Policy Options for Competitiveness and Economic Development in the Western Balkans: the Case for Infrastructure Investment

Mario Holzner

No 16, wiiw Policy Notes from The Vienna Institute for International Economic Studies, wiiw

Abstract: Summary The Western Balkans are a region with a substantial economic catch-up potential. Compared to other European economies these countries are either poor or very poor. Structural underdevelopment and low competitiveness impede the catch-up process. Mass unemployment and a huge trade deficit indicate heavy internal and external imbalances. Short-run policy measures should focus on fiscal devaluation and NPL resolution to foster cost competitiveness and private investment. A ‘Big Push’ in infrastructure investment is imperative for long-term prosperity. An investment volume of EUR 7.7 billion as envisaged in the ‘Berlin Process’ has the potential for an additional GNP growth impulse of about 1% p.a. and a positive employment effect of up to 200,000 people in the region.

Keywords: macroeconomic policy; investment; infrastructure; fiscal devaluation; competitiveness; Western Balkans; Berlin Process (search for similar items in EconPapers)
JEL-codes: E27 E60 F21 H54 O24 (search for similar items in EconPapers)
Pages: 14 pages including 9 Figures
Date: 2016-06
New Economics Papers: this item is included in nep-mac and nep-net
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Citations: View citations in EconPapers (2)

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