Transcript Territorial Scenarios and Visions for Europe ET2050 Eastern

Territorial Scenarios and Visions for Europe
ET2050
Eastern & Danube Region
,
GÁL, Zoltán (PHD, Dr habil.)
[email protected]
Centre for Economic & Regional Studies,
Hungarian Academy of Sciences
University of Kaposvár, Faculty of Economics
ESPON T-2050 Brussels, 18/02/2014
Background document/outputs by HAS RKK
(Regional Research Institute)
• Gál Z. , Lux G., Illés I..eds: Danube Region: Analysis and LongTerm Development Trends of the Macro-Region. Szerk.: Gál Z.,
Lux G., Illés I. Pécs: Institute of Regional Studies Research Centre
for Economic and Regional Studies, Hungarian Academy of
Sciences, 2013. 59 p. (Discussion Papers, 90) (ISBN:978-963-989962-9)
• Scenarios/baseline trends in the Danube Region for the Second
Interim Report
• Paper on Differentiated industrial development and economic
convergence
• Short paper on the Hungarian polycenricity and FUAs
• Paper on Modernization slope: Long-term path dependent
analysis of Central and Eastern Europe – catching up or
loosing behind?
• Comment s on the vision from Eastern regions’ perspectives
2
BASELINE TRENDS
• Eastern European countries will hardly be able to sustain the strategy
of growth of the previous decade, when many industries were
attracted, many from the Southern European regions. While large
cities and capitals may have agglomeration economies, rural areas
will tend to be depopulated. Migrations from East to West will
continue. Social Welfare may grow slowly, and the gap with Northern
and Central regions may also grow.
3
Evulutionary economic approach
• Europe as a whole, and Central and Eastern Europe is losing its
share in the world economy because of the much faster rising new
Asian and overseas economies. Historical datasets show
continuous and sharp decline, which verifies our “steady European
decline” expectation for a longer-term.
Shares from the global GDP in %
West
Europe
CEE
1820
23.0
1870
33.1
1913
33.0
1950
26.2
1973
25.6
2003
19.2
2030
13.0
3.6
4.5
5.0
3.5
3.4
1.9
1.3
Source: Zoltan Gal’s calculation based on Maddison’s database (2007) and Berend (2011)
4
Catching up experiments in CEE
• The CEE region became the periphery of a transforming West
during the early modern Age (16-17th century). The nineteenth and
twentieth centuries were characterized by 3 major periods (waves)
of catching up with the West.
1.
2.
3.
Turn of the 19th and 20th centuries experienced the most
successful catching up
Modernization under the centrally planned economy
Post-communist transformation and transition
– In general, during the last quarter of the 20th century transition process CEE
generally slowed down and started to decline.
– One-, one-and-half decades of gradual catching-up period (speded up after the
Millenium) with the West, faster growth rates and productivity increase, stopped
in 2007-2009.
5
Changes in per capita GDP level Eastern Europe (7)
in comparison with Western European Countries
(EU 12 =100%) between 1870 and 2012
1
0.6
0.9
0.48
0.44
0.42
0.7
0.40
0.41
0.42
0.6
0.5
0.44
0.8
0.39
0.4
0.39
0.39
0.39
0.32
0.33
0.5
0.3
0.30
0.27
0.4
R² = 0.4427
0.2
0.3
0.2
0.1
0.1
0
0
Western European 12
Eastern European 7
Linear (Eastern European 7)
6
Economic trends
• Economic trends: despite European catching-up processes, the large
economic and territorial inequalities can not be eliminated in
dependent economies due to constant capital scarcities
• Catching-up in the region will take place, but with internal disparities on
the increase, particularly between metropolitan centres and peripheral
regions
• With the continuing dominance of FDI among investments, the role of
domestic capital and markets will receive more emphasis than
previously,
– CEE economic differentiation and strong integration into EU-wide
ransnational corporate networks: zones alongside the main corridors in CEE
are heavily linked to FDI and to Western European industrial networks
(automotive)
– More ambiguous mixture of FDI-driven reindustrialisation and the surviving
domestic industrial capacities with rapid deindustrializing (CEE vs. SEE)
– Weak innovation: R&D investment relative to GDP funded by the business sector
– except in Austria and the Czech Republic – was low (moderete or weak innovators)
7
Peculiarities of the transition model in CEE
• CEECs followed the pattern of a dependent market economy (DME) type
of capitalism which is characterized by high dependency on imported foreign
capital.
• Foreign investors not only contributed to the modernisation of the economy,
but also increased its structural and spatial segmentation created by the
“dual economy”.
• The strong correlation between higher FDI increase and higher growth can
not be proved in the CEECs.
– Camagni’s sensitivity analysis found the same since new investments generate higher
imports. (increasing tax rate in correlation with indebtedness)
– Rajan found that developing/emerging countries that relied more on foreign finance have
not grown faster in the long run and typically have grown slowly.
– Low-income-based competitiveness represents a development trap that counteracts the
accumulation of financial and social capital, hinders upgrading to high value-added
production, and encourages migration to higher-wage regions.
• CEE is falling behind its peers in other emerging markets. The global
financial and economic crisis exposed the weaknesses of the post-socialist
neo-liberal economic development model in East-Central Europe.
•
Wage differences will remain significant in comparison with the Eastern regions (Wegener) 8
Risk of Increasing National Disparities. In CEECs
• According to G. Kolodko (2001), there is not one single
future growth prospect for CEE. He differentiated four
long-term growth path.
• Our graphs verifies the increasing disparities between
CEECs. Sustainable catching up process is jeopardized
by the dualistic feature of the transition economies
unveiled the weakness of indigenous (domestic) sectors.
• Less developed countries may grow in the short-term
because of the reduction of the current unemployment
levels, and a reduction of salaries in real terms.
• Meantime income and intraregional differences
significantly increased.
9
Changes in per capita GDP level in CEECs in
comparison with Western European Countries (12
=100%) between 1870 and 2012
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Albania
Bulgaria
Czechoslovakia
Hungary
Poland
Romania
Yugoslavia
Bosnia
Croatia
Macedonia
Slovenia
Serbia/Montenegro/Kosovo
Czech Republic
Slovakia
Source: Zoltan Gal’s calculation based on Maddison database
10
Risk of Increasing Regional Disparities
• At regional level, we may see disparities growing more than before;
in new member states capital regions are the winners, while rural
and eastern border regions may likely be the losers.
• Clashes between growth- and sustainability-oriented policies are to
be expected. (GMR model)
• A net increase in the service sector is expected in Eastern regions,
clustered in main cities, but growth in non-metropolitan regions will
maintain a significant industrial element.
• Industry will remain a backbone of competitiveness in nonmetropolitan Eastern regions, shifting to deeper territorial
embeddedness and higher local added value.
• The concentration of advanced business services corresponds to
the urban network: it exceeds 50% in the capital regions of Slovenia,
Slovakia, Bulgaria, Hungary and Croatia, is at 43% in the Czech
Republic and below 40% in Romania, where a more polycentric
urban network is present.
11
Polarised development is one of the most serious
problems of the CEE (Eastern) Region.
• After EU accession the divergence of GDP per capita continued both
between counties and within countries as well. The macro-region is
also notable for its internal disparities.
• The poorest region of the EU where the GDP per capita is less than
30 percent of the EU average (TOP 20 pooerest regions, Cohesion
R)
• Capital city regions (Praha, Közép-Magyarország, Zahodna
Slovenija, Bratislavsky kraj, Bucuresti-Ilfov) have higher per capita
GDP than the EU average, in the case of Prague and Bratislava,
double the average.
• The location of FDI driven manufacturing industries: integration zone
stretching from the Vienna–Budapest corridor to south-western
Poland, with strengthening linkages to Western European industrial
networks, predominantly automotive industry. This integration is
heavily linked to FDI, which, outside capital cities, shows its highest
levels in these industrial regions;
12
MTA Regionális Kutatások Központja
Development level by per capita GDP (PPP, % of
EU27 average)
Note: The numerical value in the upper box shows the ranking of the individual region within the
sample. The value in the lower box shows the change in the region’s ranking between 2000 and
2008.
Development gap between the most developed and
the least developed regions (GDP per capita in the
percentage) in 2000 and 2007
40%
35%
30%
25%
2000
20%
2007
15%
10%
5%
s
n
la
nd
ed
e
et
he
r
N
Sw
ar
k
d
la
n
en
m
D
Fi
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tri
a
Au
s
an
y
m
ai
n
G
er
Sp
d
ro
at
ia
C
la
n
Po
nc
e
Fr
a
ga
l
rtu
Po
om
ng
d
It a
ly
U
ni
te
d
Ki
Be
lg
i
um
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ep
ub
ec
C
ze
ch
R
ia
an
G
re
ia
om
R
ria
ov
ak
Sl
lg
a
ar
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Bu
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H
EU
-2
7
0%
Sorce: Gál-Illés-Lux (2013
14
Winners: Capital city regions
The change of the relative development level of capital cities and capital regions
in the EU 1995–2009
Source: Eurostat. Gál-Illés-Lux (2013)[1]
• Convergence processes have been most beneficial for capital cities.
It means that the overwhelming part of GDP is produced in the
capital-city-regions (in Bulgaria 48%, in Hungary 48%, in Slovakia
60%, in Croatia 47%).
Capital city or regions
Country Per capita GDP as a percentage of EU15
average
1995
2009
Change
Stockholm
Prague
Madrid
Budapest
SVE
CZ
ESP
HU
196
49
103
49
192
123
128
88
–4,0
+74,0
+25,0
+39,0
Bratislava
Bucharest
Attiki
Lisbon and Tejo Valley
Uusimaa
Central Hungary
Mazowieckie
SK
RO
GR
PT
FINN
HU
PL
41
13
70
84
175
38
24
121
41
115
95
190
65
55
+80,0
+28,0
+45,0
+11,0
+15,0
+27,0
+31,0
15
Differentiated industrial development and economic
convergence (tertiarization paradox)
• The degree of tertiarisation between the national economies of
Central Europe does not correspond to development level.
• Besides capital cities western border regions and gateway cities
have become the most successful, becoming the main target areas
of industrial FDIInvestment.
• Economic development is only service-based in central regions
• The differences of industrial decline and reindustrialisation are
essential factors in regional competitiveness: cities and regions
integrating into international industrial networks can count on a
substantial increase of their competitiveness, while services on their
own are unable to achieve this effect. Naturally, tertiary development
is not independent from industry:
• The question of endogenous development: The significance of
‘national champions’ was neglected under early post-socialism, and
no attention was dedicated to the implications of different ownership.
16
Continuous “ladder” in the degree of tertiarisation
between national economies (a reversal process
Change in industrial employment in post-socialist economies, 1990–2008 (%)
Source: Author’s construction based on national statistical yearbooks and EUROSTAT
• Countries that have been most successful at retaining a high level of industrial
employment – via the successful adaptation of indigenous industrial milieus, but
primarily through the attraction of FDI – have benefited more from.
• The deepest decline was experienced in South-Eastern Europe, where destructive
de-industrialisation was particularly prevalent.
17
Scenario relevance of economic development in
Eastern regions
• Baseline:
– Industry can be expected to have a slowly diminishing
share in employment and economic output, although
its significance will stay above the Western
European level, more closely resembling the
German development path. Development will
continue to be FDI-dominated, although the slow
emergence of mid-tier companies in the EU12 is to be
expected via capital accummulation.
18
The “MEGAs” scenario
• Metropolitan growth offers little in the way of integration
possibilities for a large share of post-socialist space.
• Flows will orient even more towards national capitals, and
resource concentration in mega-centres can be expected to
encourage further de-industrialisation; a process that offers
rather little to non-metropolitan zones.
• Even though industry on the peripheries might stay competitive
and maintain its current role for large cities, it can be expected
to face a constant drain of human resources, and be unable to
extend its networks to less dense hinterlands.
• In contrast, leading services are unlikely to locate outside
metropolitan centres.
• Therefore, the disadvantages of this scenario can be seen as
an opportunity cost to non-central regions.
19
The “Cities” scernario
• The “Cities” might emphasise a higher significance of
industry within the space economy. Large cities as
integrators of industrial production and industry-linked
business services, can serve as an anchor for large
enterprises, and maintain spreading networks towards
smaller centres.
• In terms of knowledge production and transfer, this
scenario might offer a favourable balance of
concentration, which can contribute to the critical
masses which are still weak on the European periphery.
• However, the national differences of urban networks can
pose a certain degree of risk in actual development.
20
The “Regions” scernario
• This scenario offers the strongest vision of “spatial justice”, although
at certain trade-offs. A more territorially balanced system of industry
would be one favouring strong industrial districts and clusters, with
high embeddedness but smaller individual firm size.
• A vision of integrated rural and urban areas might be one of the most
favourable policy environment to bring EU12 industrial milieus closer
to Western Europe, since it would offer institutional incentives for the
spreading-out of production and the reindustrialisation of the
peripheries.
• The conditions of technological change, particularly ICT, flexible
production systems and CAD-based mass customisation can enable
more dispersed patterns of manufacturing where certain industries
can be dominated by highly flexible small and medium-sized firms.
• Industry can retake its former employment share, but knowledge-intensive
production can be more evenly spread, bringing with it further socioeconomic advantages for smaller cities, towns and rural areas.
21
Baseline trends in Eastern region
22
MTA Regionális Kutatások Központja
Population and migration
• Demographic trends: still younger but rapidly ageing:
• The Danube Region and Eastern Europe is the only macroregion in the EU
where the population is not increasing but decreasing. This ‘natural’ trend is
expected to be continue due to the deteriorating socio-economic conditions
as a consequence of the Crisis. The decrease has both natural and
migratory reasons. (Hungary and Romania are the most affected)
• In Eastern regions, ageing combined with migration and limited savings will
place a significant burden on national budgets; in the medium term, this will
be compounded by a cohort of minimum-waged or ‘informal economy’
residents reaching pension age.
• Migration trends:
– internal: economic decline of factor supply via deskilling via internal,
intra-regional (within the Danube region) and international migration.
– The international migration to other EU (East to West) countries started
immediately after EU accession and it is triggered by the crisis.
Economic trends
• Economic trends: despite European catching-up processes, the large
economic and territorial inequalities can not be eliminated in
dependent economies due to constant capital scarcities
• Catching-up in the region will take place, but with internal disparities on
the increase, particularly between metropolitan centres and peripheral
regions
• With the continuing dominance of FDI among investments, the role of
domestic capital and markets will receive more emphasis than
previously,
– CEE economic differentiation: zones alongside the main corridors in CEE are
heavily linked to FDI and to Western European industrial networks (automotive)
– The unambiguous winners of the process are capital regions
– More ambiguous mixture of FDI-driven reindustrialisation and the surviving
domestic industrial capacities with rapid deindustrializing
– Weak innovation: R&D investment relative to GDP funded by the business sector
– except in Austria and the Czech Republic – was low
24
Employment
– emergence from the crisis might result in a lagging, mainly export-led
recovery, with diminishing or even modest formal unemployment, but also
a low activity rate and the lack (postponement) of labour market
reintegration for periperies and disadvantaged groups. (core/periphery)
– Wage convergence towards the EU average will stay below productivity
gains, compounding the outflow of the best qualified workforce, affecting
even the centres. Only the strengthening of medium-sized and medium
cities seems to offer a counter.
– Services will increase their employment share, but an emphasis on
reindustrialisatio n and export-driven growth will influence the pace of
structural change.
– Wage differences will remain significant in comparison with the Eastern regions,
where absolute poverty (a lack of resources for self-sustenance, as opposed to
income inequality) will remain a pressing issue, concentrated in specific regions
and social groups. Poverty, in contrast to western regions, is often concentrated
25
Accessibility
• Accessibility in the region mostly increases along TEN networks
• and in major aviation hubs; the South-Eastern transport connection plays a
tertiary role in transport compared to the North-Eastern German–Russian
corridor and the global integration of Core Europe. The weakness of urban
counter-poles (with the potential exceptions of Poland and Romania)
diminishes their individual transport roles, particularly with the assumption of
a Europe of MEGAs.
• Highway investment projects may enjoy priority until the
completion of adequate national networks; high-speed railways
being restricted to a few select lines
• Environmental
In Eastern Europe CHG emission is strongly
correlated by the economic activity and development level of a certain
region. It can be stated that Scenario B is even more likely than the
Baseline. In which despite the general EU level decline CO2 emissions will
26
Exploratory scenarios
• Economic Growth (MEGAs)
•
in New 12 member countries the gain in GDP growth rate is more evenly distributed than in
western countries, and core and capital regions are indeed winners but not more than their
respective countries. This is due to the fact that growth in these countries has been
concentric in the past and continues to be concentric in the Baseline scenario, so that an
increase of demand and production as the one of the Megas scenario cannot be confined
within the core areas but needs to be spread elsewhere.
• Cities
•
Regions in New 12 countries tend to benefit the most from the implementation of this
scenario, whereas the positive effects are comparable to those stemming from the more
competitive “Megas” scenario.
• Regions
•
On average New 12 grow faster than western countries; employment growth in this scenario
takes place mostly in first-rank and second-rank metro areas,
MTA Regionális Kutatások Központja
Development level by per capita GDP (PPP, % of
EU27 average)
Note: The numerical value in the upper box shows the ranking of the individual region within the
sample. The value in the lower box shows the change in the region’s ranking between 2000 and
2008.
MTA Regionális Kutatások Központja
The change of the relative development level of capital
cities and capital regions
in the EU 1995–2009
Capital city or region
Country
Per capita GDP as a percentage of EU15 average
1995
Stockholm
Praha
Madrid
Budapest
Bratislava
Bucuresti
Attiki
Lisboa e Vale do Tejo
Uusimaa
Közép-Magyarország
Mazowieckie
SVE
CZ
ESP
HU
SK
RO
GR
PT
FINN
HU
PL
196
49
103
49
41
13
70
84
175
38
24
2009
192
123
128
88
121
41
115
95
190
65
55
Change
-4,0
+74,0
+25,0
+39,0
+80,0
+28,0
+45,0
+11,0
+15,0
+27,0
+31,0
Polarised development and networks
(urban, transport & energy network)
MTA Regionális Kutatások Központja
•
•
•
•
•
•
•
•
External peripherization: CEE urban network traditionally oriented towards Western
European urban system  cyclical disintegrations increased peripherization within Europe
Internal peripherization: A polycentric macroregional urban system constituted by
monocentric national urban systems and a fragmented rural network,
– Danube a true axis of urbanisation: high concentration of population & MNCs
– Clear divide between capital cities and secondary centers
– The Balkans complex fragmentation on a national (ethnical) basis.
Proximity/distance still matters: delayed network development, capital-centric in
comparison with WE, historically influenced redundancies (due to changing national
boundaries )
Political centralism preferred capital city-based monocentric national networks with limited
border permeability
Budapest-centric TENs, development- vis-á-vis environmentally motivated transport
development (high share of highway investment ), hollowing-out of peripheries
EU energy policy influenced by: secure supply, sustainability, market liberalisation 
diversification, inherent contradictions
– South Stream, Nabucco and “Blue Stream” gas pipelines
Increased energy consumption reliance on nuclear and fossil-based generation
Renewable energy deployment motivated by EU targets
The European transport corridors (Trans European
Networks) in the Danube region
31
Scenarios for the Danube region
MTA Regionális Kutatások Központja
1 The scenario of successful integration
•
•
•
•
•
EU will overcome the current difficulties and the expansion will successfully continue
Within approx. 15 years Serbia, Bosnia-Herzegovina, Macedonia, Montenegro, Kosovo and Albania may
also become the members of the European Union.
If the euro gets over the current difficulties, new countries from the regions are likely to join the eurozone within 15 years
The poorest regions of the EU member states receive considerable support from the EU Structural
Funds. (Only three are currently ineligible for funding as convergence regions)
Among the main challenges are to improve the north-south transport connections, increase border
permeability (bridges) and improve the living conditions of Europe’s largest Roma community (8% of the
total population)
2 The scenario of Central European cooperation
•
•
•
•
•
•
In this scenario, it is assumed that EU enlargement will progress more slowly than previously assumed.
It does not mean the disintegration of the European Union. Rather, more intra-regional cooperation
(Visegrad countries) takes place, which partly compensates the slowing of EU enlargement.
In this regional collaboration scheme the importance of the Danube will increase for landlocked
countries.
Energy security, the diversification of energy supply should also be achieved through cooperative within
the region.
Cooperation among former Yugoslav member states may gain a new momentum.
Germany, Austria and Italy lead co-operation initiatives
MTA Regionális Kutatások Központja
Scenarios for the Danube region
3. ‘Worst case’ scenario, when the disputes and conflicts between the countries of the
Danube region make cooperation and integration impossible
• Debates between the countries themselves make any kind of joint action impossible. Of
course, this scenario is extreme in the current form, but draws attention to the recently more
or less hidden dangers threatening the Danube region.
– Conflicts with neighbours related to the ethnic minorities
– Conflicts arising from realised or even not accomplished projects
– Debates over the delimitation of border (former Yugoslavian border zones)
– Conflicts of disguised protectionism
MTA Regionális Kutatások Központja
Key trends driving the 2010–2050 evolution
• Demography:
•
•
The macro-region of our ana lysis has 56 million inhabitants; of them nearly 8
million live in a capital city (Budapest, Vienna, Bratislava, Bucharest and Belgrade).
Several economically advanced regions have ageing population (Austria, CentralHungary, West-Transdanubia and some of the neighbourhood of Bucharest). In the
majority of regions in Danube macro-region the ratio of young generation overweighs
the old-aged one.
• Economy:
•
•
•
The ratio of economically active population within the total number of
population is less than the European average.
Rising unemployment is a serious problem especially for young people: in
some countries youth unemployment rate may go as high as 40%. It is loweducated or professionally unskilled people who are the most badly hit by
unemployment.
On the demand side the following factors were increasing the ratio of
unemployment: tensions in industrial structure, the shrinking size of internal
markets, the transformation of firms, the new proprietary structure and
privatization of firms. The contribution of agriculture to GDP and
employment exceeds EU levels.
MTA Regionális Kutatások Központja
Key trends driving the 2010–2050 evolution
Territorial patterns:
•
•
•
•
Convergence processes have been favourable for the whole Danube region, but
they have been most beneficial for capital cities.
No region outside capital regions has experienced a significant improvement in
development ranking.
The favoured spaces of clusterisation lie in western border regions, with gradual
expansion along main transport corridors. The Danube has become the axis of
urbanisation; commercial-industrial activities related to the river have contributed
to a strong concentration of population on the upper and middle sections of the
Danube.
: a polycentric macroregional urban system constituted by monocentric national
urban systems and a fragmented rural network, a high level of industrial
employment in cities compared with European core regions, a high
concentration of companies of international and national importance in capital
cities, the weakness of the urban bourgeoisie and civil society outside Germany
and Austria, an increase in poverty and in degenerating social strata, the poor
condition of the built heritage and the slow disappearance of infrastructural
weaknesses.
MTA Regionális Kutatások Központja
Key trends driving the 2010–2050 evolution
Energy:
•
•
The European Union is determined to increase energy security,
diversification of the purchase, to avoid one-sided dependency. Important
energy transport infrastructures cross the macro region:
From 2020, the region’s nuclear power plants will deliver electricity supply to
Germany as well having closed down its similar facilities.
Transport.
Mono centrism, centred in capital cities, became natural in structuring the longdistance highway/ motorway network and rail network in the 20th century –
degrading decentralization and regional development efforts drafted in the
documents of the various political systems following each other.
MTA Regionális Kutatások Központja
Key trends driving the 2010–2050 evolution
Land-Uses:
• Land-use is expected to move towards stronger urbanisation in selected
urban areas (capital cities and cities with good growth prospects), especially
in the Western Balkans, where urban sprawl has already been observable,
and metropolitanisation is proceeding at a brisk pace. Suburban growth is
comparatively limited at the moment.
• Rural areas undergo the loss of population and sometimes a reduction in
land-use intensity, especially in distant (mountainous) areas, with potentially
accelerating instances of the complete abandonment of settlements due to
depopulation, but gain relevance as second homes in attractive locales and
suburban growth areas in the proximity of developing agglomerations. Unlike
Western Europe, selected rural areas undergo a form of ghettoisation due to
the increasing concentration of disadvantaged groups.
• Another factor shaping rural land-use patterns is EU policies encouraging
specific forms of usage (energy, forestation, recreational and reserve areas).
• A specific issue of the Danube region concerns river management and flood
control, as along the length of the Danube, Drava (the Hungarian–Croatian
border river), and especially the Tisza in Hungary, flooding is commonplace
and the area of land where flood prevention is required is larger than the
equivalent in the Netherlands.
MTA Regionális Kutatások Központja
Key trends driving the 2010–2050 evolution
• Environment. Those dependent on the Danube will need to prepare
for direct climate change impacts including more frequent flooding
and longer periods of drought. Indirect effects can include worsening
water quality, loss in diversity of flora and fauna, including fish
species as well as other environmental benefits and services that we
have come to take for granted.
• Governance. In the whole Danube region the EU has become the
dominant factor, the operator and financing agent of external and
partially of the internal integration. The Euro-regional initiatives and
the different EU funding programmes directly convey the
expectations and reactions for the outsiders. There is no region in
the area which is not linked somehow to the EU programmes, not
receiving some kind of institutional, technical and financial support.
Danube region SWOT
MTA Regionális Kutatások Központja
Danube Region SWOT table
Strengths
Weaknesses (Structural unbalances)
 Skilled workforce, valuable economic
traditions
 Lower production costs
 Improving infrastructural connectedness,
 FDI inflows into manufacturing,
 Favourable environmental conditions, low
pollution in comparison with the EU-15,
 Abundant natural resources in Balkans
countries, especially Bosnia-Herzegovina and
Albania,
 Danube as a connecting source of identity and
communication & innovation axis.
 Low economic activity rate, high relevance of
informal economies
 Underdeveloped urban centres (FUAs) without
a critical mass, the dominance of capital cities,
 Undercapitalised economies, over-reliance on
FDI,
 Dual economies: competitive exogenious
MNCs and underdeveloped indigenious
enterprises,
 Predominant foreign ownership in strategic
sectors
 Low internal demand and fragmented internal
markets,
 Large but inefficient public sector,
 Weak civil society.
Opportunities
Threats
 Integration into European and global value
chains, continuous industrial upgrading,
 Growing service economies,
 Favourable capital attraction conditions,
 Knowledge-based development on the basis of
university poles,
 State reform initiatives,
 Market expansion towards the EU core and
third countries, as well as the exploitation of
internal markets with rising living standards,
 Unexploited, diverse tourist and natural
reserves potential.
 Capital-centred development without broader
catching-up, increasing core–periphery
dichotomy
 Ageing population,
 Continuing marginalisation of specific social
groups, especially gypsies,
 Dependent power relations and increasing
profit repatriation,
 Losses in human capital due to immigration,
 Energy security challenges coupled with
growing demand,
 “Frozen conflicts” in the Balkans, postponed
EU-integration,
 Delocalisation of production towards the Far
East
 Political marginalisation in a “core vs.
periphery” EU development scenario;
preserved “second-tier” membership,
 Inadequate preparedness for climate change
scenarios,