Home | Databases | WorldLII | Search | Feedback Edited Legal Collections Data

Nowotny, Ewald --- "FDI and trade as pivotal elements for catching up and competitiveness" [2005] ELECD 388; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "European Economic Integration and South-East Europe" (Edward Elgar Publishing, 2005)

Book Title: European Economic Integration and South-East Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845425173

Section: Chapter 13

Section Title: FDI and trade as pivotal elements for catching up and competitiveness

Author(s): Nowotny, Ewald

Number of pages: 8

Extract:

13. FDI and trade as pivotal elements
for catching up and
competitiveness
Ewald Nowotny

1. SOUTH-EAST EUROPEAN COUNTRIES
AND A STRATEGY OF EXPORT-LED GROWTH

The countries of South-East Europe (SEE) are a very inhomogeneous
group, both with regard to their economic and political structures and with
regard to their relationship with the EU. But for all of these countries a
strategy of export-led growth appears to be the most promising way for
economically sustainable development. This is immediately obvious for the
many small countries of this region, but is relevant also for Romania, the
biggest country.
A policy of export-led growth is directly relevant for tackling the prob-
lems of high current account deficits. This problem is relevant for most of
the countries of the region and has to been seen as one of the major policy
restrictions for more expansionist government policies ­ policy restrictions
in many cases institutionalized by IMF agreements (see Table 13.1). One
also has to be aware that for the countries of the Western Balkans the exter-
nal balances shown in this table are the current account deficits after grants.
Current account deficits before grants are substantially higher in some
countries; in Bosnia and Herzegovina for instance they account for 21.3 per
cent of GDP ­ which is clearly an unsustainable situation.
From a longer-term perspective a policy of export-led growth has the
even more important effect of enforcing international standards of quality
and reliability and thus advancing ...