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Box: The Road to Stability and Prosperity in Southeastern Europe—A Regional Strategy Paper The Southeast European region—Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Federal Republic of Yugoslavia, the former Yugoslav Republic of Macedonia, and Romania—is a diverse region of 56 million people. Per capita income in the region is about US$2,200—roughly half the income level of five Central European countries. As a region, these economies have recovered only 75 percent of their pretransition income levels. In the past several years, growth has declined in aggregate, increasing the gap between these economies and the rest of Europe. Living standards have deteriorated, as evidenced by higher poverty, inequality, and unemployment. The poor economic performance can be attributed to four sets of factors: · Adverse initial conditions (unbalanced industrial structures, weak institutions, and fragmented civil societies) at the onset of the transition.· War, civil strife, and ethnic conflict.· Inconsistent macroeconomic stabilization policies.· Weak structural reform policies and lagging progress in trade liberalization, privatization, enterprise reform, competition policies and financial sector development, and institutional, social, and environmental policies.A credible and predictable path should be established to integrate all countries in the region with European and global structures, particularly those of the European Union. The international community must provide financial, technical, and political support. Four broad thrusts for action are designed to help achieve peace, stability, and prosperity in the region: · Move rapidly toward trade integration with the European Union and within the Southeast European region itself, creating a stable, transparent, and nondiscriminatory environment for private sector development.· Foster social inclusion and social change within the region to reduce tensions and create the conditions for peace and stability (the region has about 1.7 million refugees or internally displaced people).· Improve institutional capacity and governance structures and strengthen anti-corruption efforts in the region, through greater transparency and accountability in the functioning of state institutions; better internal controls, including auditing and financial management; a reduction in administrative discretion; and greater participation and oversight from civil society.· Invest in regional infrastructure, including initiatives that safeguard the environment, to integrate the region physically with the rest of Europe.Adapted from The Road to Stability and Prosperity in South Eastern Europe: A Regional Strategy Paper. 2000. Washington, D.C.: World Bank. |
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