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Panagiota Manoli , University of the Aegean (Greece) Shizuoka, 29 October 2012

Current Regional Dynamics in the Black Sea Area, With Some References to Economic Transactions and Labor Mobility. Panagiota Manoli , University of the Aegean (Greece) Shizuoka, 29 October 2012. The Wider Black Sea Region: A politically defined region. Who defines the BSR, When and How?

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Panagiota Manoli , University of the Aegean (Greece) Shizuoka, 29 October 2012

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  1. Current Regional Dynamics in the Black Sea Area, With Some References to Economic Transactions and Labor Mobility PanagiotaManoli, University of the Aegean (Greece) Shizuoka, 29 October 2012

  2. The Wider Black Sea Region: A politically defined region Who defines the BSR, When and How? • BSEC’s Comprehensive Approach • Littoral States’ Approach (Russia and Turkey) • EU’s Approach Core states EU Member States: Greece, Bulgaria and Romania EU Candidate Country: Turkey ENP countries: Armenia, Azerbaijan, Georgia, Moldova and Ukraine Russia: A Strategic Partner but not EU membership aspirations

  3. PolicyOptions • Bilateralism versus • Multilateralism (SectoralversusComprehensive)

  4. EU (high) Benevolent leading country (weak) BLACK SEA REGIONALISM Security dilemma (high) Economic difficulties (high) Transnational exchange & demand (weak) Explaining BSR

  5. BS Regionalism: Key Features • Evolving Process (Three Waves of BRSPhases: post-Cold War, enlargement, post-enlargement) • Strong Intergovernmentalism /weak institutions (BSEC, GUAM, BS Forum) • New EU driven initiatives (Synergy, EaP, Black Sea CBC…)

  6. The Black Sea as a Region: ‘Push’ and ‘Pull’ Factors • Low Regional Coherence • Divergence (political, security, economic, cultural) • Low Interdependences and interconnections • Weak Common Approach • Gravitational Pull • Regional Institutions • Common Vulnerabilities • European Integration Process

  7. Regional Trends: 2000-08 Before Economic Crisis • High growth despite diversity of economies- all countries experience positive growth 2002-08 • Over 2000-08 annual real GDP growth averages 5.9% • Living standards/ per capita income rise, poverty rates decline sharply • Private capital flows increase- esp. FDI over 4% GDP 2006-08 • Intra-Regional trade, investment, financing, also rise

  8. 2000-08: High growth; 2009: Negative; 2010: Recovery; 2011

  9. Short but Sharp Economic Crisis in Black Sea • Credit to businesses & consumers disappeared reducing liquidity & demand, slowing investment • International trade flows dropped, exports down, contraction in key W. European markets • Problems exacerbated by declines in (i) commodity prices, (ii) remittances • Reversal of fortune- poverty/ unemployment/ fiscal deficits up; current account deficits/ trade flows/ inflation down • Painful adjustment process only course for most

  10. BSEC Region Macroeconomic Summary for 2009

  11. BSEC Region Macroeconomic Summary for 2010

  12. Regional Economic Cooperation • Some progress, but levels still low • Much room for growth in trade, investment & financing • Many ‘Win – Win’ possibilities exist • Prospects not favorable • Lack of political commitment • Confusion & uncertainty of current policies • Economic difficulties • Intensifying bilateral rivalries • EU influence- (i) Diverts country focus westwards, (ii) Rules & restrictions hurt Black Sea cooperation prospects

  13. Regional Relations with EU- Why Important? • Most important external economic actor, directly & indirectly, high externality impact • Main market for trade, investment, finance • Key exporter of rules, regulations, standards • Steady expansion of engagement with Black Sea up to 2009, politically and economically. • Ambiguous impact on Regional Cooperation despite BSS & EaP. Mainly engages countries Bilaterally

  14. Regional Trade: Setback in 2009, Partial Recovery in 2010 (Source: BSTDB 2011)

  15. Features of Intra-Regional Flows • Regionalization is restrained • Low level of intra-regional trade • Dominant, though slowly declining, role of Russia (among Black Sea partners) • Strong Bilateral links between Russia-Turkey and Ukraine • Low dependence of Russia and Turkey on intra-regional trade • FDI: The outward FDI of Black Sea countries (but Russia) remains regional

  16. Three key determining factors continue to fuel international Labour Migration: • - the “pull” of changing demographics and labour market needs in high-income countries; • - the “push” of unemployment, crisis pressures and wage differentials in less developed countries; • - established inter-country networks based on family, culture and history.

  17. Labor Mobility - BS as transit, destination and origin for labor migrants • Two tracks: i) towards western Europe and ii) towards Russia • Largely informal nature of labour markets in BS countries (repercussions on how labour mobility takes place and on the rights and working conditions of migrants) • Brain drain - Trafficking for labour exploitation, including forced labour, is up in the agenda of policy-makers

  18. Changing Patterns of Labor Mobility Labor movement reflects: • political disruption (1990s) • cultural affinity • return to home country • shifts in patterns of economic development and the gradual enlargement of the European Union.

  19. Labor Migration and Regional Cooperation • Efforts to collaborate (BSEC, IMO, etc) • Free movement of goods and persons is lacking behind

  20. Thank you

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