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Structural changes in C &EE

The Puzzles of Central and Eastern Europe Transformation and Integration ECES, Prague. Structural changes in C &EE. Jaromír Šindel ECES.

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Structural changes in C &EE

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  1. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural changes in C&EE Jaromír Šindel ECES

  2. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural changes • From Plan to Market • From CMEA to EU • Structural reforms – liberalization, deregulation, privatization, banking sector, monetary policy framework • Economic structure, economic development • Employment, value added, trade specialization, foreign trade – geography and commodity • Role of FDI - Accelerator, positive and negative effects (spillovers) • Economy´s dynamism • Implication for competitiveness

  3. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economicstructure • De- and re-agrarianization • Deindustrialization • Tertiarization Employment structure in OECD Source: Newton. Country Report. January 2002. www.newton.cz

  4. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economicstructure CEECs' employment structures in 1989, 1993 and 1998 with those in the EU (Percentages) Source: UNECE. Economic Survey of Europe, 2000 No. 2/3. www.unece.org

  5. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economicstructure Value added structures in the CEECs,1989, 1993 and 1998(Percentages) Source: UNECE. Economic Survey of Europe, 2000 No. 2/3. www.unece.org

  6. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economicstructure in comparison Value added and employment structures in the CEECs and Germany Source: Newton. Country Report, January 2002. www.newton.cz

  7. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economicstructure in comparison Employment structures in the CEECs and Germany by NACE classification Source: Newton. Country Report, January 2002. www.newton.cz

  8. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economic structure Value added structures in baltic states in 1990-91 and 1995-96 (Percentages) Source: M. Krzak: Estonia, Latvia and Lithuania: From Plan to Market – Selected Issues - OeNB’s Focus on Transition 2/1997

  9. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague De- and re-agrarianization • tendency in most of the CEECs to reduce the size of the agricultural sector; EXCEPTIONS (BLG and ROM) • „re-agrarianization” severe employment crisis in the industrial sector limited absorption capacity in the services sector • Smaller deagrarianization in countries with bigger importance of agriculture CEECs' employment structures and Value added structures in 1989, 1993, 1998

  10. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring Industrial production, employees, productivity, investment and exports, 1990-1992 and 1993-1998(Average annual growth rate, per cent) Source: UNECE. Economic Survey of Europe, 2000 No. 2/3. www.unece.org

  11. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring • Two phases Plan to Market • the phase immediately after the beginning of the transition (1990-1992) • and the phase (1993-1998) • CEE-5 vs. CEE-7 (BUL and ROM) • Industry restructuring – branch level • low-tech group (food products, beverages and tobacco; textiles and textile products; and leather and leather products) • medium/high-tech group (machinery and equipment; electrical and optical equipment; transport equipment) • resource- (and scale-) intensive group (wood and wood products; coke, refined petroleum products and nuclear fuel; chemicals, chemical products and man-made fibres; other non-metallic mineral products)

  12. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring – branches Changes in wages, productivity and unit labour costs in the CEECs, 1991-1998 (Austria 1996=100) Wages in current PPS, productivity – constant prices –> growth rates not comparable, but relative structure is still interesting Source: UNECE. Economic Survey of Europe, 2000 No. 2/3. www.unece.org

  13. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring – branches Average initial gaps and growth rates forindustry groups, 1991-1997(Per cent) Source: UNECE. Economic Survey of Europe, 2000 No. 2/3. www.unece.org

  14. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring – branches Manufacturing production – structural changes(constant prices, %) Source: Newton. Country Report, January 2002. www.newton.cz

  15. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Industrial restructuring – branches Contributions to Manufacturing Production Growth (constant prices, in p.p.) Source: Newton. Country Report, January 2002. www.newton.cz

  16. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Technological Levels of Manufacturing Production(constant prices, %) • low-tech group(DA food products, beverages and tobacco; DB textiles and textile products; DC leather and leather products) • medium/high-tech group (DK machinery and equipment; DL electrical and optical equipment; DM transport equipment) • resource- (and scale-) intensive group (DD wood and wood products; DF coke, refined petroleum products and nuclear fuel; DG chemicals, chemical products and man-made fibres; DI other non-metallic mineral products) Source: Newton. Country Report, January 2002. www.newton.cz

  17. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural Changes - Intensity Gross valued added , 1995-2002 (current prices) Source: M. Rojíček (2006): Structural analysis of the Czech economy (in Czech), p. 5, www.cesvsem.cz

  18. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural Changes - Intensity Employment, 1995-2002 Source: M. Rojíček (2006): Structural analysis of the Czech economy (in Czech), p. 5, www.cesvsem.cz

  19. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural Changes – Intensity Value added and Employment in Czech Republic Source: M. Rojíček (2006): Structural analysis of the Czech economy (in Czech), p. 6, www.cesvsem.cz

  20. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Structural Changes - Intensity Value added and Employment in Czech Republic Source: M. Rojíček (2006): Structural analysis of the Czech economy (in Czech), p. 6, www.cesvsem.cz

  21. Structural Bonus Hypothesis (I. > 0) and Structural Burden Hypothesis(II. < 0) Static Dynamic Within shift shift growth Total effect effect effect Czech Rep. 1995-20023,3 1,0 95,7100Hungary1995-20018,2 3,1 88,7 100Poland 1995-20003,82,393,8 100Slovakia1995-20025,9 1,6 92,4 100Slovenia1995-20023,3 -2,9 99,7 100Estonia1995-20024,6 0,0 95,4 100Latvia1995-2001-0,4 6,1 94,2 100Lithunia1997-20012,3 0,3 97,4 100 Pi- productivity industry, Si- share of industry

  22. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Economy´s dynamism - competitiveness • Kaldor paradox • Market share (export) grows with growing ULC (opposite what you expect) • Technology competitiveness • Capacity competitiveness • Cost competitiveness • Demand competitiveness • country production (trade) structure and world demand Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  23. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... Overall Overall competitiveness, 1993-2001 (GDP per capita at current dollar prices andPPPs) Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  24. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... ... Technology and Capacity Composite indicators of technology and capacity competitiveness Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  25. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... Technology Overall and technology competitiveness, 1993-2001 (Average levels) Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  26. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... Technology Technology competitiveness, 1993-2001 Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  27. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... Capacity Overall and capacity competitiveness, 1993-2001 (Average levels) Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  28. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... Capacity Capacity competitiveness, 1993-2001 Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  29. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... ... Technologyand Capacity Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  30. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness ... ... Technology and Capacity Big differences. What should be improved? Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  31. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness... Price or Cost Easy to explain, but compare Norway and Ireland vs. CEEC in absolute terms. Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

  32. The Puzzles of Central and Eastern EuropeTransformation and Integration ECES, Prague Competitiveness... Demand Overall and demand competitiveness, 1993-2001 Source: UNECE. Economic Survey of Europe, 2004 No. 2. www.unece.org

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