Unlocking economic potential between Greece and North Macedonia

The paper starts with a comprehensive analysis of past economic relations be-tween Greece and North Macedonia, based upon which it emphasizes potentials for further collaboration and explores ways to unlock those potentials. In spite of the bilateral dispute, the two neighboring countries managed to develop economic ties over time, in trade, direct investments and tourism. However, there are still constraints holding intensity of flows below the actual potential. According to the gravity model of trade applied in this paper, bilateral trade between North Macedonia and Greece should be 25% higher than realized in 2018, which reveals the untapped, standard possibilities.

Hence, new avenues should be explored. Bilateral collaboration on investments can go even further towards developing common productive initiatives, either expanding existing businesses or in initiating joint start-ups.

To unlock these potentials, both states should put significant effort into facilitating trade and transport, create a favorable environment for supporting joint ventures and boost cross-border investments through a joint Innovation Fund. At the same time, business communities should explore new opportunities based on common interest and joint ventures in tourism, logistics and energy. These initiatives should be fol-lowed by intensified academic collaboration as well. We firmly believe that if half of the political capital used in the past for politicization and nationalism is invested in strengthening bilateral socioeconomic ties and cooperation in the coming decades, our region will succeed in improving citizens’ standard of living and wellbeing, especially in meeting the goals of comprehensive and sustainable development.