REGIONAL COOPERATION AND ECONOMIC INTEGRATION

FDI FLOWS IN SOUTH EASTERN EUROPE
3.2. Analysis of the pillars of competitiveness in particular West Balkan counties
in the period from 2008 to 2009
In this chapter, we will briefly analyze current situation in every West Balkan country in
terms of its basic pillars of competitiveness and emphasize the particular areas where each
country achieved the best position and the best results. We will also examine those areas
where the country achieved the worst position and results. Table 7 shows us that Albania
has the worst results for all pillars of competitiveness; it has very bad results in the field of
innovations while it has slightly better results in the health, services, elementary education
and labour market efficiency . Albania had the lowest level of foreign investments inflow
compared to the rest of the countries in the region. Lately, Albanian market has started
to develop and the economy shows average increase rate of 6% (recorded in the past 5
years). (Hunya G., Geishecker I., 2005). Bosnia and Herzegovina achieved poor results in
even 7out of 12 competitive areas. The most critical situation is in the area of innovations,
while only macroeconomic stability can be praised as the area with the best predispositions
for future improvements. We can safely say for Croatia that it achieved considerable
advancements and that it improved its competitive position. Therefore, Croatia represents
very attractive and very interesting investment area. Croatia also has good results in health
care, elementary education, high school education and university education, innovations,
research and development as well as technological development. Macedonia only has
exceptionally good position regarding macroeconomic stability, while it has bad results
for all other competitive indices. In this country labour market is significantly inefficient,
so the efforts must be directed toward its improvement. In Macedonia, as in the rest of
West Balkan countries Western Balkan countries governments often spend much energy
on doing things they should not do. This destructs them from what they should really
be doing. The problem is not only the fact that the government is too big but also that it
does not do the right thing. ( Stiglic, 2002). Talking about Montenegro, we cannot have
the clear picture of the situation in this country because this country has only recently
become independent. The large number of its institutions, markets, health, educational
and other infrastructural objects was founded while they were in the same state with
Serbia. Also, there is the question if all real values regarding financial responsibilities
of this country were considered and if it really achieves better results than Serbia with
which it was associated until recently. The comparison with other countries in the region
is also questionable. According to the presented indices, Montenegro shows good level of
macroeconomic stability and well projected financial market. However, its market size and
inadequate infrastructure are very critical areas. When we talk about Serbia, we can say
that it is still far away from the attribute of the developed country. Perhaps, from time to
time, it might seem that it achieves better results than its neighbours do. However, the data
indicates different situation. Serbia achieved significant advancement in the field of the
healthcare and lengthening the lifespan of its citizens, as well as in the field of elementary,
high and university education. By introducing Bologna system to university education,
the educational process has been significantly innovated and the production of the skilled
and qualified staff of different profiles has been secured. It is a well-known fact that
Serbia has very bad roads and rails. This area needs huge investments if we want to create
conditions for normal transportation of both people and goods and thus develop trade and
touristic potential of the country. Market for goods is poorly developed; the existence of
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