Economic dynamism in most post-communist countries has belied the high hopes of the early 90s. The impact of the collapse of the CMEA markets can be assessed in the same way.14. Late Stalinism was practiced in Albania, Romania and Bulgaria until the end of communist rule.
Albania, Romania and Bulgaria and some parts of the former Yugoslavia (Macedonia, Kosovo, Montenegro and Bosnia and Herzegovina) were traditionally the poorest areas in Europe. 26 Bulgaria relied on FSU markets for more than 70% of its foreign trade. Increased indebtedness was fueled by the abundance of petrodollars following the oil price shock of the 1970s.
Economic transition in South East Europe 1 How relevant are economic indicators?
Judging economic performance and reforms in South East Europe Prima facie South East Europe may seem to have been pursuing reforms
With the exception of Bosnia and Herzegovina, the private sector currently generates the majority of GDP in all countries of the region46. There are two layers of perceptions that condition the relative neglect of the deeper causes of economic failures in the region. One layer is formed by the consequences of the breakup of the former Yugoslavia, the war that caused problems in the economy.
The consequences of reform policies are therefore less visible, especially where the dissolution of the former Yugoslavia is intertwined with military conflicts. Along with tension, institutional fragility helps to explain stop-go policies (boom and bust cycles), as well as many of the setbacks and contradictions in the transition process.52. 52 Some analysts relate inequalities (including inflation) mainly to the breakdown of the political process and rent-seeking activities by old elites.
Most of the region can easily be qualified as a distress area, as it consists of distress economies. 53 It is notable that this high currency substitution is associated with monetary stability in many parts of the region (only Albania and Bulgaria experienced periods of hyperinflation after the financial collapse). 54 In the literature, the Dutch disease refers to consequences for behavioral patterns and the structure of the economy.
If the $4/day poverty level is used,56 more than 50% of the region's population falls below it. First, the picture is too colorful to justify an all-encompassing answer – the intensity of the phenomenon varies in different national environments (Croatia is very different from Albania), and consequently its consequences and prospects are also different.
The post-war situation is no less complicated
The political geography is still fuzzy
61 However, it is fair to add that SECI has recently tried to expand its activity in the field of energy conservation and financing for SMEs. 62 Italy has always emphasized that the EU should pay more attention to the state of the Balkans, which is a fully understandable position in light of its geographical location. It is this country, along with Greece, that for years had to deal with floods of refugees (not only from Albania) with the other threats coming from the area.
Precisely for this reason, Italy became the most vocal supporter of the inclusion of Romania and Bulgaria in NATO. 63 This is one of the main premises of the 1999 CEPS (Centre for European Policy Studies) study: M. The tension created in Macedonia by the influx of Albanian refugees had affected a very delicate demographic balance, which significantly affected on the political composition of the country. of the country.
The Macedonian authorities fear for obvious reasons that, apart from the influence of economic fate on society, the political stability of the country can be increasingly undermined by the search of the Albanian population for more say in the management of the country; this fear is reinforced by what some see as a design for the creation of a Greater Albania, which could lead to the split of Macedonia.65 Such a denouement would be catastrophic, because it could plunge neighboring countries (Bulgaria and Greece) into a involve major conflict. . This is even more valid in the case of weak states, of weak economies, which are highly vulnerable to external shocks. Such concerns are likely to hinder economic reconstruction to the extent that jurisdictional issues are important, as well as the cooperative efforts of other governments in the region.
It is no secret that a large part of the economic activity in Albania, Serbia, Kosovo, Bosnia-Herzegovina, etc. The dimensions of this phenomenon should be judged in terms of the weakness of the institutions, in general, but also in relation to the obvious. and the invisible agenda of different governments.66.
Dislocation of people
34 "geographic stability" of their states diverts energy and resources from economic pursuits; it also helps prime nationalism and reinforces extremism. With the possible exception of Croatia, all countries in the Balkans (including Bulgaria and Romania) face capital depletion. of their most valuable human resources; this is perhaps the worst shock to their long-term growth potential. If this is added to the deterioration of the education system 67 (due to lack of resources), the combination becomes more than threatening: both assets -undressing and undressing occur simultaneously.
Direct economic impact
- Macroeconomic imbalances
- More distress
- The environment
Unemployment in these economies needs to be understood in a more complex way; here it is not only the size of the hysteresis that matters, but the anatomy and physiology of seriously ill societies. Therefore, the comprehensive development framework of the World Bank is of great importance for the Balkans. Designing and implementing policies in such a framework is hardly possible until the sources of local conflicts are under control (eradicated) and the economy begins to recover.
To make the latter possible, a large injection of development-oriented aid, both financial and technical, is needed. Ecological concerns are not non-existent on the policy agenda of various governments in the region. But there are significant differences in how these concerns are addressed in Western countries.
Needless to say, where military conflicts dominate policy-making, environmental issues take second place among priorities. Second, it is the budgetary constraint that forces governments to set priorities and focus more on short-term goals; as a result, ecological issues become less important, except in urgent cases, such as the need to purify a source of drinking water. Last but not least, the impact of military conflicts, namely the destruction on the ground and in the air, affects the environment with very resistant consequences.
It can be said that ecological damage can be largely irreversible.71 It goes without saying that an unrepaired environment would not allow Southeast Europe to progress on the path of EU integration. In addition, the impact could be strongly felt due to the inability to export the products of the food industry, which has great potential in the region and can employ millions of people.
A Policy Agenda for South East Europe
Economic reconstruction (regeneration) in South east Europe
- A new Strategy
- Hindrances for and threats to reconstruction
Some experts make an analogy with the end of World War II when evaluating the prospects for the region. Who is the great common enemy of the peoples of the Balkans and of security in Europe today? At the same time, the stability of the region as a whole can be seen as a collective good, a public good for Europe.
The Stability Pact (SP) is a tangible embodiment of the growing concern in the West about instability in the Balkan region. For example, there is a need to better define the relationship between the EU aid programs for the region and the activity of the SP. In a wider context, the SP, as an institutional framework and a process, must be embedded in the overall policy of the EU towards South-Eastern Europe.
This is one of the relevant lessons of the Marshall Plan, which can be applied to South-Eastern Europe. This will also be part of the long-term exercise in crisis management (confidence building). Therefore, breaking this vicious cycle should be a top priority of the strategy (policy) of economic revival.
91 At a recent Halki (Greece) symposium (September 1999), Woodward noted that in the aftermath of the war, border controls were likely to be strengthened, which would not promote regional cooperation. Surroi, a leading journalist in Pristina and leader of the Albanian Kosovars, foresees a dynamic of relations in.
Looking ahead
External threats to reconstruction need to be assessed in the context of the current attitude towards South East Europe and the need for a serious, long-term commitment to help the region emerge from its slumber. Would the current mood continue in the face of the spread of crises, whether in Europe or elsewhere. Apart from policy consistency and a sense of direction, the countries that have achieved better results have done so as a result of better preconditions (the legacy of the past, including histories of partial reforms) and geographical proximity to the EU.
Investments and foreign capital flowing into these countries were attracted by the government's policies. For most of the lagging countries, for the countries on the periphery of Europe, a bad path dependency has developed, which will continue to affect them for a long time to come. The former ideological and political divisions that existed in pre-1989 Europe are being replaced by new divisions that essentially have an economic dimension.
Unless firm decisions are taken by political leaders, the unification of Europe, in the sense of "economic inclusion" - to use a term much in vogue among the politicians of Europe - of most of the transition countries' remains a very distant goal. With these developments, one must take into account the implications of a feeling among the citizens in the backward countries that they do not really belong to the clubs of Europe, to the relevant institutional Europe; it can only accentuate disappointments and identity crises. To overcome such a new "great divide", vision must be accompanied by a strategy that must combine much more commitment by Brussels (by the EU governments) with the efforts at internal reform by the candidate countries.
The dialogue on enlargement and aid to the Balkans raises a big question from the point of view of the political economy of the process. How can people in the West get the level of comfort with this process that it should facilitate.
