Target setting for the SEE 2020 strategy Bled, Slovenia July 3 rd

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 2

Transforming the SEE 2020 Vision SEE 2020 Vision adopted at the SEE Ministerial Conference: i.Integrated growth to deepen regional trade and investment linkages; ii.Smart growth – innovation and competition based on value-added rather than labour costs iii.Sustainable growth – private sector competitiveness, entrepreneurship, greener and energy-efficient development; iv.Inclusive growth – skills development, employment creation & labour market participation by all v.Governance for growth – improve capacity of public administrations to strengthen the rule of law and reduce corruption A set of headline targets to be adopted at the next Ministerial 3

The proposed process Nov 2011 Apr 2012 Jun 2012 Sep 2012 Nov 2012 Vision adopted First draft targets Targets discussed Second draft targets Written procedure & third draft SEE Min SEE IC Final draft targets Targets adopted SEE Min 4 Task Force Meeting 2 nd Task Force Meeting

i.Integrated growth a.Total value of trade in goods b.Total value of trade in goods as % of GDP c.Foreign direct investment net inflows d.Foreign direct investment as % of GDP e.Annual GDP growth f.Standards and technical regulations ii.Smart growth a.Business expenditure on R&D b.Gross expenditure on R&D c.Tertiary education attainment d.GDP per person employed e.High technology exports f.Internet users g.Software Piracy Rates h.Participation in lifelong learning iii. Sustainable growth a. CO2 emissions b. Renewable energy c. Energy efficiency d. Fossil fuel consumption e. Entrepreneurship f. Trade balance in goods as % of GDP iv.Inclusive growth a.Employment b.Female employment c.Gender ratio of income d.Poverty headcount / People at risk of poverty e.Early leavers from school f.Formal training g.Youth employment h.Gini co-efficient v. Governance for growth a.Unofficial payments are frequent b.Government debt as % of GDP c.Rule of law d.Regulatory quality An initial set of target indicators 5

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 6

Dimensions for Integrated Growth 7 a.Total value of trade in goods b.Total value of trade in goods as % of GDP c.Foreign direct investment net inflows d.Foreign direct investment as % of GDP e.Annual GDP growth f.Standards and technical regulations

Integrated Growth: Total value of trade in goods Main Indicator? 8 Source: OECD ICTS (International Trade by Commodity Statistics) Database

9 Integrated Growth: Regional trade openness in good Suggested indicator

Integrated Growth: Foreign direct investment 10 Source: World Bank

Integrated Growth: foreign direct investment 11 Source: World Bank Suggested indicator

GDP Growth (Annual) 12 Source: World Bank Suggested indicator

Integrated Growth: Standards and technical regulations 13 Source: SME Policy Index 2012, only includes Western Balkans Suggested indicator Full transposition of EU standards and laws No legislation or standards transposed.

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 14

a.Business expenditure on R&D b.Gross expenditure on R&D c.Tertiary education attainment d.GDP per person employed e.High technology exports f.Internet users g.Software Piracy Rates h.Participation in lifelong learning Dimensions for Smart Growth 15

Smart Growth: Business expenditure on R&D Main Indicator? 16 Source: UNESCO data for SEE, Eurostat data for the EU and Erawatch data for the Former Yugoslav Republic of Macedonia

Smart Growth: Gross expenditure on R&D 17 Source: UNESCO data for SEE, Eurostat data for the EU EU2020 target

Smart Growth: Tertiary education attainment 18 Source: Eurostat EU2020 target

Smart Growth: GDP per person employed 19 Source: World Bank ?

Smart Growth: High technology as % of manufactured exports 20 Source: World Bank

Smart Growth: Internet usage 21 Source: World Bank

Smart Growth: Estimated software piracy rates 22 Source: Eighth Annual Business Software Alliance Global Software Piracy Study

Smart Growth: Lifelong learning 23 Source: Eurostat Suggested indicator

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 24

a.CO2 emissions b.Renewable energy c.Energy efficiency d.Fossil fuel consumption e.Entrepreneurship f.Trade balance in goods as % of GDP Dimensions for Sustainable Growth 25

Sustainable Growth: CO2 emissions 26 Source: World Bank EU2020 target

Sustainable growth: Share of renewable energy 27 Source: Eurostat EU2020 target

Sustainable Growth: Energy efficiency 28 Source: World Bank EU2020 target

Sustainable Growth: Fossil fuel consumption 29 Source: World Bank

Sustainable Growth: Entrepreneurship Note: The EU average is based on data from France, Germany, Great Britain, Italy, Poland and Sweden only Main Indicator? 30 Source: EBRD Life in Transition Survey

Sustainable Growth: External balance on goods and services (% of GDP) 31 Source: World Bank

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 32

a.Employment b.Female employment c.Gender ratio of income d.Poverty headcount / People at risk of poverty e.Early leavers from school f.Formal training g.Youth employment h.Gini co-efficient Dimensions for Inclusive Growth 33

Inclusive Growth: Employment EU2020 target: an increase of employment in the category year olds 70.3% to 75% in 2020 Main Indicator? 34 Source: World Bank

Inclusive Growth: Female employment 35 Source: World Bank Suggested indicator

Inclusive Growth: Gender ratio of income Note: The data for EU-27 and SEE show exactly the same ratio: 61.9% 36

Inclusive Growth: Poverty headcount EU2020 foresees a reduction by 20 million, or 17% of the number of people at risk of poverty or social exclusion 37 Source: World Bank

Inclusive Growth: Early leavers from school 38 EU2020 target

Inclusive Growth: Formal Training 39 Source: World Bank

Inclusive Growth: Youth Employment 40 Source: World Bank Suggested indicator

Inclusive growth: Gini co-efficient 41 Source: World Bank Notes: The Gini Index plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. Suggested indicator

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth 42

a.Percentage of firms saying that unofficial payments are frequent b.Government debt as % of GDP c.Rule of law d.Regulatory quality Dimensions for Governance for Growth 43

Governance for Growth: Percentage of firms saying that unofficial payments are frequent Main Indicator? 44 Source: World Bank and the EBRD, Business Environment and Enterprise Performance Survey

Governance for Growth: Government debt as % of GDP 45 Source: World Bank, Vienna Institute for International Economic Studies, EBRD

Governance for Growth: Rule of law 46 Source: World Bank

Governance for Growth: Regulatory quality 47 Source: World Bank

Suggestions/ Discussion Indicators on: Vocational Education and Training Business demography data Net job creation rate Share of the informal economy More detailed indicators on poverty Global Competitiveness Index scores Corruption perception index scores 48 Comments Are these indicators available? Are there data for SEE economies? Do they capture something that is not yet captured by the existing indicators? Are they relevant for the SEE 2020 strategy? Do they capture a priority of the SEE 2020 strategy?

Milan Konopek RCI Project Manager / Policy Analyst OECD Investment Compact for South East Europe Private Sector Development Division Organisation for Economic Co-operation and Development (OECD) Thank you for your attention 49

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