ECONOMY

Plenty of aid required to help Balkan states improve their infrastructure

Balkan countries are eager to be integrated into the European Union and leave their fractious past behind. With the exception of Greece, lucky enough to escape the embrace of communist totalitarianism and an EU member since 1981, all other Balkan countries emerged from behind the Iron Curtain only to experience either economic disintegration or violent strife, or both. Only Slovenia is about to join the EU next year; the others will have to wait until 2007, or beyond. In the sessions of the opening day of the South-East Europe Meeting, organized by the Geneva-based World Economic Forum, one theme was prevalent: the EU must not neglect the Balkans. «The cost to Europe of an ever-lagging, unstable Balkans is far too great,» said Kori Udovicki, Serbia’s Minister of Energy and Mining, adding that withholding aid under the pretext that it would be too expensive was simply not an option. Corruption, a vast gray economy and, occasionally, violence, are some of the woes besetting Balkan states. They will take time to eradicate. What is urgent, from the point of view of financing, is to help them improve their neglected infrastructure, be it in telecommunications, transport, electric power or drinking water. Roland Falb, a consultant and moderator in one of yesterday’s panels summed up the dire state of infrastructure, by pointing out that a century ago, trains got from Vienna to Istanbul in 30 hours; now, they require 36 hours. Investing in infrastructure is a must in order to help Balkan countries’ income rise. «Each billion of euros invested in roads adds 2.4 billion euros to the country’s GDP,» said Gian Maria Gros-Pietro, chairman of Italy’s Autostrade SpA. But who will provide the funds? According to Gros-Pietro, «Public capital is needed to trigger a virtuous circle. Then the process will be self-sustaining, and profitable.» Richard Sklar, a former US envoy to Bosnia and ambassador to the UN, argued that the private sector is best equipped for infrastructure building but counseled that «if you want to create jobs, you must invite regional companies. In any case, US giant firms are now busy in Iraq, getting contracts in a very non-transparent way.»