Western Balkans must break down trade barriers

BELGRADE — The future of the Balkans looks far brighter today than many would have predicted two decades ago.

The Balkan wars left more than 100,000 dead and caused millions to flee their homes. The region’s economies lay in ruins, and many of our best and brightest left in droves to seek a better future elsewhere. Political leaders from opposing sides did not trust each other, and had no real vision for the future.

As a young man at the time, I did not see what could be gained from collaborating across the divide. But I know now that my country paid a high price for nationalist excesses.

The situation today shows that barriers can be broken with enough common will. Relations between the region’s countries have transformed dramatically over the past decade.

While European companies increasingly are seeing the value of doing business in the Western Balkans, private investment still lags far behind.

They improved so drastically because we decided to change course. We decided to learn from past mistakes. We decided to put our countries and our people first.

If we had not believed in a shared future for the region, in being part of a system that binds us together for a common purpose, we could not have overcome the years of bitter hostility that tore us apart.

We should celebrate this achievement. But we must also recognize that the hard work still lies ahead. Now that most Western Balkan countries are united in our ambition to become part of the European Union — and the EU has published a new strategy for the region — we have a unique window of opportunity in which to act.

EU membership cannot be an end in and of itself. As leaders, it is our responsibility to create the conditions that will bring growth and prosperity to our countries. We must live up to the promises we make to our people.

The free flow of goods, services, people and capital will make our region more attractive for investment. Individually, we are small players, but collectively, we are a market of 20 million. Over the past 10 years, trade between the Western Balkans and the EU has more than doubled, reaching €44 billion in 2016, with exports to the EU increasing from €7 billion to €18 billion.

But while European companies increasingly are seeing the value of doing business in the Western Balkans, private investment still lags far behind. Indeed, cross-border investment in the Western Balkans is four times lower than in the EU.

Serbian President Aleksandar Vučić | Armend Nimani/AFP via Getty Images

Trade in goods and services accounts for only 30 to 40 percent of GDP in most Western Balkan economies. This is extraordinarily low compared to the average for emerging economies, which is often between 100 to 200 percent of GDP.

Youth unemployment in the Western Balkans is also nearly twice as high as in EU countries. Of the eight countries in Europe with youth unemployment rate exceeding 40 percent, five are in the Western Balkans.

Creating a common market between Western Balkan countries would double the current level of foreign direct investment and bring at least $8 billion-$9 billion in investments annually, compared to last year’s $4.6 billion. It would also create thousands of new jobs and make our economies more competitive. This could keep the best and brightest from leaving.

Not only would a single market create new economic opportunities, it would also serve as a further point of convergence between Western Balkan countries. Economic integration will break down the regional barriers that hold us back from shared prosperity, and will make the borders that separate us less significant.

The Western Balkans experienced the destructive effects of nationalism first hand. Now, at a time when many European countries are turning inward, we want to look beyond our borders and focus on what binds us together.

Greater economic integration will help forge cultural connections between countries and make the region more politically stable. It will also act as an anchor for those who sought to leave the region to seek a better future for their children.

We all want stability. We all want economic growth and prosperity. We all want to improve the lives of our people.

History shows that economic unity is crucial for political stability. The European Coal and Steel Community, which eased enmity between France and Germany after World War II by forging economic collaboration and eventually morphed into the European Union; and the Central European Free Trade Agreement (CEFTA) are just two examples.

We laid the foundations for closer regional economic integration in the Western Balkans when we joined our Central and East European counterparts in CEFTA. Now we need to make economic unity a reality by creating a common market.

Some skeptics see this shared economic area as an alternative to EU accession. I believe it’s just the opposite. This economic union would serve as an important stepping stone in preparing us for EU integration.

The issues that unite us are stronger than those that divide us. We all want stability. We all want economic growth and prosperity. We all want to improve the lives of our people. And we can only achieve these goals through closer economic collaboration.

Aleksandar Vučić is the president of Serbia.

Original Article

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