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Policy brief: WB6 economies must grow quickly to catch up with EU peers

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VIENNA – Any changes affecting the reforms of the Western Balkans and the dynamics of convergence towards the EU must be designed taking into account “space”, that is to say the territory, local institutions which have the capacity to implement reforms and citizens, recommends Policy brief: “Convergence of the Western Balkans towards the EU: from enlargement to cohesion”published within the WB2EU network.

The enlargement dynamic and intrinsic connectivity with the EU provide the rails on which the Western Balkans will develop. However, in a constantly changing world, we need to be aware of the competing development models that interact with each node of the Western Balkans triangle (space, institutions and people),” recommends the author.

According to the Policy Brief’s recommendations, people (civil society organizations, small and medium-sized businesses, universities or other interest groups) must be at the center of all policies aimed at ensuring democratic institutions.

Ardian Hackaj, author of the Policy Brief and research director at the Institute for Cooperation and Development (CDI), said that there is a gap between the Western Balkans and EU member states in terms of human capital, quality of infrastructure and structure of the economy. , and local institutions. He added that all these factors condition the growth of countries in the region, while the speed of convergence of the BM6 towards the EU defines the pace of the enlargement process.

“All BM6 countries are fully committed to progress in key areas of reform that transform their institutions, develop their economies and improve the quality of life of their citizens, and the European Union, through its enlargement mechanism and its financing, helps them achieve these necessary advances. But on the path to membership, WB6 economies must grow rapidly to catch up with their EU peers, and local infrastructure must be improved and expanded,” writes Hackaj.

He stressed that during the COVID-19 pandemic it became clear that in order to make medical equipment and supplies available to the population, national institutions in the Western Balkans were obliged to coordinate closely and quickly.

“By studying the interaction between connectivity and development of a territory, three systematic elements appear. The first is “space”, as defined by the territory’s endowment with production capacity and connection infrastructure (transport, energy and data). Secondly, there are local “institutions” which, in a simplified definition, would be the “structures and mechanisms of social order and cooperation governing the behavior of a set of individuals” materialized in a set of public organizations and private. How national institutions are created, function, and operate defines the effectiveness of policymaking and enhances or hinders any country’s endowment with infrastructure or productive capacity. The third element is the local “people,” explains the author.

Photo: WB2EU

According to the Policy Brief, these three elements can be represented in a triangle where the nodes of space, people and institutions constantly interact and influence each other. It is added that once the Western Balkans are considered as an integral part of a system, the interconnection between roads, global value chains, good institutional governance and education levels becomes evident.

The challenge for policy makers is to identify actions that induce a “Pareto improvement” of the space-institutions-people system in the long term: that is, a positive improvement in a node without negative impact on the rest of the node. triangle.

“To be realistic, assessing the impact of any intervention must include all three nodes, even if the planned action only takes place in one of them. For change to be sustainable, we need to consider induced change, resilience and sustainability in each node and, at the same time, the resilience of the entire triangle,” the author said.

According to the Policy Brief, the six Western Balkan countries (WB6) have significant interactions with the European Union. It is added that the EU is the only third party actor with a formal permanent liaison mechanism with all WB6 countries through the enlargement process.

The author cites two prominent examples of this interaction: the extension of the EU’s trans-European transport and energy networks into WB6 and the participation of the WB6 economy in EU value chains.

A substantial portion of WB6’s total merchandise trade, around 73%, is said to be with the EU, and a significant proportion of their banking systems are foreign-owned, primarily by country banks. such as Germany, Italy, France, Austria, and Greece.

The author highlighted various proposals to strengthen EU aid in the region, including “the re-establishment of an EU agency for reconstruction and development”, the creation of a “joint regional committee investment in the Western Balkans” and the creation of a “regional regional investment committee for the Western Balkans”. Infrastructure funds.

According to the Policy Brief, the EU’s next objective under BM6 is strengthening the capacities of public institutions.

The Policy Brief is published as part of the WB2EU project. The project aims to establish a network of renowned think tanks, do-tanks, universities, higher education institutes and policy centers from the Western Balkans, neighboring countries and EU Member States that will be the most decisive for the process of enlargement and Europeanization of the European Union. the region in the years to come. The WB2EU project is co-financed by the European Commission as part of its Erasmus+ Jean Monnet programme.

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