Chinese trade threatens Balkan economic growth: World Bank

Chinese trade threatens Balkan economic growth: World Bank Sarajevo - July 17, 2008: China's trade competitiveness is threatening to slow down economic growth in the Western Balkans, the World Bank warned on Wednesday. "China competes against the countries of the West Balkans ... in a very wide range of products," the bank's top economist for Europe and the Middle East, Sanjay Kathuria, told reporters in the Bosnian capital. "Against this, the exports of the countries in the region are not doing particulary well, and there are concerns about their sustainability," he warned. In its latest report, the World Bank recommended the small countries of the region seek to strengthen their fragile economies by boosting trade cooperation with each other. "This will make (the) effective market larger ... more competitive, and will improve the qualty and cost of goods and services," Kathuria said. He singled out a free trade agreement in force in the region since 2006 as a useful tool to achieve that. The World Bank report on the Western Balkans included the following countries: Albania, Bosnia-Hercegovina, Bulgaria, Croatia, Macedonia, Montenegro, Romania, Serbia and Slovakia. Besides China, Kathura stressed trade preferences that have been enjoyed for several years by the countries of the former Yugoslavia were "now eroding." The bank also suggested that regional governemnts should start working on the issue of improving skills and wage competitiveness. "This will help for the countries to compete against low wages and very competititve Asian countries," Kathuria said. Other recommendations included the need to reduce the costs of telecommincation services and prevention of energy shortages, he added.