Current Regional Dynamics in the Black Sea Area, With Some - PowerPoint Presentation

Slide1

Current Regional Dynamics in the Black Sea Area, With Some References to Economic Transactions and Labor Mobility

Panagiota

Manoli

, University of the Aegean (Greece)

Shizuoka, 29 October 2012Slide2
Slide3
Slide4

The Wider Black Sea Region: A politically defined region

Who

defines the BSR, When and How?

BSEC

’s Comprehensive Approach

Littoral States

’ Approach (Russia and Turkey)

EU

’s Approach

Core states

EU Member States: Greece, Bulgaria and Romania

EU Candidate Country: Turkey

ENP countries: Armenia, Azerbaijan, Georgia, Moldova and Ukraine

Russia: A Strategic Partner but not EU membership aspirations Slide5

Bilateralism

versus

Multilateralism

(

Sectoral versus Comprehensive)

Policy

OptionsSlide6

EU

(high)

BLACK SEA REGIONALISM

Transnational

exchange & demand

(weak)

Economic

difficulties

(high)

Benevolent leading

country

(weak)

Security

dilemma

(high)

Explaining BSRSlide7

BS Regionalism: Key Features

Evolving Process (Three Waves of BRS

Phases: post-Cold War, enlargement, post-enlargement)

Strong

Intergovernmentalism

/weak institutions (BSEC, GUAM, BS Forum)New EU driven initiatives (Synergy, EaP, Black Sea CBC…)Slide8

The Black Sea as a Region: ‘Push’ and ‘Pull’ Factors

Low Regional Coherence

Divergence (political, security, economic, cultural)

Low Interdependences and interconnections

Weak Common Approach

Gravitational Pull

Regional InstitutionsCommon Vulnerabilities

European Integration ProcessSlide9

High growth despite diversity of economies- all countries experience positive growth 2002-08

Over 2000-08 annual real GDP growth averages 5.9%

Living standards/ per capita income rise, poverty rates decline sharply

Private capital flows increase- esp. FDI over 4% GDP 2006-08

Intra-Regional trade, investment, financing, also rise

Regional Trends: 2000-08 Before Economic CrisisSlide10

2000-08: High growth; 2009: Negative; 2010: Recovery; 2011Slide11

Credit to businesses & consumers disappeared reducing liquidity & demand, slowing investment

International trade flows dropped, exports down, contraction in key W. European markets

Problems exacerbated by declines in (

i

) commodity prices, (ii) remittances

Reversal of fortune- poverty/ unemployment/ fiscal deficits up; current account deficits/ trade flows/ inflation down

Painful adjustment process only course for mostShort but Sharp Economic Crisis in Black SeaSlide12

GDP Growth

Inflation

Budget / GDP

Cur Acc Bal/GDP

Public Debt/GDP

Albania

3.3%

2.3%

-7.0%

-15.6%

59.7%

Armenia

-14.2%

3.4%

-7.6%

-16.0%

40.6%

Azerbaijan

9.3%

1.5%

6.6%

23.0%

12.1%

Bulgaria

-5.5%

2.8%

-0.9%

-9.8%

16.0%

Georgia

-3.8%

1.7%

-7.7%

-12.2%37.0%Greece-2.0%1.2%-15.6%-11.0%126.8%Moldova-6.0%0.0%-6.4%-9.8%30.7%Romania-7.1%5.6%-7.3%-4.3%28.2%Russia-7.8%11.7%-6.3%4.0%8.3%Serbia-3.0%8.4%-4.5%-7.1%35.6%Turkey-4.8%6.3%-5.5%-2.3%46.3%Ukraine-14.8%15.9%-6.2%-1.5%34.6%

BSEC Region Macroeconomic Summary for 2009 Slide13

GDP Growth

Inflation

Budget / GDP

Cur Acc Bal/GDP

Public Debt/GDP

Albania

3.4%

3.6%

-3.2%

-12.4%

62.8%

Armenia

2.1%

8.2%

-4.9%

-14.0%

44.0%

Azerbaijan

5.0%

5.7%

14.3%

29.5%

14.1%

Bulgaria

0.2%

2.4%

-3.9%

-0.8%

16.2%

Georgia

6.4%

7.1%

-5.1%

-10.6%42.0%Greece-4.5%4.7%-10.4%-6.5%144.5%Moldova6.9%7.4%-2.5%-9.9%34.1%Romania-2.0%6.1%-6.5%-4.2%34.0%Russia4.0%6.9%-3.6%4.9%9.5%Serbia1.7%6.5%-4.1%-6.5%39.1%Turkey8.9%8.6%-3.6%-6.6%44.7%Ukraine4.2%9.4%-5.2%-2.1%

39.3%

BSEC Region Macroeconomic Summary for 2010 Slide14

Regional Economic Cooperation

Some progress, but levels still low

Much room for growth in trade, investment & financing

Many ‘Win – Win’ possibilities exist

Prospects not favorableLack of political commitmentConfusion & uncertainty of current policies

Economic difficulties

Intensifying bilateral rivalriesEU influence- (i) Diverts country focus westwards, (ii) Rules & restrictions hurt Black Sea cooperation prospectsSlide15

Regional Relations with EU- Why Important?

Most important external economic actor, directly & indirectly, high externality impact

Main market for trade, investment, finance

Key exporter of rules, regulations, standards

Steady expansion of engagement with Black Sea up to 2009, politically and economically.

Ambiguous impact on

Regional Cooperation despite BSS & EaP. Mainly engages countries BilaterallySlide16

Regional Trade: Setback in 2009, Partial Recovery in 2010

(Source: BSTDB 2011)Slide17

Features of Intra-Regional Flows

Regionalization is restrained

Low level of intra-regional trade

Dominant, though slowly declining, role of Russia (among Black Sea partners)

Strong Bilateral links between Russia-Turkey and Ukraine

Low dependence of Russia and Turkey on intra-regional trade

FDI: The outward FDI of Black Sea countries (but Russia) remains regional Slide18

Three key determining factors continue to fuel international

Labour

Migration

:

- the “pull” of changing demographics and

labour

market needs in high-income countries;- the “push” of unemployment, crisis pressures and wage differentials in less developed countries;- established inter-country networks based on family, culture and history. Slide19

Labor Mobility

- BS as transit, destination and origin for labor migrants

Two tracks:

i

) towards western Europe and ii) towards Russia

Largely informal nature of

labour markets in BS countries (repercussions on how labour mobility takes place and on the rights and working conditions of migrants)Brain drain - Trafficking for labour exploitation, including forced labour, is up in the agenda of policy-makers Slide20

Changing Patterns of Labor Mobility

Labor movement reflects:

political disruption (1990s)

cultural affinity

return to home country

shifts in patterns of economic development and the gradual enlargement of the European Union. Slide21
Slide22

Labor Migration and Regional Cooperation

Efforts to collaborate (BSEC, IMO, etc)

Free movement of goods and persons is lacking behind Slide23

Thank you