The Transition of Former Yugoslavia

1
The Transition of Former Yugoslavia
2
Slovenia The Star Performer

• Only a brief war. Was least affected.
• Revitalized the industry.
• Positive growth in 1993.
• 4.2 average growth since then.
• EU accession in 2004 gave a boost to exports.
• Inflation brought down to single digits by 1996.

3
Challenges

• Increasing external debt and current account
  deficits
• Capital flight Negative FDI
• The most successful reformer on the Western
  Balkans

4
Croatia The Next Slovenia?

• Average growth of 4.5 since 1994.
• Slump in 1999 caused by Kosovo war and export
  shock (Italy and Germany).
• Hyperinflation until the end of the war.
  Inflation is now brought down and was 3.2 in
  2006.

5
Challenges

• GDP growth led by credit-driven consumer spending
  and tourism.
• High current account deficits and increasing
  debt.
• Anticipated EU membership in 2010
• High unemployment rates.

6
Bosnia From War to Recovery

• Negative growth rates until 1994 with trough at
  -60 in 1993!!
• High MPK led to extreme growth rates in post
  Dayton period. 47 average growth from 1995-1998.
• Remained high average growth up to 2006
• Low inflation Mainly because of currency board.

7
Challenges

• Unemployment rates at 40
• Political corruption
• Competition policy and banking reform
• Infrastructure
• Brain Drain

8
Serbia The Balkan Tiger

• Negative growth until 1993
• Average growth of 5.6 since then
• 8.7 growth in 2008 made Serbia the fastest
  growing country in the region
• 1999 Nato bombing of Serbia
• Average unemployment of 28.3 since 1996

9
Challenges

• Inflation falling, but still the highest in the
  region.
• High current account deficits -10 in 2006.
• Unemployment high
• Reform, reform, reform

10
Unemployment rates
11
GDP Growth
12
GDP Growth
13
Concluding Remarks

• High growth rates in the entire region
• Low inflation rates and prices are largely freed
• Bring down unemployment rates
• Cannot have current account deficits forever
• Promote large scale privatization and also
  complete small scale in the case of Bosnia and
  Serbia
• Competition policy and banking reform

14

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