Download Vojvodina-CESS

VOJVODINA in the Serbian economic
space
Valentina Ivanic, director
Centre for Strategic Economic Studies
“Vojvodina-CESS”
Hungarian Regional Science Association 7th Annual Meeting
Cross border and transnational cooperation
Subotica, 12-13 November, 2009
CONTENTS
 AP Vojvodina – in the Serbian economic space
 AP Vojvodina – How we can improve regional
competitiveness: inherited and created factors
 Types of regional instruments and policies: macro and
micro competitiveness
 AP Vojvodina – structure of growth, RCA, external trade
2
SERBIA and AP VOJVODINA
DESCRIPTION
AP
VOJVODINA
Life expectancy
Vojvodina
Teritory: 21.500 km2
(24.3% of Serbia)
Population:
2.031.992
(27.1% of Serbia population)
SERBIA
71.6
72.7
Literacy rate

97.6
96.5
HDI value, 2006

0.824
0.821
Average wage in 2008

32,906
32,746
19.2
19.4
n/a
4597
34
27.2
2 955
5 134
279
497
Share of investment in fixed assets in GDP
(%) (2004)
GDP per capita, 2008., €
% of households having internet
connection (2008.)
Density of road network (km/inhabitants
m)
EU 25 = 12167
Density of road network (km/km² ooo)
EU = 1240

Rate of population that speaks English in the total population amounts 42,3% which is above
the average in most CEE countries (Bulgaria 14%, Romania 16%, Poland 22%).
Global Competitiveness Index (GCI) in 2009-2010, ranked Serbia on 93 place. GCI consists of
three groups of variables: technology, public institutions, macroeconomic frame.
In Business Competitiveness Index (BCI) in 2007, Serbia was ranked 91th place among 127
countries.
3
SUMMARY OF THE FORECAST FOR SERBIA
Basic Macroeconomic Indicators
GDP per capita, current prices [dinar]
2008 1)
2009
2010
374,594
401,515
429,431
5.5
-4.7
0.7
45,598
51,335
57,260
17.9
12.6
11.5
Real gross wage, growth rate [%]
5.5
3.6
5.4
Labor productivity, growth rate [%]
6.4
-5.0
1.3
Employment, growth rate [%] 2)
-0.8
0.3
-0.7
Registered unemployment rate [%] 3)
22.0
23.7
24.1
Alternative unemployment rate [%] 4)
27.7
29.0
29.5
Inflation rate, consumer prices [%]
12.4
9.0
6.1
Budget balance [% of GDP]
-3.2
-4.5
-4.0
Real GDP growth rate [%]
Monthly gross wage per employee [dinar]
Monthly gross wage, growth rate [%]
2008 partly estimated. 2) Total employment excluding agricultural producers.
Unemployed persons as percentage of unemployed persons plus total employment.
4) Unemployed persons as percentage of unemployed persons plus total employment excluding agricultural producers.
1)
3)
Source: Economic Forecatst for Serbia 2009 and 2010, IHS / Economica/Centre for Strategic Economic Studies „Vojvodina CESS“
4
ECONOMIC GROWTH - FORECASTS
% CHANGE OVER PREVIOUS YEAR
2.0
Poland
2010P
2009P
Czech Republic
1.5
-3.8
EU-15
1.0
-3.9
Bulgaria
0.5
-4.0
Slovakia
2.0
-4.5
Serbia
0.7
-4.7
Slovenia
0.5
-5.0
-1.0
Hungary
-6.0
Croatia
Romania
1.0
0.5
-6.0
0.8
-6.5
-7
-6
-5
-4
-3
-2
%
-1
0
1
2
3
Source: Economic Forecatst for Serbia 2009 and 2010, IHS / Economica/Centre for Strategic Economic Studies „Vojvodina CESS“
5
SERBIA – REAL GDP GROWTH
10.0
8.3
6.9
8.0
5.6
6.0
5.5
5.2
%
4.0
2.0
0.7
0.0
-2.0
-4.0
-4.7
-6.0
2004
2005
2006
2007
2008
2009
2010
Forecast
Source: Economic Forecatst for Serbia 2009 and 2010, IHS / Economica/Centre for Strategic Economic Studies „Vojvodina CESS“
6
SERBIA – GROWTH STRUCTURE
− GDP of Serbia showed a trend of growth in the period 2000-2008.
− Calculated by constant prices from 2002. it grew by an average rate of 5.4% annually, which is
faster if compared to global economy growth rate of 3.94% .
Structure of GDP, Serbia, 2007*
Structure of DP of Vojvodina, 2004
55,7%
24,6%
Tradable goods
Tradable goods
Non-tradable goods
75,4%
44,3%
Non-tradable goods
7
DP STRUCTURE OF VOJVODINA, BY ACTIVITIES
UNTRADABLE SECTORS
44.3%
Real estate: 2.7%
TRADABLE SECTORS
55.7 %
Health and social
Other: 0.2% work: 0.2%
Transport, storage and communication:
7.8%
Hotels and restaurants:
Agriculture: 22.4%
1.4%
Wholesale and retail, repair:
17.8%
Fishing: 0.1%
Construction: 4.5%
Electricity, gas and
water supply: 4.4%
Manufacturing: 33.2%
Mining and qarrying:
5.3%
8
THE DEGREE OF OPENNESS OF THE SERBIAN
ECONOMY
80%
70%
66.5%
60.2%
60%
52.1%
50.9%
67.7%
59.1%
52.0%
50%
40%
30%
20.9%
20%
(Exports+Imports)/ GDP
10%
0%
2000
2001
2002
2003
2004
2005
2006
2007
9
PYRAMID OF COMPETITIVENESS
TYPE OF INVESTMENT
TYPE OF COMPETITIVENESS
TYPE OF POLICIES
(patents, brands, human capital)
Innovation based
competitiveness
(Business sophistication, innovation)
Market seeking type
(horizontal FDI)
(“green field” , telecom,
energy ... )
Asset seeking type vertical FDI
(oil, natural gas, cheap
labour...)
Investment based competetiveness
(Commodity market and labour market efficiency,
financial market sophistication, market size,
higher education and training, ...)
Serbia is in the
second stage
Resource based competetiveness
Basic elements for competitiveness building
Efficiency seeking type
(Infrastructure, institutions, macroeconomic stability, health and
primary education)
10
PHASES OF ECONOMIC DEVELOPMENT – POLICIES
AND INSTRUMENTS
INSTRUMENTS
Late 1990s
-Networking and partnerships
-Improving labour force quality
-Strategies for improving competitiveness of
business climate and stimulating development
-Investments in soft infrastructure
-Public-private partnerships
-Targeted investment attracting
1980-1990
-Business incubators,
-Top-down cluster initiatives
-Support for business start up
-Direct payments to certain industries
-Trainings for SMEs
-Attracting investments aimed at
specific sectors or geographical areas
1960-1980
-Investments in hard infrastructure
-Attracting mobile production
investments from external local areas
-Attracting FDIs
-Employing cheap labour force
-Subsidies for investments in hard
infrastructure
1960-1980
1980-1990
Late 1990s11
SPATIAL FACTORS - IPA CBC – VOJVODINA
Until 2013, Vojvodina can receive from 4.5 – 6 mil € annualy from IPA -Cross Border Cooperation
IPA CBC Serbia – Croatia–
Period 2007-2009
Total funds: ≈ 3 mil. EUR
IPA CBC Serbia – BiH
Period: 2007-2009.
Total funds: ≈ 3,3 mil EUR
IPA CBC Serbia - Hungary
Period 2007-2009.
Total funds: ≈6,1 mil. EUR
IPA CBC Romania-Serbia
Period 2007-2009.
Total funds : ≈7,2 mil EUR
12
MEASURES OF IRDP AND STAGES OF
DEVELOPMENT
ASC - Agricultural Land Site Consolidation Scheme
EEP - Energy Efficiency Programme
WSP - Water Supply Pilot Project
NTD - Nautical Tourism Development Programme
I STAGE – FACTOR-DRIVEN ECONOMY
-Economies primarily compete on low prices and natural
resources
-Enterprises are mainly involved in primary production
and occupy a small part of the value chain
-The economy is particularly susceptible to fluctuations in
the world economic cycle, commodity prices, and exchange
rates
- GDP per capita: under 2000 $
IQS - Integrated Qualification Scheme
BSC - Business Standardisation and Sertification
APF - Agricultural Promotion Fund
BPF - Business Export promotion Fund
LSC - Labour Cost Subvention Scheme E - Vojvodina
II STAGE – INVESTMENT-DRIVEN ECONOMY
- Bigger share of high and secondary educated working
force
- More efficient production processes and increase product
quality
- Absorption of new technologies
- Opened market
- GDP per capita between: 3000-9000 $
BNT - New Technologies Transfer Scheme III STAGE – INNOVATION-DRIVEN ECONOMY
BBI - Building Business Incubators in Vojvodine
VIP - Vojvodina Investment Promotion Fund
CESS - Centre for Economic Strategic Studies
- Innovation supporting
- Innovative products on market
- High price of products
- High standard of living
- Well connected business sector
- GDP per capita: over 17000 $
13
COMPETITIVENESS ON THE MICRO LEVEL –
CREATED FACTORS
Barriers
Barriers
-Higher business and financial risk
-Identifying foreign business
opportunities
-Enteroreneurship abilities
-Managerial abilities
Barriers:
-Travel expenses
-Establishing foreign distribution
and marketing networks
-Distance of foreign markets
-National competition policies
-Telecomunications infrastructure
Strategic costs
Measures*:
-VIP
-IQS
-BBI
-Guarantee fund
Kinetic costs
Measures*:
-VIP
-BPF
-CESS
-E-Vojvodina
Knowledge costs
Measures*:
-CESS
-BSC
-APF
-BPF
-BBI
-Chamber of commerce
-Learning about foreign
environment
-Doing market analyses abroad
-Adaption of products to foreign
markets
-Accesing information abour other
markets
-Lack of information
-Knowledge and experience in
international markets
-Research and education policies
Transaction Costs
Measures*:
-VIP
-BBI
-BSC
Barriers:
-Purchasing legal consulting
services
-Translation of documents
-Regulatory requirements on
product standards
-Legislative and regulatory
frameworks
*Measures defined in Integrated Regional Development Plan (IRDP), except Guarantee Fund and Chamber of Commerce
14
SHARE OF AP VOJVODINA IN INDUSTRIAL
PRODUCTION OF R SERBIA
Fields of industry with smallest share of AP Vojvodina in Serbia
6.00%
5.00%
4.85%
4.00%
3.00%
2.38%
2.00%
1.00%
0.00%
0.71%
Motor vehicles and trailers
Electricity,gas and hot
water supply
Coal mining
0.00%
0.00%
Radio,TV and
comunication equipment
Metal ores mining
15
SHARE OF AP VOJVODINA IN INDUSTRIAL
PRODUCTION OF R SERBIA
Fields of industry with biggest share of AP Vojvodina in Serbia
100%
98.50%
97.90%
90%
80%
70.19%
70%
57.91%
60%
54.27%
53.36%
Textile yarns and textiles
Food products and beverages
50%
40%
30%
20%
10%
0%
Extractions of crude
petroleum and gas,services
Coke and refined petroleum
products
Chemicals and chemical
products
Leather and leather
products,footwear
16
IMPORT BY INDUSTRY, Serbia 2008.
Medium Low tech
(3329.6 mil EUR)
Coal and nuclear fuels, rubber and
plastics, base metals and metal
products, other non-metal
products
Medium High tech
(6003.1 mil.EUR)
48.0%
26.6%
21.0%
Low Tech
(2620.5 mil.EUR)
Production of food and beverages,
tobacco, textile, clothes, leather
and footwear, wood and wooden
products, cellulose and paper,
printing, furniture
4.3%
Chemical products, machines,
electrical devices, motor
vehicles and other transporting
vehicles
High Tech
(541.9 mil.EUR)
Office supplies and computers,
medical and optical
instruments, clocks and
watches.
17
EXPORT BY INDUSTRY, Serbia, 2008.
Medium Low tech
(2509.3 mil EUR)
Coal and nuclear fuels, rubber and
plastics, base metals and metal
products, other non-metal
products
Low Tech
(2341.3 mil.EUR)
Production of food and beverages,
tobacco, textile, clothes, leather
and footwear, wood and wooden
products, cellulose and paper,
printing, furniture
Direction of restructuring in
Western Balkan countries
Medium High tech
(1946 mil.EUR)
35.8%
27.8%
33.4%
3.0%
Chemical products, machines,
electrical devices, motor
vehicles and other transporting
vehicles
High Tech
(204.7 mil.EUR)
Office supplies and computers,
medical and optical
instruments, clocks and
watches.
18
REVEALED COMPARATIVE ADVANTAGE OF
THE APV
RCA of the APV in trade with the EU (1990, 1998, 2008)
1990
1998
2008
1.00
0.78
0.80
0.60
0.46
0.47
0.45
0.40
0.53
0.30
0.25
0.20
0.17
0.09
0.10
0.080.06
0.05
0.00
-0.20
-0.40
-0.07
-0.22
-0.23
-0.51
-0.80
-0.79
0 Food and live
animals
-0.11
-0.24
-0.26
-0.40 -0.41
-0.40
-0.60
-1.00
-0.09
-0.15
1 Beverages and
tobacco
-0.54
-0.85
2 Raw
3 Mineral fuels and 4 Animal and
materials,except
lubricants
vegetable oils and
fuels
fats
5 Chemicals
6 Manufactured 7 Machinery and
goods classified by
transport
materials
equipment
-0.99 -0.94
8 Miscellaneous 9 Commodities and
manufactured
transactions,n.e.s.
articles
19
REVEALED COMPARATIVE ADVANTAGE OF
THE APV
RCA of the APV in trade with the CEFTA countries (1990, 1998, 2008)
1990
1.00
0.80
0.99
0.85
0.74
0.83
0.85
0.81
1.00
1998
2008
1.00
0.99
1.00
1.00
0.89
0.73
0.60
0.48
0.45
0.40
0.48
0.50
0.31
0.13
0.01
0.20
0.00
0.13
-0.20
-0.29
-0.40
-0.33
-0.60
-0.80
-1.00
-0.82
0 Food and live
animals
1 Beverages and
tobacco
2 Raw
3 Mineral fuels and 4 Animal and
materials,except
lubricants
vegetable oils and
fuels
fats
5 Chemicals
6 Manufactured 7 Machinery and
goods classified by
transport
materials
equipment
-1.00
8 Miscellaneous 9 Commodities and
manufactured
transactions,n.e.s.
articles
20
CONCENTRATION INDICES
Concentration index CR 10 of import and
export of APV with world
Concentration index CR 10 of import and
export of APV with EU
Export
Export
60
60
50
Import
50.4
51.7
44.4
52.2
51.1
46.6
50
40
40
40.6
39.7
30
30
20
Import
28.2
25.2
20.4
10
10
0
1990
1998
30.4
20
2008
0
1990
1998
2008
•The smaller the country is the specialization index of export should be higher and specialization index of
import should be smaller.
•Specialization indices of export of AP Vojvodina are in all observed years smaller then the specialization
indices of import of AP Vojvodina which indicates that Vojvodina does not have export strategy .
• Export of AP Vojvodina in trade with EU is more concentrate than import and import from other countries is
more concentrate than from EU which is result of import structure (raw material, oil, gas)
21
SPECIALIZATION INDEX
Specialization indices of export and import of AP Vojvodina
Export
0.14
Import
0.131
0.12
0.1
0.085
0.08
0.082
0.082
0.076
0.059
0.06
0.04
0.02
0.029
0.025
0.023
0.023
2007
2008
0
1990
1998
2006
The smaller the country is the specialization index of export should be higher and specialization index
of import should be smaller.
22
COVERAGE OF IMPORTS BY EXPORTS OF
AP VOJVODINA, BY SMTK SECTORS
1990
1998
2008
579.5%
558.1%
368.2%
306.9%
241.5%
227.8%
198.8%
95.5%
81.4%
32.6%
0 Food and live
animals
1 Beverages and
tobacco
89.1%
57.5%
50.8%
50.9%
12.2%10.3% 4.2%
2 Raw
3 Mineral fuels and 4 Animal and
materials,except
lubricants
vegetable oils and
fuels
fats
103.3% 98.5% 101.3%
89.1% 62.7%
84.0%
57.6%54.0%
44.3%
123.9%
117.6%
118.7%
0.8%
5 Chemicals
6 Manufactured
7 Machinery and
goods classified by
transport
materials
equipment
8 Miscellaneous 9 Commodities and
manufactured
transactions,n.e.s.
articles
23
VOJVODINA’S SMEs
EMPLOYMENT
GROSS VALUE ADDED
Share of employees in SME'S of Vojvodina
in the total number of employees in
Vojvodina (2007)
Share of GVA of SME'S in Vojvodina
in the total GVA of Vojvodina (2007)
64,4%
SME’s
35,6%
Large
In EU, SME sector employs 67.2 % of total
employees
46%
Large
54%
SME’s
In EU, share of GVA of SME'S in the total GVA
24
was 57.6%
STRUCTURE OF COMPANIES IN AP VOJVODINA
1
0.9
0.8
94.9%
0.7
0.6
0.5
0.4
0.3
0.2
4.1%
0.1
1.0%
0
Share of small
companies
Share of medium
companies
Share of big
companies
25
APV - INVESTMENTS
−
−
The share of investments into construction works decreased in the APV in the period from
2000 to 2007 and the share intended for purchasing of equipment increased since 2001.
Investments into equipment in 2004 were at the level above 50%, which means that
economy of the AP Vojvodina passed the first (initial) phase of development
Beginning of the second phase of development
60%
50%
40%
30%
20%
10%
0%
2001.
2002.
2003.
Construction
2004.
2005.
2006.
2007.
Equipment
26
PROJECTION OF NUMBER OF INHABITANTS
Projection of number of inhabitants by assumption of constant fertility
Millions
Vojvodina
7.17
7.0
Central Serbia
6.96
Serbia
6.73
6.49
6.20
6.0
5.0
5.07
5.23
4.90
4.72
4.57
4.51
4.0
3.33
3.0
2.0
1.94
1.84
1.89
1.77
1.69
1.25
1.0
0.0
2013.
2018.
2023.
2028.
2033.
2058.
By 2002. census R. Serbia had population of 7.498.001, of what 5.466.009 lived in Central Serbia, and
2.031.992 in AP Vojvodina. In year 2008. number of inhabitants has reduces in Vojvodina (1.979.389) as
well in Central Serbia (5.370.833), that means that number of inhabitants also reduced in Republic of
Serbia (7.350.222)
27
CONTINGENT OF WORKING AGE POPULATION
Projection of contingent of working age population by assumption of constant fertility
Millions
Vojvodina
5.0
4.60
Central Serbia
4.37
4.5
Serbia
4.17
4.02
4.0
3.5
3.33
3.17
3.0
3.03
2.93
3.87
2.86
2.81
2.5
2.08
2.0
1.5
1.26
1.20
1.14
1.10
1.0
1.06
0.78
0.5
0.0
2013.
2018.
2023.
2028.
2033.
2058.
Contingent of working age population consists of men between 15 and 65 years old and women between 15
and 59 years. By the 2002 census. in Vojvodina was 1320694 working-age inhabitants, while in Central
Serbia this category consisted of 3476003 people, that means that at the level of Serbia there was 4796697
of working age population. According to the state in year 2008., that number of working age population in
Vojvodina has dropped to 1298487, in Central Serbia on 3451800, Which means that number of workingage population in Serbia has decreased for 46,410 and is 4750287.
28
HUMAN RESOURCES
Employment structure in enterprises, institutions and organisations, by sectors in Vojvodina in 2008
Tertiary 54.7%
Primary 8.3%
Secondary 37%
In September 2009, primary sector employed 5.7%, secondary 25%, and tertiary sector employed
69.3%of total number of employees in EU27*
Source: Eurostat, National Accounts, annual average
29
SWOT Analysis and Policy recommendations
Strengths
Weaknesses
-Bordering region (IPA –CBC for APV (2007-2013)
≈4.5-6 million € per year )
-Vicinity of the EU market
-Scientific research institutions in agriculture
- IRDP (programmes for product quality raising,
energy efficiency increase, IQS)
-Outdated technology
-Absence of NDP
-Donor driven development
-Extensive agricultural production
-Unfavourable demographic trends
-Postponed reform of public sector/ would
decrease the country risk – which would lead to
favourable debt/equity ratio and allow private
capital to enter the public sector – PPP
Opportunities
Threats
-European integration process and IPA funds
-Foreign investments in technology intensive sectors
-Postponed regionalisation and fiscal
decentralisation
-Global financial crisis and sudden stop of FDI
Source:Competitivenes of Vojvodina economy drafted by Vojvodina-CESS (unpublished).
30
THANK YOU FOR YOUR
ATTENTION
Centre for Strategic Economic Studies
“Vojvodina-CESS”
Mite Ružića 2
Phone: +381(21) 528-755
[email protected]
www.vojvodina-cess.org
31