The precondition for growth of Serbian export to the EU market is restructuring of domestic production in accordance with the import demand of this market. However, increasing of export is not possible without bigger inflow of foreign capital in form of new equipment and modern technology. In implementing measures of economic policy, bigger attention has to be paid to financing production for export, to crediting and insuring export, as well as to export promotion. Role of small and medium size enterprises has to be stronger in domestic production. Connecting between them and distributive chains of parts and intermediate goods within TNC can contribute to growth of sustainable export of Serbia to EU as well as to process of connecting with this integration.
The precondition for growth of Serbian export to the EU market is restructuring of domestic production in accordance with the import demand of this market. However, increasing of export is not possible without bigger inflow of foreign capital in form of new equipment & modern technology. In implementing measures of economic policy, bigger attention has to be paid to financing production for export, to crediting & insuring export, as well as to export promotion. Role of small & medium size enterprises has to be stronger in domestic production. Connecting between them & distributive chains of parts & intermediate goods within TNC can contribute to growth of sustainable export of Serbia to EU as well as to process of connecting with this integration. Tables, Figures, References. Adapted from the source document.
The empirical literature on the growth impact of foreign direct investment (FDI) suggests a strong positive relationship between the two. Yet, the lack of evidence of a clear causality from FDI to growth impedes our ability to firmly conclude that FDI inflows are a driver and not just a consequence of higher economic growth. Just as a higher return on investment typically attracts more fixed investment, it should be no surprise that it also attracts more foreign investors. Having said that, we need to acknowledge that the difficulty of finding unambiguous evidence of causality from FDI to growth does not refute the notion that such a relationship nevertheless exists. As the growth literature suggests, many different factors combine to create an environment conducive to higher economic growth. Proper policies and institutions have been found to be particularly important over longer periods of time. In this context, we need to view FDI from a broader perspective than its direct and immediate impact on growth itself. Could it not be the case, for example, that foreign investors are more demanding than indigenous firms as regards a stable and favourable policy environment, good infrastructure and an appropriate human capital stock? If governments introduce policies and create institutions with the purpose of attracting FDI, they may create an environment more generally favourable to growth even though some of this growth is not the result of FDI per se. The evidence is stronger that FDI has been boosting growth directly in Central and Eastern European countries (CEE) than in the 15 countries of the European Union (EU-15). The reason, as we have argued, is that while these countries needed to bridge the technology gap to the more advanced countries, they nevertheless met some key conditions - especially in terms of human capital - which helped them bridge this gap more quickly with the help of FDI. In addition, the sheer magnitude of net FDI inflows helped sustain a higher level of domestic investment than would have been possible on the basis of domestic saving and debt-creating capital inflows alone. While FDI is expected to continue to contribute to economic growth in the CEE countries that have joined the EU, it is less clear whether the economic gains from FDI will be as high as during the transition from plan to market. The more the new EU members come to resemble EU-15 countries in terms of inward FDI stocks as a share of GDP, productivity, efficiency and level of technology, the less likely it is that FDI will have a positive influence on economic growth beyond what is observed in more advanced market economies. That said, FDI and the associated activities of transnational corporations will undoubtedly remain an important welfare-enhancing force - both inside and outside an enlarged European Union.
Developing countries have highlighted the importance of examine the interlink ages between trade, debt and finance in an effort to find sustainable solutions to these challenges within the context of the multilateral trading system. This paper analyzes what actions could be taken in the context of the WTO Doha negotiations to assist countries to benefit from deeper trade integration. It discusses the policy agenda that confronts many developing countries and identifies a number of focal points that could be used both as targets and as benchmarks to increase the likelihood that WTO negotiations will support development. To achieve these targets a number of negotiating modalities are proposed for both goods and services-related market access issues, as well as rule making in regulatory areas. Developing countries must approach WTO negotiations with a firm view of their national priorities, and seek to ensure that multilateral obligations will assist in and not detract from, the realization of development objectives. For the development community this implies priority should be given to strengthening the capacity to identify national priorities and to analyze the cost and benefits of proposed agreements in light of those priorities.
It is an important result of economic theory that integration might alter the allocation of resources within a country as well as between countries. Moreover, there are theory-based arguments suggesting that border regions might have an advantage in attracting resources due to their specific location in the center of the integration area. In this paper author have highlighted the continued empirical importance of national borders, even within the EU, which exhibits a much higher degree of economic integration than has been achieved at the global level. Perhaps even more surprising is that capital flows show distinctly similar patterns, a bias towards investment in the home market. In fact it would appear that these two phenomena are closely linked. Thus, whilst globalization has had profound effects on economic actors there is little to suggest that the traditional role for governments in OECD countries in providing social welfare and in regulating the domestic market economy are being undermined. If these borders to international commerce are impervious to further policy initiatives, or if their removal would reduce welfare by, for example undermining individual preferences, then the frictionless world foreseen by some where national administrations become largely impotent in affecting domestic economic outcomes is unlikely to occur. Thus, future discussions concerning global governance will take place between sovereign states that retain substantial discretion in economic policy making in an environment of considerable differences in economic and political power. The author have noted, however, that this situation is apparent for the industrialized countries. In developing countries the situation may be very different. The range of policies that is available in OECD countries is not accessible to many developing countries. In addition the social and business networks and the nature of consumer preferences, which have evolved over many years in OECD countries, and which are key elements in differentiating national from international markets, are not developed to the same extent or take forms which may be inconsistent with and undermined by the increasing use of the market mechanism.
This paper analyze economic growth during the transition from centrally planned to market economy in Central and Eastern European and former Soviet Union countries. It provides a descriptive analysis of regional growth performance vis-a-vis countries at similar levels of different factors that have been identified in the cross-country literature as being associated with economic growth. Several points of controversy emerged within the overall stately, particularly over so-called shock therapy, and over sequencing. Rapid policy action was possible in some areas of reform - price and trade liberalization, and inflation stabilization, and perhaps small scale privatization - but in others it was clear that reform would take a long time. The controversies over shock treatment related mainly to macroeconomic stabilization and the pace at which privatization could be attempted, and to a lesser extant, over the pace of trade liberalization for some reason there was less controversy over the pace of trade liberalization. On sequencing the argument was that some reforms were preconditions for others - for instance that privatization would fail unless the right legal framework or financial system or both were in place, or that price decontrol should non take place until macroeconomic stabilization could be assured. After a brief assessment of the extent to which economic growth has been associated with progress on different measures of well being, the paper concludes with a list suggested issues to be investigated in the context of specific country studies.
