ECONOMIC CHALLENGES AND POLICY RESPONSES TO THE COVID-19 CRISIS IN ALBANIA, SERBIA AND NORTH MACEDONIA

Abstract

The outbreak of Covid-19 in some cases looks similar to that of SARS. This is how it is described in
some literature. Similar to any other crisis, Covid-19 also caused a great economic and global destabilization. It
started as a health crisis, but the flow and continuity also affected the socio-economic aspect and for this reason in
this paper only the economic aspect of the impact of Covid-19 will be analyzed.
This paper will focus on clarifying the economic challenge in the face of Covid-19, specifically for the Western
Balkans region, not excluding the political responses of these countries to mitigate the created situation. The
countries that have been included in the research, due to their status as developing countries, have experienced a
deep recession as the aftermath of the pandemic and for this reason they have experienced rising unemployment
rates, rising inflation, imbalances in aggregate supply and demand etc. Compared to developing countries,
developed countries were more prepared to implement comprehensive packages to calm the situation they were in,
although even in developing countries government intervention was strong. In these cases, it happens that the
implemented policies favor more people with formal jobs, and less those with informal jobs. For example, wage
subsidies or enterprise loans are intended only for formal sector firms. So, they continue to fight the economic
consequences and continue to find ways to recover the economy. The various subsidies to some extent may have had
a positive effect on the restoration of the earlier situation, but also the various financings and aids from the world
institutions have helped the economy of the Western Balkan countries not to experience an economic collapse or
destruction. We will enumerate some of the anti-crisis measures implemented by the governments of countries such
as North Macedonia, Albania and Serbia, comparing and analyzing how these political responses have helped and
improved the economy of the country in question. For these phenomena and others similar to them, we will also
paraphrase models and theories that have an impact on the crises of recent years in order to make a connection
between previous crises and the Covid-19 crisis and see what what do these theories propose for the overcoming and
recovery of certain economies.