REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART I:
The paper examines how Western Balkan countries may achieve a sustainable rate of
economic growth comparing them with New EU members from the region (Bulgaria,
Hungary, Romania and Slovenia). We shall analyse first the macroeconomic indicators
during the transition to market economy and then search why sustainable high economic
growth has not resulted in a higher employment in the Western Balkan. Finally, we are
going to analyze briefly the economic impact of World economic crisis on this region.
1. Macroeconomic performance of South Eastern European countries (SEEs)
during the past 20 years
The territory of South-Eastern Europe is 859,000 km 2 , or 14.5 per cent of Europe (without
Russia). On this territory lived 77.9 millions of inhabitants (in 1989), or 13.4 per cent of
the European population (without Russia). At the beginning of 2007 the EU-27 recorded
a population of more than 495 million persons. The South Eastern Europe had almost 76
million inhabitants in 2007 (see table 1).
Western Balkan countries (WBCs) had together a population representing nearly 5 per
cent of the total EU-27 population. During the last twenty years, the population in this
region has shrunk by 2,8 per cent. The declining tendencies are much more pronounced
in the countries which are already in the EU (-3, 1%) than in Western Balkan (-1, 8%). In
the fast growing world population it is unusual that a region has a declining population. It
is evident that the region’s participation in the world population decreased from 1,51% in
1989 to only 1,16% in 2007. This fall in the population of the region differs from the past
performances in population’s growth in the region and could be explained only by larger
emigration and war operations in Western Balkan countries. Since the majority of émigrés
were younger, it is quite likely that this tendency of negative rate of population growth will
persist.
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Table 1: Population in South Eastern Europe (in thousands), 1989, 1998, 2007
Population (in 000)
Percentage of world
Population
Region/ Country 1989 1998 2007 1989 2007
Rate of
growth
1989-
2007
A. Western Balkan 23732 23952 23294 0.48 0.36 -0.11
Albania
Bosnia and
3196 3367 3153 0.06 0.05 0.53
4398 3502 3508 0.09 0.05
Herzegovina
Croatia 4501 4265 4441 0.09 0.07
-1.25
-0.08
FYR Macedonia 1891 2015 2042 0.04 0.03 0.43
Montenegro 638 630 625 0.01 0.01 -0.11
Serbia 9108 7583 9525 0.18 0.15 0.23
Kosovo .. 2590 2143 .. .. ..
B. EU members 54188 53205 52492 1.03 0.80 -0.17
Bulgaria 8990 7985 7679 0.17 0.12 -0.85
Greece 10056 10579 11172 0.19 0.17 0.58
Hungary 10398 10211 10006 0.20 0.15 -0.23
Romania 22852 22509 21565 0.44 0.33 -0.32
Slovenia 1892 1921 2010 0.04 0.03 0.33
TOTAL 77920 77157 75786 1.51 1.16 -0.18
Source: DZS, Statistical Yearbook of Croatia; Eurostat, Yearbook, various issues