Competitiveness in South East Europe 2021

A Policy Outlook

image of Competitiveness in South East Europe 2021

The future sustainable economic development and well-being of citizens in South East Europe depend on greater economic competitiveness. Reinforcing the region’s economic potential in a post-COVID-19 context requires a holistic, inclusive and growth‑oriented approach to policy making. Against the backdrop of enhanced European Union (EU) accession prospects and a drive towards deeper regional integration, the governments of the six Western Balkan (WB6) economies have demonstrated a renewed commitment to enacting policy reforms.

The third edition of Competitiveness in South East Europe: A Policy Outlook comprehensively assesses policy reforms in the WB6 economies across 16 policy dimensions crucial to their competitiveness. It leverages a highly participatory assessment process, which brought together the views of OECD experts, WB6 policy makers and local non-governmental stakeholders to create a balanced and realistic depiction of their performance. The report seeks to provide WB6 policy makers with a multi-dimensional benchmarking tool, enabling them to compare performance against regional peers as well as OECD good practices, and to design future policies based on rich evidence and actionable policy recommendations.

Economy-specific profiles complement the regional assessment for the first time in this edition of Competitiveness in South East Europe: A Policy Outlook, and provide each WB6 economy with an in-depth analysis of their competitive potential as well as policy recommendations tailored to their specific challenges to inform their structural economic reforms and sustainable development agenda.


State-owned enterprises (Dimension 6)

State-owned enterprises (SOEs) are an integral part of the Western Balkans’ economic architecture. They often operate in vital sectors of the economy and deliver crucial public services, making their efficient operations decisive for broader economic and societal outcomes. Depending on whether they are profitable or loss-making, SOEs can also have significant, and sometimes unexpected, impacts on fiscal budgets. For these reasons, ensuring that SOEs operate efficiently, transparently and on a level playing field with private companies is important. This chapter assesses these aspects through four key sub-dimensions. The first, efficiency and performance through improved governance, summarises available data on the region’s SOE landscape, notably sectoral distribution, employment contributions and performance. It then examines state ownership and corporate governance arrangements and how they affect SOEs’ efficiency. The second sub-dimension, transparency and accountability practices, discusses SOEs’ accountability to the state, the general public and minority shareholders. The third sub-dimension, ensuring a level playing field, explores how the legal treatment and financing conditions for SOEs influence the level playing field with private companies, and how they affect economic efficiency. The final sub-dimension, reforming and privatising SOEs, reviews regional trends concerning SOE reform and privatisation. Each sub-dimension section makes specific recommendations for going forward.


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