Skopje, 9 September 2023

Vice-Governor Emilija Nacevska, together with Professor Paola Subacchi from Queen Mary University of London and Gian Ferretti, senior fellow at the Center on Fiscal and Monetary Policy of the Brookings Institution, participated in the panel Dualization of the Global Financial System - Consequences for Trade, Capital Flows and Exchange Rates, which was part of the discussions at the high-level symposium organized by the Central Bank of Armenia and the Reinventing Bretton Woods Committee. The heightened geopolitical tensions create risks of fragmentation of the global economy and pose a serious threat to the benefits of the high interconnectedness and dependence of the global economic system, which can lead to serious consequences and losses in the world economy. The geopolitical events of the last few years have triggered fragmentation in international payment infrastructure, which tend to affect trade and capital interdependencies of countries and regions and in turn reinforce economic fragmentation.

In her presentation, Vice-Governor Nacevska pointed out that the adverse effects of geo-economic fragmentation would be especially felt in small and open economies, like ours, whose growth potential is largely conditioned by their involvement in international flows of goods, services and capital. She emphasized that the economies of Macedonia and the Western Balkan countries are already suffering weaker growth and convergence towards the EU countries, as a result of the decelerated globalization after the emergence of the global financial crisis. Therefore, maintenance and stimulation of growth amid increased deglobalization risk requires timely and well-designed measures that would take advantage of the changes in multinational companies caused by geo-economic shifts, and facilitate the inclusion of domestic production facilities in the global supply chains. In this context, it is important for our country to take advantage of the opportunities arising from the nearshoring of the production of European multinational companies from the current more distant to closer and less risky locations, which will enable greater integration in the EU. According to the IMF analysis, the greater integration of the Western Balkan countries in the global supply chains could raise the GDP from 3% to 10%.

Underscoring the importance of payment infrastructure for the trade and financial integration, Vice-Governor Nacevska emphasized that the Western Balkan countries are working hard to create conditions for mutual integration of the national payment systems and their integration into the EU payment infrastructure. For this purpose, the countries of the region are actively preparing for accession to the Single European Payment Area (SEPA). The adoption of the SEPA principles and standards is expected to improve efficiency, cut costs and facilitate trade and investment within and outside the borders of the domestic economy.