ECONOMIC TRANSITION OF SOUTHEASTERN EUROPE
Introduction:Introduction
The dossier "Economic Transition of Southeastern Europe" is an original work of the journalists specialised for economic topics, associates of the Alternative Information Network (AIM). It resulted from a seminar organised on this topic by AIM with the intention to offer an opportunity to its economic correspondents to supplement the existing and acquire new knowledge of the experiences, results and prospects of the processes of transition in the countries of Southeastern Europe into market economy, operation of market economy, and global economic trends. The dossier covers the following countries: Albania, Bosnia & Herzegovina (B&H) and within it two Bosnian entities - B&H Federation (FB&H) and Republika Srpska (RS) - Montenegro, Croatia, Kosovo, Macedonia, Slovenia and Serbia.
The central expert presentation at the seminar was that of Vladimir Gligorov, Ph.D., leading economist of the Vienna Institute of International Economic Studies (WIIW), on the economic situation and results of transitional processes in these countries. Besides Mr. Gligorov, Nebojsa Medojevic, M.A., independent expert in the domain of the economy from Podgorica (Montenegro) spoke about the problem of corruption in these countries, and Milko Stimac, member of the independent group of experts G17 from Belgrade (Serbia) spoke about financial markets and possibilities and capabilities of these markets to help privatisation to be more successful and attract foreign capital into these countries. The seminar took place on November 25 and 26 in Podgorica.
About ten years ago, in the beginning of the processes of transition in the East of Europe, the SFRY was the favourite in these processes. Nowadays, the level of economic development of the countries created in the tragic dissolution of former SFRY, together with Albania, is comparable with typical under-developed countries. The economic status of the countries in which about 29 million inhabitants live is best illustrated by the fact that their social product is lower than that of Greece with its eight million inhabitants, which ranks the lowest on the list of the countries of the European Union.
With the exception of Slovenia, all the other states are evidently unsuccessful in implementation of transition. Observed in the light of the fact that this region was much more developed than other countries in transition when the institutions it had and the relations with the West are taken into account, this unsuccessfulness is certainly greater than indicated by other parametres.
All the countries in the region, except Slovenia again, had a negative production growth, their industries are ruined and they are criminalised. None of them have quickly and consistently been democratised, and not a single one has avoided a minor or a major clash with authoritarianism which has brought them negative distribution of political power and economic goods. Most of the former Yugoslav republics have not managed to preserve the existing institutions and what is nowadays popularly called social capital. With destruction of institutions the rule of law was shattered, and after that came autocracy and corruption.
All the former Yugoslav republics, except Slovenia once again, nowadays have worse relations with the European Union than they used to have as members of the former Yugoslav federation. Slovenia can count on being the first among the countries in transition which will become a member of the European Union. Macedonia and Croatia have received the contract on associated membership while the other countries or territories are still far from it.
Albania is in every sense a case in itself, comparable perhaps only to Kosovo. International financial institutions have imposed a shock therapy on this country which almost brought about its total collapse in 1997. Economists claim that the mistake was made because it had not been taken into account whether the existing institutions could endure such a therapy, so that only nowadays is it possible to speak of certain institutional and legal, but still not economic recovery and development for which much more time is needed.
Having excluded Slovenia again, Mr. Gligorov claimed that all these countries were in fact on the verge of the so-called second transition, in other words, actual transition and departure from under-development. The first transition implies the shift from socialist into market economy, while the second transition requires transformation of the coloured and criminalised economy and politics into a democratic and legal state.
Chances to achieve this are nowadays more favourable than they have been until recently. In majority of these countries, production has started to grow. The European Union has decided to open its market to the import from the so-called Western Balkan practically with no customs duties (except for certain delicate products), investments into the whole region are stimulated, new war conflicts are not in sight. Should all the countries in the region normalise their relations and liberalise trade and business operation in general, prospects would be even better. Independent experts estimate that in any case several years shall pass before in Balkan states accelerated and sustainable development starts.
D.B.