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Financial Stability Report No1 20 December 2010 - Banka Qendrore ...

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Number 1<strong>Financial</strong> <strong>Stability</strong> <strong>Report</strong>Table 13. Trade matrix of the selected countires as a share to total, unlessotherwise indicatedMatrix of thecountriesKosovo Macedonia Albania Bulgaria Serbia MontenegroKosovoExports=4.6% of GDPImports=47.6% of GDPExp (KS→MKD)=9.6%Imp(KS→MKD)=15%Exp (KS→Al)=13.5%Imp(KS→Mac)=3.2%Exp (KS→Blg)=2%Imp(KS→Blg)=2%Exp (KS→SR)=1.6%Imp(KS→SR)=11.1%Exp (KS→MNG)=1.5%Imp(KS→MNG)=0.6%MacedoniaExp (MKD→KS)=7.5%Imp(MKD→KS)=0.2%Exports=37.1% of GDPImports=59.7% of GDPExp (MKD→AL)=2.9%Imp(MKD→AL)=0.5%Exp (MKD→BLG)=8.8%Imp(MKD→BLG)=4.8%Exp (MKD→SR)=18%Imp(MKD→SR)=7.8%Exp (MKD→MNG)=1%Imp(MKD→MNG)=0.03%AlbaniaExp (AL→KS)=6.7%Imp(AL→KS)=0.6%Exp (AL→MKD)=2.8%Imp(KS→MKD)=2.0%Exports=9.5% of GDPImports=35.8% of GDPExp (AL→Blg)=0.7%Imp(AL→Blg)=1.4%Exp (A L→SR)=3.0%Imp(KS→SR)=3.5%Exp (AL→MNG)=3.4%Imp(KS→MNG)=0.3%BulgariaExp (BLG→KS)=n/aImp(BLG→KS)=n/aExp (BLG→MKD)=2.1%Imp(BLG→MKD)=3.2%Exp (BLG→AL)=0.5%Imp(BLG→AL)=0.05%Exports=45.8% of GDPImports=59.2% of GDPExp (BLG→SR)=2.1%Imp(BLG→SR)=3.2%Exp (BLG→MNG)=2.1%Imp(BLG→MNG)=3.2%SerbiaExp (SR→KS)=3.5%Imp(SR→KS)=0.03%Exp (SR→MKD)=4.6%Imp(SR→MKD)=2.2%Exp (SR→AL)=1.4%Imp(SR→AL)=0.1%Exp (SR→BLG)=2.5%Imp(SR→BLG)=2.1%Exports=<strong>20</strong>.9% of GDPImports=40.2% of GDPExp (SR→MNG)=4.6%Imp(SR→MNG)=2.2%MontenegroExp (MNG→KS)=7.4%Imp(KS→KS)=0.1%Exp (MNG→MKD)=0.5%Imp(KS→MKD)=1.4%Exp (MNG→AL)=0.5%Imp(KS→AL)=1.4%Exp (MNG→BLG)=2.8%Imp(KS→BLG)=0.0%Exp(MNG→BLG)=24.9%Imp(KS→BLG)=41.2%Exports=17.3% of GDPImports=67.6% of GDPSource: Created by the author based on the IMF World Economic Outlook Database (April <strong>20</strong>10), World Bank Data,Central Banks of Respective Countries.However, it is the lack of institutional development in the region that one may blame formissing stronger economic growth revival. Although one could claim that the SEE countrieshave been successful in establishing macroeconomic stability and proceeded prudently withmicroeconomic liberalization processes and privatization of state owned sectors of theireconomies, it is important to acknowledge that the SEE countries have not been successfulin development of the institutional market economy framework which is needed to supportfurther economic growth. By institutional market economy framework one understands theestablishment of property rights, protection of the Rule of Law, and especially the capacityto enforce the existing contracts in the economy.Table 12 presents the ranking of the SEE countries according to the World Bank DoingBusiness <strong>20</strong>10 study which provide tentative answers to the question why the SEEcountries lack the power to grow faster.Namely, private investors in the region are not protected by the institutional settings inthese countries which prevent them from increasing their exposure to the region. This iseven more important at the times when world financial markets are more cautious insupporting new investments in relatively riskier environments.72 |

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