South East Europe: gathering its strength
by John Garratt
South East Europe remains a patchwork of nations with different levels of IT, differing rates of progress, resources and sizes. A massive amount of money has, however been put in by the IMF, EU and others to float the economies, and this seems to be working as governments invest in infrastructure, some of it basic, but some in IT and comms, which will set the region back on the path to the high levels of growth seen in the previous years....
This slowdown reflects low growth in key EU export markets. At the same time there has been reported a negative trend in retail. Therefore, it has reduced the consumers’ interest in fast moving consumer goods and durables industries. Consumer packaged goods that saw a growth in value of more than 20% in Romania during 2007-2008, for example, are currently looking at best cases of a slight, single digit increase. Liquidity is limited and SMEs with their small cash flows are very susceptible
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to payment risks. At the same time banks have moved to restrict lending and corporate credit has decreased. Furthermore, a number of companies have proceeded to close down units and decreasing personnel. This inevitably has increased unemployment levels. In a deteriorating international environment structural public finance issues
are critical. Croatia and Albania both had a particularly high state debt in 2009 with both approaching 55% of GDP. Governments faced the twin challenge of reassuring public anxiety while
taking steps to cushion the economic blows. Across the region, governments have adopted anti-crisis plans that should help the fragile economies survive.
ital economic sectors have been hit hard by the economic downturn. Industrial production is strongly linked to exports in central and southeast Europe which have been dramatically reduced.
These include: keeping the budget deficit under control refusing to abandon national infrastructure projects subsidized by foreign investment; support- ing and providing guarantees for deposits; increasing exports while reducing imports; preserving the currency’s exchange rate; and protecting the most vulnerable groups of the population from being heavily affected. The region has been facing a severe recession and local economies are not in a position to finance the large public deficits. Due to this fact a significant external financ- ing program Implemented In order crisis-hit economies to get back on track and calm fears of a meltdown. Earlier this year, IMF enabled the release of an amount of $3.6m (€2.7m) for Albania, while currently, IMF approved a $1.57bn (€1.18bn) loan for Bulgaria and $2.9bn (€2.2bn) for Serbia. The Belgrade govern- ment, having available a total of $3.9bn (€2.9bn), adopted measures, to support production and export growth this year. Serbia will also receive a loan from Russia. Additionally, the IMF, the EU and the World Bank made available a total of €20bn to help Hungary. Günther Meyringer (opposite), is Chief Technology Officer with New
Frontier, an emerging player in Central and Eastern Europe in the IT Solutions area. New Frontier Holding GmbH is an Austrian company, registered in Vienna on 23rd August 2006 by a group of four people whose careers are connected for many years with IT in emerging markets, mainly Central and Eastern Europe
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30 APR 2010
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