MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS : assessing opportunities and constraints.

654 Pages·2021·17.741 MB·English

by  ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT: DEVELOPMENT CENTRE.

OECD Development Pathways
Multi-dimensional Review
of the Western Balkans
ASSESSING OPPORTUNITIES AND CONSTRAINTS

OECD Development Pathways
Multi‑dimensional Review
of the Western Balkans
ASSESSING OPPORTUNITIES AND CONSTRAINTS
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and
arguments employed herein do not necessarily reflect the official views of the member countries of the OECD or its
Development Centre.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over
any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Please cite this publication as:
OECD (2021), Multi-dimensional Review of the Western Balkans: Assessing Opportunities and Constraints, OECD Development
Pathways, OECD Publishing, Paris, https://doi.org/10.1787/4d5cbc2a-en.
ISBN 978-92-64-39167-3 (print)
ISBN 978-92-64-86176-3 (pdf)
OECD Development Pathways
ISSN 2308-734X (print)
ISSN 2308-7358 (online)
Photo credits: © Cover design by Aida Buendia (OECD Development Centre).
Corrigenda to publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.
© OECD 2021
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Foreword
Economic growth matters, but is just one facet of development. Policy makers are required to reconcile
economic, social and environmental objectives to ensure that their country’s development path is
sustainable and that the lives of its citizens improve. At the same time, the achievement of economic, social
and environmental objectives needs strategies for reform that factor in the complementarities and
trade-offs across policies.
The OECD Multidimensional Reviews (MDR) provide governments in the Western Balkans (Albania, Bosnia
and Herzegovina, Kosovo, North Macedonia and Serbia)1 with concrete policy advice for their development
strategies. They identify the main constraints to more equitable and sustainable growth, and propose priorities
for policy intervention. The MDR of the Western Balkans supports the region in identifying key constraints to
development and strategic policy priorities for the next decade.
The MDR of the Western Balkans is composed of two parts: Assessing Opportunities and Constraints, and
From Analysis to Implementation. The approach aims at the co-creation of reforms that respond to region’s
specific challenges and opportunities, and comes with guidance on implementation. This report concludes
the first part of the project: Assessing Opportunities and Constraints for Albania, Bosnia and Herzegovina,
Kosovo, North Macedonia and Serbia. The process conjugates expert policy analysis with participatory
approaches including “Visioning” workshops that involved actors from the private and public sectors, civil
society, and academia. Analytical work is based on statistics about individual well-being as well as macro-
and micro-economic performance at the central, local, sectoral, household and firm levels. Both domestic
and international sources are used.
Benchmarking and comparison of results and experiences with other countries is a key element of the
OECD method. For each MDR, a set of comparator countries is designed to include regional peers,
countries from other regions with similar structural characteristics and OECD members. Depending on
data availability, the Western Balkan economies are compared with three groups of benchmark countries:
1) Organisation for Economic Co-operation and Development (OECD) countries (Costa Rica, Czech
Republic, Greece, Slovak Republic, Slovenia and Turkey); 2) non-OECD EU countries (Croatia and
Romania); and 3) countries in neither the OECD nor the European Union (Kazakhstan, Morocco,
Philippines and Uruguay). The report also includes regional averages for the Western Balkans and OECD
and EU members. The selection of benchmark economies is based on historical similarities, including their
paths towards EU integration, and on economic structures, geographical proximity and mutual
partnerships. The selection of non-OECD economies is based on similar economic and social challenges
(such as high migration rates), shared history as transition economies and similar development patterns.

 This designation is without prejudice to positions on status, and is in line with United Nations Security Council
Resolution 1244/99 and the Opinion of the International Court of Justice on Kosovo’s declaration of independence.
1 In addition to the economies covered by this project, the Western Balkan region also includes Montenegro.
Depending on the data availability, Montenegro is included in the benchmarking analysis throughout the report and
contained in calculated averages for the region.
MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021
4 
The assessment in this report builds on the five pillars of the Sustainable Development Goals: People,
Prosperity, Partnerships, Planet and Peace. For each of these dimensions, strengths and constraints, as
well as trends that could create opportunities or hamper future progress are identified. The objectives of
this report are twofold: first, to identify strategic priorities of relevance for the whole region as the focus for
peer learning; and second, to serve as inputs for the development strategies and plans currently under
development in the region, as well as for the region’s many co-operation partners as they devise their
support.
MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021
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Acknowledgements
Multi-dimensional Reviews (MDR) are the result of a collaborative effort by the OECD and the economies
under review. This report was carried out by the OECD Development Centre in collaboration with the
Centre on Well-being, Inclusion, Sustainability and Equal Opportunity (WISE). The report benefited from
excellent collaboration with the Governments in the Western Balkans.
The review was produced under the guidance of Mario Pezzini, Director of the OECD Development Centre
and Special Advisor to the OECD Secretary-General on Development. The review was led and co-ordinated
by Jan Rieländer, Head of Country Diagnostics and Strategy, together with Gorazd Režonja, Policy Analyst.
The report was drafted by Jan Rieländer, Juan de Laiglesia, Gorazd Režonja, Lara Fleischer (OECD WISE),
Diana Hanry-Knop, Kerstin Schopohl and Andrea Colombo (OECD Development Centre), and Marija
Kuzmanović (external consultant). The analytical and drafting work for all the economy chapters was co-
ordinated by the staff of the OECD Development Centre. Diana Hanry-Knop co-ordinated the work for
Albania, Gorazd Režonja the work for Bosnia and Herzegovina, Jan Rieländer the work for Kosovo, Andrea
Colombo the work for North Macedonia, and Juan de Laiglesia the work for Serbia. Vararat Atisophon, Kate
Chalmers, Lucie Fourel and Nishtha Jain (OECD Development Centre) provided superb statistical and
research support. Secretarial assistance was provided by Myriam Andrieux (OECD Development Centre).
A special thanks goes to the Multi-dimensional Reviews’ main focal points and their teams in the
Government institutions. Majlinda Dhuka, General Director of Department of Development and Good
Governance, and Oriana Arapi, General Director of Policy Unit, both in the Office of the Prime Minister,
were the main focal points in Albania and were supported by Nertil Jole, Daniela Tako and Anjeza Xhaferaj.
Hamdo Tinjak, Secretary General, Ministry of Foreign Trade and Economic Relations, was the main focal
point in Bosnia and Herzegovina and was supported by Admir Alihodžić. The focal points in Republika
Srpska and the Federation of Bosnia and Herzegovina in Bosnia and Herzegovina were Jovana Simić,
Expert advisor to the Prime Minister, and Rijad Kovač, Assistant Director, Federal Institute for Development
Programming. Vedat Sagonjeva, Director of the Strategic Planning Office, Office of the Prime Minister was
the main focal point in Kosovo and was supported by Venhar Nushi. Elena Ivanovska, State Adviser on
Monitoring the Implementation of the Government Programme, and Ivanna Hadjievska, Advisor to the
Prime Minister on International Relations and Cooperation with Organizations, both in the Office of the
Prime Minister, and previously Ana Jovanovska, former Head of the Sustainable Development Unit,
Cabinet of the Deputy President, were the main focal points in North Macedonia. Branko Budimir, Assistant
Minister, Department for planning, programming, monitoring and reporting on EU funds and development
assistance, Ministry of European Integration of the Republic of Serbia was the main focal point in Serbia,
and was supported by Danilo Golubović, and Vladimir Lazović.
The report was greatly supported by the Embassies of Sweden in the economies of the Western Balkans,
including Petra Burcher, Ermelinda Xhaja, Biljana Dzartova Petrovska, Ivana Nakikj, Torgny Svenungsson,
Mario Vignjević, Ida Reuterswärd, Snezana Vojčić, Nasrin Pourghazian, and Erik Pettersson. The
Embassies of Sweden provided support for the project through the organisation of missions and
workshops, and have provided valuable comments in the process. The OECD team is also grateful to the
Delegations of the European Union, the World Bank offices, the United Nations Resident Coordinator
MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021
6 
offices, the European Bank for Reconstruction and Development offices and other stakeholders in the
regional economies, which provided valuable facts and information during the OECD missions.
The team is grateful for insightful comments by Marzena Kisielewska (OECD Global Relations Secretariat),
Gregor Virant, Annika Uudelepp, Jesper Johnson, Kaido Paabusk, Xavier Sisternas, and Bagrat Tunyan
(OECD Public Governance – SIGMA), Alessandro Lupi, Barbara Baredes and Santiago Gonzalez (OECD
Public Governance – Governance Indicators and Performance Evaluation), Bathylle Missika and Gaelle
Ferrant (OECD Development Centre), Elizabeth Fordham, Caitlyn Guthrie, Hannah Kitchen and Richard
Li (OECD Directorate for Education and Skills), and Dorothee Allain-Dupre, Jose Enrique Garcilazo, and
Maria Varinia Michalun (OECD Centre for Entrepreneurship, SMEs, Regions and Cities).
The Western Balkan economies, member countries of the OECD Development Centre, and other experts
gathered during the informal meetings of the Mutual Learning Group held in September and October 2020
to review Multi-dimensional Reviews and to share insights of development experiences. The report
benefited from valuable comments and examples by the lead reviewers and discussants. H.E. Adrian
Maître, Ambassador and Head of Mission, Embassy of Switzerland in Albania provided the lead review of
Albania. Vedat Sagonjeva, Director of the Strategic Planning Office, Office of the Prime Minister, Kosovo
provided the lead review of Bosnia and Herzegovina. Ana Jovanovska, former Head of the Sustainable
Development Unit, Cabinet of the Deputy President, North Macedonia provided the lead review of Kosovo.
Ayana Manassova, Minister Counsellor of the Embassy of Kazakhstan in Paris provided the lead review
of North Macedonia. Mr Andrea Cascone, Director of the Adriatic and Balkans Unit at the Ministry of
Foreign Affairs and International Cooperation, Italy provided the lead review of Serbia. José Román León
Lora, Minister Counsellor, Development and EU DAC delegate, EU Delegation to the OECD provided the
lead review of the regional overview. Ermelinda Xhaja, Programme Officer, Embassy of Sweden in Tirana,
Albania served as a key discussant for Albania. Agnes Stenström, Chief Economist Team, Swedish
International Development Cooperation Agency served as a discussant for Bosnia and Herzegovina and
North Macedonia. Erik Petterson, Programme Manager at the Embassy of Sweden in Pristina served as a
key discussant for Kosovo. Ida Reuterswärd, First Secretary, Embassy of Sweden in Belgrade served as
a key discussant for Serbia. Susanna Gable, Chief Economist, Swedish International Development
Cooperation Agency served as a key discussant for the regional review. A special thanks goes to chairs
of the six informal meetings, including Abdelghni Lakhdar, Co-Chair of the Mutual Learning Group, Ayana
Manassova, Minister Counsellor of the Embassy of Kazakhstan in Paris, Suvi Tuominen, First Secretary
at the Permanent Delegation of Finland to the OECD, Christoph Graf, Counsellor at the Permanent
Delegation of Switzerland to the OECD and Daniela Benjamin, Deputy Delegate, Office of the Delegate of
Brazil to International Economic Organizations in Paris, Embassy of Brazil in Paris.
The MDR team is grateful to the representatives from ministries, agencies, private sector and non-
governmental organisations that took part in the numerous fact-finding meetings and the workshops held
in 2020, as well as for their insightful contributions and comments to the publication.
In Albania, Majlinda Dhuka, Oriana Arapi, Nertil Jole, Evis Qaja, Daniela Tako, Julia Cela, Anjeza Xhaferaj
(Prime Ministers' Office, Policy Unit for Development and Good Governance), Oljan Kanushi, Mitea
Gegushi and Drilona Deliu (Cabinet of Prime Minister), Irena Malolli, Thimjo Plaku, Gjergji Simaku (Ministry
of Infrastructure and Energy), Brikena Shehu (Ministry of Justice), Redi Baduni, Lediana Karalliu, Erjola
Sojati (Ministry of Turism and Environment), Idriz Haxhia (Ministry of Interior Affairs), Dikensa Topi (Ministry
of Education, Sport and Youth), Herida Duro (Ministry of Culture), Merita Xhafaj and Brunilda Dervishaj
(Ministry of Health and Social Protection), Ada Ilia (Minister of State for Diaspora), Kleina Kasanai (Minister
of State for Enterpreneur Protection), Albana Kociu and Arvena Deda (Department of Public
Administration), Gerta Lubonja and Anduen Karagjozi (Agency of Management of Water Resources),
Nensi Lalaj and Adelina Greca (National Agency of Territory Planning), Rezar Turdiu and Arben Skenderi
(National Agency of Cadaster), Zamir Dedej (National Agency of Protected Areas), Ledion Lako (National
Coastal Agency), Romina Kostani (National Agency of Information society), Haki Cako and Fatjona
MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021
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Xhaferri (National Agency of Civil Protection), Genci Celi and Sokol Nano (Albanian Investment and
Development Agency (AIDA)).
In Bosnia and Herzegovina at the state level, Directorate for Economic Planning, Ministry of Justice,
Ministry of Foreign Trade and Economic Relations, Ministry of Communications and Transport, Ministry of
Human Rights and Refugees, Ministry of Civil Affairs, Ministry of Finance and Treasury, Agency for
Statistics of Bosnia and Herzegovina, and Central Bank of Bosnia and Herzegovina. In Bosnia and
Herzegovina at the level of the Federation of Bosnia and Herzegovina, Federal Institute for Development
Programming, Ministry of Justice, Ministry of Energy, Mining and Industry, Ministry of Education and
Science, Ministry of Finance, Ministry of Transport and Communications, Ministry of Trade, Ministry of
Labor and Social Policy, Ministry of Development, Entrepreneurship and Crafts, Ministry of Interior, Ministry
of Displaced Persons and Refugees, Ministry of Physical Planning, Ministry of Health, Ministry of
Agriculture, Water Management and Forestry, Ministry of Environment and Tourism, Agency for
Privatization, Tax Administration, and Federal Employment Agency. In Bosnia and Herzegovina at the level
of Republika Srpska, Government of the Republic of Srpska, Ministry for European Integration and
International Cooperation, Ministry of Spatial Planning, Construction and Ecology, Ministry of Economy
and Entrepreneurship, Ministry of Family, Youth and Sports, Ministry of Administration and Local Self-
Government, Ministry of Health and Social Welfare, Ministry for Scientific-Technological Development,
Higher Education and Information Society, Ministry of Education and Culture, Ministry of Finance, Ministry
of Labour, War Veterans and Disabled People's Protection, Ministry of the Interior, Ministry of Energy and
Mining, Ministry of Justice, Ministry of Transport and Communications, Ministry of Trade and Tourism,
Ministry of Agriculture, Forestry and Water Management, Employment Agency, and Tax Administration.
In Kosovo, Office of Strategic Planning (Office of the Prime Minister), Ministry of Agriculture, Forestry and
Rural Development, Ministry of Education, Science Technology and Innovation, Ministry of Finance,
Transfers and Labour, Ministry of Economy, Ministry of Industry, Entrepreneurship and Trade, Ministry of
Health, Ministry of Environment, Spatial Planning and Infrastructure, Ministry of Internal Affairs and Public
Administration, Ministry of Justice, Ministry of Local Government Administration, Ministry of Regional
Development, Ministry of Culture, Youth and Sport, Anti-Corruption Agency, Agency on Gender Equality,
Food and Veterinary Agency, Environmental Protection Agency, Inter-ministerial Water Council, Central
Bank, Kosovo Competition Authority, Office for Budget and Finance, Agency for Statistics, Municipality of
Pristina/other municipalities, Employment Agency, Public Procurement Regulatory Commission, Labour
Inspectorate, Social Services, Trade Union Representatives, Investment and Enterprise Support Agency,
American Chamber of Commerce, Customs Administration, Tax administration, Balkan Green Foundation,
Foundation Open Society, Regional Environment Kosovo, Council for the Defence of Human Rights and
Freedoms, and Civil Rights Program.
In North Macedonia, Elena Ivanovska and Ivanna Hadjievska (Office of the Prime Minister), Kalinka Gaber,
Hristina Koneska Berovska and Ljubica Gerasimova (Secretariat of European Affairs), Ana Jovanovska,
Viktor Andonov, Daniel Josifovski and Sandra Andovska (Cabinet of the Deputy President of the
Government of the Republic of North Macedonia, in charge of economic affairs and co-ordination of
economic departments), Jasmina Mjastorovska, Biljana Stojanovska, Marina Arsovska and Sofket
Ramadani (Ministry of Economy), Vesna Cvetanova, Magdalena Simonovska, Jordan Trajkovski, and
Aleksandra Velkova (Ministry of Finance), Aleksandar Dilije and Aleksandar Musalevski (Ministry of
Agriculture, Forestry and Water Economy), Biljana Zdraveva and Svetlana Gligorovska (Ministry of
Transport and Connections), Dushan Tomisic, Darko Docinski and Goran Veleski (Ministry of Labour and
Social Policy), Tatjana Vasić (Ministry of Justice), Andriana Stojanovska (Ministry of Local Self-
Government), Biljana Prentovska (Ministry of Culture), Mihajlo Kostovski (Ministry of Health), Lendita Dika,
Vlatko Trepski, Ana Karanfilova, Katerina Nikolovska and Vesna Indova (Ministry of Environment and
Physical Planning), Elena Bodeva, Tanja Dinevska, Shpresa Jusufi and Igor Popov (Ministry of Foreign
Affairs), Tanja Ilievska (Fund for Innovation and Tehnology), Aneta Krsteva (National Bank), Aleksandar
Argirovski and Rita Gligorievska (Public Procurement Bureau), Snezana Shipovic, Mirjana Boshnjak, Arija
MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021
8 
Caushovska, and Branko Hinikj (State Statistical Office), Ivan Ivanov (Invest North Macedonia), Zlatko
Vterovski and Dragan Ivanovski (Customs Administration), Ivana Donchevska and Vasil Blazevski (Public
Revenue Office), Biljana Koceska (National Agency for Security-Migration), Nadica Kostovska (Ministry of
Education and Science), Mihajlo Kostovski (Ministry of Health), Tanja Ilievska (Fund for Innovation and
Technology), Frosina Velkovska Petkovska and Violeta Stojanovic (Employment Agency of the Republic
of Macedonia), Zorica Dzingova-Trpcevska, Zlate Stojanovski and Toni Vojnevski (Labor Inspectorate),
Ana Panceva (Social Services Agency), Maja Konevska and Irena Popovska, Karolina Anovska and Rosa
Galevska (Commission for the Protection of Competition), Arbonara Bajrami and Elena Zlateska (Bureau
for Economically Insufficient Developed Regions), Bojan Dunev and Aleksandar Sapundziski (Directorate
for Water Management), Darko Blinkov (State Inspectorate for Environment), Mare Basova and Tatjana
Minovska (State Enterprise for Forests), Atanas Kochov and Dusko Mukaetov (Academia), EKO ZVON,
Jadranka Arizanovska (Chamber of Commerce), Aleksandra Chavadareva (MASIT), Drilion Iseni
(OEMVP), and Maja Filipceva (Amcham).
In Serbia, the Office of the Prime Minister, Branko Budimir, Danilo Golubović, and Vladimir Lazović
(Ministry of European Integration), Slavko Lukić (Regional Development Agency Zlatibor), Vukasin
Vučević, Natalija Luković, Tanja Stojanović and Verica Kugić (Ministry of Mining and Energy), Ministry of
Construction, Transport and Infrastructure, Ministry of Trade, Tourism and Telecommunications, Ministry
of Labour, Employment, Veteran and Social Policy, Ministry without portfolio responsible for innovation
and technological development, Ministry without portfolio responsible for regional development and
coordination of the work of public companies, Ministry without portfolio responsible for demography and
population policy, Ministry of Public Administration and Local Self-Government, Ministry of Health, Ministry
of Finance, Amalija Pavić and Marko Jovanović (AmCham Serbia), Gordana Lukić (Commission for
Protection of Competition), the Team of the Standing Conference of Towns and Municipalities, Jelena
Mujčinović and Janko Prica (Public Policy Secretariat), and the National Academy for Public Administration
for their hospitality, Nataša Đereg and Pera Marković (CEKOR), Miloš Đinđić (European Policy Center),
Zorana Milovanovic (Evropski pokret u Srbiji), Duska Dimovic (WWF in Serbia), Ivan Topalović (Belgrade
Open school), Public Procurement Office, Labour Inspectorate, Commission for State Aid Control and
Department for State Aid Control, National Employment Service, National Bank, Fiscal Council, Statistical
Office of the Republic of Serbia, Chamber of Commerce and Industry of Serbia, and H.E. Carlo Lo Cascio,
Ambassador of Italy in Belgrade and his team.
Finally, the team acknowledges Jessica Hutchings for editing the manuscript. Aida Buendia, Delphine
Grandrieux and Elizabeth Nash from the OECD Development Centre’s Communications and Publications
Unit, and Meral Gedik (Consultant) edited, laid out and produced the report.
This publication was produced with the financial support of the Swedish International Development
Cooperation Agency. The contents of this publication are the sole responsibility of the OECD Development
Centre and do not necessarily reflect the views of the Swedish International Development Cooperation
Agency, or that of the Governments of Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and
Serbia.

MULTI-DIMENSIONAL REVIEW OF THE WESTERN BALKANS © OECD 2021