Catching-up Strategies in CESEE Economies
Edited by Ewald Nowotny, Peter Mooslechner and Doris Ritzberger-Grünwald
Chapter 8: The Catching-up Experience of the Western Balkans – the Cases of Serbia, FYR of Macedonia and Albania
Michael Loufir Although they effectively started their transition to free-market economies almost at the same time – at the beginning of the new millennium – the Western Balkan countries (WBC, comprising Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic (FYR) of Macedonia, Montenegro, and Serbia) and the Eastern Balkan countries (EBC, comprising Bulgaria and Romania) have experienced quite different catching-up processes. Before the global crisis, WBC were slower to catch up to the EU-27 average than EBC. However, when the global crisis emerged, WBC proved to be better placed than EBC to withstand all but the severest of external shocks, thus catching up faster to the EU-27 average than EBC. The purpose of this chapter is to present the factors that explain the different catching-up speeds of WBC and EBC in the pre-crisis period and the post-crisis period. Evidence provided here is limited to those countries in which the National Bank of Greece Group has a strong presence, namely Albania, FYR of Macedonia and Serbia from among the WBC segment and the two EBC, Bulgaria and Romania. 1 BEFORE THE GLOBAL CRISIS: WBC SLOWER TO CATCH UP, FROM A LOWER BASE Unlike their neighbours in Central and Eastern Europe, both WBC and EBC had experienced slow progress in their transition to freemarket economies in the 1990s, due to, inter alia, political instability and stop-and-go economic policies. However, at the start of the new millennium, a turnaround story gained momentum, underpinned by 90 M2733 - NOWOTNY TEXT.indd 90 19/09/2011 16:34 The...
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