Abstract
The Western Balkan economies have emerged from a serious economic recession and are in search of a new growth path on their way to eventual EU membership. However they are beset by numerous economic and social problems that hinder their progress. This chapter outlines the main issues that need to be addressed and that are taken up in the subsequent chapters in this volume. These key issues are identified as relating to both economic governance and social inclusion, while the need to deepen the quality of democracy and strengthen the rule of law is also recognised. The economic issues discussed in this book include promoting export-led growth by developing trade in services and promoting regional trade liberalisation, resolving the debt crisis and improving macroeconomic governance. In relation to macroeconomic governance, the chapter addresses the comparative merits of supply-side and demand-side policies. On the social side, the book discusses the need to improve the inclusiveness of their societies to reduce poverty and inequality and to raise the quality of human capital through reforms of the higher education systems. In achieving these aims, the countries will simultaneously make progress on their road to EU membership, which has recently been given a renewed sense of urgency. In addition, the need to create a more integrated regional economic area as a way for the region to make further progress along its path to deeper EU integration is also discussed.
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Notes
- 1.
The Western Balkans comprise six European transition countries that are not yet EU member states: Albania, Bosnia and Herzegovina, Kosovo, the former Yugoslav Republic of Macedonia (which we refer to as Macedonia in this book), Montenegro and Serbia.
- 2.
These conditions were known as the “Copenhagen criteria”.
- 3.
“Social ownership” in the former Yugoslavia was a form of non-state, non-private ownership akin to “trust” status in the UK in which assets are held in trust for the wider society. This meant that enterprises in former Yugoslavia had a much greater autonomy to operate on the market than did state-owned enterprises in Albania, which were subject to central state planning.
- 4.
http://europa.eu.int:80/comm/enlargement/enlargement.htm, accessed 2017-11-02.
- 5.
http://ec.europa.eu/enlargement/pdf/albania/st08164.06_en.pdf, accessed 2016-05-05.
- 6.
http://www.ebrd.com/ebrd-in-bosnia-and-herzegovina.html, download 2016-05-05.
- 7.
A recent report has observed that the two reform programmes that were attempted between 2009 and 2014 “did not achieve significant structural reforms” (p. 4) and that while a new “Reform Agenda” was initiated in 2015, since “BiH enters another general election cycle in 2018, it will unfortunately become increasingly difficult to pursue their implementation” (p. 32) (Toperich et al. 2017).
- 8.
n-tv: Balkanlaender haengen am Tropf, http://www.n-tv.de/wirtschaft/Balkanlaender-haengen-am-Tropf-article17685891.html download 2016-05-18.
- 9.
Bosnia reached a 3-year €800 million Stand-By Arrangement (SBA) with the IMF in 2009 and a further €400 million in 2012; further lending from the Extended Fund Facility (EEF) of €553 million was made in 2016. Serbia reached a 15-month €400 million SBA with the IMF in 2009, an additional 3-year €1.25 billion SBA with the IMF in 2015. Kosovo began a €107 million SBA in 2012. Albania was a latecomer to this process with a 3-year €330 million EEF in 2014.
- 10.
For example, this ratio was circa 15% in BiH on the average of the years 2000–2008, and well above 10% in the same period in Serbia and Montenegro, and oscillating around 10% for Albania for the whole 2000–2015 period (EEAG 2016, p. 102).
- 11.
- 12.
As Koczan (2016) has observed: “In the aftermath of the crisis, the Western Balkans experienced difficulties in regaining control of their public finances…In particular, public sector wage-bills and pensions…proved to be very rigid” (p. 473).
- 13.
In 2015, the ratio of public debt to GDP was 72.5% in Albania, 63.3% in Montenegro, 41.9% in Bosnia and Herzegovina and 38% in Macedonia (Eurostat online data—variable code: cpc_ecgov). External debt was even higher reaching almost 90% of GDP in Serbia in 2015 (Bartlett and Prica, 2018).
- 14.
On the notion of “competitive authoritarianism”, see Günay and Dzihic (2016).
- 15.
- 16.
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Osbild, R., Bartlett, W. (2019). The Western Balkans on the Road to the EU: An Introduction. In: Osbild, R., Bartlett, W. (eds) Western Balkan Economies in Transition. Societies and Political Orders in Transition. Springer, Cham. https://doi.org/10.1007/978-3-319-93665-9_1
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