UNIVERSITY OF NIŠ FACULTY OF ECONOMICS
THE GLOBAL ECONOMIC CRISIS AND THE FUTURE OF EUROPEAN INTEGRATION Editors: Zoran Aranđelović Srđan Marinković
Niš, October 18, 2013
THE GLOBAL ECONOMIC CRISIS AND THE FUTURE OF EUROPEAN INTEGRATION - Proceedings of the International Scientific Conference Niš, 2013
Published by: University of Niš, Faculty of Economics Trg kralja Aleksandra Ujedinitelja 11 18000 Niš, Serbia www.eknfak.ni.ac.rs Publisher: Zoran Aranđelović, PhD - Dean Editors: Zoran Aranđelović, PhD Srđan Marinković, PhD Reviewers:
Antić Ljilja, Aranđelović Zoran, Cvetanović Slobodan, Cvetković Predrag, Ćuzović Sreten, Denčić Mihajlov Ksenija, Džunić Marija, Đekić Snežana, Đorđević Biljana, Đorđević Dejan, Đorđević Marina, Đukić Suzana, Đukić Tadija, Đurović-Todorović Jadranka, Fabris Nikola, Golubović Nataša, Gradojević Nikola, Grubišić Zoran, Hafner Petar, Ivanović Đukić Maja, Jovanović Radmila, Jovanović Sonja, Krstić Borko, Krstić Jovan, Marinković Srđan, Marjanović Vladislav, Marković Ivan, Milenković Kerković Tamara, Milojević Radenko, Mladenović Igor, Novićević Blagoje, Petrović Dragan, Radenković Jocić Dragana, Radović Ognjen, Rakić Biljana, Sekulić Vesna, Spasić Dejan, Spasojević Milan, Stanković Ljiljana, Stefanović Suzana, Stefanović Zoran, Stevanović Tatjana, Stojković Nebojša, Todorović Miloš, Zubović Jovan
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ISBN: 978-86-6139-085-2 2013 University of Niš, Faculty of Economics All rights reserved. No part of this publication may be reproduced or stored in the system to search or transmitting in any form - electronic, mechanical, photocopying, recording or otherwise, without written permission. This proceedings were partly financed by Ministry of Education, Science and Technological Development of the Republic of Serbia
PREFACE At the time of launching this proceedings, we do hope that the international
conference “The Global Economic Crisis and the Future of European
Integration”, held in Niš on 18th October 2013, proved to be an useful occasion for better understanding the opportunities and threats posed by the process of
integration, also for identifying and evaluating the tools and measures that can facilitate the shift of the very paradigm toward the one more oriented to sustainable growth of the region within the EU.
After decades of long history of European integration, many issues
concerning economic and political integration still remain unclear and need to
be solved. Moreover, we discuss the issue of integration in the time of crisis,
when crisis changes its face. In the biology and medicine sciences there are
specific disciplines devoted to study of abnormal or undesired condition of
leaving organisms, or the physiological processes or mechanisms whereby such condition develops and progresses. We believe that even economic science deserves a branch devoted to malfunctioning of economic organisms. Maybe
the conferences are the first step in that direction. This conference offered an opportunity to gather, share experiences and discuss how to navigate through uncharted waters.
Somehow we are now on the crossroads. In many aspects we need to
decide which way to take; concerning further integrations: to speed up the process or to hold back; concerning public spending: to go on further with
stimulating the economy or to deleverage it with austerity measures; concerning leading economic paradigm: to fully apply or to abandon a set of neoliberal recipes. The right answer on these issues definitely will result in the improved outcomes for governments, industry and societies at large.
The conference was opened with welcome speeches of prof. Srđan
Marinković, Vice-Dean of the Faculty of Economics, prof. Zoran Aranđelović, Dean of the Faculty of Economics, prof. Vesna Lopičić, Vice Rector of the
University of Niš, and prof. Zbigniew Paszek, from Andrzej Frycz Modrzewski Kraków University.
It was our great pleasure and privilege to have Professor Željko Šević from
the UK to join us for this conference. Professor Šević is former Dean of Caledonian Business School, a part of prestigious Glasgow Caledonian
University. He opened academic program of the conference by giving a keynote lecture trying to answer Does Financial Reporting and Audit Quality Support
Economic Growth and Development? A Post-modernist Re-interpretation. We also have had eight distinguished speakers in the plenary session, which all addressed specific issues from the angle of their respective fields of expertise.
This conference brought together academics from 13 different countries.
The academic program contained 75 papers, with almost double figure of
authors. With that large number of participants, we believe that this conference will be an educational, memorable, and even “not to be missed” event.
The direct outcomes of this conference are this proceedings and a special
issue of the academic journal Economic Themes. The content of the proceedings
fully portrays diversity of research interests of contributors. Such variety of
thematic areas contributed to flourishing debate, interesting for wider audience.
Here, we would like to express our gratitude to all authors and guests. We
truly value authors’ support for this conference. Thank you all for the interest
you have shown, for coming here from near and far to take part in our
discussions. We also like to acknowledge financial support of Republic of Serbia Ministry of Education, Science and Technological Development.
Editors
Prof. dr Zoran Aranđelović, Dean
Prof. dr Srđan Marinković, Vice-Dean (Research)
TABLE OF CONTENTS SESSION 1
LABOUR MARKET, EMPLOYMENT AND HUMAN RESOURCES MANAGEMENT
Petar Atanasov, Bojana Naumovska EQUAL OPPORTUNITIES OF WOMEN: PROCESSES OF EMPLOYMENT AND PROMOTION ON HIGHER POSITIONS ................. 3-16 Mirjana Petković, Biljana Đorđević GLOBAL TALENT MANAGEMENT IN MULTINATIONAL COMPANIES AS THEIR RESPONSE TO GLOBAL COMPETITION ................................ 17-27 Aleksandar Šević IMPORTANT ISSUES IN POPULATION STUDIES ..................................... 29-40 Yuri Humeniuk LABOR MIGRATION IN THE SYSTEM OF TECTONIC SHIFTS OF WORLD ECONOMY: METHODOLOGICAL ASPECT .......................... 41-49 Biljana Predić, Suzana Stefanović, Danijela Stošić THE IMPACT OF CRISIS ON THE SMEs’ EMPLOYMENT – THE CASE OF THE REPUBLIC OF SERBIA............................................. 51-61 Anton Vorina, Bojan Sešel SATISFACTION WITH LIFE AND POLITICAL CULTURE - THE COMPARISON BETWEEN YOUNG PEOPLE FROM SLOVENIA AND CROATIA .............................................................. 63-71 Persefoni Polychronidou, Christos Batzios, Giannoula Glorou, Anastasios Karasavvoglou, Vasilios Aggelidis GREEK AND IMMIGRANTS INPATIENTS AT KAVALA'S PUBLIC HOSPITAL: A PRELIMINARY DESCRIPTIVE ANALYSIS FOR THE PERIOD 2005-2011 .......................... 73-80
SESSION 2
FINANCIAL INSTITUTIONS AND FINANCIAL MARKETS IN GLOBAL ENVIRONMENT
Borko Krstić, Mirjana Jemović, Jelena Radojičić SECURITIZATION OF LOANS AS A MECHANISM FOR THE FORMATION OF SPECULATIVE BUBBLES AND LAUNCHING FINANCIAL CRISIS OF GLOBAL PROPORTIONS .. 83-90 Pero Petrović, Aleksandar Živković ECONOMIC CRISIS AND THE CHANGES IN FUNCTIONING OF INTERNATIONAL FINANCIAL INSTITUTIONS .................................. 91-108
Sonja Arsić, Jelena Obradović THE FINANCIAL ASSISTANCE FROM THE IMF SUFFICIENT TO OVERCOME THE CRISIS: YES OR NO? ............................................... 109-121 Zorana Kostić MERGERS AND ACQUISITIONS DURING THE ECONOMIC-FINANCIAL CRISIS ........................................................ 123-132 Lazar Sedlarević, Nenad Tomić REFORMS OF THE BANKING SECTOR AS A PART OF EUROPEAN INTEGRATION PROCESS ................................................. 133-144
SESSION 3
GLOBAL ECONOMIC CRISIS: IMPACTS AND RESPONSES
Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović INTERNATIONAL COMPETITIVENESS AND EXPORTS OF SERBIA .... 147-156 Blagoj Gorgievski ECONOMIC GROWTH, RECESSION AND PUBLIC DEBT IN WESTERN BALKANS AND REPUBLIC OF MACEDONIA .................. 157-169 Marija Petrović-Ranđelović, Snežana Radukić FOREIGN DIRECT INVESTMENT IN THE FUNCTION OF ECONOMIC GROWTH AND ECONOMIC RECOVERY ....................... 171-178 Sladjana Sredojević, Predrag N. Cvetković HOW TO “PROCURE” THE BEST PRIVATE PARTNER: THE CASE OF COMPETITIVE DIALOGUE ................................................. 179-185 Chernichenko G., Orekhova T., Yemel’yanova N. THE MODELS OF PUBLIC-PRIVATE PARTNERSHIP IN EUROPEAN COUNTRIES ......................................................................... 187-193 Vera Đorđević, Snežana Đekić, Vesna Janković Milić, Sonja Jovanović EXPLORATION OF RELATIONSHIP BETWEEN COMPONENTS OF SUSTAINABLE DEVELOPMENT IN SOUTH-EASTERN EUROPE COUNTRIES ............................................. 195-204 Dragoslav Kitanović, Igor Mladenović THE THEORY OF CRISIS AFTER CRISIS ................................................... 205-211 Danijela Jaćimović, Mijat Joćović FDI AND ITS EFFECTS ON FOREIGN INVESTMENTS AND TRADE IN THE WESTERN BALKAN – FOCUS ON ECONOMIC AND LEGAL SYSTEM......................................... 213-222
Danka Milojković THE CLUSTER CONCEPT FOR SUSTAINABLE ECONOMIC DEVELOPMENT IN TRANSITIONING AND POST-CONFLICTS BALKAN COUNTRIES ....................................... 223-236 Marko Dimitrijević LEGAL ASPECTS OF TAX COMPETITION IN GLOBAL PUBLIC FINANCES .................................................................. 237-248 Eva Eraković, Ivana Ilić, Marija Milojić THE GLOBAL ECONOMIC CRISIS’ IMPACT ON THE HEALTH SECTOR IN SERBIA ...................................................... 249-261 Jovica Mojić, Vukašin Šušić NEW TENDENCIES OF DEVELOPMENT SERBIAN TOURISM IN TERMS OF GLOBALIZATION ................................................................. 263-272 Turalina A. G. THE ANALISYS OF THE DEPENDENCE OF TECHNOLOGICAL LEVEL OF COUNTRIES’ INTERNATIONALIZATION ON THE DEGREE OF THEIR INTEGRATION TO THE GLOBAL ECONOMIC AREA ........... 273-282 Svetla Boneva IMPACT ASSESSMENT OF DIRECTIVE 2010/12/EC OF THE COUNCIL ON THE STRUCTURE AND RATES OF EXCISE DUTY APPLIED ON MANIFACTURED TOBACCO .................... 283-293 Daliborka Conić NEW LEGISLATION ON PUBLIC PROCUREMENT IN SERBIA .............. 295-303
SESSION 4
BUSINESS ECONOMICS, ACCOUNTING, AUDITING AND RISK MANAGEMENT
Nada Barac, Marija Anđelković Pešić, Goran Milovanović, Aleksandra Anđelković SUPPLY CHAIN RESILIENCE: NEW SOURCE OF COMPETITIVE ADVANTAGE ..................................... 307-315 Iva Konda, Barbara Rodica, Jasmina Starc CREATING CONDITIONS FOR THE INNOVATION ACTIVITY OF SMALL AND MEDIUM-SIZED ENTERPRISES IN SLOVENIA........... 317-330 Maja Ivanović Đukić, Maja Lazić ENCOURAGING INNOVATION OF SMALL AND MEDIUM ENTERPRISES IN SERBIA TO SUPPORT THE OVERCOMING OF THE GLOBAL ECONOMIC CRISIS.................... 331-341
Slavoljub Milovanović INTRANET AS A COMMUNICATION AND COLLABORATION PLATFORM FOR SUPPORT TO ELECTRONIC BUSINESS....................... 343-352 Jelena Stanković, Vesna Janković-Milić, Gorica Bošković BUSINESS FRIENDLY ENVIRONMENT – THE KEY TASK OF THE LOCAL SELF-GOVERNMENT ...................................................................... 353-362 Irina Snimschikova, Ksenia Semenenko TRANSNATIONAL CORPORATIONS AT THE AGRICULTURAL MACHINERY MARKET IN INTEGRATION PROCESS CONTEXT ..................................................... 363-369 V.V. Makrusev, D.G. Zerkin, M.V. Boikova, L.N. Velikova CUSTOMS MANAGEMENT AS A THEORY OF CUSTOMS BUSINESS ADMINISTRATION IN RUSSIA ...................... 371-376 D.G. Zerkin, V.V. Makrusev, M.V. Boikova, E.B. Gayko THE CONCEPT OF ADAPTIVE SITUATIONAL MANAGEMENT OF THE CUSTOMS BUSINESS IN RUSSIA IN TERMS OF STRATEGIC CHANGE .......................................................... 377-381 Velina Savcheva OPERATIONAL PROGRAMME COMPETITIVENESS – OPPORTUNITIES AND CHALLENGES FOR THE BULGARIAN BUSINESS ........................ 383-392 Oriekhova T.V., Ostapenko A.I. ACCOUNTING AREAS SHAPING COMPETITIVE ABILITIES OF COMPANIES BY MEANS OF IAS APPLICATION ................................ 393-402 Hristina Oreshkova THE CRISIS WITH A MESSAGE FOR THE FUTURE OF FINANCIAL REPORTING - GLOBAL FINANCIAL REPORTING STANDARDS - REALITY OR UTOPIA ................................ 403-432 Evgeniy Stojanov PROBLEMS FROM BULGARIAN CONSULTING PRACTICE IN WORK WITH CONTROL MODELS ......................................................... 433-440 Daniela Feschiyan THE PROCESS OF HARMONIZATION OF PUBLIC SECTOR ACCOUNTING IN THE EU ............................................................................ 441-452 Mila Georgijevski, Tanja Spasić THE IMPORTANCE OF CONTEMPORARY INFORMATION TECHNOLOGIES FOR FINANCIAL REPORTING IN CONTEXT OF GLOBAL ECONOMIC CRISIS ........................................ 453-463 Ivana Bešlić, Dragana Bešlić THE IMPORTANCE OF MANAGING CASH FLOWS IN CONDITIONS OF GLOBAL ECONOMIC CRISIS .................................. 465-478
SESSION 5
EMU PERSPECTIVES, EU ACCESSION: CHALLENGES FOR EU CORE AND PERIPHERY COUNTRIES
Alexandr Melnikov, Natalia Chernyshova EUROPEAN AGRICULTURE: PROSPECTS FOR DEVELOPMENT AFTER THE GLOBAL RECESSION.............................................................. 481-488 Vladimir Mikić VOX POPULI MORE POPULAR THAN EVER: VOTERS’ CHALLENGES TO THE ENLARGEMENT PROCESS ............... 489-502 Christo Ivanov THE CRITERIA OF EUROPEAN UNION ECONOMIC POLICY IN THE MIRROR OF THE REAL GOAL OF EACH ECONOMY ................ 503-512 Marija Gjosheva Kovacevic APPROXIMATION OF MACEDONIAN AGRICULTURE AND RURAL DEVELOPMENT TO EUROPEAN COMMON AGRICULTURAL POLICY ......................................................... 513-528 Nikolay Donchev INTEGRATION OF THE BULGARIAN ECONOMY INTO THE EUROPEAN UNION – ACHIEVMENTS AND PROBLEMS ....................... 529-541 A. Shyshatskiy COMPETITIVE DEVELOPMENT OF EUROPEAN MACROREGIONS............................................................... 543-552 Georgi Biserov Nikolov E-GOVERNMENT DEVELOPMENT IN EUROPEAN COUNTRIES GOOD PRACTICES IN THE CONSTRUCTION OF E-GOVERNMENT .......... 553-564 Marina Malenović, Ivana Avramović, Valentina Nestorov EURO ZONE DEBT CRISIS AND FISCAL UNION AS A POTENTIAL SOLUTION ...................................................................... 565-575 Zenaida Šabotić, Semir Vehapi, Hilmija Redžić THE EUROPEAN UNION: GOOD IDEA-BAD REALIZATION? ................ 577-585
Faculty of Economics, University of Niš, 18 October 2013 International Scientific Conference
THE GLOBAL ECONOMIC CRISIS AND THE FUTURE OF EUROPEAN INTEGRATION
INTERNATIONAL COMPETITIVENESS AND EXPORTS OF SERBIA Predrag Bjelić ∗ Radmila Dragutinović Mitrović* Ivana Popović Petrović* Abstract: This paper aims to analyse the international competitiveness and its relations to exports of Serbia. Serbia has a low ranking in global competitiveness, even in the region of Western Balkans. But there are some indications that Serbia has a strategic competitive advantage in the region, among countries signatories of Central European Free Trade Agreement from 2006. Our analysis also takes into account the differences in sectoral competitiveness, and observes the period 2004-2012. We are set to explore which sectors can be the leaders in exports of Serbia. Keywords: International competitiveness, Exports, Global Competitiveness Index, Sectoral competitiveness, Serbia.
1. Introduction Following Porter`s answer to the question of what explains the competitiveness of a country and Krugman`s views concerning the competitiveness of nations as “dangerous obsession”, this paper aims to provide a clear picture of Serbian national competitiveness at the world market. The intention is to make a positioning of Serbia, evaluating its role at the world market and its role in external trade flows, especially with other Balkan countries. Trying to find possibilities for international competitiveness improvement in the case of Serbia, we will assess trade competitiveness dynamics, especially for sectors with comparative advantages.
2. International Competitiveness During last few decades the question of international competitiveness of a state was a central question of many scientific debates. This category is defined as the macro competitiveness - comparison of the one national economy’s competitiveness towards other ∗
University of Belgrade, Faculty of Economics, Serbia;
[email protected],
[email protected],
[email protected] UDC 339.564(497.11)
Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović countries. Starting from the idea that the competitive advantage of each state is determined by its enterprises competitive advantages, Porter published his book “The Competitive Advantage of Nations” in 1990. This is the example of deriving macroeconomic concept from the microeconomic concept. By that concept, Porter has found the answer to the question of what explains the competitiveness of a country. He believed that the competitiveness of each state has been determined by the competitiveness of its companies, meaning that they have been operating in an environment representing a given state. (Bjelić, 2011) As this concept of competitiveness of companies is a well known fact on one hand and the concept of the national competitiveness is not, on the other, this second concept met with the open criticism, embodied in the works of the Paul Krugman. This author has found the term of the competitiveness of nations as a “dangerous obsession”, explaining it as a fact that nations are not able to compete between themselves economically while companies can. (Krugman, 1994). Some other authors have eased his attitude concluding that there was a difference between the way nations compete between themselves and companies on the other hand, although in both cases, economical. (i.e. Dunn, 1994). This opinion certainly has influenced further work of Krugman, who has accepted the term of the national competitiveness. After many attempts to give a true and complete definition of the national competitiveness, experts of the UNCTAD have defined national competitiveness as the ability to achieve the export of the concrete country at the world market. Also, they emphasized the role of the foreign direct investments inflow for the national competitiveness increase, especially if the countries are underdeveloped. There was a widespread view also, that the best indicator for the national competitiveness level was a trade balance, but the example of the USA trade balance huge deficit was the opposite argument. Namely, the USA are one of the most competitive economies, although they record trade deficit. American scientist Bruce Scott with his colleague George Lodge have given the definition of the national competitiveness, which, by their opinion: „refers to a country’s ability to create, produce, distribute, and/or service products in international trade while earning rising returns on its resources” (Scott and Lodge, 1985). By their opinion, employment of national resources should lead to real incomes and living standard increase, based on real categories, rather than borrowing abroad (Bjelić, 2011). At the macroeconomic level, a competitive economy is the economy with the ability to achieve economic growth and additionally, to sustain its growth. Competitiveness of an economy could become obvious only if we study and compare it with other countries` competitiveness. This is possible only if we measure national competitiveness having a cross-country study. World Economic Forum (WEF) has developed competitiveness measurement index, using a Porter` theory. That index is a Global Competitiveness Index (GCI) and it includes more than 300 factors influencing competitiveness of nations. For developed countries mostly, Institute for Management Development (IMD) from Lausanne has used similar methodology, but the number of countries was more modest comparing with the GCI. Measurement of the competitiveness could be realized using some simpler methods of competitiveness called Revealed Comparative Advantage (RCA) Index, but limited at the sector` level, only. It was developed by Bela Balassa in 1965. This index shows the degree of export specialization of
148
International Competitiveness and Exports of Serbia the country. If the index is higher than 1, then we conclude that the country has a comparative advantage in the production and this product` export (Ballassa, 1965). National competitiveness is a category used to be defined by World Economic Forum during the last decade as the ability of the economy to generate significant economic growth in the long run. (Bjelić, 2011). But the most recent editions of the WEF defined "competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country" (WEF, 2013, p.4). The WEF analysis for the 2012-2013, using the GCI shows medium positioning for Western Balkan countries. Their ranking shown in the Global Competitiveness Report for 2012-2013 on world rank list of 144 economies is from 70th to 100th place (Figure 1). These countries have low competitiveness ranking, comparing to other European economies. In this region, Serbia has realized a decrease after 2008, with the ability to maintain it. The best position has been achieved by Slovenia which has been accompanied by Montenegro. Figure 1: Global WEF Competitiveness Ranks of Western Balkan economies and Slovenia
Country rank
Slovenia Croatia Albania Serbia
Montenegro Macedonia Bosnia and Herzegovina
140 120 100 80 60 40 20 0 2006
2007
2008
2009
2010
2011
2012
Source: Authors’ graphical representation of World Economic Forum data from The Global Competitiveness Report, several years. Immediately after the world economic crisis, in 2009 and in 2010, consequences of the crisis have been reflected on the loss of positions of the GCI of all Western Balkans economies. The only exception was Albania, with the improvement in its positioning until the last Report for 2012-2013, which has shown an decrease. The greatest loses of positions had Slovenia, Croatia and Serbia, while Macedonia and Bosnia and Herzegovina have realized some improvements. After the improving period from 2006-2010, Montenegro recorded decrease at the GCI ranking. After the Bosnia and Herzegovina improved its position, Serbia remained as the country with the lowest GCI in the region, according to the last Report` data. Despite Slovenia has lost its 30th position, many years ago, it looks that the period of further decrease has been stopped. International competitiveness (measured by GCI) is often investigated in the empirical literature, as well as its effects on bilateral trade. Kalirajan, K. and K. Singh 149
Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović (2008) analysed the international competitiveness (measured by growth competiveness index in the period up to 2005) as one of determinants of bilateral trade in case of China and India. They found that international competitiveness has significant positively effect on its exports growth in case of India, but not in case of China. Concerning the Western Balkan region, Dragutinović Mitrović R. and Bjelić P. (2013) have investigated the effects of global competitiveness index (GCI) on bilateral trade, based on panel data gravity model estimated for the period 2006-2011. The positive and significant GCI effect on the Western Balkan countries’ bilateral exports is found, but with its decreasing impact over time. Moreover, the authors’ results implicate that due to gradual introduction of symmetry in EU-Western Balkans trade regime, the low international competitiveness of WB even more decreases leading to its bilateral export effects weakens. Following these findings, an interesting issue in this paper is the analysis of Serbian exports and its global competitiveness, particularly on the sectoral level.
3. Exports and Global Competitiveness of Serbia Serbia is a small and underdeveloped economy. Foreign trade has a significant role in the overall economic development as one of its main determinants. Serbia suffers from constant trade deficit, which was decreased only in 2005 and 2009. For decades, Western Balkan countries are focused on the same partner countries. For Serbia, as for other West Balkan economies, the EU has a central role as the most important foreign trade partner. However, according to data of the Statistical Office of Serbia for 2009, the share of the EU in Serbian export in 2011 is decreasing, bearing in mind the fact that in 2009 its share was 53.6 % and that in 2011 it was only 48%. The share of CEFTA 2006 countries also is decreasing comparing its share in Serbian export in 2009 of 35.1% and only 27.2% in 2011. Only the role of the Russian Federation` market is increasing, bearing in mind its share of 4.2% in 2009 and its increase to 6.7% in 2011. (Statistical Office of Serbia, 2012). Traditionally, foreign trade with EFTA countries is at a low level, with the share of EFTA in Serbian export and import of only approximately 1%. Table 1: External trade of Serbia, 2009-2011 Teritory/Country European Union Germany Italy CEFTA 2006 Bosnia and Hercegov. Montenegro Croatia Macedonia Kosovo (UNMIK)* Albania** Moldavia***
150
Export 2009 mil. % USD 4,477.4 53.6 870.7 10.4 820.8 9.8 2,942.1 35.1 1,015.6 12.2
Import 2009 mil. % USD 916.9 56.8 1,964.5 12.2 1,549.8 9.6 1,311.0 8.1 448.2 2.8
Export 2011 mil. % USD 5,653 48.0 1,331 11.3 1,306 11.1 3,202 27.2 1,191 10.1
Import 2011 mil. % USD 10,453 52.6 2,150 10.8 1,771 8.9 1,609 8.1 670 3.4
836.2 278.8 429.1 308.2
10.0 3.3 5.1 3.7
179.3 427.4 230.9 5.1
1.1 2.7 1.4 0.0
891 468 525 0.3
7.6 4.0 4.4 0.0
131 488 320 2.3
0.7 2.5 1.6 0.0
69.8 4.4
0.8 0.0
5.9 14.2
0.0 0.0
126.6 9.6
1.1 0.1
22.9 66.3
0.1 0.3
International Competitiveness and Exports of Serbia Russian Federation China Ukraine USA EFTA Turkey TOTAL
349.4 8.9 180.3 67.8 92.0 45.1
4.2 0.1 2.2 0.8 1.0 0.5
1,969.9 1,135.4 256.8 356.3 263.0 293.8
12.3 7.1 1.6 2.2 1.6 1.8
792 15 211 79 92 183
6.7 0.1 1.8 0.7 0.8 1.5
2,654 1,488 384 288 247 405
13.4 7.5 1.9 1.4 1.2 2.0
8,344.3
100.0
16,055.6
100.00
11,779
100.0
19,862
100.00
Notice: Statistical Office of Serbia published only data for the most important countries in Serbian foreign trade. The data for the imports from Albania, for import and export from Moldavia and Kosovo (UNMIK) is obtained from Serbian Chamber of Commerce. Total for CEFTA 2006 is given for major member countries (without Albania, Moldova and Kosovo*). Source: Statistical Office of Serbia, (2012), Statistical Yearbook of the Republic of Serbia 2012, Belgrade. We can observe from the following graph that commodities dominate in Serbia export. Problem is that these are the products with low value added in their production so the content that the country exports is lower. In this group we can include primary commodities, labour-intensive and resource-based manufactories and manufactures with low skill and technology intensity, and we can see that they dominate the export of Serbia with a share far above 50%. In the period of crisis, after 2008, we can observe even that these products are augmenting it share in exports of Serbia. Figure 2: Serbia product structure of exports 2007-2012 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2007 2008 2010 2009 2011 Manufactures with high skill and technology intensity Manufactures with medium skill and technology intensity Manufactures with low skill and technology intensity Labour-intensive and resource-based manufactures Primary Commodities
2012
Source: Authors' graphical representation according to UNCTAD data. More specific concept of competitiveness connected to international trade is Trade competitiveness. Countries are trying to secure its strategic position on a global market true international trade. International Trade Center (ITC) has developed a research tool Trade Competitiveness Map where it analyses competitiveness of sectors and products of individual 151
Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović economies with a global comparison. It uses different methods but basic analysis point out the main export product groups. In the next table we have selected the main export product groups of West Balkan economies with net exports larger than 100 million USD. Net export is chosen indicator because countries tend to export and also import same products and product groups. We can observe that the number of products with such level of net exports vary, from 2 in Albania to 7 in Serbia. West Balkan economies do not have such a large number of "real" export products. And even if this product groups are significant in their total exports in 2010 from a global standpoint their export are not globally significant. Almost all export products from Western Balkans has a share in global export of that particular product less than 1% which makes this exports globally insignificant. Only product group that can be considered important are ships exported from Croatia or Serbia's export of cereals, 0.85% and 0.51%, respectively. But we have to notice that some product groups are relevant for several West Balkan countries. The co-ordination of this exports and joint sales on third markets could stabilize and improve this export flows.
Albania Bosnia and Herzegovina
Croatia
Macedonia
Serbia
64 Footwear, gaiters and the like, parts thereof 26 Ores, slag and ash 94 Furniture, lighting, signs, prefabricated buildings 76 Aluminium and articles thereof 44 Wood and articles of wood, wood charcoal 64 Footwear, gaiters and the like, parts thereof 99 Commodities not elsewhere specified 89 Ships, boats and other floating structures 44 Wood and articles of wood, wood charcoal 31 Fertilizers 25 Salt, sulphur, earth, stone, plaster, lime and cement 62 Articles of apparel, accessories, not knit or crochet 72 Iron and steel 26 Ores, slag and ash 38 Miscellaneous chemical products 61 Articles of apparel, accessories, knit or crochet 24 Tobacco and manufactured tobacco substitutes 72 Iron and steel 10 Cereals 08 Edible fruit, nuts, peel of citrus fruit, melons 74 Copper and articles thereof 17 Sugars and sugar confectionery 76 Aluminium and articles thereof 61 Articles of apparel, accessories, knit or crochet
Source: Authors calculations based on International Trade Center data. 152
15.6 6.9 9.3 8.3 5.7 5.7 2.6 12.2 4.2 2.1 1.6 16.1 23.2 6.2 7.1 4.2 3.9 10.6 4.1 3.5 5.0 2.0 4.7 2.6
product (%)
Product group (number in front the product group name represents the HS code)
Share in world export of a
Country
Share in country export (%)
Table 2: Export of product groups with net trade is above 100 millions USD, 2010
0.25 0.06 0.27 0.28 0.26 0.28 0.02 0.85 0.47 0.47 0.51 0.30 0.19 0.10 0.15 0.07 0.36 0.28 0.52 0.48 0.32 0.48 0.34 0.15
International Competitiveness and Exports of Serbia
4. Trade Competitiveness Dynamics – Case of Serbia Following results obtained for the the Western Balkan region (Dragutinović Mitrović R. and Bjelić P., 2013), our intention is to make further analysis of trade competitiveness in case of Serbia on the sectoral level. Changes in the dynamics of Serbia’s trade competitiveness seem to appear along with trade regime changes in the process of the EU integration. Competitiveness in the export sectors is captured by Revealed Comparative Advantage (RCA) index 1, as commonly used sectoral competitiveness indicator. In order to capture the dynamics in trade competitiveness over years, we calculated RCA index for each observed year in the period 2004-2012. The index is calculated with respect to the whole world market, but also to the Serbia’s main food trading partners: EU15, new EU members and CEFTA 2006 signatories. This should reflect competitiveness changes during different EU trade regimes. Figure 3 presents RCA dynamics for Serbian main export sectors (according to SITC classification). Figure 3: Revealed Comparative Advantage index (RCA) of most important Serbian export sectors Sector 5 - Chemicals and related products 1.800 1.600 1.400 1.200 1.000 0.800 0.600 0.400 0.200 0.000
EU-15
EU NEW
CEFTA2006
World
2004 2005 2006 2007 2008 2009 2010 2011 2012
Sector 0 - Food and live animals 4.000 3.500 3.000 2.500 2.000 1.500 1.000
EU-15
EU NEW
0.500
CEFTA2006
World
0.000 2004 2005 2006 2007 2008 2009 2010 2011 2012
1
This index is calculated following its original form (Balassa, B. (1965)).
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Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović Sector 6- Manufactured goods 3.000 2.500 2.000 1.500 1.000 0.500 0.000
EU-15
EU NEW
CEFTA2006
World
2004 2005 2006 2007 2008 2009 2010 2011 2012
Sector 8 -Miscellaneous manufactured articles 1.600 1.400 1.200 1.000 0.800 0.600 0.400 0.200
EU-15 CEFTA2006
EU NEW World
0.000 2004 2005 2006 2007 2008 2009 2010 2011 2012
Calculated indices indicate the overall decreasing dynamics in Serbian comparative advantage in the most of observed sectors. This is true not only for observed groups of countries but in relation to the world market, particularly in case of chemicals and related products. In this sector, starting from 2008 Serbia lost comparative advantage in relation to the EU-15 and to the world market, and from 2009 with respect to CEFTA 2006 (Figure 3). Regarding the sector of manufactured goods, the RCA index decrease is also registered, but this did not lead to the loss of comparative advantages (indices in all years are greater than 1). In case of food and live animals sector, the decrease of RCA up to 2008, did not cause the loss of comparative advantages - Serbia has comparative advantage in the whole observed period in relation to all observed groups, with the period of the RCA increase came after the global crisis. Finally, RCA index in the sector of miscellaneous manufactured articles stagnates related to most of observed groups of countries (the exception are new EU member states, and CEFTA members with slight RCA increase). Judging the Serbian exports dynamics, it appears that the decreasing overall dynamics of RCA index did not provoke tendency of food exports decrease, particularly in the sector of food and and live animals. Therefore, our future research will refer to deeper investigation of the trade competitiveness effects along with other important determinants 154
International Competitiveness and Exports of Serbia of Serbian exports in observed sectors. In that way, it would be possible to find out whether competitiveness factors or trade regimes variations predominate as determinants of Serbian export dynamics.
3. Conclusion The level of competitiveness has decisive role in further plans for increasing of Serbian share at the world market. Although Serbian role in world trade is negligible, it can`t be said if we observe Balkan countries intra-trade, especially trade realized due to CEFTA 2006 Agreement. Its role at the world market is determined by many factors, including the product structure of exports with the domination of products with low value added. Different data and indicators presented in this paper, provide a clear picture relating to the position of Western Balkan countries and Serbia on world competitiveness ranking. Their competitiveness ranking is at the low level especially comparing to EU countries. That low level is not worrying but the trend of continuous decline of trade competitiveness is. Serbia low competitiveness position has a negative effect on its export expansion. The proof is our previous finding that gradual introduction of symmetry in EU-Serbia trade regime decreases Serbia exports generally. In this paper we also discovered the deminishing of trade competitiveness on sectoral level. Our analysis has shown that sectors 0 and 6 SITC have comparative advantages, measured by RCA, but we registered decreasing trade competitiveness dynamics even in these sectors. The important question is the effect of further preference erosion both on aggregate and sectoral level exports of Serbia along with further integration into the EU. The only possibility is improvement of international competitiveness for Serbia. In our futher research in this area we will concentrate on a gravity model estimation on sectoral level, testing the effects of trade competitiveness on Serbian bilateral exports of most important trade sectors.
References 1. Balassa, B. (1965), Trade Liberalisation and Revealed Comparative Advantage, The Manchester School, 33(2): 99-123. 2. Bjelić, Predrag, (2011): Međunarodna trgovina. Beograd: CID Ekonomskog fakulteta 3. Dragutinović-Mitrović, Radmila and Predrag Bjelić, (2013): International Competitiveness and Asymmetry in Trade Regime in the EU Integration: Evidence from Western Balkans, Paper for the The Tenth International Conference: Challenges of Europe: The Quest for New Competitiveness, 1-11, Split, Faculty of Economics. 4. Dunn, M. H. (1994): Do Nations Compete Economicaly? Intereconomics, November/December 1994: 303−308. 5. Kalirajan, K. and K. Singh (2008): A Comparative Analysis of China’s and India’s Recent Export Performances, Asian Economic Papers 7(1), The Earth Institute at Columbia University and the Massachusetts Institute of Technology. 6. Krugman, Paul (1994): Competitiveness - A Dangerous Obsession, Foreign Affairs, 73(2): 28−44. 7. Scoot, B.R. and G.C. Lodge (1985): US Competitiveness in the World Economy, Boston: Harvard Business School Press. 8. World Economic Forum (2012): The Global Competitiveness Report 2012–2013, Davos 155
Predrag Bjelić, Radmila Dragutinović Mitrović, Ivana Popović Petrović
MEĐUNARODNA KONKURENTNOST I IZVOZ SRBIJE Rezime: Cilj ovog rada je da ukaže na uticaj međunarodne konkurentnosti Srbije na tokove njenog izvoza. Srbija ima nizak nivo globalne konkurentnosti, čak i u poređenju sa zemljama Zapadnog Balkana. Ali registrovana je poboljšana pozicija Srbije u izvozu u zemlje potpisnice CEFTA 2006 sporazuma. U radu smo se bavili i analizom konkurentnosti pojedinačnih sektora u izvozu Srbije, u period 2004-2012. godine. Ključne reči: međunarodna konkurentnost, izvoz Srbije, konkurentnost sektora privrede.
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