The socioeconomic patterns of the Western Balkans have been inextricably tied to those of the EU ever since the signing of the 1995 Dayton Accord, an agreement that brought an uneasy end to the brutal war in Bosnia and Herzegovina between 1992 and 1995. Since then, the states have formally been considered to be on the path to EU membership. This process has involved several key agreements, including the Stabilization and Association Process (SAP), a set of funding mechanisms designed to help the Western Balkans reform their economies and move closer to being full members of the Union.

The integration process made significant progress due to the Visa Facilitation Agreements, which entered into force on 1 January 2008. They removed the need for the "Type C" short-term visa, upon which citizens of the Western Balkans gained access to the Schengen area, and could benefit from short-term travel, 90 days abroad within 180 days, in the European Union.¹  Visa liberalization depends on countries' progress in implementing reforms such as the rule of law, combatting organized crime, and migration management.² As it currently stands, all Western Balkans countries except Kosovo are part of the Schengen area. This paper seeks to examine the impact of this visa liberalization process. It will start by looking at the benefits of access to the Schengen area on labor mobility and the issues it has caused due to brain drain. It will then look at an indirect benefit of the liberalization agreement – namely, its catalyzing effect on security and justice reforms in the Western Balkans. Finally, it will conclude with several recommendations for mitigating the less desirable impacts of this liberalization.

Visa liberalization has had a clear positive impact on short-term mobility in the Western Balkans. To take Albania as an example, 627,788 Albanians left the country to visit the EU between 2010 and 2012.³ The temporary nature of the visas means that many Western Balkans citizens cannot spend extended amounts of time in the EU. Nevertheless, it is highly valuable for business, offering young people the potential for language exchanges, as well as the opportunity for professionals to participate in fairs and conferences, which can lead to networking and cooperation, and perhaps in the future to a professional visa.

Ikonomi and Ndoci,⁴ who look at the impact of Albanian travel to Italy, provide an enlightening case study on the mobility impact of visa liberalization. They find that while previously many Albanians would be less inclined to travel to find work, they can now go to a country, look for work, and if they do not find it, return home without any fear of not being able to try again in the future. This reassurance has also damaged smuggling networks. Besides making it increasingly difficult to falsify biometric passports, people smugglers have less leverage over migrants.

However, this increased labor flexibility has a notable negative component – namely, brain drain. Immigration from the Western Balkans to Member States had been a problem long before visa liberalization. The World Bank estimates that 4.4 million people emigrated from the region between 1990 and 2015.⁵ Yet access to the Schengen area has, perhaps unsurprisingly, accentuated it: the Institute for Strategic Research and Education published a study in 2017 showing that 20% of lecturers, assistants and researchers in Macedonia had applied for a job abroad.⁶ Additionally, in 2016, 300 fully qualified and working doctors left Bosnia and Herzegovina, with many more departing immediately after completing their education.⁷

The migration of recently educated workers is problematic, as it represents a net cost to the country. It costs an estimated €150,000 to educate a doctor in Bosnia and Herzegovina, meaning the government spends more than €50 million a year on doctors who end up leaving.⁸ While the Western Balkan states do receive remittances, these mostly contribute to purchases of consumer goods and do not provide the capital needed to fund sustainable, long-term growth.⁹ On the other hand, the EU significantly benefits from this flow. Some economists estimate that investments into education and training of young workers by Eastern countries reigned in €200 billion for the German economy between 2009 and 2016.¹⁰ As a result, Germany has consistently relaxed its immigration laws for skilled workers from the region. The EU has expressed concern about these levels of emigration, but the bloc's interests and those of Eastern states diverge.

For the Western Balkans, visa liberalization was highly desired – indeed, a poll in Albania in 2003 established free movement as the main aspiration of both Albania's polity and its people.¹¹

The desirability of this visa liberalization allowed the EU to carry out required reforms. After establishing a visa-free regime, the bloc implemented a monitoring mechanism. It made clear that visa-free travel is not unconditional but can be suspended if non-EU citizens privy to the visa-free regime excessively abuse the system.¹² This covers occurrences such as a more than 50 percent growth in irregular migration, a rise in people staying longer than the visas permit, or a heightened security risk in Member States due to criminal offenses.¹³ In 2017, the Visa Suspension Mechanism, which allows the EU to temporarily suspend visa exemptions for non-EU countries, was modified so that both the Commission and the Member States could trigger the mechanism.¹⁴

While the Visa Suspension Mechanism has not been triggered yet, it seems to have had a positive impact in prompting reforms in the Western Balkans. Albania, which historically has had a problem with organized crime groups, has significantly increased its police operations, leading to several high-profile arrests. In January 2020, the Albanian government adopted a legislative package introducing new preventative measures against corruption and terrorism.¹⁵ Montenegro, which previously experienced serious drug trafficking issues, has significantly enhanced its international cooperation mechanisms, particularly with Europol and Interpol, leading to large amounts of drugs seized and crime group members being arrested in 2019.¹⁶ However, Bosnia and Herzegovina still suffer from "systemic shortcomings in the operation cooperation of law enforcement agencies."¹⁷ While these improvements are not present in the entire region, the growth of established security measures is nonetheless notable.

The reduction in crime due to improved security measures also has positive economic effects. As previously discussed, a significant economic barrier in the Western Balkans is the hidden economy, comprising those employed without a work contract, estimated to be around 12% in the region as a whole.¹⁸ In addition to experiencing job instability, such workers are far less likely to gain social security coverage, health insurance, or benefit from any EU support. While the reasons for such a significant hidden economy are varied, organized crime is an important factor, having both direct (i.e., people employed in illegal activities) and indirect (i.e., increasing corruption in public institutions) effects. By compelling reforms in security and justice, the visa liberation conditions help reduce the reach of organized crime, therefore lowering the impact it has on the hidden economy. While the hidden economy is still an issue,  as security reforms continue, we can expect improvements in the future.


 

There is no doubt that visa liberalization has brought significant benefits to the Western Balkans. The opportunity for young people and professionals to travel regularly to the Member States has positively contributed to the employment success of Balkan citizens and deterred many people from going down illegal migration routes. Furthermore, the popularity of this access to the Schengen area, and the threat of it being revoked, has been a significant catalyst for security and justice reforms in the region.

The most significant issue that the Visa liberalization has contributed to is 'brain drain,' the emigration of the Western Balkans' best and brightest to EU Member States. While the EU has stated its desire to help mitigate this issue, it gains significantly from this inflow of cheap skilled labor, leading to a potential conflict of interest. This continues today as the European Commission's 2020 revised methodology on the Western Balkans' accession process only references the issue once and offers no specific strategy to tackle it. Meanwhile, Germany introduced a skilled immigration act in 2020, whose equivalence of qualification conditions heavily favors workers from the Western Balkans.²⁰

The solution to this issue is not to stop immigration. If the Western Balkans are to be treated as prospective members, it is crucial that their populations have the opportunities to seek employment within the bloc, just as any of the Member States' populations would.

However, the negative impacts on the economic state of the region must be accounted for. One way to do this is to encourage greater levels of circular integration by providing incentives for emigrants to return home after some years working abroad. The skills they have gained working in strong economies abroad are likely to be highly valuable, which has the twofold benefit of creating significant demand for ex-emigrant workers, and bringing much-needed productivity boosts to their home country. While so-called circular migration requires the Western Balkan governments to make returning seem appealing to emigrants, the EU can also play a role. For example, the bloc could broker bilateral deals with the Balkans that ensure emigrants some of the benefits they enjoyed working abroad at home.

A more comprehensive way of managing remittances sent from emigrants in the Member States would also be beneficial. While remittance levels to the Western Balkans have historically been fairly high, they have generally had little structural impact, generally going immediately towards consumption. Any schemes that ensure these remittances go to better use would have a strong and sustainable benefit to the region. One suggestion, made by political scientist Alida Vracic, is for Western Balkans countries to invest three euros for every one euro in remittances it receives.²¹ This would not only encourage emigrants to send as much as they can, but it would also mean more remittances are transferred through official channels. In turn, governments would better understand where remittances are sent, and thus also which areas require development.

While brain drain poses a significant issue, we have seen several viable ways to both mitigate and reverse it. However, visa liberalization has overall been highly valuable and arguably the most significant demonstration of the Union's commitment to the Western Balkans, both in terms of their economic performance and as prospective members of the EU.

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