1. TAMÁS NOVÁK International Economics VI. Development and competitiveness indicators

2. Readings Human Development Report 2009. http://hdr.undp.org/en/media/HDR_2009_EN_Overvie w.pdf http://hdr.undp.org/en/media/HDR_2009_EN_Indicato rs.pdf Poverty Facts and Stats http://www.globalissues.org/article/26/poverty-facts- and-stats

3. The World economy according to development level Before 1989 Today Developed market economiesDeveloped market economies („first world”) Socialist economiesCountries in transition („second world”) NICs Developing countriesOil exporting countries („third world”)Middle income countries Low income countries LDCs

4. Successful path of industrialisation – via export of manufactured goods HPAE (High Performing Asian Economies) or NIC (Newly Industrialised Countries: 1. Hong-Kong, Taiwan, Singapour, South Korea Export oriented industrialisation: the East Asian miracle

5. 2. Malaysia, Indonesia, Thailand, Philippines 3. China, Vietnam High growth rates, open to international trade Other factors: – high saving rates – rapid improvement in education Export oriented industrialisation: the East Asian miracle

6. Measuring economic development and backwardness I. – Static and dynamic indicators; – Economic performance; – Structure; – External trade; – Infrastructure; – Society, demography, health care; – Competitiveness.

7. Measuring economic development and backwardness II. „Human development index” (UNCTAD): composition of three basic indicators – GNI (PPP); – Life expectancy at birth; – Adult literacy rate, combined gross enrolment ratio.

8. HDI valueLife expectancy at birth (years) Adult literacy rate (% ages 15 and above) Combined gross enrolment ratio (%) GDP per capita (PPP US$) 1. Norway (0.971)1. Japan (82.7)1. Georgia (100.0) 1. Australia (100.2) 1. Liechtenstein (85,382) 41. Poland (0.880)65. Saint Lucia (73.6) 19. Albania (99.0) 28. Bahrain (90.4) 44. Bahamas (20,253) 42. Slovakia (0.880)66. Occupied Palestinian Territories (73.3) 20. Antigua and Barbuda (99.0) 29. Belarus (90.4) 45. Slovakia (20,076) 43. Hungary (0.879)67. Hungary (73.3) 21. Hungary (98.9) 30. Hungary (90.2) 46. Hungary (18,755) 44. Chile (0.878)68. Bahamas (73.2) 22. Italy (98.9)31. Latvia (90.2) 47. Antigua and Barbuda (18,691) 45. Croatia (0.871)69. Bulgaria (73.1) 23. Croatia (98.7) 32. Ukraine (90.0) 48. Barbados (17,956) 182. Niger (0.340)176. Afghanistan (43.6) 151. Mali (26.2) 177. Djibouti (25.5) 181. Congo (Democratic Republic of the) (298)

9. Income disparities in the world economy, TOP15 countries (HDI Report 2009) Rank Country Intl. $ 1 Qatar 87,717 2 Luxembourg 78,723 3 Norway 53,269 4 Brunei 50,103 5 Singapore 49,433 6 United States 46,443 7 Switzerland 42,948 8 Ireland 39,441 9 Netherlands 39,278 10 Austria 38,896 11 Kuwait 38,876 12 Canada 38,290 13 United Arab Emirates 38,284 14 Australia 37,302 15 Iceland 37,243

10. Rank Country Intl. $ 40 Slovakia 21,374 44 Hungary 18,548 46 Estonia 18,051 47 Poland 17,989 48 Croatia 17,876 50 Lithuania 15,803 51 Russia 15,039 54 Latvia 14,304 67 Bulgaria 11,760 68 Romania 11,755 176 Niger 736 177 Guinea-Bissau 489 178 Burundi 401 179 Liberia 379 180 Congo, Democratic Republic of the 334 Income disparities in the world economy, some CEE countries and the last 5 (HDI Report 2009)

11. Indicators of inequality

12. Lorenz curve – Percentage of households is plotted on the x-axis, the percentage of income on the y-axis. – Every point on the Lorenz curve represents a statement like "the bottom 20% of all households have 10% of the total income." – Perfectly equal income distribution would be one in which every person has the same income. In this case, the bottom "N"% of society would always have "N"% of the income. This can be depicted by the straight line "y" = "x"; called the "line of perfect equality. – By contrast, a perfectly unequal distribution would be one in which one person has all the income and everyone else has none. In that case, the curve would be at "y" = 0 for all "x" < 100%, and "y" = 100% when "x" = 100%. This curve is called the "line of perfect inequality

13. Indicators of inequality Gini coefficient: – It is the area between the line of perfect equality and the observed Lorenz curve, as a percentage of the area between the line of perfect equality and the line of perfect inequality. – The higher the coefficient, the more unequal the distribution is.

14. Explanations of poverty – Demography; – Dual economic structure; – Problems with agriculture, worsening terms of trade; – Mistakes in economic policy.

15. Dual economy The division of a single economy into two sectors that appear to be at a very different levels of development (e.g. a modern, capital-intensive, high wage industrial sector and a very poor traditional agricultural sector) is referred to as economic dualism.

16. Some facts on differences of development – 80-85% of world population live in less developed countries and gets less than 20% of total income; – Ratio between average incomes in most developed and least developed countries has increased in the last 200 years: 1820 – 3:1; 1913 – 11:1; 1950 – 35:1; 1970 – 44:1; 2002 – 82:1; – 1,3 billion people live on less than 1 dollar per day.

17. Some facts on differences of development – More than 800 million people are threatened continuously by hunger; – 35% world population (above 18) is illiterate; – Migration due to wars and political abuses; – Cumulative process of indebtedness.

18. 1997200020042005200620072008 EU27100.0 Belgium125.6126.1121.2119.8117.8115.7115.1 Denmark133.1131.6125.6123.7124.2121.3120.1 Germany124.3118.5116.3116.9116.1115.8115.6 Ireland114.6130.9142.1144.1145.5148.1135.4 France114.6115.4110.0110.6108.8108.5108.0 Italy119.0116.9106.6104.9104.2103.4102.0 NL127.0134.3129.2130.8131.2132.2134.0 Austria131.3131.4126.8124.5124.6123.0123.5 UK118.2119.0123.7121.9120.3116.7116.2 Norway147.4165.0164.4176.3183.7179.2191.2 CH150.6144.9135.5133.3136.1140.8140.7 US160.9 157.3159.0158.1155.6154.6 Japan127.9116.9113.0112.9112.7112.2: GDP per capita at PPP

19. Gross domestic expenditure on R&D in the EU (Percentage of GDP) 2000200720002007 Austria1.942.56Bulgaria0.520,48 Belgium1.971.87Cyprus0.240,45 Denmark2.242.55Czech Rep.1.211,54 UK1.811.79Estonia0.611,14 Finland3.353.47Poland0.640,57 France2.152.08Latvia0.440,59 Greece0.600.57Lithuania0.590,82 NL1.821.70Hungary0.780,97 Ireland1.121.31Malta0.260,59 Luxembourg1.651.62Romania0.370,53 Germany2.452.54Slovakia0.650,46 Italy1.051.13Slovenia1.391,45 Portugal0.761.18EU-271.851,85 Spain0.911.27 Sweden3.613.60 Source: Eurostat

20. Employment rate (age group: 15-64, 2000 és 2007 (%) 2000200720002007 Austria68.571.4Bulgaria50.461.7 Belgium60.562.0Cyprus65.771.0 Denmark76.377.1Czech Rep.65.066.1 UK71.271.5Estonia60.469.4 Finland67.270.3Poland55.057.0 France62.164.3Latvia57.568.3 Greece56.561.4Lithuania59.164.9 NL72.976.0Hungary56.357.3 Ireland65.269.1Malta54.254.6 Luxembourg62.764.2Romania63.058.8 Germany65.669.4Slovakia56.860.7 Italy53.158.7Slovenia62.867.8 Portugal68.467.8EU-2762.265.4 Spain56.365.6 Sweden73.074.2 Source: Eurostat

21. Definitions of competitiveness (WEF) Country-level / macroeconomic competitiveness World economic Forum (WEF): – Institutions, policies and factors influencing productivity and growth potential of a given country.

22. – Basic requirements: 1. Institutions; 2. Infrastructure; 3. Macroeconomic stability; 4. Health and primary education. Key for factor-driven economies Pillars of competitiveness (WEF)

23. – Efficiency enhancers: 5. Higher education and training; 6. Goods market efficiency; 7. Labour market efficiency; 8. Financial market sophistication; 9. Technological readiness; 10. Market size. Key for efficiency-driven economies Pillars of competitiveness (WEF)

24. – Innovation and sophistication factors: 11. Business sophistication; 12. Innovation. Key for innovation-driven economies. Pillars of competitiveness (WEF)

25. Global competitiveness rankings WEF: Global Competitiveness Report 2009- 2010 133 countries 110 „hard” (statistical) and „soft” (based on questionnaire) data Global Competitiveness Index, GCI

26. WEF competitiveness ranking, 2009-2010 GCI According to pillars Basic requirements Efficiency enhancers Innovation factors 1.Switzerland3. 2. USA28.1. 3. Singapore2. 10. 4. Sweden5.7.4. 5. Denmark4.6.7. … 129. Mozambique129.124.113. 130. Mali128.127.102. 131. Chad131. 126. 132. Zimbabwe132.130.124. 133. Burundi133. 119.

27. WEF competitiveness ranking, 2009-2010 GCI According to pillars Basic requirements Efficiency enhancers Innovation factors 31. Czech Rep.45.24.26. 35. Estonia34.27.42. 37. Slovenia29.37.30. 46. Poland71.31.46. 47. Slovakia54.34.57. 53. Lithuania47. 53. 58. Hungary58.45.61. 64. Romania86.49.75. 68. Latvia60.51.86. 76. Bulgaria80.62.89.

28. International Institute for Management Development: The IMD World Competitiveness Yearbook (WCY) is the world’s most renowned and comprehensive annual report on the competitiveness of nations, ranking and analyzing how a nation’s environment creates and sustains the competitiveness of enterprises. Definitions of competitiveness (IMD)

29. – Economic performance: 1. Domestic economy; 2. International trade; 3. International investment; 4. Employment; 5. Prices. – Government efficiency: 6. Public finance; 7. Fiscal policy; 8. Institutional framework; 9. Business legislation; 10. Societal framework. Group of competitiveness factors (IMD)

30. – Business efficiency: 11. Productivity; 12. Labour market; 13. Finance; 14. Management practices; 15. Attitudes and values. – Infrastructure: 16. Basic infrastructure; 17. T echnological infrastructure; 18. Scientific infrastructure; 19. Health and environment; 20. Education. Group of competitiveness factors (IMD)

31. Krugman : International competitiveness today can not be understand at country level, but rather between enterprises. Competitiveness = productivity Critics

32. 57 countries 329 „hard” and „soft” data Value: 0-100 World Competitiveness Score, WCS IMD: World Competitiveness Yearbook 2009

33. IMD competitiveness ranking, 2009 WCS 1. USA100,00038. Bulgaria58,985 2. Hong Kong98,14644. Poland53,930 3. Singapore95,74045. Hungary53,917 4. Switzerland94,163… 5. Denmark91,74153. Croatia48,587 …54. Romania46,945 29. Czech Rep.66,75555. Argentina43,084 31. Lithuania64,88256. Ukraine40,421 32. Slovenia64,63757. Venezuela39,060 33. Slovakia63,913 35. Estonia62,573

34. Dynamic indicator. Per capita GDP at PPP, 2000 and 2008 (EU-27 average = 100.0) 20002008 Bulgaria (BG)27.840.2 Czech Rep. (CZ)68.580.1 Estonia (EE)45.068.2 Poland (PL)48.257.6 Latvia (LV)36.755.8 Lithuania (LT)39.361.1 Hungary (HU)55.362.8 Romania (RO)26.145.8 Slovakia (SK)50.171.9 Slovenia (SI)79.890.7 Source: Eurostat Change +12.4 +11.6 +23.2 +9.4 +19.1 +21.8 +7.5 +19.7 +21.8 +10.9

35. FDI-import stock, 2000 and 2008 (USD million) Source: UNCTAD