Albania, the last in the region for industrial processes, does not integrate with global chains

The Western Balkan countries, including Albania, can advance their economies by developing industrial production and cooperation among themselves by creating clusters in several industries, according to a recent study by the Regional Cooperation Council (RCC).

But as the data shows, Kosovo and Albania are lagging behind in industrial processes and the integration of their products into global markets. The automotive industry, especially in North Macedonia and Serbia, has shown growth through integration into global supply chains, with growing capabilities for electric vehicle components. Metal processing, concentrated in Bosnia and Herzegovina and Serbia, offers expertise in the fuller exploitation of resources.

Agro-processing, Albanian production, packaging in Serbia

In the agri-food industry, the promotion of the regional brand “Balkan Fresh” is seen as promising: the Regional Economic Observatory could finance feasibility studies for promising products and markets, as well as design schemes for added value in regional value chains. A unified “Balkan Fresh” branding campaign 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 rotation of host cities) would bring global buyers closer.

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 added value in export destinations.

It is also suggested to build a digital platform for food security "from farm to fork" in all countries.

Albania, as a promoter of Agrotourism, should enable a better connection of the sector with domestic 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 high-value ecological and organic production.

Automotive Industry, Albania for simple assemblies

The automotive industry in Serbia and North Macedonia is growing within global chains, with the potential to advance into higher value segments, including electric vehicles. The plan suggests that Albania is proposed to focus on the assembly of sub-components (cables and electronic modules), but this requires fiscal incentives 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 need to be created with technical universities and professional centers in the region, with a focus on electric and autonomous vehicles.

What Albania needs to improve

To become a beneficiary of regional industrial clusters, Albania should 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, boosting 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./ Monitor