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KOSOVO PUBLIC POLICY CENTER
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27 June
2010
The title of our conference is “Western Balkans: An opportunity or a challenge for the future of the EU”. Maybe we should rephrase it and say: an opportunity and a challenge for both the EU and aspiring countries. According to our Minister of Foreign Affairs, Mr. Hyseni, in the short run it is more of a challenge, but in the long run we should look at it as an opportunity, or as an investment as quoted from our presenters from Macedonia. The clear long run perspective for EU membership was mentioned several times during the conference. I can only hope that our referees are not quite correct with their predictions, since as the famous economist John Maynard Keynes once put it: In the long run we are all dead. Professor Clewing was more precise. In his opinion, well-founded on past experiences, the full membership may require more than 20 years. Croatia would be a good example for this. Well, I am not quite sure that Croatia could be used as a good proxy for this, but maybe for something else. If we all agree that membership in EU is the main target for policymakers in the Western Balkans, then any progress towards it should be measurable. Hence, statistics were said to be very important. EU membership should be reflected in a smaller and smaller gap in the levels of per capita GDP between candidate countries and the average of EU countries. Presented data in this respect were not really optimistic. It was also suggested from our Italian friends that convergence using GDP per capita as the sole indicator may not be the proper approach. Maybe other indicators, such as HDI, or the Gini coefficient would provide us with more insightful information not only on growth rates but also on the quality of this growth and its pro-poor nature as well. Having said that, let me present some other data that could give us a better insight on the statistical relevance of the topic discussed during this past weekend. The number of citizens with permanent citizenship in EU countries is around 500 million. The number of people living in the Western Balkans (excluding here Croatia, as its membership is almost a closed issue) is around 19 millions, which is only about 3.9% of the EU. The situation is even more visible when comparing the level of welfare measured in terms of output. All EU countries together generate a level of nominal GDP equal to more than 18 trillion US Dollars. Countries included here in the Western Balkans produce some 90 billion which is approximately 0.5% of EU-s GDP. It is also equivalent to only 75% of the Hungary’s nominal output. EU membership implies the ability of candidate countries to meet certain criteria, better known as the Copenhagen Criteria. But EU is not a static community. Instead EU’s output is expanding, and EU itself is expanding both with respect to the functional scope and also institutional design. For candidate countries, the integration process takes the form of a convergence towards a flexible target, a kind of steady state that moves away, the closer we come. The decision making in EU was explained with the mathematical model of the game theory, the so called Prisoners Dilemma, which means measuring costs and benefits of two uncertain outcomes. It was also explained with the principle of compensating opponents in all cases where consensus in decision making is needed. But as the number of countries entering EU before the Western Balkans increases, transaction costs required to reach the consensus for further enlargement may also increase, thus making the process politically less attractive for existing members of the EU. The process of association and stabilization includes the implementation of several reforms in candidate countries, as to make them ready for the new community. Croatia is an example that may prove to us the insufficient nature of this technical aspect. In the same way, Rumania and Bulgaria may prove that in some cases political calculations become more relevant. Croatia has a larger GDP than both of the above mention countries and its public administration is by far more advanced. But how important is the EU membership? It was stated more than one time during the conference, that EU membership is just a target, or a goal. In this case the process of joining EU was considered to be much more important. During this process, countries will undergo substantial reforms in many areas that directly affect the welfare of citizens, and also strengthen institutions responsible to implement reforms and policies. Many technical aspects of the process of association have direct positive impact in our life. Let me mention here only few of them: agricultural policy; fiscal policy; monetary policy; trade policy; transport policy; industrial policy; environmental policy; labor market policies; regional development policy; competition policy; aid policy; rule of law; regulations that ensure capital mobility and many others. Being a candidate country has the additional advantage of receiving increased financial and technical assistance from the EU for the implementation of this homework. It was also confirmed that reforms leading to an improved welfare should not be initiated and implemented for the sake of joining the EU. They should rather represent actions meant to increase the welfare of voters. If this process leads to higher standards of living, the membership itself loses on importance. One could put it differently: as the development gap to EU diminishes, the marginal benefit of this membership also diminishes. The history of the EU records examples when countries refused to join it or even decided to leave the community (Greenland in 1985). Maybe this is the reason why Croatia is not so eager to join the EU now. They receive on average 40% more foreign direct investment than Bulgaria, which is already a member of the EU. Integration in the EU is supposed to bring more welfare to citizens, measured in terms of more ability to produce and consume. Through integration, countries could increasingly benefit from the different distribution of resources, thus making use of the comparative advantage. But does this necessary include more trade integration within candidate countries themselves? The impression here is that trade volume will rather increase with other EU members and not to other candidates. Now let’s get back to Kosovo. The process of integration has officially not yet started. But the country has already set up the institutional framework needed for the coordination, implementation and monitoring of the process. The fact that five EU countries still are reluctant to recognize the independence of the country was identified as the main obstacle. However, this does not mean that policymakers should not start with the implementation of reforms, strengthen the rule of law, and fight corruption and organized crime. Another obstacle was seen in the multilayered nature of the Kosovar institutions, where competencies are spread among domestic and the Ahtisaari institutions. The existence of the Ahtisaari institutions, which by the way represent the largest ever deployed EU Mission, could (or should) also speed the process of integration. For this to happen, another approach of EULEX and ICR may be necessary. Six years ago, it was not a good political move to question the existence and the efficiency of UNMIK in Kosovo. Today it is not a good political move to defend it. Today it seems unattractive to question EULEX. EULEX representatives even feel offended when compared with the UNMIK administration. I don’t know what will be the devise for 2015. Decentralization was also mentioned as a tool to be deployed in favor of a more efficient government. It should be noted though, that decentralization can only succeed if it is a superior good, meaning it is demanded by citizens and not imposed on them, and, only if it is implemented successfully. Another interesting debate was devoted to the question of multiethnic nature of the country. In my opinion, multi-ethnicity was the most used and abused concept after the war in Kosovo. In the name of ethnicity, as an example, some minorities were constantly privileged while others were ignored; Albanian newspapers publish everyday vacancies in three different languages; ministries employ people for years and they never appear in their working places, and internationals create micro-municipalities unable to survive without extensive financial support. Kosovar citizens, was said, show the highest level of support for EU membership. But is this something that should make our policymakers happy? Is this maybe a documentation of their disappointment with developments in the country? Dear guests, dear speakers: We now do come to the end of this very interesting conference. The organizer has promised to make it an annual event. After listening your presentations and your discussions, I must congratulate him on the choice of papers and presenters. As already mentioned, more than 100 abstracts were submitted. To our surprise, especially the interest of academics from Albania and Macedonia to present here and exchange ideas was extraordinarily high. This is a very promising development. At the very end, I would like to give special thanks to all those that made this event possible, starting from Faton who did an excellent job, our donors and sponsors, FES Prishtina, Kosovo Foundation for Open Society, ProCredit Bank, Hotel Victory and College Victory, AUK and Victory student support and of course all visitors. Thank you again and hope to see you soon in other events, and read your written work in the soon to be published Western Balkans Policy Review, a journal of international academic standards being published in Prishtina. . I wish you all a safe trip home and I hope you enjoyed your weekend in Prishtina. Besnik Bislimi AUK Research Center
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Dear
keynote speakers, dear presenters, dear guests,