The inside story of the shadowy Emirati-Serbian partnership

How Palestinian strongman Mohammed Dahlan midwived a shadowy Emirati-Serbian partnership
7 min read
11 May, 2021
Analysis: Political and business relations between Serbia and the United Arab Emirates are marked by opacity and secrecy.
Serbia has a history of murky deals with the UAE. [Getty]
In March, Serbian president Aleksandar Vučić was visiting the UAE, where he attended the birthday party of his close friend, Sheikh Mohammed bin Zayed al Nahyan, the Crown Prince of Abu Dhabi

During the occasion, President Vučić announced that his country plans to produce the Sinopharm vaccine with the help of the UAE and China.

While such an effort during the pandemic is more than welcome, many observers have questioned the proposal, taking into account a history of opaque and murky deals between Serbia and Arab countries. 

Serbian vaccine politics

It is also unclear what exactly the deal will entail, as the joint venture with China and the UAE will not include the production of vaccines, as initially announced, but rather the construction of a large regional warehouse for storing the Sinopharm vaccine.

Marko Savković, Program Director at the Belgrade Fund for Political Excellence and Belgrade Security Forum, told The New Arab that it is likely that the Serbian government will prioritise the project, be it a proper factory or a storage facility.

Firstly, he explained, the Covid-19 is far from "defeated" in Serbia. Secondly, the vaccine has become a matter of prestige, leadership, and projecting "soft power" in the region. Serbia has donated some 48,000 vaccines to Macedonia, 10,000 to Bosnia and Herzegovina, and 2,000 to Montenegro. It has also vaccinated citizens of these countries (along with Croatia and Slovenia) within Serbian borders.

Private deals between President Vučić and Sheikh Zayed prove to be untouchable

Moreover, Jakšić notes, working with China in the Balkans grants the UAE a chance to strengthen its presence in Europe and to enter the global biotechnology race.

However, Boško Jakšić, a prominent Serbian political commentator and former foreign policy editor for Politika, said that all information about Covid-19 medical equipment and vaccine pricing has been made confidential by the Serbian government. Furthermore, most details of the greenfield investment are unknown, from the project value to its location.  

The UAE's strategic ties with Serbia

Soon after rising to power in 2012, Serbia's then-Deputy Prime Minister Vučić befriended Mohammed bin Zayed, securing high-profile business deals and a $1bn state loan from the UAE. The UAE has since become a strategic investor in Serbia, holding major shares in former state-owned companies in agriculture, air transport, armaments, and construction.

Read more: Normalisation with Kosovo: Israel's expansion
through the Balkan corridor

Al Dahra, owned by Sheikh Zayed, bought the largest state-owned farm complex for $126m. Speaking to The New Arab, Jakšić reported that experts believe that the farm was sold far below market value, adding, "privatization of such a giant is probably wrong considering food production is a strategic activity, but private deals between President Vučić and Sheikh Zayed prove to be untouchable." Emirati companies now control thousands of hectares of arable land in northern Serbia.

The UAE has been also very interested in the Serbian arms industry. In 2019, Serbian arms company Yugoimport SDPR signed a deal with the UAE's Emirates Advanced Research and Technology Holding reportedly related to the development of a Serbian multipurpose anti-armour weapon "capable of destroying all existing models of tanks in the world."

However, the biggest and most controversial investment has been the Belgrade Waterfront. This extravagant project aiming to turn Belgrade into the "Dubai of the Balkans" has deeply divided Serbia and raised concerns about a lack of transparency and excessive foreign influence. Opponents of the Belgrade Waterfront view the colossal project as a vain monument to President Vučić's reign and accuse him of not consulting with the public. 

The project has been anything but transparent. The final price has not been disclosed, but reports estimate that the value of the investment is worth a staggering $3.6 – $9.6bn. Some critics describe the project, allegedly funded by the Abu Dhabi-based investment firm Eagle Hills Properties, as "probably the largest money-laundering endeavour in Europe."

While Savković refrained from commenting, he agreed that there were no consultations with the public prior to the launch of the Belgrade Waterfront. Moreover, newly built skyscrapers seem rather empty, as speculation abounds that many flats were bought only to be sold later for a higher price. Aesthetics aside, "it is not clear who this project is for, apart from the very rich, in a country that already has one of the highest Gini coefficients in Europe," he added. 

Critics describe the project as 'probably the largest money-laundering endeavour in Europe'

These deals, Jakšić observes, have two elements in common. Firstly, Serbian laws were regularly ignored in making them. Secondly, the deals differ in value from what was announced by Serbian officials. According to him, "By building a shield against transparency… everything is tailored for one bidder. A legal framework is being created, which suspends the fight against corruption and opens the door to it."

Over the last decade, Vučić has earned a reputation for being an authoritarian and illiberal ruler, but has been also described as Europe's favourite autocrat. World leaders, hoping that his "strong hand" can stabilise the turbulent Western Balkans, simply turn a blind eye to fundamental violations of democratic processes. Serbia is the only country in Europe besides Belarus without opposition representatives in its national assembly.

It is no surprise then that Vučić and Zayed have quickly found common ground as "their political cultures are in many ways compatible — it's UAE sultanism meets the Balkans' authoritarianism," observed Tena Prelec, a researcher at the London School of Economics.

The Belgrade tower under construction at the Belgrade Waterfront. [Getty]

The 'man with a thousand faces'

Behind the UAE-Serbia love affair and their murky business ties stands shady Palestinian strongman Mohammed Dahlan - a man with a thousand lives, faces, and crimes, according to Jakšić and Dahlan's enemies. A former Fatah spy chief in Gaza who has been living in exile in the UAE, Dahlan has been accused of financial embezzlement by Palestinian Authority president Mahmoud Abbas, as well as involvement in assassination attempts on former Palestinian leader Yasser Arafat. Dahlan is also wanted by Turkey, for his alleged role in the failed 2016 coup, with $1.3m offered for his arrest.

Dahlan reportedly works as a security advisor to Sheikh Zayed and has been his key man in the Balkans.

He was among the first to establish close personal ties with Montenegro's president, Milo Djukanović, and President Vučić and has been granted citizenship by both countries.

Behind the UAE-Serbia love affair and their murky business ties stands Palestinian strongman Mohammed Dahlan

While there is little knowledge of Dahlan's operations in Serbia aside from the Belgrade Waterfront, Jakšić said that Dahlan is the epicentre of speculations concerning the final destinations of Serbia's arms exports.

Experts suggest that the Emiratis and Saudis have been buying arms for clients in Syria, and some shipments have ended up in the hands of radical Islamists. Jakšić said that "despite the secrecy of the operations, it is thought that such deals are part of a colossal money-laundering operation which started a decade ago."

What's next?

While President Vučić holds power in Serbia, it is logical to assume that Dahlan will continue "advising" activities, bringing benefits to a narrow circle of friends and family members of both leaders. But once Vučić falls, his mission in Serbia will likely be over.

Read more: Mohammad Dahlan's shady regional agenda

But what will be the fate of these shadowy deals? Savković predicts that while the incumbent president will not lose power anytime soon, the foundations of his autocratic pyramid may be weak.

While the president has been able to concentrate tremendous power in his hands, he is also surrounded by a team of very incompetent associates who express utmost devotion and loyalty to their "beloved" leader. But one false move may trigger a chain reaction meaning the beginning of the end. 

Even if some future authorities decide to end this "marriage of convenience," it remains to be seen how deep Vučić's successors intend to dig into his dirty laundry.    

If these deals are harmful to the Republic of Serbia, as it is claimed, Jakšić wonders which of their signatories will benefit: the investor, the ruling party in Serbia, or both? Authorities in Belgrade are doing their best not to answer. Vučić protects his personal friend from the UAE, and Sheikh Zayed is doing the same.

Stasa Salacanin is a freelance journalist who has written extensively on Middle Eastern affairs, trade and political relations, Syria and Yemen, and terrorism and defence.