Sarajevo summit discusses digital development in the Western Balkans
The “Investing in Digitalisation in the Western Balkans” conference was held in Sarajevo on 28 March, including a donor coordination meeting on the “Common Regional Market in the Western Balkans – Regional Digital Area”. The event, jointly organised by the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the Regional Cooperation Council (RCC), was attended by private-sector companies from across the Western Balkans. Ministers in charge of the digital sector and other high-ranking government officials, local and international experts on digital projects, key donors and international financial institutions also participated.
Several WBIF-supported investments were mentioned as success stories about digitalisation in the Western Balkans, such as the establishment of Smart Labs in Albania and the Digital Highway initiative. Furthermore, the rural broadband infrastructure project in Serbia was presented as an example of a public sector-driven investment that also attracted private investors who develop and operate the last-mile connections. This investment, channelling 90% of funds in CAPEX, has the potential to be replicated throughout the region.
Participants agreed on the importance of boosting successful digitalisation models in the areas of soft and hard infrastructure in the private and public sectors. They discussed opportunities for the digitalisation of small and medium-sized enterprises (SMEs) as a source of growth and efficiency, as well as the opportunities digitalisation brings for a green transition.
At the same time, it was reiterated that the region's total investments in the digital sector are five times lower than in the EU. Also, only 2% of all WBIF investments were directed into this sector. To address this situation, the EU and WB partners should work together in building strong pipelines and using the potential of the EU financial instruments, particularly the Western Balkans Guarantee Facility (EFSD+ Guarantee) and the WBIF.
It was emphasised that the Western Balkans has made progress in the digital sector, both in terms of investments and policies, but is still lagging behind the EU. Key strategic orientations for further developments are provided in Digital Agenda for the Western Balkans and the Economic and Investment Plan (EIP) for the Western Balkans - Flagship 8.
Adrienn Kiraly, Advisor, Directorate D – Western Balkans, DG NEAR, said: “We all recognize that digitalization represents a key policy for the region's economic growth, innovation, and integration into the European Union. By embracing digital, we can create new job opportunities, enhance access to public services, and promote innovation. We should strive to take the full potential of EFSD+ and WBIF. During the last two years, only 2% of investment supported by EU in the region targeted digital. In order to increase investments in this key sector, we have to work together and prepare potential investments, both sovereign and private.”
Christoph Denk, EBRD Managing Director for Policy, Strategy and Delivery, said: “We at the EBRD are committed to doing more and better on digital. We launched our Approach to Accelerating the Digital Transition to outline what and how the Bank can deliver on the digital front for its partners, economies and clients. Restoring telecommunications was our priority from day one – in fact, it was our first project in Bosnia and Herzegovina after the war. Today, we see digitalisation as an important tool for improving the investment climate, fostering international trade and strengthening transparency and trust in institutions. We are here to support our partners in the Western Balkans on their journey of digital transformation.”
Alessandro Bragonzi, EIB Head of Regional Representation for the Western Balkans, said: “Europe is facing a digital dilemma. While the Covid-19 crisis accelerated digitalisation, especially among SMEs, some companies are becoming increasingly digital, while others are being left behind, unable to catch the digital wave. An insufficient level of digital skills is hampering economic growth, deepening the digital divide and increasing the risk of digital exclusion. Investing in broadband networks and software development, cybersecurity and innovations is essential to ensure competitiveness and higher productivity throughout Europe and here in the Western Balkans. As the EU Bank, the EIB is committed to playing a key role in the implementation of the digital agenda for the region”.
In the afternoon session, the RCC gathered Western Balkans ministers and other high-ranking government officials from the digital sector, as well as key donors, international financial institutions and business representatives from the entire region, to coordinate approaches and discuss challenges in relation to digital infrastructure investments and the soft digital needs of the region. On the occasion, the Minister of Communications and Transport of Bosnia and Herzegovina, Edin Forto, announced the upcoming Digital Summit in Sarajevo in early October 2023.
EU support for developing digital economies in the region has been acknowledged as a means of supporting job creation, market diversity and sustainable economic growth. The meeting was concluded with a message that a mix of policy reforms, enabling regulatory framework, digital skills and financing opportunities for investments is needed for developing a thriving digital economy in the Western Balkans region.
Majlinda Bregu, RCC Secretary General, concluded: “Governments across the region are ambitiously moving fast towards e-services, easing administrative procedures and reducing time through digital means. This underscores the need to have affordable internet access for all, particularly in public areas. Embarking on initiatives similar to our peers in the EU (like WiFi4EU) could improve e-service accessibility for all and contribute to reducing the digital divide. There is new momentum and a new normal in the digitalisation efforts of the Western Balkans. With the Digital Europe programme and similar financing opportunities, the new momentum of today will become the reality of tomorrow. The private sector can contribute qualitatively to this change.”
Digital Agenda for the Western Balkans, coordinated by the RCC, has been a prime example of successful regional cooperation in recent years, as evidenced by the effective implementation of the “Roam Like at Home” regime within the region, as well as the signing of the EU-Western Balkans Roaming Declaration, enabling a reduction in roaming charges between the EU and the Western Balkans as of October 2023. Digital transformation has far greater potential to accelerate progress and transform threats into opportunities if managed well and wisely.