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8852. Industrial Policy for a New Growth Model: A Toolbox for EU-CEE Countries
- Author:
- Alexandra Bykova, Rumen Dobrinsky, Richard Grieveson, Maciej J. Grodzicki, and Doris Hanzl-Weiss
- Publication Date:
- 07-2023
- Content Type:
- Special Report
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- The EU member states of Central Eastern Europe (EU-CEE) have experienced rapid convergence in the decades following their EU accession, and have built up strong export-oriented manufacturing sectors boosted by foreign direct investment inflows. While this growth model has brought many positives, there are indications that it is hitting its limits. Endogenous limits to EU-CEE’s growth model are exacerbated by exogenous challenges of the ‘twin’ (green and digital) transitions, and the fallout of the pandemic and Russian invasion of Ukraine. This reinforces the imperative for EU-CEE to transition to a more innovation-driven, new growth model, enabled by a comprehensive industrial policy. However, the EU-CEE countries have not only lacked a stable and strategic approach to industrial policy in their development paths, but also find themselves in a unique position due to EU membership. As a result, innovation and industrial policies are underdeveloped in the region. Based on an in-depth analysis of the industrial landscape and the industrial policy environment of the region, we propose eight pillars for creating a EU-CEE version of the entrepreneurial state.
- Topic:
- Climate Change, Industrial Policy, European Union, Economic Growth, and Green Transition
- Political Geography:
- Poland, Lithuania, Estonia, Bulgaria, Romania, Hungary, Croatia, Latvia, Slovenia, Slovakia, and Czechia
8853. Trade Balances and International Competitiveness in Cyber-physical, Digital Task-intensive, ICT Capital-intensive and Traditional Industries
- Author:
- Alexandra Bykova and Roman Stöllinger
- Publication Date:
- 05-2023
- Content Type:
- Special Report
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- In this report, we analyse the international competitiveness of the EU in four industry groups over the period 1995-2018. The groups are delineated by specific factor intensities, where these intensities are assessed from digital tasks performed by labour services and ICT capital stocks. The EU’s positions relating to trade balances, revealed comparative advantages and unit value ratios are assessed relative to its main competitors, such as the US, China, Japan and South Korea. The trade specialisation patterns confirm EU advantages in traditional industries, which still represent the largest part of global trade, and in the group of digital task-intensive industries. In the cyber-physical group of industries, which are characterised by both high digital task and ICT capital intensities, the EU records a trade deficit, although this has been receding in recent years. Competitiveness indicators depict heterogeneity among EU countries. The loss of international competitiveness for some technology front-runners is a worrying sign. On the positive side, however, a reduction in trade deficits or an improvement in product quality and market shares is evident for certain EU countries, especially in the Central European region.
- Topic:
- International Trade and Finance, European Union, Trade, Digitalization, and International Competition
- Political Geography:
- Japan, China, Europe, Asia, South Korea, and United States of America
8854. The Future of EU Cohesion - Effects of the Twin Transition on Disparities across European Regions
- Author:
- Ambre Maucorps, Roman Römisch, Thomas Schwab, and Nina Vujanović
- Publication Date:
- 05-2023
- Content Type:
- Special Report
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? And what impact will it have on regional cohesion in Europe? Our study finds that greening and digitalising the economy will likely widen the gap between rich and poor regions in Europe.
- Topic:
- European Union, Economy, Regional Integration, Digitalization, Green Transition, and Regional Development
- Political Geography:
- Europe
8855. CEFTA: Trade and Growth Patterns Fifteen Years since Establishment
- Author:
- Nina Vujanović
- Publication Date:
- 04-2023
- Content Type:
- Special Report
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This research report investigates the trade and growth benefits of the CEFTA agreement for its members. Although the countries have not reached their end goal of membership of the European Union, the report shows that CEFTA has supported their economic growth. However, there is trade heterogeneity in terms of the extent to which individual countries use CEFTA value added in their manufacturing exports. Less-developed economies seem to rely more on regional (CEFTA) supply chains, while manufacturing-based economies are increasingly coming to rely on EU supply chains. The countries have not built a strong export advantage abroad, as very little of their value added is used in EU exports.
- Topic:
- European Union, Economic Growth, Trade, Supply Chains, and CEFTA
- Political Geography:
- Moldova, Eastern Europe, Kosovo, Serbia, Balkans, Albania, Montenegro, Bosnia and Herzegovina, and North Macedonia
8856. Ending Counterproductive U.S. Involvement in Yemen
- Author:
- Annelle Sheline
- Publication Date:
- 02-2023
- Content Type:
- Policy Brief
- Institution:
- Quincy Institute for Responsible Statecraft
- Abstract:
- • The Saudi-led coalition and the Houthis maintain a de facto truce; however, should the Saudis choose to begin dropping bombs again, they would do so with the assistance of the United States. • Washington should use the current lull in fighting to withdraw support for military actions by the Saudi-led coalition in Yemen. • If the Biden administration fails to withdraw, Congress should pass a War Powers Resolution ending U.S. involvement in the conflict. In the absence of a War Powers Resolution, Saudi Arabia or the UAE could drag the United States into deeper involvement in the war. • The Biden administration justifies its opposition to a War Powers Resolution on the basis of its support for negotiations. However, evidence indicates that the longevity of the de facto truce reflects a mutually painful stalemate rather than American diplomacy. • To protect current and future negotiations, the Biden administration should address the threat import restrictions pose to diplomacy. Congress should request information as to why, after the United States arranged to rehabilitate Hodeidah port, almost no containerized goods, including medical equipment and supplies, have been permitted through the port. • Foreign intervention in the war has failed to undermine the Houthis militarily and instead has strengthened their legitimating narrative.
- Topic:
- Foreign Policy, Diplomacy, War, Military Intervention, and Houthis
- Political Geography:
- Middle East, Yemen, Saudi Arabia, and United States of America
8857. The Ukraine War & European Security: How Durable Is America’s Strategy?
- Author:
- Zachary Paikin
- Publication Date:
- 04-2023
- Content Type:
- Policy Brief
- Institution:
- Quincy Institute for Responsible Statecraft
- Abstract:
- More than a year after Russia’s invasion of Ukraine, the morale of the United States and its Western allies appears high.1 Spurred into action by Moscow’s act of aggression, NATO appears more united, the EU has seemingly become more of a geopolitical actor, and Ukraine has resisted and repulsed the Russian onslaught to a degree that few initially thought possible. The Biden administration has thus far laudably managed to ramp up assistance to Kyiv without directly confronting Moscow. However, while the current U.S. policy toward Russia and Ukraine may be sustainable for some time, that does not mean it will never run out of road. Sanctions against Russia — a major global economy — have been ramped up to a level previously unseen, but they have not been effective in compelling Moscow to change course. The United States and its allies have yet to agree on what they deem to be an acceptable endgame to the war. Great power or not, Russia will remain a populous, powerful and potentially disruptive actor in Europe. Without clearly and credibly proposing policies that can lower the temperature, and without beginning to envisage what a future European security order might look like, the United States risks prolonging the conflict — with potentially unforeseeable consequences if popular war–weariness continues to grow.
- Topic:
- Foreign Policy, NATO, Sanctions, European Union, Strategy, Military Aid, Regional Security, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Ukraine, and United States of America
8858. Paths to a Ceasefire in Ukraine: America Must Take the Lead
- Author:
- Anatol Lieven
- Publication Date:
- 05-2023
- Content Type:
- Policy Brief
- Institution:
- Quincy Institute for Responsible Statecraft
- Abstract:
- Barring an improbable complete victory for Ukraine or Russia, the conflict in Ukraine will end, or more likely be suspended, in the form of a compromise. The fighting is therefore now essentially about the geographical and political lines along which this compromise will be drawn. These will become much clearer once the results of the forthcoming Ukrainian counter–offensive are known, and the aftermath of the offensive will be the time for an intensive diplomatic effort to bring about a ceasefire. Ideally, this compromise should take the form of a peace settlement like Northern Ireland’s in 1999, that would end the war and allow the creation of a stable, consensual and peaceful security order in Europe. More likely, however, is a ceasefire that (as in the cases of Kashmir, Korea, and Cyprus) will freeze the existing battle–line, wherever that runs. Such a ceasefire will in any case be necessary if talks aimed at a formal peace settlement are to take place; and even if such a treaty cannot be reached, such a ceasefire, if far from ideal, might still prove reasonably stable and permanent. Both the U.S. and Ukrainian administrations stated after it began that the war would inevitably end in a negotiated peace. In the first month of the war President Volodymyr Zelensky put forward peace proposals that included suspending the issues of Crimea and the eastern Donbas for future negotiation. Since then, however, both Ukraine and Russia have adopted positions that make any agreement between them exceptionally difficult. Given these circumstances, the United States must play the greatest role in achieving a ceasefire.
- Topic:
- Conflict Resolution, Foreign Policy, Diplomacy, Strategic Engagement, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, Ukraine, and United States of America
8859. Defense Contractor Funded Think Tanks Dominate Ukraine Debate
- Author:
- Ben Freeman
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- Quincy Institute for Responsible Statecraft
- Abstract:
- Think tanks in the United States are a go–to resource for media outlets seeking expert opinions on pressing public policy issues. But think tanks often have entrenched stances; a growing body of research has shown that their funders can influence their analysis and commentary. This influence can include censorship — both self-censorship and more direct censoring of work unfavorable to a funder — and outright pay–for–research agreements with funders. The result is an environment where the interests of the most generous funders can dominate think tank policy debates. One such debate concerns the appropriate level of U.S. military involvement in the Russian invasion of Ukraine. Since Vladimir Putin’s illegal and disastrous decision to launch a full–scale invasion of Ukraine, the United States has approved approximately $48.7 billion in military spending.1 Despite the very real risk that escalations could lead to direct U.S. military involvement in the war, few think tanks have critically scrutinized this record setting amount of U.S. military assistance. Within the context of public debate about U.S. military involvement in the Ukraine war, this brief investigates Department of Defense (DoD) and DoD contractor funding of think tanks, those organizations advocacy efforts for policies that would benefit those funders, and the media’s predominant reliance on think tanks funded by the defense sector. The analysis finds that the vast majority of media mentions of think tanks in articles about U.S. arms and the Ukraine war are from think tanks whose funders profit from U.S. military spending, arms sales and, in many cases, directly from U.S. involvement in the Ukraine war. These think tanks also regularly offer support for public policy solutions that would financially benefit their funders without disclosing these apparent conflicts of interest. While this brief did not seek to establish a direct causality between think–tank policy recommendations and their arms industry funding in the case of the Ukraine war, we find a clear correlation between the two. We also found that media outlets disproportionately rely on commentary from defense sector funded think tanks.
- Topic:
- Foreign Policy, Think Tanks, Russia-Ukraine War, and Military-Industrial Complex
- Political Geography:
- Russia, Ukraine, and United States of America
8860. Ethnic Divisions and Ensuring Stability in Kazakhstan: A Guide for U.S. Policy
- Author:
- Suzanne Loftus
- Publication Date:
- 06-2023
- Content Type:
- Policy Brief
- Institution:
- Quincy Institute for Responsible Statecraft
- Abstract:
- This brief assesses ethnic divisions in Kazakhstan, analyzes the potential risks of ethnic and geopolitical tension and makes recommendations for U.S. policy. Kazakhstan’s current approach to managing its internal divides and overall stability is assessed and drivers of potential risk are evaluated. Due to renewed cold war tensions with China and Russia, the United States must resist any temptation to become involved in Kazakhstan’s internal politics and refrain from any efforts to sway Kazakhstan to ally itself with the West. This would only cause internal instability and hostile relations with its neighbors, Russia and China. Given Kazakhstan’s potential for domestic strife, U.S. interests are best served by a restrained approach to the country that better preserves its internal and external stability. Kazakhstan’s vast land mass and sparse population leave the country vulnerable to potential external threats. Kazakhstan borders Russia and China, its strongest security and economic partners respectively. These two powers are very close while the United States is far and consequently plays a relatively minor role in the country. The United States can and should, however, engage economically with Kazakhstan to support its development.
- Topic:
- Foreign Policy, Political stability, Ethnicity, and Domestic Politics
- Political Geography:
- Central Asia, Kazakhstan, and United States of America