Civil Society Forum of the Western Balkans Summit Series
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Source: The Financial

Soft connectivity and the Western Balkans


Soft connectivity and deepening economic integration between the six countries in the Western Balkans dominated the agenda of yesterday’s third Western Balkans Investment Summit.

From the opening speech by EBRD President Sir Suma Chakrabarti to the remarks from the six Prime Ministers to the panel on “Soft Connectivity Agenda for the Western Balkans” the topic was a recurring theme of the event.

Investment in transport and energy systems, as a driver of growth and jobs creation have been a priority for European policymakers ever since the leaders of the six Western Balkans countries first met at the EBRD in 2014.

However, it was clear that physical infrastructure on its own would not deliver desired results. Similarly important is implementing soft measures and harmonising regulations which eliminate barriers and administrative obstacles to regional connectivity.

A panel dedicated to the topic of soft connectivity, chaired by the EBRD Vice President for Policy and Partnerships Pierre Heilbronn, gathered some of main advocates of soft connectivity in the Western Balkans: Ana Brnabić Prime Minister of Serbia; Christian Danielson, Director General for European Neighbourhood Policy and Enlargement Negotiations of the European Commission; Marko Čadež, President of the Board of Chamber Investment Forum; Linda Van Gelder, Director for Western Balkans, World Bank; and Goran Svilanović, Secretary General of Regional Cooperation Council.

The panellists agreed that a key element of the soft connectivity is creating a single investment space, which includes harmonising legislation, removing trade barriers, improving the links of capital markets, and strengthening the business climate in the region.

In practice this would translate into a unique Regional Economic Area, the ambitious idea which was endorsed by the regional leaders last year at the WB six summit in Trieste and is now taking shape.

The European Union strongly supports soft connectivity for the Western Balkans as it is seen not only as a driver of economic growth but also a vehicle for securing peace and stability in the region, according to the EBRD.

“There is no doubt about the European perspective for the Western Balkans region,” said Mr Danielsson. “Am I optimistic? I am very much so. There are big positive steps that are being taken and we need continuous political support and push from the Western Balkans leaders to continue achieving these goals”.

Customs and trade regulations are a major problem for businesses. However, within the framework of the new Regional Economic Area, the focus should also be on enhancing regional mobility and developing digital integration.

The first concrete project towards digital integration is the establishment of the Regional Investment Platform, launched officially during the summit. The online tool, which was developed by the regional chamber of commerce, the Chamber Investment Forum with support from the EBRD, will provide a one-stop shop for foreign investors interested in the Western Balkans.

Countries are making progress at fostering regional mobility. “Next year we plan to start discussions on recognition of diplomas and professional qualifications within the region, and also with the EU,” said Mr Svilanovic. “This would help increase the mobility of the people inside the region and with the EU as well.”

“The only downside of the European integration for us is brain drain,” said Ms Brnabic. “We already have a problem, and it will only become bigger, and to combat that we need much more investments.

“We are investing in education. For example, we are launching programmes introducing coding at primary schools and we are increasing the numbers of enrolments at technical universities. We have to make a step up from an investment-driven economy to an innovation-driven economy. And for this we will need to invest in human resources”.

EBRD Managing Director for Economics, Policy and Governance Economist Mattia Romani argued, as an economist, that figures speak for themselves. “Investors want to come to the markets that have size,” he said. “A single economic space in the Western Balkans means bigger economic space, higher productivity, more opportunities, and more jobs”.