Conclusions: Achieving Sustainable Growth Through Outward Looking Policies and Regional Integration

Abstract

One of the key lessons of the chapters included in this book is that the key to reducing the high levels of public and private debt that have built up in Western Balkan economies in recent years is to promote export-led economic growth. The recently announced plan for a regional economic area (MAP) aims to liberalise regional trade in services, backed up by increased mobility of professional workers, greater digitalisation of the economies, and improved attractiveness of the region for foreign direct investment. Yet liberalisation may be ineffective if not also backed up by an improved capacity to supply both goods and services. This in turn requires completion of the privatisation processes and enhanced digitalisation of the region. In implementing such a policy, the state has an important role of play in providing appropriate conditions for attracting foreign investment and linking the region into global value chains. A focus on export-led growth should not ignore the deep social divisions within the Western Balkan region. Increased supply capacities require the engagement of all sections of society, drawing people from disadvantaged groups into the labour force to take full advantage of the opportunities for growth afforded by trade liberalisation. Deep reforms to education systems, not least to systems of higher education, will be needed to ensure that the skills of the labour force are adequate to meet future growth in the demand for labour and to support the use of emerging technologies.