Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead...
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![Page 1: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/1.jpg)
Western Balkans and Europe 2020
Does the Western Balkan need a new Growth Model?
Peter Sanfey
Lead Economist, EBRD
Regional Coordination Meeting, Regional Cooperation Council
Brussels, March 31 2011
![Page 2: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/2.jpg)
The “growth model” of the Transition Region (incl. the Western Balkans):
Market-oriented reforms
Trade integration
Financial integration with the West
Political integration (for EU or near-EU countries).
Rapid catch up and growing prosperity
But also important weaknesses and gaps
![Page 3: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/3.jpg)
Is a new approach to development needed after the crisis?
The EBRD answer in a nutshell
No new “growth model” needed, but region must address its key weaknesses
Need both stronger and safer growth New reform agenda
• Close sector-level reform gaps
• Develop local currency finance
• Strengthen export capacity
• Improve business environment
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Weakness (1): Incomplete Reforms
HUNEST
POL
SVK
BGR
ROMTUR
ALBARM
MNEMDV
GEO
UKR
FYRKAZ
SRB
MON
KYR
BIH
AZE
TAJBEL
UZB
TKM
RUS
LIT
LATSVN CRO
1
1.5
2
2.5
3
3.5
4
4.5
1 1.5 2 2.5 3 3.5 4 4.5
Traditional country-level transition indicators
Ne
w E
BR
D s
ect
or
ind
ica
tors
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Weakness (2): Financial Sector Fragility
![Page 6: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/6.jpg)
Weakness (3): Unbalanced Growth
![Page 7: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/7.jpg)
Exports ► Innovation ► Growth
0
8
16
24
32
Pro
ba
bili
ty (
%)
Firm level R&D Spending
≈1/3Export activity significantly raises probability of R&D
No
n-e
xpo
rter
Exp
ort
er
![Page 8: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/8.jpg)
Top priorities to improve export-friendliness
![Page 9: Western Balkans and Europe 2020 Does the Western Balkan need a new Growth Model? Peter Sanfey Lead Economist, EBRD Regional Coordination Meeting, Regional.](https://reader035.fdocuments.us/reader035/viewer/2022062318/55154d0855034673228b62f4/html5/thumbnails/9.jpg)
Weakness (4): persistent business environment problems
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Albania BiH Croatia FYR Macedonia Montenegro Serbia
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BEEPS: Top three constraints in each country