Socio - Economic and Political Development in Southeastern Europe
Economic growth and political reforms have been picking up in Southeastern Europe. However, it is worth looking at five countries within the region to see the true picture of socio-economic and political development.
During the last two decades, Romania has progressed considerably after introducing a market economy. Its decision to join the European Union in 2007 also turned out as an impetus for reforms and modernization. It quickly recovered from the financial crisis of 2008 because of practical macroeconomic management. The Romanian government opted for stabilization and structural measures. These were backed by a multilateral program from international financial institutions. Economic activity increased in 2013 and 2014 respectively as exports continued to grow.
However, Romania has very high frequency of rural poverty (70%) with a vey huge gap in living and social benchmarks between the countryside and urban communities. One of government’s thrusts is enhance skills of the citizenry to meet the targets of Europe 2020. The country’s National Education Law was implemented in 2011 to promote reforms practically in all areas of education.
Last June, Prime Minister Victor Ponta was ordered investigated for corruption (2007 to 2008) while he was still a lawyer. He is also being probed for conflicts of interest caused by nominating an ally and personal friend in government positions. President Kalus Johannis demanded his resignation. Nonetheless, the prime minister denied these accusations and refused to relinquish his post.
Moldova has a fragile economy and weak political external environment. Primary challenges include eliminating corruption, enhancing the investment environment, removing impediments for exporters, directing remittances into productive investments, and creating a healthy financial sector. It needs to improve efficiency and equity of public spending as well. This should focus on more effective administration of public capital investments required for higher growth. Administrative and judicial reforms are necessary to improve governance which is a prerequisite for Euro Zone integration and economic progress.
Recent economic performance of Moldova trimmed down poverty and promoted mutual prosperity. In fact, Moldova is one of the leading performers worldwide in terms of poverty alleviation. Nonetheless, it is among the most impoverished nations in Europe despite the sharp decrease in poverty. Highly vulnerable groups are households with low education levels and three or more children, those living in remote localities, self-employed individuals, and elderly folks. Moldova has demonstrated remarkable performance in gender equality but inequalities continue in education, healthcare, economic prospects, and violence against women.
Prime Minister Viktor Oban asserts that his government’s economic policy is meant to generate a structural change in Hungary’s economic system. Yet, some international organizations and corporations consider this as quite oppressive. The government has reduced costs of utilities for the sake of household consumers. It also reduced liabilities by recovering taxpayers' money. These were allegedly accumulated by privately-managed pension fund firms supposed to cover future pensions. The Prime Minister also advocated changes in the banking system in favor of locally-owned banks in this industry currently dominated by EU institutions.
Many Europeans still link Hungary to Eastern Europe along with the nuances of the previous communist regime. However, the situation is entirely different nowadays. Observers see that despite the marked economic transformation, Hungary needs political change since it is far away from Baltic neighbors like Poland, Romania and Slovakia. Meanwhile, PM Oban continuously advocates the tax policy that increases burdens on certain industries controlled by overseas corporations. According to the EU’s highest tax tribunal, Hungary’s Special Retail Tax law put companies from EU member-nations at a serious disadvantage.
Bulgaria went through tumultuous political and economic transition during then nineties just to become a member of the European Union which was realized in January of 2007. At present, it has a population of 7.3 million people, upper middle-income economy and per capita income of $6,870.
10 years before it was accepted to the Union, Bulgaria settled for difficult reforms just to maintain economic stability and accelerate growth. The government created fiscal buffers by accruing monetary surpluses from 2004 until 2008. It reduced public debt from 70 percent of the country’s Gross Domestic Product to 18.5 percent in 2012. This was the second lowest debt level in the entire bloc.
To maximize achievements during the previous decade and shift to higher growth course in the existing economic milieu, bold government actions and investments are necessary. It focused on infrastructure to accelerate private sector-led development and made the commitment in reinforcing delivery of public services.
Albania is a middle-income nation that has attained enormous improvements in creating a convincing, multi-party democracy and market economy during the last 20 years. The government succeeded in maintaining positive growth rates and financial stability notwithstanding the economic crisis.
Looking towards the forthcoming years, Albania chose to concentrate in supporting economic recovery in the midst of a difficult external environment. It also seeks to sustain social gains as well as reduce exposure to climate change. Major challenges for Albania consist of fiscal consolidation and robust public expenditure management, regulatory and institutional reforms, reduction of infrastructure shortfalls, and improvement of social protection systems and major healthcare services.
This is how Southeastern Europe looks like right now including countries in this region.