Mr Ljajić: CEFTA crisis, the region stops in economic integrations

Deputy Prime Minister and Minister of Trade, Tourism, and Telecommunications Rasim Ljajić has said early today that the region has stopped with further economic integrations since CEFTA is in a serious internal crisis.

“The results of all the efforts invested in the past, especially by the European Union is CEFTA Agreement which actually ensured a free market among six economies in the Western Balkans. It seems to me that the list of successes is facing an end, since apart from the free market, we have nothing else in terms of further economic integrations which should lead to something we have in Baltic and Nordic countries”, estimated Mr Ljajić on the Ninth Regional Investment Conference in Sarajevo.

Mr Ljajić: CEFTA crisis, the region stops in economic integrations

He said that the reasons for such an outcome is primarily political reason, since the region is still dealing with the wards and unresolved issues dating back from 1990s, and other open issues which objectively make the establishment of the political stability in the region hard.

He said that the second reason is pure economic in nature, adding that today within CEFTA we have more non-tariff barriers than with any other third country.

“Behind that there is the intention of protecting own economies, even though it is an illusion that such small markets, with small population can ensure more competitiveness, more productivity and after all recovery of own economies”, concluded Minister.

Mr Ljajić has said that the countries in the region “are rather creative in making up new barriers”, especially when it comes to keeping the lorries at the cross borders, and this it is not strange that on the world lists of competitiveness we are very badly evaluated when it comes to this criterion.

He has said that the average waiting time for the export at the border crossings in the countries in the region is 20 hours and costs 158 dollars. Precisely because of these frequent delays at the border crossings, the costs of logistics in the region, as he has underlines, are 16 per cent of GDP, which is double more than compared to the average 8 per cent in the EU.

He has said that one day of delay reduces the export value of the goods by one per cent, and that percentage is seven when it comes to agricultural products.

As one of the main reasons for the continuation of economic integrations Mr Ljajić mentioned that the CEFTA member countries are the largest foreign trade partners to each other after the EU.

Minister has also underlined that all the countries have to increase the share of export in the GDP and to change the export structure through the increase of the share of products of the higher production phase.