Europe’s immediate neighborhood of the Western Balkans is facing symptoms of deterioration such as a worsening situation regarding the rule of law, rise of nationalist forces challenging international treaties and a deterioration of good neighborly relations with the European Union and its members. Political dynamics cast a shadow over the region’s economies, slowing down any positive growth momentum.
Greece has always been a leading advocate of the European trajectory of the Western Balkans. The perspective of joining the European Union, with the obvious pre-requisites of respecting the European acquis and international agreements, is the most important driving force for institutional, regulatory and economic progress in Western Balkan countries.
The six Western Balkan economies (Serbia, Montenegro, Albania, North Macedonia, Bosnia and Herzegovina, Kosovo), despite positive steps forward, are still faced with structural challenges: high unemployment, emigration (1/5 of their total population has migrated), low educational performance measured by PISA indicators, slow digital transition, widespread shadow economy and corruption, low integration into global value chains. Lagging behind produces vicious cycles of brain drain to the West and relapse into nationalism and anti-Europeanism.
The EU has tasked the OECD with compiling hundreds of indicators about the competitiveness of Western Balkan economies, in an effort to bring them closer to the EU. The “Western Balkans Competitiveness Outlook” is the flagship publication of the OECD, which since 2016 has been surveying the performance of the six economies, allowing for benchmarking and the use of good practices. At the OECD Ambassadors level, the South-East Europe Program is being monitored by the Friends of South-East Europe Group, which as of 2024 is chaired by Greece.
The latest OECD Competitiveness Outlook was officially launched on June 26, at this year’s High-Level Conference on South-East Europe, with a focus on the Western Balkans and their development path. The Outlook promotes improving the competitiveness of the six Western Balkan economies, covering 15 assessment areas through 400 indicators for the 2021-2024. These 15 sectors are grouped into 5 policy clusters: infrastructure and connectivity, digital transformation, skills, business environment and green transition. The progress made in the first two clusters is in some cases remarkable. The Greek experience of the rapid transition to digital governance (gov.gr) over the last four years is particularly relevant for the Western Balkans, especially as it concerns a digitalization boom that started from very low levels of digital development, following a pattern of leapfrogging. Of all the countries in the region, Serbia is already an equal partner in the Global Partnership on Artificial Intelligence (GPAI) – which, in early July, formalized its ‘integrated partnership’ with the OECD. Other countries, such as Montenegro, have made great strides towards the Euro-Atlantic institutions and the objective of EU accession. The Western Balkans are in great need of a success story that will give new momentum to the EU’s enlargement policy.
The OECD is one of the very few international organizations with both the experience and the capability to support the economic development and convergence of the Western Balkan economies with the EU. OECD databases, policy recommendations and toolkits allow for both comparative assessment and peer learning by its members, facilitating the effective design of country-specific policies. The OECD South-East Europe Program does not only promote the adjustment and prosperity of our Western Balkan neighbors; it also serves to contain the influence of third powers in the region, to anchor the European orientation of the Western Balkans, to prevent their transformation into a “black hole” of instability and vicious cycles.
*George Pagoulatos is a Professor, the Ambassador of Greece to the OECD and Chair of the Friends of South-East Europe Group at the OECD
