Building Economic Resilience in Western Balkans during COVID-19

Abstract

COVID-19 has had a significant impact on global trade costs (WTO, 2021). Predicting, and managing risks is a necessary and difficult task for policymakers thus to minimize the negative effects coming from these unexpected incoming shocks. Natural disasters, health crisis and political conflicts over the recent decade, are pushing more pressure to developing countries to re-evaluate their trade partners in the international cooperation, as a way to prevent the direct impact of a probable shock on trade. The early stages of the pandemic exposed also how reliant Western Balkans had become on relatively few global producers of critical medical supplies, prompting widespread calls for greater supply chain diversification. This study attempts to answer the question: Did the effects of the COVID-19 pandemic on regional trade policies revealed an increase or decrease of economic resilience? Travel restrictions and border closures, which were an important part of the initial policy response to the pandemic, disrupted freight transport, business travel and the supply of services that rely on the presence of individuals abroad. Trade facilitation measures taken at the border made it possible for supply chains to continue delivering and have been critical during the COVID-19 crisis. GDP recovery in the last year has been faster in economies with strong pre-pandemic trade ties to countries with fewer COVID-19 cases. In the post COVID-19 area, the Western Balkan countries are recommended to make sustainability and resilience a baseline requirement for every trade and investment decision.

Received: 10 September 2022 / Accepted: 21 October 2022 / Published: 30 November 2022