The advantages of mini-Schengen

So far, only Montenegro has not supported the action plan on the establishment of the common regional market in the Western Balkans, the so-called mini-Schengen, implemented by Serbia, North Macedonia, Kosovo, Albania and Bosnia and Herzegovina.

The action plan covers the period from 2021 to 2024, and stipulates the introduction of four freedoms in the region, the same which are the pillars of the European Union – free movement of people, goods, services and capital.

The countries of the region, with the addition of Moldova, have been cooperating economically for more than a decade through the CEFTA (Central European Free Trade Agreement). Thanks to this, Serbia has been achieving a high external trade surplus for years. According to official data, in 2019 alone, the country exported goods worth 3.06 billion euro to the CEFTA countries and imported 978.7 million worth, writes Deutsche Welle.

Discover the most important foreign investments in Serbia in 2019: click here!

Together with Serbia, Albania also has made a trade surplus (significantly lower though) with the CEFTA countries (exports 417.6 million euro, imports 361.7 million), while for example, Montenegro has a deficit of over half a billion euro.

Which economic sectors would benefit most if the four freedoms mentioned were actually introduced in the region?

The experts of Deutsche Welle agree that tourism is one of the economic branches that could benefit quickly from the establishment of new rules, even though there will be an inevitable influence of politics in different fields.

“What will improve? These are comparative advantages for each of the members. First of all, tourism, better use of existing capacity and the imports for certain production chains, such as the automotive industry and the food industry,” says Professor Sain of the University of Economics of Sarajevo, adding that the vision is to form of mutual cooperation with the aim of exporting common products to third markets.

“Take, for example, the wood industry. A world giant like IKEA is asking Bosnia for more than it can offer. We have the raw materials, we have the knowledge, we have the experience. Not everyone should join forces and collaborate with a giant like IKEA. Even in the automotive industry, agriculture, tourism, we just have to let the experts find the most rational solutions,” says Professor Sain.

Arben Malaj, former Albanian Minister of Economy and member of the Albanian Parliament, now president of the Institute for Public Policy and Good Governance, says:

“CEFTA has often faced the challenge of non-tariff barriers, where some trade wars have occurred. Therefore, the positive effect of the approximation and harmonization of legislation with the EU and the reduction of customs duties has been stopped by non-tariff barriers that feed the interests of a handful of companies. It took five years after the end of World War II for winners and losers in Europe to unite through economic cooperation and integration aimed at reducing and eliminating conflicts and wars; the Balkans are still afraid after 20-30 years of religious and ethnic conflicts”.

Ljubodrag Savic, professor at the Faculty of Economics in Belgrade, says that such an agreement, if successful, will offer great opportunities, but it does not mean much at the moment because most of these countries do not have common projects or infrastructure. At the same time, he sees the fact that people do not fully understand the importance of the economy as a problem.

“This is our basic problem: people do not understand that politics is one thing, history and the past another, but the economy is the most important thing for most people. It’s nice to be a proud Serb, but we don’t live on that. In the Balkans, we don’t organize things in the right order and act contrary to our best interests. We have an opportunity now and we will see if we can use it,” said Savic.

(021.rs, 15.11.2020)

https://www.021.rs/story/Info/Biznis-i-ekonomija/258488/Ko-je-na-dobitku-uz-mini-Sengen.html

This post is also available in: Italiano

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