Western Balkans Faces Looming Worker Shortage, Needs New Growth Model

The Western Balkans stands at a critical juncture, facing a looming labor deficit that could significantly hinder its economic development. As highlighted by Amer Kapetanović, Secretary General of the Regional Cooperation Council (RCC), the region must urgently adopt a new growth model. This model needs to prioritize productivity and deeper regional economic integration to counter the projected decline in the working-age population and the persistent gap in productivity compared to the European Union.

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The Western Balkans needs a new growth model based on productivity, trust, and stronger regional economic integration.

Kapetanović's remarks at the KFF2026 business forum in Pristina underscore a stark choice: embrace a productivity-based economy or risk becoming a region plagued by labor shortages, fiscal strain, and a failure to align with EU economic standards. The current reliance on cheap labor, remittances, public spending, and infrastructure development is unsustainable. A transformation driven by increased productivity is essential for genuine economic progress, not just growth.

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The Western Balkans faces a strategic choice - either turn to a productivity-based model or risk becoming a collection of economies with a labor shortage, fiscal pressures, and a permanent state of partial alignment.

The Common Regional Market is presented as a practical tool to achieve these goals. By fostering a larger market for small and medium-sized enterprises, enabling skilled labor mobility, reducing fragmentation costs, and harmonizing standards, it can transform the Western Balkans into a credible regional value chain integrated with the EU's single market. This integration, coupled with a renewed focus on results, offers a pathway to reverse the brain drain and create opportunities for skilled workers to return and invest.

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Growth in itself will not bring alignment without transformation, and our region cannot indefinitely rely on cheap labor, remittances from abroad, public spending, or development based on building new infrastructure. Without a significant shift in productivity, we will continue to grow, but not transform.

This perspective is crucial for our region. While international observers may focus on the numbers, we understand the deep-seated challenges and the urgent need for structural reforms. The potential loss of 190,000 workers is not just a statistic; it represents a threat to our social fabric and economic future. The RCC's emphasis on regional cooperation and integration offers a homegrown solution, tailored to our specific circumstances, which is often overlooked in broader European discussions. Our future depends on seizing this opportunity for transformation.

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By integrating into the European economic space and re-emphasizing results, the Western Balkans can reverse the trend of skilled labor emigration and create new opportunities for skilled workers to return and invest.