ANALYZING MARKETS: THE BALKANS

The Balkans: European geographic area very unknown for the majority of Spanish businessmen. The image of an area of conflict and instability since the Balkan war is still in the memory or stereotype of the Spanish businessman. Other reasons are the belief that it is a sparsely populated area that makes it possible to gain a foothold in the market.

These ideas are, undoubtedly, what are causing the Spanish presence to be inadequate in this market made up of seven countries (six from the Spanish point of view, which has not recognized Kosovo as a country).

The Western Balkans are made up of Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia (FYROM), Montenegro and Serbia, including Kosovo.

At the Zagreb Summit in November 2000, the EU launched the Stabilization and Association Process. In the economic sphere, the process aims at the development of a market economy based on close cooperation in the Western Balkans. The aim is to establish special relations between this region and the EU, in exchange for the implementation of reforms that will enable a later goal of accession to the European Union.

This stabilization process was reinforced at the 2003 Thessaloniki Summit, where it was concluded that the Association Agreements between the EU and the Western Balkans would depend on progress in meeting the requirements of regulatory alignment, particularly on trade.

Within the framework of the Stabilization and Association Process, the Western Balkan countries are granted Autonomous Trade Preferences and can conclude Stabilization and Association Agreements with the EU, aimed at the progressive creation of a Free Trade Area for goods, a reciprocal liberalization of trade in services, the establishment of competition rules and the regulation of public procurement, state aids and intellectual property.

In order to continuously monitor the Stabilization Process, the European Commission prepares an annual General Report on the Process and a country-specific report.

* Source: Secretariat of State for Foreign Trade.

As a sample of this reality, we can observe comparatively the Spanish exports to the area compared to other EU countries during 2014:

Of the 6 most important EU economies, including Spain, Spain’s position is not among the best in general terms:

• In Albania, Spain ranks third in export currency units.
• In Bosnia Herzegovina, Spain ranks fifth ahead of the United Kingdom.
• In Croatia, fifth place ahead of the United Kingdom.
• In Kosovo, penultimate place ahead of the United Kingdom.
• In Macedonia, last place
• In Montenegro, penultimate place ahead of the United Kingdom.
• And in Serbia, last place

The most important position in the area is in Albania, but far from the volume of exports that both Italians and Germans do.

This is a business area that is largely unknown to Spanish businessmen and to society in general. Undoubtedly, a geographical area to analyze and define strategies.

Author: Miguel Ángel Martín Martín