Strategic Moves - Regional Environmental Center for Central and ...

Economic development in SEE
The level of economic development of a country and a region has a direct bearing
on ability to invest in public projects in general, and in environmental infrastructure
projects in particular. The size of the national budget is directly correlated
with the budgetary amounts allocated to the institutions (in most cases ministries)
in charge of investments in water and waste infrastructure. It also defines the budgetary
amounts that trickle down to the local governments for carrying out their
often newly acquired legal obligations in the waste and water sectors.
The current economic situation and the related per capita income, the number
of unemployed people and the number of people living below the poverty line
all have an influence on the political climate at the local level. They also influence
the level of political will to reform the water and waste utilities, since an impoverished
local population will not accept — politically or financially — a serious increase
in water and waste tariffs.
The process of economic transition to a market-based economy, or at least its
acceleration in the majority of SEE countries, started after 2000 because of the wars
FIGURE 4: GDP per capita at purchasing power parity in SEE countries
USD
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2004 2005 2006 2007 2008
Albania Bosnia and
Herzegovina
Croatia FYR
Macedonia
Montenegro Serbia
Source: IMF country reports, national banks, Eurostat, national and federal statistical offices, the World Bank, NCB, SEE ministries of finance
Kosovo (under
UNSCR 1244)
S T R AT E G I C M O V E S 71