Wilson Center Experts

While the economic crisis that began in 2008 has had a global reach, the pain of the crisis has been disproportionately felt in the postcommunist transition countries generally, and in the Western Balkans in particular. Former WWICS public policy scholar Franjo Stiblar offered the simple explanation that poor countries, with their higher income inequality and high unemployment, are fated to feel the effects of the economic crisis more strongly. In addition to being relatively poor, the countries of the Western Balkans were particularly vulnerable to the crisis due to extremely high external debt to GDP ratios and high foreign currency reserves. Their economic performance also contributed to the countries' vulnerability to the crisis, since as Stiblar indicated, the region performs elastically in reaction to the global market, such that a global downturn spurred an even deeper downturn in the Western Balkans. more