More economic freedom in the Balkans requires reducing government corruption

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The recent US sanctions imposed on the former Albanian prime minister for corruption represent the latest in a series of events highlighting breaches of government integrity in the Balkans.

US Secretary of State Antony Blinken Explain that Sali Berisha, Albanian Prime Minister from 2005 to 2013, was “involved in acts of corruption”. Blinken clarified “the embezzlement of public funds and interference with public processes, including using his power for his own benefit and to enrich his political allies and members of his family.”

Sanctions announced by Blinken on May 19 make Berisha the fourth senior Albanian official to be barred from entering the United States over corruption allegations.

The entire Balkan region, with the exception of Slovenia, is rife with corruption. Here are some examples :

  • Bulgaria’s ruling party fell from power last month after a year of public outcry over government corruption. Former Prime Minister Boyko Borisov, who served his third term from 2017 to 2021, would have long been connected with organized crime.
  • In 2019, the leader of the Romanian Social Democratic Party, Liviu Dragnea, was sent to jail for using a state agency to pay party members for bogus jobs. Since then, Dragnea has faced other corruption charges, including allegations he organized a criminal group to steal money from government projects. Dragnea was considered one of the most powerful actors in Romanian politics.
  • In 2014, Montenegro accepted a $ 1 billion loan from the Chinese government to build a transnational highway intended to connect the southern and northern parts of the country. After seven years, less than 25% of the road is complete and the small Balkan country is running out of funds to finance the project. The public outcry has started, and many believe the government’s lack of transparency indicates a Corruption.

Dishonest government practices inhibit the capacity of the Balkans to prosper economically. The Balkan region in south-eastern Europe consists from 10 countries, the most important of which are Serbia, Romania and Bulgaria. Although part of Europe, the Balkans are much less prosperous there than other countries.

The average gross domestic product per capita for the European region excluding the Balkan states, converted to US dollars, is $ 44,173. The average GDP per capita in the Balkans is $ 23,041, a difference of $ 21,132.

Research shows that implementing market-oriented reforms that extend economic freedom can to improve individual savings. The Heritage Foundation’s Annual Index of Economic Freedom contains a comprehensive snapshot of each of the 184 countries. The index averages 12 sub-variables to compile an overall score for each country.

Many Balkan countries perform well on many indicators of the index. Almost all of the Balkan countries, however, are far behind most of Europe on one indicator: government integrity.

The average score among the Balkans for government integrity is a dismal 48.8. The rest of Europe has an average score of 68.8 for government integrity, a gap of 20 points.

How Does Government Integrity Affect Economic Freedom? When a country scores low on government integrity, it has a high level of systemic corruption.

Corruption includes practices such as bribes, nepotism, cronyism and embezzlement. Such practices are totally incompatible with economic freedom because competition for government largesse supersedes healthy business competition aimed at pleasing customers. Corruption discourages citizens from starting businesses that are not government favorites and from taking risks and innovating.

The Balkan region has made a lot of progress over the past two decades. Gross domestic product has increase. Life expectancy has improved. The level of education has resurrected.

Yet corruption persists.

If the various governments of the Balkans are concerned about improving the living conditions of their citizens, they must create an environment of freedom and economic opportunity. The first step is to get rid of the dark clouds of corruption.

This piece originally appeared in The daily signal.


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