Bishev, Gligor and Boskov, Tatjana (2015) Export-led growth in SEE6 – Facts and recommandations: The case of Republic of Macedonia. Journal of the Institute of Economics - Economic Development, 17 (3). pp. 277-306. ISSN 1857-7741 (on line) UDK -338
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Abstract
Globalization brings the threat of a weakened SME sector, since
its role in (direct) exporting is less than proportional to its size, and in the
same time it can also increase the importance of a strong SME sector.
The recommendations are on building relationships with financial
institutions, especially with banks, to facilitate funding to SMEs. In this
context, it is useful to identify where SMEs are dealing in foreign
currency and seek opportunities to provide value-adding advice in areas
such as managing foreign exchange risks and forecasting currency needs.
The key factors for realization of these aims are innovation and
knowledge that would help for increasing competitiveness with support
of real exchange rate by stimulating the growth of export, too. This can
contribute for sustainability of the economic growth and economic
integration especially of small economies on which this paper is mainly
focused with special emphasis on Macedonia.
Because of the fact that Southeastern European countries rely
mainly on exchange rate anchors to reduce inflation, the appreciation of
the real exchange rate among countries in the region is significant,
although it is slightly lower when compared to countries in the EU
member states. As a result, the SMEs of these countries suffer from loss
of competitiveness. This can be clearly seen from the movements of the deficit on their current account, which are important in all these
countries. Using the exchange rate as anchor for inflationary
expectations, on long run have been effective so far, producing a low and
stable inflation rates. However, in periods of low inflation and
deflationary pressures, exchange rate anchors do not allow sufficient
space for fiscal and monetary stimulus. In this respect, policy makers are
under following dilemma: to deviate from exchange rate anchor and
increase the space for fiscal and monetary stimulus; to accelerate
structural reforms and competitiveness and on short run deepen the
recessionary pressures; and to increase foreign debt and thus increase
scope for fiscal and monetary stimulus while preserving the exchange
rate anchor.
Economic policies can be instrumental for growth in the near- and
the medium-term in SEE6. On the fiscal side, sustained reform effort is
needed to address structural rigidities in the budgets of SEE6. Priorities
include: changes in the composition of public expenditure toward
investment and away from wages, public expenditure targeting and
prioritization as well as improvements in revenue collection and the
broadening of the tax base, among others. On the monetary policy side,
with regional inflation at a very low 1.2 percent and big output gaps
remaining, some scope for short-term easing of monetary conditions
exist, especially in those countries where deficits have begun to decline.
Above facts and real situations are our challenges for making
analysis and contribution in this area.
| Item Type: | Article |
|---|---|
| Subjects: | Social Sciences > Economics and business |
| Divisions: | Faculty of Tourism and Business Logistics |
| Depositing User: | Tatjana Boskov |
| Date Deposited: | 26 Jan 2016 14:52 |
| Last Modified: | 26 Jan 2016 14:52 |
| URI: | https://eprints.ugd.edu.mk/id/eprint/15043 |
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