Economic cooperation between Serbia and Albania

Economic cooperation between Serbia and Albania

The first official visit by Prime Minister of Albania was nearly cancelled because of the “incident” at the football match Serbia - Albania, when unknown persons at that time, operating a drone, waving a provocative flag showing the territories in the Balkans inhabited by Albanians, marked as “Great" or "Natural Albania”. This incident caused fierce reaction in the public opinion of Serbia, which had a negative impact on the preparations for the upcoming “historic” visit of Prime Minister Rama to Serbia, and his meeting with the then Prime Minister of Serbia, Aleksandar Vucic. In spite of the tense atmosphere, and mainly negative comments in Serbian public, the summit that was planned and agreed upon in August 2014 during the Conference in Berlin marked a symbolic turning point in the relations of the two countries. In addition, in the Final Declaration from Berlin, which represents the beginning of the “Berlin Process” for the Western Balkans, Germany pledged to support the membership of all Western Balkan countries in the European Union upon meeting of the required conditions; to support resolution of the bilateral problems by intensifying the regional cooperation of the countries; development of good governance, which implies fight against corruption and organized crime, and strong and responsible institutions, rule of law and media freedoms; and ensuring the economic development as a prerequisite for the stability of the societies and states. Through the Berlin Process, the European Union has pledged and undertaken steps towards the reconstruction and improvement of the road, railway, energy and digital infrastructure in the Western Balkans.

The meeting in Belgrade was followed by the visit of Prime Minister Vucic to Tirana in March 2015, and a new arrival of Prime Minister Rama to the Business Forum Serbia – Albania in Nis in 2016. The Business Forum gathered 211 companies from Serbia and 41 companies from Albania, having created the opportunity for informing businesspeople about the possibilities of the economic cooperation of the two countries, and demonstrating the “official support” by the two Governments. Such a great interest of businesses confirms a big potential for cooperation, which had not been used until that point, mainly due to the negative political circumstances, primarily influenced by the different positions on the status of Kosovo. During the Forum, the Memorandum of Cooperation on the establishment of Albanian-Serbian Chamber of Commerce and Industry was signed by Marko Cadez, CCIS President, and Luan Bregasi, President of the Business Association “Business Albania” with the seat in Tirana.

The joint Chamber was registered at the beginning of 2017, while the Founding Assembly, attended by more than a hundred Serbian and Albanian companies, was held on 25 November 2017, in Tirana, with the participation of the Minister of Economy of Serbia, Goran Knezevic, Minister for Protection of Entrepreneurship of Albania, Sonila Cato, President of the Union of Albanian Chambers of Commerce and Industry, Ines Mucostepa, and President of the Chamber of Commerce and Industry of Serbia, Marko Cadez, who announced the investment of a large distribution company from Serbia into a logistics company in Albania. At the Assembly session, President and Co-president of the joint Chamber, Isuf Ferra and Miroljub Aleksic, respectively, were elected, and so was the Executive Council, consisting of seven members - four representatives of the Serbian business community and three from Albania.

The goal of the Chamber is to improve the overall economic cooperation of Serbia and Albania, by strengthening business connections among companies, expanding membership, facilitating business operations by removing barriers to business, representing companies’ interests vis- a- vis respective Governments and providing other services agreed by its members.

In the last two years, the economic cooperation has recorded a constant growth, which can be definitely attributed to the increased intensity and positive dynamics of the political relations. The total commodity trade between Serbia and Albania stood at 118.4 million euros in 2016, and recorded an increase of 7.8% as compared with 2015. The exports to Albania amounted to 93.14 million euros, which was higher by 1.5% as compared with 2015. The imports from Albania grew by 40.1% as compared with the same period in 2015, and it stood at 25.3 million euros. However, the total commodity trade in the period January-September 2017 increased substantially as compared with the same period in 2016 and stood at 118.6 million euros. The exports to Albania increased by 36.2% as compared with the same period in 2016, and the imports from Albania grew by 37.2%, which shows the balanced trade and growth of both sides. Such a volume of trade was contributed by the introduction of a direct air route Belgrade-Tirana, with daily flights, and the organized participation of companies at the biggest fair in Albania-PANAIR. This year, the Chamber of Commerce and Industry of Serbia and Development Agency of Serbia represented the national pavilion on the area exceeding 300 m2 at which 41 companies from Serbia participated. The exhibitors were companies from the sectors of agriculture and food industry, construction, machine building and chemical, power, textile, and pharmaceutical industries. This participation of companies from Serbia has been the largest so far.

It has already been said that such a favorable trend in the economic cooperation between Serbia and Albania has been facilitated by the improved political relations of the two countries, and the beginning of the process of normalization of the relations between Belgrade and Pristina. Both processes have hinted, if not suggested openly, that a dialogue can contribute to the improvement of the relations between Serbs and Albanians, creating the prerequisites for positive trends in the wider Western Balkan region. These positive trends have been influenced by the active role of the leading European Union countries through the Berlin Process, by the accession to the EU, and by the role of the United States, which has substantial leverage on the political processes in the Region, especially in Kosovo and Albania.
The European Union has elaborated and introduced at the Trieste Summit the Action Plan for the creation of a Regional Economic Area (REA), which includes adoption and harmonization of the regulations, coordination of the procedures aimed at improving business in four areas: trade, investments, digitalization, and unhindered exchange of labor force by recognition of qualifications. This Action Plan largely relies on the experiences of CEFTA, which enabled the economies in the region to achieve significant economic growth, and to increase mutual trade. However, a large number of registered non-tariff barriers, non-harmonized regulations, certificates, standards, and quite inefficient mechanism for dispute resolution within the framework of CEFTA still make the trade in the Western Balkan Region inefficient, which makes final products more expensive, and thus uncompetitive with the products coming from the EU and other countries. Having this in mind, the discussions were held at the unofficial meeting of Prime Ministers of the Western Balkan countries held in Durres at the end of August 2017 about the preconditions for the implementation of the Action Plan, i.e. the steps to be taken by the Governments in the Region to achieve greater and deeper regional economic cooperation. The Commissioner for European Neighburhood Policy and Enlargement Negotiations, Johannes Hahn, stated that the exports from all Western Balkan countries to the EU had been doubled, whereas the trade between the countries in the region had remained at the same level as ten years ago.

In spite of the fact that intensification of the economic cooperation, by linking companies in the compatible areas, which can create added value by amalgamation and simplification and full harmonization of procedures and documents would contribute to the development of all economies in the region, there is some opposition to the initiative for creation of the single economic area. The opposition is political, and it reflects the fear that REA could become an excuse for disruption of the EU enlargement process for all Western Balkan Countries. In addition, in spite of the fact that all countries have been committed to more intensive regional cooperation, bilateral relations of some countries do not speak in favor of that, and they challenge the sustainability of the initiative.
The economic cooperation that ensures growth of gross domestic product has to be accompanied by intensive investments in education, manufacturing, infrastructure, innovations and development of IT and digital technologies. To achieve this, the stronger political cooperation and coordination has to be ensured, which is, unfortunately, often not the case, and we are the witnesses of the imposition of unilateral measures by one country towards the other.

One of the conclusions (which resulted from the recommendations of the six Chambers organized in the Western Balkans 6 Chamber Investment Forum – CIF, introduced in Trieste) from the unofficial summit in Durres that should contribute to regional cooperation among the Governments was the nomination of the regional cooperation coordinators in the Prime Ministers’ Cabinets. They will be in charge of the communication and coordination between the Cabinets of Prime Ministers of six Berlin Process participating parties and to ensure the prerequisites for implementation agreed in the national systems. The CIF recommendation to the CIF Governments was to nominate a Vice Prime Minister or Minister in charge of the regional cooperation that would have political influence and be operationally involved in the implementation of joint regional policies. It is estimated that, at this moment, the maximum of just twenty officers in all Western Balkan 6 Governments deal with the regional (economic) cooperation, including the implementation of the CEFTA Agreement. Of course, this is far below the minimum required for the achievement of ambitious goals that were either set by the Governments or imposed on them in Brussels.

At the end, certainly, without the systemic approach to the regional economic cooperation and the expressed political will and commitment to achieve it, there will be no significant results. We can state the same on the relations between Serbia and Albania, i.e. the relations between Serbs and Albanians, which require a systemic and long-term approach. It would be good to use the current positive momentum and lay the foundations of the future cooperation in the way that it would be difficult to damage them, by establishing an umbrella organization – institution, which would have a task to work systemically on bringing closer Serbs and Albanians, through cultural exchange programmes (translation of books, texts, movies, etc.), scientific cooperation through the scholarship programmes for researchers and students, internships, learning languages, and finally, exchange of civil servants. This institution needs to lead the policy and programmes that would ensure that the two nations learn about each other, contribute to understanding and overcoming of conflicts that occurred in the past, using the experiences of the German-French initiatives after the World War II. Such an initiative has to be started and financed by the Governments of Serbia and Albania, with the possibility of its expansion to the cooperation with Kosovo, if there is an interest in it on the part of Kosovo.

The economic cooperation opens up paths because there is a mutual interest for it. I am sure that there is such an interest in other areas too, because knowing well your neighbors and working with them, ensures pleasant dreams to everyone.

Nenad Djurdjevic is Director of the International Economic Relations Division in Serbian Chamber of Commerce and Industry. The English version of the above article is exclusively for Albanian Daily News, while its version in Serbian is published at internet portal http://kossev.info. The text was elaborated on the margins of the recently held first Assembly of the Albanian-Serbian Chamber of Commerce and Industry in Tirana last November and represents the views of the author, thus not necessarily representing the opinion of the Serbian Chamber of Commerce and Industry.