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21. EU MONITOR: Has the time come for a Czech Regional Policy?

Author:
Vít Havelka
Publication Date:
01-2020
Content Type:
Special Report
Institution:
Europeum Institute for European Policy
Abstract:
Over the past 5 years, the Czech Republic has experienced unprecedented GDP growth, moving the country from 83% of EU average GDP in 2013 to 91% of the EU average GDP in 2019. At the same time, the Czech wage increased by more than 7% in 2013 in the last three years. This phenomenon is addressed by our Vít Havelka in the latest issue of the EU Monitor. The following decade will likely be determining for the future success of the Czech Republic. The global economy and its supply chains are undergoing a significant shift; Asian states are slowly becoming innovative leaders rather than being a cheap labour pool. Furthermore, the Czech Republic is heavily dependent on the automotive industry3, which is under pressure not only by stricter emission regulation, but also disruptive market change such as autonomous systems, digitalization and electrification. It is likely that old market strategies will prove obsolete as it happened in case of cell phones. Along with the changing global economy, the Czech Republic is nearing to a point where it will not be fully able to rely on the EU Cohesion Policy anymore. The country has reached the threshold of 90% EU ́s average GDP, and if the current economic development remains the same, the Czech Republic will not have access to Cohesion Funds after the coming MFF, and it will receive significantly less money from the EU budget. The problem is that regional disparities within the Czech Republic remain high, especially between the capital city Prague and the rest of the country. Simultaneously, since the EU accession in 2004, the Czech Republic relied mainly on the EU Cohesion Policy in terms of providing funding for regions, supplementing the EU ́s activity only with minor national contributions. As a result, the country does not have a well-developed culture of regional policy that would be nationally funded, and there is not even a discussion in the media about national solidarity with disadvantaged regions. The following paper aims at discussing a possible way forward for the Czech Republic, especially in the context of expected changes in global economy and simultaneous decrease of EU Funding that could help mitigate the impact of economic disruptions. The focus will be laid on possible If the whole automotive left the Czech Republic, Deloitte estimates that the Czech GDP would decrease by 25% and 1,4 million Czechs would lose their reaction to lower income from the EU, as it is presumed that a solid regional policy is crucial in maintaining internal cohesion and contributes to mitigation of economic turbulences.
Topic:
European Union, GDP, Global Political Economy, and Economic growth
Political Geography:
Europe and Czech Republic

22. Fostering Growth in Digital Trade

Author:
Don Stephenson
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
The shifting trends in trade, especially given the growth in communications capacity and reduced cost of computing have altered traditional economic development. India and Canada have a shared commercial interest in E-trade. Both countries need to align their resources to frame trade rules of the new digital economy, to mutual benefit.
Topic:
Communications, Economic growth, Trade, and Economic Development
Political Geography:
South Asia, Canada, India, and North America

23. Patterns of Official Development Assistance in Tajikistan: effects on growth and poverty reduction

Author:
Mubinzhon Abduvaliev and Ricardo Bustillo
Publication Date:
06-2020
Content Type:
Journal Article
Journal:
Revista Brasileira de Política Internacional (RBPI)
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
The aim of this paper is to assess the effect of official development assistance on economic growth and poverty reduction in Tajikistan, as well as to examine the recent role of South-South Cooperation. We used a panel data set on economic growth and poverty estimates in Tajikistan, and found that a 1% increase of official development assistance provoked a 1.6% rise in per capita GDP and a 0.48% decrease in poverty levels in Tajikistan. Despite the increased relevance of South-South Cooperation in Tajikistan, the current bilateral cooperation pattern does not allow us to think South–South aid will create employment and growth opportunities.
Topic:
Poverty, Economic growth, and Development Aid
Political Geography:
Central Asia and Tajikistan

24. The Economic Consequences of Globalisation in the United States

Author:
Peter Petri and Meenal Banga
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The unprecedented rise in global interdependence since World War II, especially since the 1970s, has been very productive. World gross domestic product (GDP) growth increased from around 2% per year in the 1970s to 4% per year before the global financial crisis. Globalisation helped to lift a billion people from extreme poverty and improved the lives of billions more. The United States also gained an estimated 11%–19% of its annual GDP. Yet many Americans are concerned about the fairness of these gains. We review evidence of increasing wage inequality and stubborn unemployment effects, even though, on balance, technological change has had a much greater impact on these outcomes than globalisation. Barriers against globalisation do not offer solutions to inequality – they reduce the size of the economic pie without necessarily improving its distribution. Policies should focus on redistributing gains from growth, increasing the productivity of all workers, and helping affected communities adapt socially and economically to rapid change.
Topic:
Globalization, Financial Crisis, Inequality, and Economic growth
Political Geography:
United States and North America

25. A Quantitative Analysis of Disaster Risk Reduction Investment Effects for Sustainable Development: Indonesia Case Study

Author:
Hiroaki Ishiwata, Hiroyuki Wada, Koji Suzuki, and Naoto Tada
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the long-term impacts of large-scale disasters on the economic growth of developing countries in the Association of Southeast Asian Nations (ASEAN) Community, by the scale of disaster risk reduction (DRR) investments. As a means of quantitatively analysing the optimal level and economic efficiency of DRR investments, a case study was conducted on Indonesia by using a dynamic stochastic macroeconomic model. The results showed that in Indonesia, although greater economic growth is expected when additional DRR investments are made, an excessive DRR investment may contrarily lead to a slowdown in economic growth: an optimal level of DRR investment exists and maintaining its level is essential for sustainable economic growth. Furthermore, it was confirmed that there is a break-even point when the amount of accumulated disaster damage mitigation benefits exceeds the amount of accumulated DRR investment. This demonstrated that the funds invested in DRR could be recovered. Additionally, the results also showed that even if no disaster damage is caused over a long period of time, DRR investments are by no means redundant as the ‘ex-ante risk reduction effect’ will be generated when the optimal level of DRR investment is made. Lastly, it was determined that providing a continuous DRR investment is important in achieving the global target set forth in the Sendai Framework for Disaster Risk Reduction. In addition, it is considered desirable to maintain a higher level of DRR investment than that which is currently being implemented.
Topic:
Economic growth, Investment, Risk, and Disaster Management
Political Geography:
Indonesia, Asia, and Indo-Pacific

26. The Economic Impact of Globalisation in Indonesia

Author:
Kiki Verico and Mari Pangestu
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Economic growth
Political Geography:
Indonesia, Asia, and Indo-Pacific

27. Measuring the Pro-Poorness of Urban and Rural Economic Growth in Indonesia, 2004–2014

Author:
Takahiro Akita and Sachiko Miyata
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study measures the pro-poorness of urban and rural economic growth by region from 2004 to 2014 in Indonesia using pro-poor growth indexes, with data from the National Socio-Economic Survey (Susenas). It also conducts a probit analysis to explore the determinants of poverty. All regions (Sumatra, Java–Bali, Kalimantan, Sulawesi, and East Indonesia) experienced a substantial increase in expenditure inequality in both urban and rural areas; thus, the change in poverty incidence due to redistribution effects is positive. Apart from East Indonesia, they reduced the incidence of poverty in both areas, but their growth was not pro-poor in the strict sense. According to the pro-poor growth indexes, urban areas performed better than rural areas; in most regions, the growth of urban areas was moderately pro-poor, while that of rural areas was weakly pro-poor or anti-poor. The government needs to take urban–rural and regional differences into account when formulating poverty alleviation policies and programs since these differences would affect economic growth and changes in inequality.
Topic:
Poverty, Inequality, Economic growth, Urban, and Rural
Political Geography:
Indonesia, Asia-Pacific, and Indo-Pacific

28. It’s Time for a New Deal

Author:
Constantine Michalopoulos
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The prospects of the Greek economy are mostly good with growth continuing for the fourth straight year. But there is a sense of disappointment, as the recovery has not been very strong and pre-crisis income levels will not be regained for another decade. There are two main reasons for the sluggish recovery: The European creditors have imposed on Greece the requirement to run a primary budget surplus of 3.5% of GDP for five years to ensure that they get repaid—a requirement that constricts growth of the Greek private sector—through heavy taxation of consumers and business. And domestic investment is sluggish, although there are plenty of unutilized resources, such as those provided by the European Structural Funds. There is a need for a new deal with the European Institutions: the Europeans should be more relaxed about getting repaid because of Greece’s much improved access to the European capital markets and be willing to accept a Greek government commitment to a significantly lower primary budget surplus for the next several years. In exchange the Greek government should commit to a commensurate increase in domestic investment through reforms of the banking sector as well as greater public sector investment spending.
Topic:
Government, Financial Crisis, Economy, Economic growth, and Public Spending
Political Geography:
Europe and Greece

29. The Future is Green, Digital and Social: Europe’s new growth model and its Recovery Plan

Author:
Christina Kattami
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The policy brief* outlines the agenda of the new Commission before the outbreak of the coronavirus pandemic, and aims to analyse the ways in which the crisis has reinforced and strengthened key points of that agenda. It further outlines the Commission’s Recovery Plan proposal, and examines its links to the aspiring green and digital transition. Finally, it showcases the legal base and timeline of the Recovery Plan proposal and highlights the main points of agreement and contention across the Member States, outlining the July deal of the European Council and the ensuing resolution of the European Parliament. It overall argues for the need of a holistic recovery, that takes into account the unprecedented policy window brought by public and private funding, and ensures that the eventual indebtedness of the next generation is at least compatible with the aspirations and goals of an economy and society of the future.
Topic:
Science and Technology, European Union, Economic growth, Institutions, Coronavirus, and Sustainability
Political Geography:
Europe

30. What role for health in the new Commission?

Author:
Simona Guagliardo
Publication Date:
02-2020
Content Type:
Policy Brief
Institution:
European Policy Centre
Abstract:
As the Juncker Presidency hands over its mandate baton to Ursula von der Leyen, all eyes are on the energised new President and her ambitions bestowed upon her cabinet. Despite some progress, more efforts to improve Europe’s health policy is still needed if it is to tackle unprecedented challenges like demographic changes, environmental degradation and the rapidly changing world of work. Newly-appointed Health Commissioner Stella Kyriakides has been entrusted with a considerable portfolio, indicating an arduous yet promising five years ahead of her. In this Policy Brief, policy analyst Simona Guagliardo argues that von der Leyen’s agenda for a “Union that strives for more” offers a unique opportunity to build a strong case for placing health and well-being at the centre of her policy triad: economic growth fuelled by technological innovation and environmental protection. The EU and its member states must recognise the centrality of people’s health and well-being vis-à-vis economic growth; ensure that health is a constant factor in all policymaking; and deliver on their promises of social fairness, equality and inclusion.
Topic:
Environment, Health, Science and Technology, European Union, and Economic growth
Political Geography:
Europe