BALTIMORE (Reuters) - Balkan countries will need to cooperate more closely to achieve the kind of economic scale and stability that will attract western investors, leaders told a regional business summit this week.
“This is a key objective of our country. While small is beautiful, size does matter,” said Macedonian Deputy Prime Minister Vladimir Peshevsky.
The first-ever U.S.-Balkans Business Summit brought together key leaders from Albania, Bosnia, Montenegro, Macedonia, Kosovo and Slovenia in an effort to sell the region to U.S. investors and forge ties with American companies.
Notably absent from the summit was Serbia, which boycotted the event due to the participation of Kosovo, which declared full independence in 2008.
Officials from the region, known in the United States more for its conflicts than its commerce, said that they wanted to become more integrated economically and reduce barriers to trade with their neighbors.
They are also working to accelerate entry into NATO and the European Union, which Balkan leaders see as signaling a green light for investors in power generation, transport, mining, timber, tourism and other sectors.
U.S. firms have lagged far behind their European competitors in investing in the Balkans, partly because of lingering perceptions of the conflicts of the 1990s, said Charles Dillon, a Baltimore-based international trade lawyer who organized the two-day summit.
“The biggest barrier to investment in the western Balkans, from an American standpoint, is familiarity,” Dillon said. “A lot of Americans, when they think of that region, ask ‘Aren’t they still at war?’”
The Muslim member of Bosnia’s tripartite presidency, Bakir Izetbegovic, also blamed a dearth of American trade on a misperception that Bosnia is an “unstable and dangerous place.”
He touted the country’s potential in development of hydroelectric power, coal deposits and tourism and said delays in forming a government should not cause investors to turn away from Bosnia.
After two decades of focusing on independence and competition following the collapse of the old Yugoslavia, many leaders are recognizing some of the benefits of a more unified economic approach, said Tom Countryman, the U.S. State Department’s deputy assistant secretary for European and Eurasian affairs.
“After the old Yugoslavia fell apart, there was deep suspicion, on the part on a number of the states of the region of anything that even appeared to be reconstructive of Yugoslavia in any sphere, any scale,” said Countryman, who has worked in the region for 25 years.
“This inhibited the ability to do cooperation among the different countries in the region. I think we’re past that today,” he added.
Peshevski said leaders also used the conference as a forum for them to discuss regional issues such as connections to Russia’s South Stream gas pipeline project and electricity grid issues.
But while participants did their best to present investment prospects that were ripe for maximum profit — urging investors to get in now before investment costs rose in future years — there are varying degrees of risk, Countryman said.
He questioned whether they all had the political will to make the reforms necessary for EU membership — reforms which would “generate more growth internally and improve their attractiveness to investors.”
“We would love to see them all accede to EU membership within the same year. That’s just not going to happen,” he added.
Reporting by David Lawder