REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART V:
Figure 1: FDI in selected countries 2000-2007 (cumulative in million US dollars)
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
Makedonija
Crna Gora
Slovenija
Srbija
Bugarska
Slovaka
Hrvatska
Rumunija
eška Rep.
Maarska
Poljska
0
2000 2001 2002 2003 2004 2005 2006 2007
316
Source: according to the WIIW data
South-Eastern European countries – present members of CEFTA – were much slower in
trade reform. Today it is widely accepted in those countries that having liberal investment
policy only, is not enough to attract sufficient quantity of FDIs. CEFTA membership is
precious for gearing up customs and other administrative regulations to be compatible
with WTO standards, as well as to create stable, transparent and favorable environment
for trade development within the region. The main task for Southern-European economies
is to intensify trade and create institutional conditions to attract FDIs, because presently
theirs’ common characteristic is low level of export concentration, which is consequence
of following facts (D. Milenkovic and I. Milenkovic, 2008, p. 71):
- they have no recognizable export products, nor comparative advantages in
traditional meaning,
- they developed in the past wide range of industrial products, without
specialization in industry, which resulted in low export concentration
coefficient,
- except Moldavia (that is not so incorporated into the region), all other CEFTA
2006 member countries have no predominant mutual trade, therefore index
of trade complementarities is 30-35. This indicator gives useful information
on intraregional trade possibilities, and in this very case shows that Eastern-
European economies have relatively less index values in comparison to the
former CEFTA members. In following years theirs’ production and export
supplies will adjust to the import demand of regional partners. Macedonia
and Bosnia and Herzegovina have export supplies less adjusted to the import
demand of neighboring economies due to high level of export to the EU.
By now was recognizing the fact that certain level of complementariness of
regional economies, especially of former Yugoslav republic economies, was
present, which could be useful as important impulse for further specialization
of those economies in the way of better mutual linkage and bigger foreign
trade level.
For CEFTA member economies it is important that expected economic growth rate in the
EU, as for the rest of the world, is negative, that causes decline of export demand for CEFTA
member countries products. This fact, together with high structural dependence of national
product from import, means that even more FDIs are needed to provide positive economic