Bridging the Gap: Convergence strategies for Western Balkans’ EU future

This episode of WeBER Talks is dedicated to economic growth challenges and opportunities for the Western Balkans. WeBER 3.0 guest is Nicola Pontara, Country Manager of the World Bank in Serbia. He talked with Milena Mihajlović, CEP Programme Director and WeBER 3.0, about the region’s future and how reforms, governance, and technology can propel the Western Balkans toward convergence with the EU.

1. Growth Slowdown & Socioeconomic Divergence: While the Western Balkans experienced solid growth in the early 2000s, the region has struggled to maintain momentum post-2008. Nicola highlights the “golden period” between 2000 and 2008 but warns that without significant reforms, convergence with the EU could stretch as far as 2093 in a pessimistic scenario.

2. Governance Deficit: Poor governance remains a significant roadblock. Nicola emphasizes that countries in the region must focus on improving the rule of law, combating corruption, and increasing government accountability to accelerate growth and reduce the trust gap with their citizens.

3. The Role of State-Owned Enterprises: The discussion provides a key insight into the incomplete transition to market economies in the region. Many state-owned enterprises (SOEs) still dominate critical sectors like energy, limiting the private sector’s potential to drive growth. Privatization and the introduction of market competition are seen as crucial steps forward.

4. Digital Transition & Innovation as Key Catalysts: Excitingly, digital transformation can help bridge the institutional and governance gaps. Serbia has become a leader in digital innovation, spearheading initiatives in AI, biotech, and IT services. The region can leverage this momentum to modernize public services, increase transparency, and reduce bureaucracy.

5. Youth, Women & Brain Drain: Nicola calls for urgent reforms to integrate young people and women into the workforce. Improving educational curricula and fostering labour market flexibility will prevent further brain drain and ensure that economic benefits are more inclusive.

Looking forward, both experts agree that focusing on second-generation reforms is vital: deepening financial markets, boosting regional trade and connectivity, investing in human capital, and addressing the urgent need for green transition and sustainable development.

While challenges persist, especially in governance and institutional reforms, there is hope that with the right policies and an embrace of digital transformation, the region can achieve sustained growth and converge with the EU in the coming decades.

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