The Western Balkan countries, including Albania, can move their economies forward by developing industrial production and cooperation between them by creating clusters in several industries, a recent study by the Regional Cooperation Council (RCC) shows.

However as the data shows, Albania and Kosovo are behind in industrial processes and the integration of their products into global markets.

The automotive industry, especially in North Macedonia and Serbia, has grown through integration into global chains, with a growing capacity for electric vehicle components. Metal processing, concentrated in Bosnia and Herzegovina and Serbia, offers expertise in the fuller use of resources.

In the agri-food industry, the promotion of the regional brand “Balkan Fresh” is seen as promising: the Regional Economic Observatory can finance feasibility studies for promising products and markets, as well as design schemes for added value in regional value chains.

A unified branding campaign “Balkan Fresh” would improve the visibility of the region’s agri-food products in international markets, with certification for quality and sustainability. The organization of international agri-food fairs (annual, with rotating host cities) would bring global buyers closer, RCC noted in the study.

The plan suggests that in the field of agro-industry, Albania together with Kosovo should further strengthen domestic production and connect with processing centers in Serbia and Montenegro, thus improving the level of processing and value-added in export destinations.

It also suggests building a digital platform for food security “from farm to table” in all countries.

Albania as a promoter of agro-tourism should enable a better connection of the sector with local production, the plan suggests.

The creation of the Regional Agri-Food Innovation Center, an institution that brings together research, training, and technology could accelerate good practices in ecological and organic production with high value.

The automotive industry in Serbia and North Macedonia is growing within global chains, with the potential to advance towards higher value segments, including electric vehicles.

The plan suggests that Albania focus on the assembly of sub-components (cables and electronic modules), but for this, fiscal incentives are needed for investors who bring assembly technology to the country. To be included in this industry, Albania needs to improve the qualification of the workforce for the production of electrical sub-components and partnerships should be created with technical universities and professional centers in the region, with a focus on electric and autonomous vehicles.

To become a beneficiary of regional industrial clusters, Albania needs to invest in the road, rail, and multimodal network, as well as digitalize border crossings to reduce transport costs and speed up logistics. The plan suggests facilitating access to finance for SMEs. Albania should also promote alternative financial products (factoring, leasing) and create conditions for attracting private funds (private equity), reducing collateral barriers.

Albania should also adopt common environmental criteria in public tenders above certain thresholds, stimulating demand for products and services with low environmental impact.

Regional structures, such as the Regional Economic Observatory, can help with feasibility studies to identify promising directions, but political will is required from countries, the RCC study noted.\