2. Emerging Markets & Transition Economies Jens Hölscher Vice President European Association for Comparative Economic Studies University of Brighton

3. motivation

4. The bold story Continued strong growth

5. The bold story

6. Finance & Investment expanding fast

7. Financial turbulence? Implications for the region

8. structure introduction the scenario empirical findings Special theme: Happiness & Institutions SME developments country snapshots conclusion

9. The scenario (GDP growth 2007) Central East Europe and the Baltics (CEB) 6% South East Europe (SEE)7% Commonwealth of Independent States (CIS) 8%

10. Transition is... Privatision Liberalisation Stabilisation

11. Transition looks... J

12. empirical findings

13. 2007 Czech Republic130 Hungary134 Poland158 Romania113 Russia93 (1989=100)

14. Special theme: happiness

15. Life in transition survey

17. Most people perceive decline

18. Strong support for democracy

19. weaker support for market economy

20. People want governments to invest in health care and education

21. … partly because of corruption

22. Past, present, future

23. Labour markets and employment

24. What do people do?

25. SME developments

26. registering for business

27. Share of SME Czech Republic80.032.756.76,7421000.0 Estonia80.073.755.64,7951571.9 Georgia65.029.479.0736111.1 Hungary80.036.956.86,5811103.5 Kazakhstan65.0n.a. 1,688n.a. Romania*65.055.020.82,091155.5 Russian Federation70.045.139.32,400297.8

28. Czech Republic 2002 2003 34.6 33.7 13.3 13.2 10.9 11.0 20.5 21.5 20.7 Kazakhstan 2002 2003 36 36.3 21.5 21.3 9.8 9.3 21.1 20.6 11.6 12.5 Poland 2002 2003 36 n.a. 12.1 n.a. 10.5 n.a. 37.2 n.a. 4.1 n.a. Romania 2002 2003 50.2 n.a. 14.4 n.a. 5.0 n.a. 16.9 n.a. 8.6 n.a. Russian Fed. 2002 2003 47.9 n.a. 13.7 n.a. 12.8 n.a. 1.5 n.a. 17.5 n.a. Ukraine 2002 2003 40.2 38.2 16.1 15.9 8.5 8.8 15.6 17.2 19.6 19.9

29. Russia 2000200120022003200420052006 Estimate Output and expenditure GDP10.05.14.77.37.16.46.7 Private consumption7.39.58.57.512.112.711.2 Public consumption1.9-0.82.62.22.12.24.2 Gross fixed capital formation21.510.22.812.812.68.313.9 Exports of goods and services9.44.210.312.511.86.47.2 Imports of goods and services31.518.714.617.723.317.021.7 Industrial gross output11.94.93.77.07.34.03.9 Agricultural gross output7.77.51.55.53.01.51.7 Employment Labour force (end- year)0.4-2.01.20.81.50.70.0 Employment (end- year)3.1-0.32.40.12.01.20.2 Unemployment (end- year)10.28.78.88.68.37.67.2

30. Poland 20002001200220032004200520062007 Estimat eProjection Output and expenditure GDP4.31.21.43.95.33.66.16.5 Private consumption3.12.33.41.94.32.05.1na Public consumption2.12.71.44.93.15.23.9na Gross fixed capital formation3.9-9.7-7.2-0.16.46.516.5na Exports of goods and services23.23.14.814.214.08.014.5na Imports of goods and services15.5-5.32.79.315.24.715.8na Industrial gross output6.3-0.8-0.57.810.53.59.2na Agricultural gross output-4.16.61.02.76.86.7na Employment Labour force (end- year)1.8-0.6-1.1-3.40.21.0-4.4na Employment (end- year)-1.6-3.5-2.4-0.72.02.70.9na Unemployment (end- year) 1 16.418.920.019.618.216.912.3na

31. Romania 2000200120022003200420052006 Esti mateProjection Output and expenditure (Percentage change in real terms) GDP 1 2.15.75.15.28.44.16.5 Private consumption-0.86.95.38.514.19.8na Public consumption12.33.63.07.55.04.4na Gross fixed capital formation5.510.18.28.610.813.0na Exports of goods and services23.412.117.58.413.97.6na Imports of goods and services27.118.412.016.022.117.2na Industrial gross output, unadjusted series8.28.34.33.15.32.1na Agricultural gross output-14.822.7-3.55.218.9-13.9na Unemployment in per cent7.16.68.47.06.35.9na GDP per capita in US Dollar1,651,792,102,743,484,54na

32. Ukraine 2000200120022003200420052006 Estimate Output and expenditure GDP5.99.25.29.612.12.67.1 Private consumption2.39.09.511.513.116.614.4 Public consumption1.010.4-6.76.91.82.74.8 Gross fixed capital formation12.46.23.422.520.53.918.7 Exports of goods and services21.53.57.410.321.3-12.2-4.9 Imports of goods and services23.86.03.316.415.56.46.5 Industrial gross output13.214.27.015.812.53.16.2 Agricultural gross output9.810.21.2-9.919.10.41.0 Employment Labour force (end- year)0.3-0.10.50.30.00.4-0.5 Employment (end- year)-1.21.70.3-6.00.71.90.2 Unemployment (end-year) 1 4.23.73.83.63.53.12.7

33. Kazakhstan2000200120022003200420052006 Estimate Output and expenditure GDP9.813.59.89.39.69.710.6 Private consumption1.27.82.711.813.911.415.3 Public consumption15.019.2-7.58.910.611.818.0 Gross fixed capital formation16.125.310.08.022.511.924.0 Exports of goods and services28.7-1.816.67.510.91.45.3 Imports of goods and services26.10.33.1-7.614.813.313.8 Industrial gross output15.513.810.59.110.44.87.0 Agricultural gross output-4.217.33.41.61.06.77.0 Employment 1 Labour force (end- year)0.75.2-1.13.52.20.81.5 Employment (end- year)1.68.00.24.12.61.11.4 Unemployment (end- year)12.810.49.38.88.48.17.8

34. A new fear: overheating Shanghai stock exchange: a casino? Regulation put to the test

35. interpretation diversity progress stagnation recession EU membership €

36. conclusion Ordnungspolitik required does successful transition need democracy?