Economic Development in the Western Balkans: On the Road to Competitive Market Economies?
Publication Type:Journal Article
Source:Connections: The Quarterly Journal, Volume 13, Issue 4, p.53-66 (2014)
Today, more than ever, economic security is the main challenge facing the Western Balkans. Poverty, unemployment and inequality threaten the everyday security of average citizens in the region. Indirectly affected by the world economic recession through trade and finance spillover channels and strong dependence linkages with European Union markets, this region became highly vulnerable, falling into a double dip recession. The economic downturn has worsened socio-economic conditions, diminishing consumers’ confidence in markets, socially dividing the societies in terms of income and wealth levels, declining living standards and shaking social foundations, and threatening the hopes of eventual convergence with advanced countries. To reverse the downhill slide, the Western Balkans need to change gears, revising the model of growth by accelerating socio-economic reforms and speeding up measures to develop its economy. In desperate need of modernization, institutional transformation and sustained economic growth, countries should rely on deeper regional cooperation and integration with the EU as the foremost option for positive development. The most important driver of growth will be the catch up with technologies and market-friendly institutions of the advanced countries.