---------------------------------------------------------------------------
    In Europe, an EU team StratCom East documents disinformation 
originating from Russian sources and issues a weekly bulletin 
highlighting numerous distortions, as well as a Twitter feed called EU 
Mythbusters. Ukraine's StopFake is a valuable resource reporting on 
Moscow's disinformation tactics. MythDetector tracks and debunks anti-
Western disinformation. Digital Sherlocks expose and explain 
disinformation at the Atlantic Council's Digital Forensic. Prague has 
established a specialist unit dealing with fake news spread by websites 
supported by Moscow. The Czech interior ministry Center Against 
Terrorism and Hybrid Threats scrutinizes disinformation and counters it 
via social internet platforms. An informal internet army of Lithuanians 
``elves'' counters hate speech and pro-Moscow propaganda. They patrol 
social platforms, coordinate their actions through Facebook and Skype 
to expose fake accounts, and post blogs to discredit conspiracy 
theories. At the same time, the European Commission has called upon 
social platforms, including Facebook, Twitter, Google, and Mozilla, to 
do more to block Russian trolls from disrupting European elections.
    Exposure of Russian disinformation is vital, but to be more 
effective in countering disruptive attacks Western governments and NGOs 
need to undertake an informational offensive targeted at public and 
political opinion inside Russia. Such a psychological operation should 
be geared toward two core objectives: alienating the Russian public 
from the regime and provoking power struggles inside the ruling 
stratum. Detailed revelations about financial abuse among officials 
while living standards for the masses continue to plunge can help fuel 
social, ethnic, regional, and religious unrest. Western sources can 
disseminate poignant information for Russian citizens that is avoided 
by the state media, including economic decline due to government 
corruption; the country's neglected and crumbling infrastructure; 
Russia's looming demographic catastrophe; and growing regional unrest.
    Western intelligence services can acquire, leak, and dump kompromat 
material about Putin and his inner circle. A key component would be to 
disseminate official Russian communications, with a focus on the 
Kremlin, government ministries, parliament, key businesses, and 
subservient political parties, as well as private correspondence 
between officials, particularly at local level, which negatively affect 
the lives of ordinary citizens. Potentially incendiary information can 
be circulated through the internet and various social platforms.
    The objective would be to disclose the most provocative scandals of 
Russia's state and local officials and the extent of their corrupt 
governance, opulent lifestyles, public lies, and contempt for ordinary 
citizens. Especially valuable would be messages that reveal the 
willingness of state officials, oligarchs, and bureaucrats to betray 
the country for personal gain from the Russian budget. Humor, irony, 
and satire are also valuable assets in addressing Kremlin propaganda 
and the nature of the Putinist system.
    Disclosures about conflicts within the ruling elite can generate 
uncertainty and anxiety in government circles and expose the regime's 
political vulnerabilities. The promotion of internal power struggles 
may not precipitate Putin's downfall, but it can help divert the 
Kremlin from its unchallenged information war against Western 
democracies. By spreading suspicion and distrust between officials and 
raising fears of political purges or state expropriation of oligarchs, 
factional infighting can be aggravated to endanger Putin's presidency.
    Participation in social internet platforms has soared among 
Russia's younger generation in recent years. The West needs to target 
sectors of Russian society, including young people, the unemployed, 
nationalists, ethnic and religious minorities, regionalists, 
separatists, and numerous other groups to help sow discord and inspire 
the emergence of anti-Kremlin movements. Russia itself may not be 
immune from the anti-establishment populism that has swept through 
Europe and the United States in recent years and from which the Kremlin 
has tried to benefit in disassembling the West. \11\ This populist 
boomerang, outraged by failing living standards, the yawning gap 
between rich and poor, and rampant official corruption, may be manifest 
in street protests and even violent acts against state property or 
government officials, as there is no effective political outlet for 
mass grievances.
---------------------------------------------------------------------------
    \11\ Paul Goble, ``Anti-Establishment Wave like Those in UK and US 
May Engulf Russia, Minchenko Consulting Says,'' Windows on Eurasia--New 
Series, October 26, 2018, https://windowoneurasia2.blogspot.com/2018/
10/anti-establishment-wave-like-those-in.html
---------------------------------------------------------------------------
    Some Western policy makers will caution that informational 
offensives against Moscow would be too provocative and could escalate 
bilateral disputes. However, from the Kremlin's perspective, the lack 
of an effective United States response to its own interference in 
Western societies is perceived as a major vulnerability that invites 
further intervention. The attacks continue primarily because Moscow 
faces an inadequate defense and a tepid counter-attack. Although the 
EU's East StratCom, NATO's StratCom, and the newly established national 
StratComs in Europe can be effective tools, they still lack sufficient 
resources and coordination to combat and counter Kremlin-directed 
disinformation. \12\ Since officials in Moscow will in any case accuse 
the United States of interfering in its domestic affairs, Washington 
together with its allies should make sure that their involvement is 
politically consequential.
---------------------------------------------------------------------------
    \12\ Donald N. Jensen and Peter B. Doran, Chaos as a Strategy: 
Putin's ``Promethean'' Gamble, Center for European Policy Analysis 
(CEPA), November 2018, https://www.cepa.org/chaos-as-a-strategy
---------------------------------------------------------------------------
                    cyber defense and counter-attack
    Cyber attacks on the West can include systematic assaults and 
denial of service attacks on government sites by Kremlin agencies or 
hired hackers. It can also entail the monitoring of telecommunications, 
infecting targeted networks with viruses, or disabling entire systems. 
Such attacks can affect critical infrastructure and the defense 
industrial base, including power stations and grids, transportation and 
telecommunication networks, banking and financial services, as well as 
law enforcement and national security systems. An internal U.S. 
Department of Defense report released in December 2018 enumerated 
various gaps in cyber security, including failure to encrypt classified 
flash drives or place physical locks on critical computer servers, that 
have left the country vulnerable to missile attacks. \13\
---------------------------------------------------------------------------
    \13\ https://www.nbcnews.com/news/us-news/cybersecurity-failures-
raise-threat-deadly-missile-attacks-pentagon-watchdog-says-n949176
---------------------------------------------------------------------------
    Measures must be taken to better protect vital infrastructure, 
including national defense systems, in case Moscow escalates its cyber 
probing into an actual attack. Lessons learned from European countries 
that have been targeted by the Kremlin must also be incorporated in the 
United States response, including Ukraine where a major Russian attack 
(NotPetya) in June 2017 disabled about 10% of all computer systems and 
affected airports, banks, electrical networks, and communications 
services. Critical infrastructure among NATO allies needs better 
protection from cyber attacks. \14\ Key measures should include state 
funding of public utilities and commercial providers to upgrade their 
systems; contingency plans to ensure a rapid response and coordination 
among NATO members; better public information and preparation for 
cyber-related disruptions of vital supplies; and modernization of 
emergency services to handle large-scale emergencies.
---------------------------------------------------------------------------
    \14\ Central European Futures: Five Scenarios for 2025, Visegrad 
Insight, Special Edition 1(12)/2018, https://visegradinsight.eu
---------------------------------------------------------------------------
    Stricter sanctioning against cyber attackers needs to be pursued. 
In June 2018, the United States Treasury imposed sanctions on five 
Russian entities and three individuals, including a firm that is 
controlled by Russia's Federal Security Service (FSB), in response to 
Russian cyber attacks on the United States and its allies, including 
the NotPetya cyber attack and cyber intrusions of America's energy 
grid. The United States Cyber Command, established in 2009, has 
targeted Russian operatives to deter them from spreading disinformation 
in United States elections. \15\ American operatives inform them they 
have been identified, that their work is being monitored, and they 
could be indicted or sanctioned. This is a useful first step but may 
not dissuade the broad array of Kremlin-affiliated hackers and trolls. 
To pursue a more potent offensive, an example should be made by 
releasing personal information about pro-Moscow cyber offenders and 
pursuing ways to neutralize their online operations.
---------------------------------------------------------------------------
    \15\ Julian E. Barnes, ``U.S. Begins First Cyberoperation Against 
Russia Aimed at Protecting Elections,'' The New York Times, October 23, 
2018.
---------------------------------------------------------------------------
    The U.S. Cyber Command defends military networks but has also 
developed offensive capabilities. In September 2018, the Pentagon 
issued a comprehensive cyber strategy document focusing on Russia and 
China as the chief adversaries and calling for ``confronting threats 
before they reach U.S. networks.'' \16\ U.S. Cyber Command has been 
tasked with defending the country against attacks. However, this 
approach needs to be more assertive and extensive, particularly as 
there is consensus that lower-level malicious campaigns pose a major, 
cumulative risk to the U.S. The strategy also makes more explicit the 
Defense Department's role in deterring or defeating cyber operations 
targeting U.S. critical infrastructure that is likely to cause a 
significant ``cyber incident.''
---------------------------------------------------------------------------
    \16\ Department of Defense, Cyber Strategy 2018, https://
media.defense.gov/2018/Sep/18/2002041658/-1/-1/1/
CYBER_STRATEGY_SUMMARY_FINAL.PDF
---------------------------------------------------------------------------
    The U.S. and its allies need to develop and deploy its offensive 
cyber capabilities to deter and attack aggressors. In September 2018, 
President Trump signed the National Security Presidential Memorandum 
13, a directive that enables offensive U.S. cyber operations. \17\ It 
allows the military and other U.S. agencies to undertake cyber 
operations intended to protect their systems and the country's critical 
networks. Washington must make it clear that it is prepared to use all 
available tools, including cyber offensives, against state-sponsored 
assailants. In deterring and defeating cyber adversaries, a Cyber Force 
should also be established that can work more closely with allies and 
partners. \18\
---------------------------------------------------------------------------
    \17\ The Washington Post, 20 September 2018, https://
www.washingtonpost.com/world/national-security/trump-authorizes-
offensive-cyber-operations-to-deter-foreign-adversaries-bolton-says/
2018/09/20/b5880578-bd0b-11e8-b7d2-
0773aa1e33da_story.html?utm_term=.72cb3af80304
    \18\ Seth G. Jones, ``Going on the Offensive: A U.S. Strategy to 
Combat Russian Information Warfare, CSIS Briefs,'' October 1, 2018, 
https://www.csis.org/analysis/going-offensive-us-strategy-combat-
russian-information-warfare
---------------------------------------------------------------------------
    Moscow's reaction to a United States cyber attack will prove 
instructive, given that America has superior electronic capabilities 
and can take down critical infrastructure in Russia itself. As a 
warning, Washington could demonstrate its cyber capabilities vis-a-vis 
third parties that have attacked U.S. systems. A resolute action is 
more likely to deter Moscow's attacks than repetitive warnings and 
fruitless admonitions.
                    economic and financial penalties
    The Kremlin uses a number of economic tools to enmesh specific 
states in a web of financial ties that buttress its political 
penetration. It tries to influence European governments through 
ownership of strategic economic sectors, particularly in energy, 
banking, and telecommunications. Russian company ownership of key 
energy infrastructure, such as pipelines, refineries, and storage 
sites, enables Moscow to exert political leverage. The supply of energy 
and other strategic resources can be decreased or severed at important 
junctures to exert pressure on particular capitals, or their price can 
be lowered or raised to gain political concessions. Russia's business 
penetration also fosters corruption, non-transparency, money 
laundering, tax evasion, and links with international organized crime.
    To undercut Moscow's financial offensive several initiatives can 
prove beneficial. Financial sanctions should be extended on Russian 
government officials and Kremlin connected oligarchs, including 
freezing their international bank accounts, investment funds, and safe 
deposit boxes, denying access to credit cards and the SWIFT banking 
network, and seizing their real estate, investment funds, planes, cars, 
boats, and other properties in the West. Putin himself can be included 
in the expanded list of targets, together with major energy companies 
and other Kremlin-linked businesses. Thus far the ``sectoral 
sanctions'' imposed on Russian companies have had a limited impact. To 
be more effective ``blocking sanctions'' are needed that freeze all 
Russian transactions via the U.S. financial system. \19\ This could be 
replicated in Europe's financial system. An asset freeze on Russian 
banks can be combined with a suspension of any new trade and investment 
with Moscow.
---------------------------------------------------------------------------
    \19\ Michael Carpenter, ``How to Make Sanctions on Russia Work,'' 
The American Interest, December 18, 2018, https://www.the-american-
interest.com/2018/12/18/how-to-make-sanctions-on-russia-work/
---------------------------------------------------------------------------
    Current money laundering regulations in Western countries are 
inadequate and insufficiently enforced; they must be significantly 
tightened and the sources of cash flows investigated. The bi-partisan 
2018 Defending American Security from Kremlin Aggression Act needs to 
be passed and implemented by Congress. \20\ This legislation expands 
financial sanctions on new Russian sovereign debt, against investment 
in state-owned energy projects, and on key political and business 
figures who facilitate the Kremlin's subversive activities.
---------------------------------------------------------------------------
    \20\ https://www.govtrack.us/congress/bills/115/s3336/text
---------------------------------------------------------------------------
    Additional measures can be taken to reverse Russian state 
penetration of Western economies. This can include counter-intelligence 
and law enforcement investigations of all Kremlin-connected business 
and banking deals; bans on purchases of Russian sovereign and state 
corporation bonds; embargos on the transfer of dual use technologies; 
countering Russia's monopolistic energy schemes by suspending support 
and financing for the Nord Stream II natural gas pipeline under the 
Baltic Sea as well as Moscow's other politically-motivated energy 
projects; and the imposition of sanctions on all companies investing in 
Russian-controlled infrastructure and which contribute to undermining 
Western democracies and alliances.
                   military and security instruments
    Russia's new military doctrine signed by President Vladimir Putin 
in December 2014 describes an increasingly threatening international 
environment that can generate problems at home. \21\ It claims that 
intensifying ``global competition'' from NATO and the United States in 
particular constitutes a direct threat to Russia. In disguising its own 
neo-imperial aspirations, Moscow asserts that it will counter Western 
attempts to gain strategic superiority by deploying strategic missile 
defense systems. \22\ It also reserves the right to use nuclear weapons 
in response to the use of nuclear or other weapons of mass destruction 
against Russia or its allies, and even in case of an ``aggression'' 
against Russia with conventional weapons that would endanger the 
existence of the state. The threat of nuclear strikes against NATO 
members is intended to terrorize citizens and convince Western 
governments that they need to negotiate and acquiesce to Moscow's 
demands.
---------------------------------------------------------------------------
    \21\ Paul Goble, ``Putin's New Military Doctrine Says Russia Faces 
More Threats Abroad--and at Home,'' Windows on Eurasia--New Series, 
December 27, 2014, http://windowone urasia2.blogspot.com/2014/12/
window-on-eurasia-putins-new-military.html; and news.kremlin. ru/media/
events/files/41d527556bec8deb3530.pdf.
    \22\ Pavel Podvig, ``New Version of the Military Doctrine,'' 
Russian Strategic Nuclear Forces, December 26, 2014, http://
russianforces.org/blog/2014/12/new_version_of_the_military_do.shtml
---------------------------------------------------------------------------
    The Kremlin employs an assortment of tools to undermine the 
security of its neighbors and prevent them from acting in unison to 
defend their national interests. These include persistent military 
threats, dangerous military encounters and other provocations, 
intimidating exercises, nuclear blackmail, unconventional offensives, 
proxy wars, sponsorship and funding of separatist militias, 
conventional military intervention, territorial fragmentation, and the 
creation and manipulation of ``frozen'' or unresolved conflicts.
    Western states and NATO can pursue a number of counter-measures to 
impair Russia's offensives and dent its ambitions. All aspirant states 
in the Western Balkans should gain membership in NATO in the quickest 
possible time once they fulfill basic conditions for accession, 
particularly Macedonia, Bosnia-Herzegovina, and Kosova. Membership 
Action Plans (MAPs) on route to NATO entry should be provided to 
Ukraine and Georgia. MAPs should also be offered to Serbia, Moldova, 
Armenia, Azerbaijan, Belarus, and whichever NATO Partnership for Peace 
(PfP) countries request accession and commit themselves to qualifying 
for membership.
    Ukraine, Georgia, and other countries facing a direct Russian armed 
assault must be effectively armed with whatever weapons they need to 
inflict heavy losses on invading Russian forces and their proxies. In 
the Black Sea and Azov Sea the U.S. and NATO need to dispatch naval 
vessels to Ukrainian ports to demonstrate the validity of Freedom of 
Navigation Operations and underscore that these are not Moscow's lakes. 
This will also highlight the fact that Russia's invasion of Ukraine has 
positively intensified NATO-Ukraine relations--precisely the outcome 
that the Kremlin aimed to prevent. \23\ NATO members along the eastern 
flank from the Baltic to the Black Sea regions confronting an assertive 
Russia must be more intensively assisted in developing their maritime 
and territorial defensive capabilities.
---------------------------------------------------------------------------
    \23\ Stephen Blank, ``Why is the Sea of Azov so Important?'' 
Atlantic Council, November 6, 2018, http://www.atlanticcouncil.org/
blogs/ukrainealert/why-is-the-sea-of-azov-so-important
---------------------------------------------------------------------------
    NATO military drills should be regularly staged in different zones 
close to Russia's borders with minimal prior warning. All states 
neighboring NATO should be invited to participate in such exercises, 
including Belarus and Moldova. Numerous scenarios can be simulated in 
the drills, including repulsing indirect or direct military invasions 
and territorial seizure by foreign forces. Such maneuvers could help 
disrupt Moscow's military planning and disperse Russian forces along 
its long borders with NATO states.
    NATO planners also need to prepare contingences for opening 
alternative fronts and conflict zones for Moscow in the event of a 
Russian military attack on any part of NATO territory. The aim would be 
to convince the Kremlin that the Western alliance is capable of 
creating and exploiting potentially destabilizing scenarios inside 
Russia and along its borders if Moscow intervenes in a NATO state. In 
addition to strengthening conventional military forces to deter a 
Russian assault, NATO can also prepare plans for special operations on 
Russian territory or missions whereby it can draw Moscow into internal 
or external conflicts that backfire politically. Such moves are more 
likely to place the Kremlin on the defensive rather than allowing it to 
maintain the initiative in its attacks on the West.
                     managing russia's dissolution
    The United States and NATO need to return to core principles in 
dealing with Putin's Russia by applying and adapting policies that 
hastened the collapse of the Soviet Bloc and the Soviet Union in the 
late 1980s and early 1990s. This should be anchored in supporting 
political pluralism, minority rights, genuine federalism, 
administrative decentralization, and self-determination among Russia's 
disparate regions and numerous ethnic groups. The impending 
fragmentation of the Russian Federation may not be as peaceful as the 
disintegration of the Soviet Union and the West needs to start planning 
for a range of scenarios that will affect several of Russia's European 
neighbors, NATO allies, and EU members. The basis for such a strategy 
would be a comprehensive assessment of each federal unit, ethnic group, 
and regional identity to reveal all of Russia's vulnerabilities and 
determine the opportunities for resistance, protest, sovereignty, and 
secession.
    Russia has failed to develop into a nation state with a distinct 
ethnic or civic identity but remains an essentially imperial construct. 
In order to retain its state integrity, Russia needs to operate along 
more inclusive lines to manage disparate domestic interests. The 
country's increasingly stifling authoritarianism, much like Soviet 
communism, will eventually fragment the country. Russia's numerous 
nationalities are in effect trapped within a colonial federation that 
only benefits a narrow elite of security personnel, bureaucrats, 
oligarchs, and politicians tied to the Kremlin. Moscow extracts maximum 
resources from the federal regions while disbursing and investing as 
little as possible. Without local self-determination and regional 
autonomy, the federal structure will become increasingly unmanageable 
with the prospect of violent collapse.
    While Moscow seeks to divide the West and fracture the EU and NATO 
by supporting nationalist, populist, separatist, anti-American, and 
anti-EU parties throughout Europe, Washington and its Allies can 
counteract by promoting regional and ethnic autonomy inside the Russian 
Federation and eventual independence from Moscow. \24\ The rationale 
for such a strategy should be logically framed: in order to survive 
Russia needs a federal democracy and a robust economy; with no 
democratization on the horizon and economic conditions deteriorating 
the federal structure will become increasingly ungovernable; to manage 
the process of dissolution and lessen the likelihood of conflict that 
spills over state borders the West needs to establish links with 
Russia's diverse regions and promote their efforts for a peaceful 
transition toward statehood.
---------------------------------------------------------------------------
    \24\ The argument that Russia must be kept intact because it 
possesses nuclear weapons is flawed; similar assertions were made about 
the Soviet Union before its collapse. Any emerging Muscovite state 
ruled from the Kremlin will inherit the nuclear arsenal just as Russia 
inherited that of the Soviet Union.
---------------------------------------------------------------------------
    In the West's information offensive against the Putin regime, 
Russia's fake federalism should be contrasted with the genuine 
federalism of the United States system and other federal states in 
Europe and elsewhere. Western governments can diplomatically support 
self-determination and federalization inside Russia in key 
international institutions. As during the Cold War, when Washington 
backed the ``captive nations,'' including Ukrainians, Lithuanians, 
Estonians, and Latvians, Western services can both openly or covertly 
assist autonomist and independence movements throughout the Russian 
Federation--from Kaliningrad and Karelia, through the Middle Volga and 
the North Caucasus to Tuva and Sakha in Siberia and the Far East. 
Indeed, Western leaders need to underscore that regions such as Sakha 
and Magadan, with their substantial mineral wealth, could develop into 
successful independent states without Moscow's political control and 
economic exploitation.
    Governors of Russia's federal units appointed by the Kremlin may be 
faced with a stark choice as public disaffection mounts. They can 
either continue to implement Moscow's repressive and exploitative 
policies and face growing domestic opposition and even violent revolt, 
or they can transform themselves into genuine leaders pushing for the 
interests of their republics and resist pressures from the Kremlin. 
Recent public protests in Ingushetia against a land exchange deal with 
Chechnya that favors Grozny and was backed by the Kremlin indicates 
that the power and policies of local governors will come under 
increasing question at the same time that Moscow has diminishing 
financial resources to support the poorest republics. \25\
---------------------------------------------------------------------------
    \25\ Tony Wesolowski, ``Land Grab? Why the Ingush are Furious with 
Chechnya,'' Radio Free Europe/ Radio Liberty, October 10, 2018, https:/
/www.rferl.org/a/explainer-ingush-chechen-land-swap/29536507.html
---------------------------------------------------------------------------
    Demands for authentic autonomy among Russia's diverse regions can 
be boosted through foreign economic connections. Local populations in 
several regions will benefit from forging closer trading contacts with 
neighboring states rather than depending on Moscow, whose federal 
budget is drastically shrinking. The Russian government has been 
calling for the richer regions to help subsidize the poorer ones, thus 
further aggravating their relations with the Center. Collapsing 
infrastructure means that residents of enormous regions such as Siberia 
and the Russian Far East will become even more separated from Moscow 
and European Russia, a trend that encourages regionalist or even 
independence movements. Siberia has also been hit particularly hard by 
international financial sanctions, as some of the major sanctioned 
oligarchs operate large enterprises in the region employing tens of 
thousands of workers.
    It will be important to base Western policy on the calculation that 
the Russian Federation may not disintegrate simply along ethnic lines, 
as regional identities and grievances are growing even among Russian 
ethnics in Siberia and the Far East who may favor separation and 
statehood. Simultaneously, separatist sentiments among non-Russians can 
be encouraged through an information campaign underscoring Kremlin 
plans to downgrade the distinctiveness of ethnic republics, absorbing 
them into Russian-majority regions, or eliminating them altogether. 
This is evident in Moscow's plans to amalgamate and reduce the number 
of federal units, as well as the recently enacted language law designed 
to promote Russification and curtail native languages. \26\
---------------------------------------------------------------------------
    \26\ Paul Goble, ``Putin's Language Policies `a Bomb Under the 
Russian Federation,' Experts Say,'' Windows on Eurasia, December 22, 
2018, https://windowoneurasia2.blogspot.com/2018/12/putins-language-
policies-bomb-under.html and ``Declining Trust in Government at All 
Levels Becoming Problem in Majority of Federal Subjects, Grashchenkov 
Says,'' December 23, 2018, Windows on Eurasia, December 23, 2018, 
https://windowoneurasia2.blogspot.com/2018/12/putins-language-policies-
bomb-under.html
---------------------------------------------------------------------------
    Support for autonomist and independence movements will also send a 
strong signal that the West can react to Moscow's aggression against 
NATO states by intensifying its backing for Russia's rupture. Indeed, 
NATO should prepare contingencies for both the dangers and the 
opportunities that Russia's fragmentation may present. This would 
involve a twin-track approach. First, Russia's European neighbors must 
be provided with sufficient security in terms of weapons systems and 
NATO military support to shield themselves from the most destabilizing 
 scenarios emanating from Russia's dissolution. Plans can also be drawn 
up for handling refugee outflows, cross-border military spillovers, and 
other incidents that can negatively impact on nearby states.
    Second, detailed plans should be drafted for engaging with the new 
entities emerging from a splintering Russian federation. New aspiring 
states may not necessarily be based on ethnic principles but on 
regional multi-ethnic identities amidst increasing local estrangement 
from Moscow even among Russian populations. Some regions could join 
existing countries such as Finland, Ukraine, China, and Japan, from 
whom Moscow has forcefully appropriated territories in the past. Other 
republics and territories in the North Caucasus, Middle Volga, Siberia, 
and the Far East could become fully independent states and forge 
bilateral relations with China, Japan, the United States, and Europe.
                      russia's escalating failures
    Russia is infected with terminal maladies that will have widespread 
domestic reverberations and impact on United States and Allied 
interests from Europe to East Asia. Instead of assuming that Russia 
will transform itself into a stable and internationally constructive 
polity, it is time to acknowledge that the Russian Federation has 
failed to develop into a national state with a binding ethnic or civic 
identity and into a regional power without neo-imperial ambitions. 
Under the Putinist system, Russia has become a brittle centralized 
federation that will only become post-imperial through its dissolution.
    Neglecting Russia's impending fragmentation may prove more damaging 
to Western interests than making preparations to manage its 
international repercussions. To avoid sudden geopolitical jolts and 
possible military confrontations, Washington and its European allies 
need to monitor and encourage a peaceful rupture and establish links 
with the entities that emerge from Russia's convulsions. The sudden 
collapse of the Soviet Union should serve as a lesson that far-reaching 
transformations occur regardless of the Kremlin's disinformation 
campaigns or the West's shortsighted adherence to a transient status 
quo.
_______________________________________________________________________

    Janusz Bugajski is a Senior Fellow at the Center for European 
Policy Analysis (CEPA) in Washington DC and author of 20 books on 
Europe, Russia, and trans-Atlantic relations. His most recent book is 
co-authored with Margarita Assenova and entitled Eurasian Disunion: 
Russia's Vulnerable Flanks, Washington, DC: Jamestown Foundation, 2016.

                                 [all]