Analysis by Majlinda Bregu/ When light is not enough

2025-06-17 13:08:00, Opinione Majlinda Bregu

After years of effort and work to understand the European future of the Western Balkans, I no longer read economic reports solely through a political lens. I read them with growing concern. I hope that I am able to judge them even more objectively without compromising a simple analysis.

The OECD, or Organization for Economic Cooperation and Development, has recently published two reports, the Global Economic Prospects and the Western Balkans Economic Convergence Scoreboard, or the Western Balkans Development Gap Scoreboard, which compares the region's performance with Europe. If you read them together, you can easily understand that global shocks = local pain. Slowdown in global economic growth, inflation that is expected to increase, trade barriers, and every new conflict or war, affects the smallest and economically weaker countries the most. The dependence of the countries of our region on trade with the EU adds to the concern about high prices, especially in food and energy. In short, uncertainty will be dominant for a long time.

In an increasingly fragmented and uncertain world, the ability to cooperate on trade, digital development and investment is no longer an option. It is a necessity. For regions like the Western Balkans, which aim not only for EU membership but for comparable living standards, the message is clear: structural reforms are no longer about completing a checklist, they are bridges to a competitive and future-ready economy.

Trade policies need to be more trustworthy and cooperative.

Supporting innovation and digital services, from healthcare to education, could be the engine of growth that finally narrows the competitiveness gap. But only if we shake off the complacency that holds us hostage and get serious about closing this gap.

In the Western Balkans, the lack of trust is not a scientific formula. It has names, it has faces. It is the young person preparing to leave; it is the entrepreneur reluctant to grow; it is the small business paying ever higher bills and facing more obstacles than help.

-Between 2015-2024, more than 635 thousand people emigrated, reducing the population in the Balkans by 4.4 million, with Albania having the highest growth in emigration.

-77% of businesses in the region report increased costs. Only one in three expects any improvement. (Balkan Barometer, 2023)

-Meanwhile, labor productivity is 'stuck' at just 40% of the EU average. Youth unemployment remains dramatically high. Only 34% of adults possess basic digital skills.

-Investments in Research & Development are low, around 17% of the EU level, and rely almost entirely on exhausted state budgets.

The OECD uses a significant term: “hurdle rate,” or the minimum rate of return on investment. In the Western Balkans, the “hurdle rate” is not simply economic. It is institutional. Legal. Psychological. It is no longer the interest rate that decides whether to invest or not. It is uncertainty.

Every delayed reform, every unstable law, every complicated procedure pushes it even further down the line.

The OECD warns: if we continue like this, without bold and coordinated reforms, the Western Balkans could reach the EU average only in 2074.

But what kind of Europe will it be in 2074?

An older Europe. More digital. More exposed to climate crises.

And perhaps more fragmented, if cohesion policies do not deliver on their promises.

A continent where Artificial Intelligence will guide industrial policies, where the green economy will no longer be the exception, but the rule.

And where regions that don't catch up today risk being left behind forever.

We know our problems on the moral, human, and institutional levels.

The middle ones seem more complicated and cannot be solved with ratio formulas. Youth unemployment, low funding for innovations, lack of career stability, legal instability, still fragmented regional market, etc.

Is there a solution?

Of course, I have only referred to the reports here, which, as is the symbolism of the publication, are like a lighthouse in the middle of a storm - they shine, but the path to safe swimming does not depend on the light of the lighthouse.

In a troubled sea, it is not the lack of tools that sinks, but the reluctance to use them responsibly and seriously./ CNA