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Competitiveness of Business Environment of the Western Balkan Countries

Economic competitiveness of the Western Balkan countries is uneven. Concept of competitiveness of the country is a source of important information enabling investors to perceive potentials of their future investment returns. Poor ranking of a country signals to potential investors to take additional measures of caution about their investing intentions. Beyond that, the level of competitiveness of an economy has a material role in its economic growth and development. The main research objective of this paper is to analyse the ranking of business environment of Western Balkan countries (Albania, Bosnia and Herzegovina, Croatia, FRY Macedonia, Montenegro, and Serbia). The aim of this paper is to analyse the relative positions of Western Balkan countries and to point out the differences or similarities among them and trends in past five years. Analysis in this paper are based on survey data of international institutions: EBRD, World Bank, World Economic Forum, Heritage Foundation. By the analysis of indicators of competitiveness and quality of business we should point out competitive advantages and disadvantages of Western Balkan countries. According to the World Bank’s report “Doing Business 2019”, FYR Macedonia is the best ranked among the Western Balkan countries regarding conditions of doing business (10th rank), followed by Serbia (48th) and Montenegro (50th). The worse positions in the region is held by Bosnia and Herzegovina (89th rank). According to the report of World Economic Forum for (Global Competitiveness Report for 2018), Serbia is the most competitive economy within the Western Balkan region (ranked in 65th place among 140 countries), followed by Croatia, Montenegro, Albania, Macedonia. The worst ranked according to this report, is Bosnia and Herzegovina (ranked in 91st position). Serbia and Croatia are only countries from the region with the overall score above global median score (60). Serbia had the best improvement in overall score, compared to 2017. According to the study of Heritage Foundation (“Index of economic freedom“2019) FYR Macedonia is the best ranked country in Western Balkan region (ranked in 33rd position), and the only one country in the region with the score (71, 1%) slightly above European average (68, 6%). Albania is ranked in 52nd position, followed by Serbia on 69th position, which are also the countries with significant improvement comparing to last year. According to this report, Montenegro (ranked in 92nd position) is the worst ranked in region, with the lowest score in 2019 and highest declining of the score compared to 2018.

business competitiveness, doing business, Western Balkan, investing intentions

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