This session was graced with the presence of a number of regional former Heads of State in the audience. The panel was composed of three former Ministers of Finance as well as those with experience in international financial institutions.
The Session Chair, Abdul Basit Syed, asked the rhetorical question: "What does a peace organisation have to do with trade? Promoting integration of economies opens ways for peace. The Balkan region is moving from war to peace through trade."
He continued, "This sends a strong message to the rest of the world that this region has achieved the maturity to cooperate and collaborate beyond borders. There is huge potential in this region with a European culture, a favourable tax regime and high skill level." He commented that investment and the rate of new business startups is not sufficient at the moment. "A safe, sustainable growth with a stable Government and inclusive economics are needed. Growth should benefit all of society. The economic strategy should advance structural reforms beyond borders. Peace between nations in the West Balkans is providing economic developments for all."
Prof. Arben Malaj began by congratulating the Universal Peace Federation for choosing the land of Mother Theresa to convene this conference. She was famous for saying we may not be able to do big things, but we can do the small things every day. He also referred to Winston Churchill's quote that, “the Balkans creates more history than it can consume.”
European integration through negotiation and cooperation is a good model for former Communist nations. The present and the future inspire us to collaborate for a better future. It is intrinsically linked that ‘without peace there is no prosperity and without prosperity there is no peace’. We must increase the range of opportunities for all our citizens throughout the Balkans for peace to be strong.
The multi-lateral successful collaboration can overcome the difficulties of the past and bring sustainable development. Robert Schuman saw that cooperation between European nations would bring the peace in Europe that had been so elusive and allow development. Where there can be trade wars, there also can be trade collaboration through which development can be facilitated.
Hon. Azra Hadziahmetovic explained that In 1992, due to the conflict, 70% of houses, 60% of hospitals as well as infrastructure, were destroyed. In 1999 - 2008 the Stability Pact for South Eastern Europe was agreed and implemented with the EU.
In 2006-7 most of the West Balkan nations joined the Central European Free Trade Agreement (CEFTA). With trade liberalisation there has been increased stability. There are economics of scale developing. This is necessary for EU integration and EU membership.
The Free trade agreement was an important part of accession to the EU. Lord Peter Mandelson (the EU Trade Commissioner at the time) agreed that CEFTA will not only offer real economic benefits, but also send a signal that integration in the region is possible and open the way for accession to the EU.
More ambitious targets have naturally developed, as well as more important trading partners. Western Balkan regional economies have not fulfilled their potential in exports to the EU yet, but are making effort to catch up.
CEFTA has had a very good benefit to the region, but the regulations of the EU and other regional Governments take a lot of businesses time. A higher export led and FDI driven growth is part of the strategy of 2020, but the nations of the West Balkans are falling behind.
Mrs. Jolanda Trebicka started by expressing that the business community is demand driven and pushes the government to make changes in its policies to allow business to thrive. The lack of opportunities pushes people to engage in illicit activities to support themselves where there are no jobs. A terrible example is that some joined ISIS because of a lack of money. They knew they would be paid if they joined.
There are two reports on the Albanian economy for the years 2012 – 2019. There was progress during these years. Foreign Direct Investment (FDI) grew by 80%. New enterprises started and progressed. However, intra-regional trade had 0% growth over this period! This is of great concern because of the need for regional integration. Why are we at a zero level of growth and still at 9.6 % cooperation instead of 14.3% (the target for this year, 2019).
How much does the Government dialogue with business? She found through surveys that business does not believe Government is listening to their concerns. Business can break barriers to trade, but only Government has the role to remove them through negotiation and legislation.
Hon. Haki Shatri explained that from 1989, Kosovo was under the administration of the United Nations. This was the time rebuilding started. Ten years later there was a transition to becoming a nation. Free market principles are embedded in the Kosovan constitution, however, we still have too many people under the poverty line.
Free market liberalisation has been implemented in stages with the support of the EU and advice promoting regional integration, especially during 2016 – 2021. There is a strong pathway of reforms to be implemented.
Public budget debt is approximately 1bn euros, which is about 70% of GDP. This is close to the border where it could become a problem. 25% of Kosovans live abroad and support their families at home through remittances. Remittances from the diaspora in 2017 were just under 800 million Euros. FDI is at a comparably low level. We need to make it easier to invest.
We are a good case to attract foreign capital if you consider that tax on profits is between 0% - 10%. On the other hand, the non-liberalisation of visas by the EU is a big problem. It is an obstacle to trade.