Inequality, Poverty and Growth: the Balkan Case

The economic experience of the Balkan countries is striking with respect to several aspects. In the last decade the region has been the poorest European area with a large percentage of the population living below the poverty line. At the same time, in the last couple of years, the economies of these countries have grown at higher rates than the EU economy and inflation has remained low. However, unemployment is high, the informal sector is large, and institutions are poor. The launch of the SAP by the EU with the five Western Balkans (SEES) has created a new momentum for trade integration/liberalization in and of SEE but each country finds itself at different stages of integration and faces different problems and challenges. The process has important implications for trade integration and institutional upgrading; and trade policies and institutional upgrading have been recognized as key priorities for private sector development and economic growth in the Balkan region.