How many families have a Fiat Chrysler Automobiles 500 L (a city car)? But would you ever say it was assembled in Kragujevac, Serbia?
Or would you ever think that the BMW 5, a company car, uses a cockpit designed in Sarajevo, Bosnia and Herzegovina?
And who hasn’t ridden on a Van Hool coach at least once? Would you believe it was made in Skopje, North Macedonia?
Hyundai cars are yet another example. Many of their wiring harnesses are manufactured in Fier, Albania by Yura Company.
In Kosovo,Intertex, a textile company in Gjakova, produces protective covers for Volkswagen cars.
These are well-known products which are either manufactured in the Western Balkans, as part of a regional/global value chain (GVC)or use intermediate inputs produced in the Western Balkans.
Integration into GVCs has been limited compared to new ASEAN and EU member states
An upcoming World Bank Group study shows that businesses in all Western Balkan economies (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) have integrated and participated in GVCs. has increased over time. Furthermore, some of these economies have increased their participation in GVCs over the past two decades. For example, Bosnia and Herzegovina and Serbia moved from commodity GVCs to limited manufacturing GVCs between 1990 and 2015..
However, compared to peer and ambitious countries, like the new member states of the European Union (EU), or ASEAN countries, the Western Balkans underperform in GVC participation. Network analysis shows that the economies of the Western Balkans have limited connections with the main hubs of the EU and the UK. Accelerated integration would bring economic benefits to the Western Balkans. The experience of new EU member states has demonstrated that participation in GVCs and connectivity to major hubs can help small economies accelerate export and income growth..
Within the region there are significant differences. Companies from Serbia, North Macedonia and Montenegro are the most integrated into GVCs, although in different sectors. On the other hand, companies in Albania and Bosnia and Herzegovina are the least integrated. Data for Kosovo are unfortunately not available.
