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The Balkans: Economic Growth in a Post-Conflict Environment

The Balkans: Economic Growth in a Post-Conflict Environment
Velma Anne Ruth, M.Ed. - Sun Mar 03, 2013 @ 02:57PM
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A section authored as part of a larger report published and distributed to 150 countries by Universal Peace Federation, an NGO with special consultative status to the UN Economic & Social Council, with appreciation to Ralph Winnie, Jr., Director of Global Business Development, Eurasia Center. 




"(The UPF Office of Peace and Security Affairs is very appreciative for the following report by Ralph Winnie, Jr., Director, Global Business Development, Eurasia Center and Velma Anne Ruth, M.Ed., President of Independent Review, Inc. & Executive Director of Middle East Democracy Federation.)"


When embellished in a recent history of warfare, extensive loss of family, friends, associates, and countrymen, complicated by international interests and varied interpretations, notwithstanding an ongoing struggle for advancement and quest for futures beyond the remaining conflicts; it is imperative to take a step back, and rise above those issues with a concrete grasp of current positioning, and detailed prospectus towards achieving advancement.


Financial assistance is only a part of resolves, given the dynamics of strategic planning, policy, capacity of implementation, variables of international partnerships, and risk management determine the capacity of funds to be effectively allocated. As we have seen in recent years of US financial crises, when combined with a lack of answers, sizable blank checks can fuel further complications due to mismanagement and a lack of committed applications and prevention of abuse of funds. Government spending and economic and fiscal policy are best planned with committed partners who can map growth in short- and long-term outlooks through procedural standards that positively impact both the people, industry, and government.


There are five fundamental principles for addressing stabilization plans in post-conflict and near post-conflict environments:


1) Implement economic development initiatives that promote the well-being of all citizens of the country, address targeted consumer demographics, and may involve partnerships between government, corporate and charitable sectors, with prospective benefit to immediate neighbors


2) Remove the cultural debate by focusing on equal provisions for all types of consumers as applied through advancing industry standards, such as equal access to medical care and protective policies of diversity in labor


3) Preserve ethnic and historical values by addressing prevalence of issues and areas for advancement per demographic, such as provision of social services for survivors of human rights atrocities, advanced immigration policy, or restoration of citizenship rights


4) Restore strategic communications and develop a public image with corrective and competitive address to policy, media, corporate sector, and any misrepresentation that may be skewing local realities, which may include public debate, cultivation of spokespersons, coalition of organizations, and development of evidentiary reporting systems, while preserving a level of transparency that recognizes challenges with proposed resolves


5) Strengthen independent records systems, intelligence, and security apparatus towards lesser dependence on foreign advisement, education for foreign powers with regards to local issues, and contribution to regional and international stability


The Balkans


In a recent speech by a German member of the European Parliament, the MEP cited the expedition of additional national membership to the European Union as a means to leverage out of current economic crises. The Balkans were very much a part of the dialog, including lingering questions on resolves for Greece, and suggestions to bring industry, technological advancement, exports, education, and streamlined qualification standards to Europe.


While EU membership is a key to economic advancement, it is also an expensive and intensive process of preparation towards future commitments. For long-term development, especially towards greater involvement in the global economy, any prospectus should address improvement of a nation’s credit ratings, reflecting both prosperity, approach to citizenry, and risk, which impact a country’s capacity to participate at highest levels in the global market (see Table: Balkan Regional Credit Ratings).


As reflected in the Balkan diplomatic panel hosted by the Universal Peace Federation, focus areas for regional advancement include the following: energy, communications, forestry, agriculture, science, education, health, security, anti-corruption, and information technology. In a concerted approach to economic development, components of each sector would provide mutual benefit through partnered and parallel initiatives over the long-term.


In the course of introducing investors, loans or grants towards development, varying areas of growth require different forms of financing in order to preserve any intentions for nationalized or more free-market approaches to the advancement, while public-private partnerships may also leverage opportunities to effectively balance influence between government, charitable, and corporate partners. However, as a core economic principle, the generation of revenues, reduction of costs and debt, lessened dependency on grants, and increased focus on free-market strategies, application of income to furthered advancement are all crucial to sustainable growth.




With Croatia’s successful completion of prerequisites, the nation will enter European Union membership on July 1, 2013. Amidst the range of areas for economic growth, regional empowerment, and potential positive impacts on Europe’s stability, is a $13.7 billion euro elephant in the room: an equivalent $10 billion USD in sponsorship from the European Union to Croatia.


No doubt, Croatia may be bombarded by a host of proposals, offers, and demands for participation in the economic development program that stretches to 2020. However, terms and mandates for use of the grant, guarantees and non-guarantees of 5 - 8.7 billion, historical trends, and future outlooks are all in question.


As of November 2012, “Under the Commission's proposal, during the 2013-2020 period Croatia would have access to 13.7 billion euros, and the greatest part of this amount, 8.7 billion euros, comes from the cohesion and structural funds. The 8.7 billion is not a guaranteed amount but can be drawn based on projects that meet strict criteria.”


Already, Gazprom has targeted Croatia’s energy sector through a developing deal for pipeline construction, providing benefits also to Serbia, while offering to reduce some local Croatian prices by as much as 20 percent. Energy cost-cutting is crucial for Croatia, given their high level of imports and consumption while struggling with extremely high unemployment numbers. However, national adoption of alternative energy resources may more significantly cut expense of imports by removing demand, promoting job growth, and increasing energy resources for local consumption.


Croatian medical standings are also very positive, which includes medical tourism programs. This positioning may promote Balkan advancement. For example Montenegro is limited in reporting their medical indicators, which suggest a need for physicians, facilities, and educational improvements. And Albania has positive initial measures but may need a children's hospital to lower infant mortality rate. However, given the expense of medical care per patient, Croatia and its neighbors may want to review their social security programs for impact of nationalized care on local economies and explore options for public-private partnerships and insurance packaging.


According to a report by the Institute of Public Finance, Croatia has historically applied state aid in a range of areas, including but not limited to employment and training, research and development, environmental protection and energy saving, ship-building, transport, and tourism.


Moving forward, Croatia may benefit from a renewed review of its national market and potential for regional, European, and international partnerships.




Amidst the country’s quest for EU membership, many Albanians are villagers; there is a need for increasing access to fundamental resources such as electricity and medical care, while the nation contributes to NATO in Afghanistan; 5 million Albanians reside in Turkey while 4 million are in Albania.


Albania is seeking a long-term plan, participation in the competitive market, and invitation for investors to the Balkan region. A starting point for Albania may be to address local issues and to leverage greater internal stability for national growth, which then fosters higher capacities for increased regional and international contributions.


While the life expectancy of Albanians is moderate at 77.59 years, the infant mortality rate is high at 14.12 deaths per 1000 live births, suggesting a serious need for increased infant and pediatric medical care. According to an Albanian Ministry of Health report from 2009, “levels of cardiovascular diseases, cancer, and external causes of death are increasing. The burden of communicable diseases is decreasing in general terms, but some infections as HIV/AIDS are increasing.” The nature of the worsening health situation suggests also a need for specialized medical services and facilities. In addition to strengthening the population, advancements in the area of medicine would inspire increased access to fundamental modern resources such as electricity and technology, promoting Albania’s capabilities and job growth in all sectors.


From a high-level view, it appears that Albania’s energy production and electricity consumption is relatively flat, predominantly from hydro resources, and limited in capacity for expansion. As compared to Croatia, national adoption of alternative energy resources may leverage the limited accessibility of hydro-power and natural gas, promote job growth, and increase energy resources for local consumption.


Given a stronger internal infrastructure, Albania may see increasing opportunities for leveraging small-to medium-size businesses and enterprises, and advancing their regional and international position such as through agricultural exports.




With a population of 650,000 people, and 25 percent of the economy in tourism, Montenegro is seeking EU membership and working to address market nationalism, transparency, organized crime and corruption.


As of November 2012, “Justice Ministers of Montenegro and Bosnia, Dusko Markovic and Barisa Colak, signed the extradition agreement...[that] will allow for the extradition of Montenegrins charged with grave crimes, particularly in the field of organized crime, corruption and money laundering, to Bosnia and vice-versa...Montenegro has already signed extradition agreements with Serbia, Macedonia and Croatia, and is preparing to do the same with Kosovo and Italy.” Exhibiting a strong commitment to cross-border security issues, the addition of Bosnia to extradition partnerships furthers the capacity of Montenegro to promote a stable environment for regional economic growth. Effective implementation of justice crack-downs, combined with industry advancements, establish grounds for Montenegro and its partners to improve credit ratings and become an increased part of the global market.


Upon preliminary review of Montenegro’s medical indicators, a significant amount of health data was missing from standard international sources, indicating an overall need for expanding the medical infrastructure in terms of facilities, physicians, and supportive resources to assist the Ministry of Health in oversight. A thorough June 2011 report by Montenegro’s Ministry of Health outlines proposed areas of improvement, while further analysis is required to determine the country’s status in optimizing the healthcare system.


In comparison, while a more extensive medical infrastructure may strengthen Albania's population, advancements in the area of health would inspire increase in access to fundamental modern resources such as electricity and technology, promoting Albania’s capabilities and job growth in all sectors. Further, the combination of strong tourism industry and advancement of medical care opens Albania as a potential market for international medical tourism.


In Montenegro, 75.8 percent of electricity is hydro, while there is little to no presence of oil and gas. Albanians consume almost twice as much electricity as is locally produced, resolving in a high level of dependence on electricity imports. Compared also to Croatia and Albania, Montenegro's national adoption of alternative energy resources may leverage its limited accessibility of hydro-power, significantly cut expense of imports by removing demand, promote job growth, and increase energy resources for local consumption.


Similar to its coastal neighbors, Montenegro may benefit from a multi-national Balkan approach to parallel advancements in medicine, energy, and security that leverage growth from tourism, and to which education, communications, technology, science, forestry and agriculture may follow.


Extended Global Participation


Successful high-level participation in the European Union and global markets often requires coalitions of nations from both within their immediate region and outside, which can tie in with the leadership of UK, France, Germany, and the United States and maintain standards of human rights and anti-corruption in policy.


As a partner to Turkey, the Balkans offer fresh eyes to Middle East conflicts that impact global stability both in terms of market and security. Just as Albania offers boots in Afghanistan, diplomatic voices from the Balkans may also empower shifts towards more positive and expansive western alliances. In the crux of the cultural and historical debates, a deepened relationship for Turkey in the Balkans may leverage stronger economic growth and more positive impacts on comparable areas of diplomacy and NATO involvement.


For example, while the Syrian people are seeking a post-war environment, and Egyptian people are rioting against a new dictator installed by election fraud, Turkey is caught in a cross-fire of varying international influences including finance from Saudi Arabia to Qatar, political pressure from Egypt and coalitions seeking to remove secularism from Middle Eastern governance, intensive conferences with European and American leaders, plus ongoing threats from Iran and Syrian regimes, compounded by a complex web of terror groups conflicting inside Syria, the heated presence of Israel, and hundreds of thousands of refugees fleeing Syria, many taking respite in Turkey.


Turkey’s economic position is further complicated by the intended "pipelineistan" project that would connect Iran, Syria, Iraq, and Turkey through regional energy dominance. While Iran and Syria back the PKK and exploit their presence against both Turkey and the Kurdish people, they are no more representative of the Kurdish people than are the Muslim Brotherhood to the Egyptians or the Syrians.


The Balkans have experienced comparable conflicts in their own region and heard the secular and diverse voices unified in the streets; yet, these are not echoed in the chambers of policy makers nor the press; they have witnessed the process through International Criminal Court. The Balkans are in a unique position of leadership through example, standing in their post-conflict moment towards a plateau of influencing stability. While organized crime is less violent than terrorism, it operates in much the same fashion and just as globally.


Internationally, diplomacy is immediately tied to economic issues; while global transparency, anti-corruption, and government financial management initiatives are still in the early stages of influence, they have far-reaching challenges due to lack of information technology, reporting strata, and administrative infrastructure for effective management.


For example, in the case of Syria, the United Nations has received and been pledged over $1.5 billion in assistance from the United States, Europe, and other countries; these funds are then distributed for humanitarian aid and related issues. As a vessel for distributing funds, the UN has a responsibility to assure that every dollar is applied in accordance with the sponsor's intent. However, the UN also works with a vast network of subdivisions, partner organizations, and partner organizations to those subdivisions, while being responsible for determining which entity or foreign government agency is to receive the funds for appropriation to given cause. When funds are transacted through a series of hands, each with independent internal structures and risk management procedures, sponsorship becomes more liable for misuse through each additional transaction while the UN should maintain responsibility for oversight from the point of original receipt.


There are two current controversies with regards to use of this $1.5 billion in funds:


$500 million may go straight to the Syrian regime for distribution, of which both the Muslim Brotherhood aligned and non-aligned opposition assert that Assad and partners will seize up to 90 percent for use in furthering violence, not excluding murdering Syrian Arab Crescent emergency medical technicians (EMTs) who assist the Free Syrian Army or other opposition bodies.


As is also the case with Iranian refugees, Syrian refugees are reporting that supplies and funds that are processed through the UNHCR are ultimately stolen on the ground, almost immediately upon arrival to beneficiary locations (such as storage facilities or offices), and that refugees see neither food, heating supplies, or cash awards, and some are personally threatened against reporting.


Given the Balkan personal experience in warfare, working with UNHCR, hosting or otherwise being part of a humanitarian aid and refugee crisis, the Balkan voice to the European Union and United Nations may offer advice and recommendations from recent history as a cathartic means to leverage understanding over cultural diversity and conflict towards greater stability.


The Balkans are positioned on a horizon of liberty and democratic shifts and may offer guidance to more troubled nations which tie-up trillions of dollars in the global market, while establishing local economic empowerments and expanding international partnerships. With commitments to anti-corruption and organized crime, the Balkans may also offer models of advancement for peer and more troubled nations to follow. And by seeking equality and free market principles in national growth, the Balkans can look within as see themselves as champions of liberty and and embrace internal capacities for deeper sustainability.





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