REGIONAL COOPERATION AND ECONOMIC INTEGRATION

the war conditions in WBC. In order to find a proper answer for those differences we have
tried to correlate the pace of privatisation with the rates of growth. Namely, some countries
followed the principle of “big bang” approach in privatising the economy in short period
of time, while the others were more caution. For example, in the year 2002 in Hungary
about 80% of GDP was produced by private sector, compared with 65% in Slovenia, 45%
in Bosnia and Herzegovina and only 40% in Serbia. In 2007, Slovenia and Croatia reached
the level of 70%, Serbia 55%, Bosnia 60% and Macedonia 65% (EBRD, Report 2008). The
speed of privatization was not correlated with the rate of growth and quality of privatisation
was responsible for differences. This is, however difficult to measure.
Rising demand has contributed to a fast increase in trade deficit: it is reported in SEE’s
every year. The FYR of Macedonia, Albania, Bosnia and Herzegovina, Montenegro, Serbia
and Kosovo were particularly dependent on imports (Table 6).
Table 6: Trade balance of South Eastern European countries
A. Western
Balkan
Export Trade Balance
Exports (mil US $)
per capita (US $) (million of US $)
2004 2007 2007 2004 2007
17.221 45591 1959 -22.625 -33.830
Albania
601 1.079 342 -1.583 -2.899
Bosnia &
2.087 9947 2834 -4.570 -5.704
Herzegovina
Croatia
8.215 12623 2842 -518 -1.836
Macedonia
1.675 3350 1658 -8.346 -12.933
Serbia
4.082 17689 1857 -1.139 -1.627
Montenegro
561 903 1445 -6.469 -8.831
B. Members
of EU
234227 179.227 4460 -15.113 -36.174
Bulgaria
18524 18.524 1913 -3.688 -10.141
Hungary
93434 93.434 9282 -3.555 435
Romania
40176 40.176 1863 -6.612 -24.138
Slovenia
27093 27.093 13479 -1.258 -2.330
TOTAL 279818 208.283 3693 -37.738 -70.004
Source: Eurostat, 2009
REGIONAL TRADE AGREEMENTS AND REGIONAL COOPERATION
In 2007, the average of imports and exports relative to GDP registered a value of 40%
for the EU-27. According to the available Eurostat data, lower levels were reported in
Albania (35 % in 2005) and Kosovo (27% in 2006). On the other hand, significantly higher
values were recorded in 2006 for the FYR of Macedonia (57%) and Montenegro (64%)
while Croatia and Bosnia and Herzegovina also showed values above the average 50 per
cent (Eurostat, 2009). Membership of Western Balkan states in the Central European Free
Trade Agreement (CEFTA) and the associated bilateral free trade agreements used to be a
sign of liberalizing trade relations that resulted in increased trade and investment linkages
among the region’s economies. However, national statistics of those countries shows that
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