Innovative Financing of the Sustainable Development Goals in the Countries of Western Balkans

Abstract

Background: This paper is related to the current stage of the development in the Western Balkans. Despite becoming a growing instrument to finance sustainable development green, debt swaps and social or sustainability bonds are a relative novelty in this region. At the same time the development needs are huge, especially in the light of the Covid-19 aftermath. Results: We have analyzed the public debt position in the Western Balkans countries which points to the deteriorated new debt accumulation perspective especially in the light of the growing public debt over the past decade. Our research suggests that the ESG/Sustainability-linked bonds and debt-for-climate swaps as innovative financial instruments seem to be promising to leverage additional finance into sustainability goals in the Western Balkans Six given their need on the EU track and their economic and structural challenges. After briefly discussing the methodological approach, we discuss the history and features of green bonds and debt-for-nature swaps and their diverse underlying mechanisms. Then we derive recommendations for policymakers in designing future green bonds and debt-for-nature swaps and apply these to national circumstances in the Western Balkans Six. Conclusions: The related countries need to explore more innovative approaches to finance sustainable societies. In the close cooperation with the EU and related to the European Green Deal countries of the Western Balkans six should feel motivated to design financing mechanisms that will bring in the more transparency into the different policies and the more accountability for their implementation. The EU should stand ready to use its cohesive and pre-accession funds to support such market mechanisms, which can bring the cooperation to the next level. Applying the recommended modality may help keep the problem of the public debt be kept at bay while additional funds may support implementation of thestructural reforms.

Innovation Vouchers as a Modern Financial Tool for the Development of Smes

“…Another region of the Czech Republic, Ostrava, also shows successful support for technology transfer in the field of biotechnology through innovation vouchers (Matulova, Stemberkova, Zdralek, Maresova, & Kuca). Green financial instruments in the Western Balkans are seen as essential for achieving sustainable development goals (Luksic, Boskovic, Novikova, & Vrbensky, 2021;Doranova, Griniece, Miedzinski and Reid;Shevchenko et al, 2021;Kholiavko et al, 2021). In Italy, innovation voucher programs have a regional context.…”