Building Up a Regional Marketplace: Economic and Functional Cooperation

Abstract

Trade, investment, transport, and energy are all at the core of any regionalist undertaking. Concepts such as regionalization and regional cooperation — the staple of the debates on ‘New Regionalism’ (Söderbaum and Shaw, 2003) — are heavily biased towards forms of functional cooperation, dismantling boundaries constraining cross-border commercial activity and collective market governance. Not unlike the early integration experience of Western Europe in the 1950s, the leading policy assumption in the Balkans has been that the gradual removal of economic barriers would catalyse political stability anchored in economic growth. This expectation has largely materialized. Following a decade of wars and economic turmoil, the region saw a period of expansion, particularly before the global economic crisis struck in 2008 (Cviié and Sanfey, 2010, Ch. 5). Over the period 2002–6, growth averaged at 4.74 per cent for the Western Balkans and 5.55 for Romania and Bulgaria.¹ These figures indicate that, though lagging behind other regions in terms of growth rates, the post-communist Balkan countries have experienced an economic turnaround. This turnaround has been fuelled by increased domestic spending and an influx of FDI, and has included such previously stag­nant sectors as steel production (Cviié and Sanfey, 2010). Regional cooperation has played a role, albeit secondary to integration into the EU. It has helped spur economic exchanges and established func­tional regimes in various policy-areas assisting growth.