The Western Balkans have come a long way over the last two decades, achieving significant economic and social progress, leading to poverty reduction and improved living standards. Geographical proximity to important European markets and production networks, and the ongoing integration with the European Union (EU) have offered additional opportunities for the region to attract international investment, boost competitiveness, develop attractive tourism destinations, and strengthen democratisation processes. In the decade leading up to the global financial crisis in 2008, most regional economies experienced dynamic growth and financial sector expansion. However, the crisis was followed by much more subdued economic performance. Moreover, deep-seated social, institutional and environmental challenges in the region remain pressing. Therefore, the region stands to benefit from more in-depth multilateral engagement and regional collaboration. Innovative solutions will be key to address the challenges ahead and to set the basis for more inclusive and sustainable development.
The first of its kind dedicated to a region, the Multi-dimensional Review of the Western Balkans combines the assessments of five economies, with visions of what may constitute future successes, elaborated through a series of aspirational foresight workshops.
Education and competences for economic transformation emerge as the top priority at the intersection of people’s aspirations for quality of life and the need to address untapped development opportunities for more prosperity in the region. Second comes social cohesion as both an opportunity and a significant challenge for all societies in the region. A lack of jobs leaves many on the side-lines of society and strains citizens’ ability to support each other, while rendering the mostly contribution-based social protection systems unsustainable and under-dimensioned. Third, energy and excessive air pollution must be addressed. A cleaner environment is a top desire among citizens and crucial to making the region an attractive place to live, invest and return to. Given the small size of each economy and the variation in their endowments in terms of natural resources and energy opportunities, a resilient, climate-friendly and high-performing energy mix only seems attainable at the regional level.
As the COVID-19 crisis continues to demand counter cyclical responses, identifying strategic priorities has become more urgent than ever to ensure that resources are well spent. The shared strategic opportunities and challenges presented in the Multi-dimensional Review of the Western Balkans can help deliver solutions and play a part in making recovery spending as strategically effective as possible.
This report is a multidisciplinary effort. It mobilises and combines economic, social, statistical, environmental and institutional expertise from across the OECD. It was prepared in close collaboration with the governments from the Western Balkans and with the financial support of the Swedish International Development Co-operation Agency.
Mario Pezzini Director of the OECD Development Centre Special Advisor to the OECD Secretary General on Development