The dead hand of aid

4 February 2008 By Martin Hutchinson

Serbia s narrow vote for the proWestern candidate on Sunday resulted partly from its decent economic performance. Macedonia and Croatia have also done OK and Slovenia is a star. The laggards are Bosnia and Kosovo, where aid and outside interference have played a pernicious role.

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Boris Tadic, the prowestern candidate defeated the nationalist Tomislav Nikolic by 50.3% to 48.1% in the Serbian presidential election on February 3. The EU promised a faster path to membership for Serbia but reiterated their support for Kosovo independence February 18.

Serbia (excluding Kosovo) had a Gross Domestic Product at official exchange rates of $41bn in 2007, which grew at 5.9%. It had 8.9% inflation, a budget deficit of 0.5% of GDP in 2007 and a payments deficit of 5% of GDP. Economic aid has been negligible since an aid suspension in 2001.

Macedonia had a GDP at official exchange rates of $6.9bn in 2007, with growth of 4.6% and GDP per capita at purchasing power parity of $8,400. It had 2% inflation, a budget deficit of 1% of GDP and a payments surplus of 0.1% of GDP. Economic aid was 2.9% of GDP.

Bosnia had a GDP at official exchange rates of $14.2bn in 2007, with growth of 5.5% and a GDP per capita at purchasing power parity of $6,600. It had 1.5% inflation, a budget deficit of 1.5% of GDP and a payments deficit of 14.5% of GDP. Economic aid was 4% of GDP.

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