Balkans Becoming Economically Freer, Says Index

Balkans Becoming Economically Freer



Montenegro’s growing external debt and poor targeting of government spending were reported as specific problems, though the report recognized the country’s “impressive average economic growth” of over 7 per cent during the past five years. The small Balkan country, whose ongoing problems include high unemployment and the black market, was ranked 68th freest.

The report noted that Croatia had moved up 24 places and was now ranked as the world’s 92nd freest economy. However, its economic freedom score of 59.2 points was still below European and world averages.

“Croatia's overall weakness stems from excessive government interference that erodes the economy’s efficiency and flexibility,” the report said. “In addition to high levels of government spending, government intervention in other key areas of the economy is considerable,” it added.

Bulgaria was the only country in the region to register a fall in its economic freedom score. Following a 2.3 point fall, the European Union member country now scores 62.3 points and was ranked 75th in the index.

According to the report, despite “substantial progress” toward long-term stability and sustained growth, Bulgaria still suffers from “institutional weaknesses that could hamper macroeconomic stability and retard growth.

“Weak property rights, lingering corruption, and burdensome bureaucracy continue to reduce economic freedom, and developing a more independent judicial sys¬tem would appear to be a key area for reform,” in Bulgaria, the report said.

While recognizing the progress achieved by Romania, another EU member in the Western Balkans, the report warned that it continued to lag behind many other European countries.

This was attributed to the absence of deeper structural reforms and to “ongoing institutional challenges to overall economic freedom”, resulting from widespread corruption and a rigid labour market. Romania was ranked 63rd in the index.

Serbia’s economic freedom score registered the lowest increase in the region, of 0.3 points. With a score of 56.9, Serbia was ranked 104th freest economy in the 2010 index.

Source:balkaninsight.com/