Transcript 1. dia

This group covers the
European countries that
were formerly under the
sway of the Soviet Union,
and includes
the Baltic states of Estonia,
Latvia and Lithuania; the
former Yugoslavian states
of
Serbia,
Croatia,
Slovenia,
Bosnia,
Montenegro, Macedonia
and Kosovo; and Poland,
Hungary,
the
Czech
Republic,
Slovakia,
Romania, Bulgaria, and
Albania.
Source: http://www.pwc.co.uk/economic-services/global-economy-watch/economic-growth-in-europe-can-you-cee-it.jhtml
http://www.economywatch.com/economic-statistics/country/Central-and-Eastern-Europe/
The majority of CEE countries are
• small,
• relatively open and
• heavily dependent on exports for growth,
notably to other EU countries.
This makes them highly sensitive to
developments in advanced economies.
(Mateusz Walewski)
The CEE economies can be grouped into three
camps.
1, The smaller economies of the Baltic States
were most severely affected by the crisis
(annual GDP fell by 15% in 2009), but they are
also now bouncing back most strongly.
3.5-4% GDP growth per annum over the next 5
years.
(ES,LA,LI – 2.99; 4.16; 3.04 - 2013)
2, Next are larger economies, like
Bulgaria, Romania and Poland, which
are export focused with a reasonably
friendly business environment and
good stock of human capital.
2-3% GDP growth per annum over the
next 5 years.
BL,RO,PL 1.2, 1.59, 1.31 (2013)
3,
Finally,
there
are
problematic stragglers like
some
Hungary (high public debt 74-80%
net-gross) and
Slovenia (high private debt), which will
struggle to reach 1.5% average
growth over the next 5 years.
HU, SL -0.01, -1.99 (2013)
The Inward FDI Contribution Index aims to measure the
development impact of FDI in the host economy. It looks at the
contribution of foreign affiliates to
1. GDP (value added),
2. employment,
3. wages and salaries,
4. exports,
5. R&D expenditures,
6. capital formation and
7. tax payments, as a share of the host-country total
(e.g. employment by foreign affiliates as a percentage of total
employment).
A number of these variables are also proposed by the G-20 in
its work on indicators for measuring and maximizing
economic value added and job creation arising from
private sector investment in value chains.
According to this year’s (2012) index – the first of its kind –
the host economy with the largest contribution by FDI is
Hungary, followed by Belgium and the Czech Republic.
Looking at regional patterns in the Contribution Index shows
that there are more host countries with higher index values
in the developing regions.
In “high contribution” (top quartile) countries TNC
foreign affiliates contribute
1. about half of their GDP (in value added) and
2. exports,
3. about one fifth of employment
In “high contribution” (top quartile) countries TNC
foreign affiliates contribute significantly higher values for
three indicators:
1. wages (with TNCs accounting for a large share of formal
employment and paying higher wages than local firms),
2. R&D spending (with TNCs accounting for nearly 70 per
cent of some countries’ registered R&D), and
3. capital expenditures
formation)
(in
total
gross
fixed
capital
Ghemawat, Pankaj.: "Distance Still Matters: The Hard
Reality of Global Expansion."
Harvard Business Review 79, no. 8 (September 2001): 137147.
The CAGE framework of distance presented here
considers four attributes:
1. cultural distance (religious beliefs, race, social norms,
and language);
2. administrative or political distance (colony-colonizer
links, common currency, and trade arrangements);
3. geographic distance (the physical distance between
the two countries, the size of the target country, access to
waterways and the ocean, internal topography, and
transportation and communications infrastructures); and
4. economic distance (disparities in the two countries'
wealth and variations in the cost and quality of financial
and other resources).
TRADE CAN BE A POWERFUL ENGINE FOR GROWTH AND
JOB CREATION IN EUROPE
Boosting trade is one of the few ways to bolster economic
growth without drawing on severely constrained public
finances.
The contribution of external demand to GDP is the EU's
most important source of growth for the moment, as
domestic demand components - both public and private remain weak.
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf
In fact, the contribution of trade to GDP in 2012 (+0.9
percentage points) cut the depth of the recession in the
EU by a factor of four, helping compensate for the
downward pull of domestic demand and inventories (1.2 points).
The contribution of external demand to economic
growth is bound to increase in future, as 90 % of global
economic growth in the next 10-15 years is expected to
be generated outside Europe, a third of it in China
alone.
To be sustainable, economic recovery will need to be
consolidated through stronger links with the new
centres of global growth.
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf
Long-term evidence from EU countries shows that a 1 %
increase in the openness of the economy leads to an
increase of 0.6 % in labour productivity.
By operating on both supply and demand, trade is a
powerful tool to boost economic growth.
Trade policy is therefore an essential component of
the EU’s growth compact. More trade is also essential
to job creation:
About 30 million jobs in the EU depend on sales to the
rest of the world, an increase of 10 million since 1995. On
average, each additional €1 billion of exports supports
15000 additional jobs across the EU.
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf
In recent years, despite difficulties in moving forward in the
multilateral context, we have not stood still in the face of
rapid changes in the global economy. We have developed a
trade policy agenda of an unprecedented scale: while less than
a quarter of EU trade was covered by Free Trade Agreements
(FTAs) before 2006, concluding on-going negotiations would
bring this figure up to half of our trade and we are now
accelerating and deepening this agenda with the opening of
negotiations for an agreement on a far bigger scale with Japan
and the possibility of going down the same road in the near
future with the US.
Completing this agenda would bring the coverage of our
trade by FTAs to two-thirds of EU external trade. This is by
far the most ambitious trade agenda in the world today.
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf
These negotiations could boost EU GDP by more than 2% or
€250bn — equivalent to the size of the Austrian or Danish
economy — and support an increase of more than 2 million
jobs related to trade across the EU.
This focus on an ambitious bilateral trade agenda has already
produced results with the successful implementation of a
new-generation FTA with Korea and the conclusion of similar
agreements with Colombia, Peru, Central America, Ukraine and
most recently, Singapore.
Negotiations with Canada are also close to finalisation.
Deep and comprehensive FTA negotiations are on-going or
soon to be launched with Georgia, Moldova and Armenia, as
well as with Egypt, Jordan, Morocco and Tunisia.
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf
http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_151052.pdf