Revista de Economie Mondiala/ Journal of Global Economics

1-25

Authors: Agnes Ghibuțiu

Growth in FDI flows to and from the BRICS countries accelerated markedly since the 2000s. While surge in inward FDI reflects the growing attractiveness of all five countries to foreign investors, the notable outward FDI growth signals the grouping’s emergence as a global player. However, the recent slowdown in BRICS countries’ growth patterns raises concerns over their medium-term growth prospects, and, hence, their ability to maintain the current course in terms of capital flows and investment. This paper addresses the main trends shaping the BRICS countries’ inward and outward FDI over the last decade and a half, with a view to highlight their growing role in the global investment landscape and disentangle their longer term prospects. It examines the dynamics and patterns of BRICS countries’ involvement in global investment and reveals the reasons behind their outstanding performance in attracting and generating FDI worldwide. It than goes on assessing the prospects for BRICS both as host and home economies in the light of their weakening growth and the associated challenges arising from the new domestic and external environment.

48-68

Authors: Răzvan Voinescu, Cristian Moisoiu

The prospects of Turkey’s integration within European Union are complicated by the tough geopolitical context in the region. Ambiguous trends and options for the EU’s institutional reform, integration versus fragmentation, have brought additional uncertainties for Eastern enlargement. The ongoing war in Syria and Iraq has determined Turkey to be confronted with an over increasing number of refugees and dislocated population. Moreover, the unsolved issues with Cyprus and internal risks of insecurity, especially determined by the intensification of the Kurdish conflict, have added even more pressure. This paper presents three exploratory scenarios about possible developments of the EU – Turkey relationship, which describe three distinct visions for the 2025 horizon, as it follows: the pessimistic scenario of divergence, competition and conflict; the optimistic scenario of cooperation, convergence and integration and the neutral scenario, reflecting a limited cooperation relationship.

86-99

Authors: Ionela Bălțătescu, Alexandra Rusu

The present article summarizes arguments, but also historical and statistical data supporting the following theses: (a) in the mid-twentieth century Sweden has become one of the most prosperous and fast-growing economies in the world promoting free-market, free trade and a favorable business environment; (b) the establishment of the welfare state and the enforcement of radical welfare reforms in Sweden resulted in only two decades in economic downturn: unsustainable financial situation of the public finances (by increasing government spending and public debt), inflation and macroeconomic policies that generated a boom bust business cycle and economic crisis; (c) the economic principles of the Swedish model (folkhemmet) and the radical vision of welfare policies were generally abandoned or weakened in the post-crisis period in Sweden. Economic policies and reforms enforced after 1990 reflects this new approach: lower government expenditures, lower taxes and the liberalization or the reform of certain markets that were traditionally under state monopoly; (d) Swedish model is one of the best examples of how economic freedom fosters economic growth and development, whereas radical welfare policies and reforms destroys the very foundations of wealth creation: private property and free market.

146-155

Authors: Ecaterina Stănculescu

This article highlights the most important issues concerning the cooperation between the EU and the US in science and technology. The author analyzes the latest available data concerning both partners, the main areas in which the technical and scientific cooperation between EU and US is developing and will further develop, the common approach of the main global challenges and the possible benefits resulting from this cooperation. The paper emphasizes that both the EU, through its main RD program, Horizon 2020 and Euratom, and the US, whose concerns in scientific and technical research are the best reflected in The Strategy of American Innovation, launched in 2009, are willing to enlarge the range of issues tackeled in their cooperation framework. Romania, as an EU member state, could benefit from the existing cooperation framework between the two parties, but this remains, for now, a simple aspiration.

165-186

Authors: Iulia Monica Oehler Șincai

In the present paper, the main objective is to analyze to what extent the Chinese economy has been rebalancing towards a higher contribution of domestic consumption to the GDP, by taking into account both temporary and structural determinants and public policies. Our research includes two case studies, considered relevant from the standpoint of this topic: (1) urbanization, increasing the living standards and changing consumption patterns and the correlations between these changes and savings and consumption; (2) measures adopted or announced by the Chinese government in order to stimulate the internal consumption (“reform dividend”) taking into account the Chinese economic slowdown and a global gross product recording growth rates lower than 4% until 2020. Our investigations underline that beyond the direct objective assumed by the Chinese government, to spur the domestic consumption, it targets a more inclusive and sustainable economic growth, oriented towards innovation, high-tech industries and services. As the Chinese GDP structure is changing, and the main role is played by labour intensive services, not by the capital intensive manufacturing, the GDP becomes more and more labour intensive itself, which sustains the labour market and implicitly domestic consumption. Moreover, the universal access to the social security system represents a priority of the government, which determines the diminishing of the precautionary saving and automatically stimulates the domestic consumption.

1-17

Authors: Virginia Câmpeanu

The objective of this paper is to answer two questions: how and how much the economic and financial global crisis affected the rural development in the Member States of the European Union. Comparative analysis of statistical data shows that the severity of the crisis has influenced in different ways the rural economies of the Member States, with impact on employment rate, economic development of agricultural and non-agricultural sectors, and structure of the economy. This paper measures the impact of the global crisis on employment in rural areas as well as the impact on the development of the rural economy in the EU Member States, including Romania.

32-42

Authors: Sarmiza Pencea

Bull markets, bear markets, boom and bust, speculative bubbles are frequent phenomena with stock markets. All the more so with imature stock exchanges such as China’s, where unwary investors, lured by the prospect of quick and easy gains, trade instinctively, in accordance with the prevailing market sentiment, so that the ups and downs in securities values may be ample, unexpected and dangerous. Besides, the repeated interventions of a government which aims at tightly controlling the functioning of such markets may generate abrupt responses, which risk to get out of hand. Such an episode took place in June-July 2015, when, following 12 months of exuberant growth, Chinese stock markets, which were already in a bubble, started a sudden descent, generating panic among investors, thrills and worry amid foreign analysts. This paper radiographs this episode, looking at its causes and at the risks entailed for both the domestic and foreign markets, trying to explain the seemingly unjustified and excessive interventionist reaction of the government to the market-inflicted price corrections and to shed light on the expected consequences of the stock market fall on domestic consumption and demand for imports, on foreign demand for Chinese exports, as well as on the economies of the partner countries and the global economy as a whole.

84-97

Authors: George Cornel Dumitrescu

In the context of an increased distrust of the population in the financial system, generated by the recent crisis, ”the digital payment instruments” have emerged as a new alternative to the online transactions for a variety of communities interlinked via the Internet. Bitcoin is the first of these "instruments" that came out of the pattern of a single online community, propagating as an accepted means of payment in the transactions between virtual communities worldwide. Its platform enables the expansion of the network by taking new members: individuals, public or private organizations, etc. Analyzing economic literature, the statistical information and the available data provided by the great promoters of this payment system, our paper aims to assess the Bitcoin phenomenon, from monetary standpoint and also from the perspective of a SWOT analysis, identifying the advantages and disadvantages of the system and development prospects in the medium and long run.

115-126

Authors: Andreea Drăgoi

This article aims to analyze the European model of the welfare state both from a qualitative but also a quantitative perspective. Based on the main theoretical approaches related to the welfare state, our research aims to evaluate the consequences of the failure of social security system in Greece. Using some macro-economic indicators (the share of social security spending in the GDP, growth rate of GDP, GDP per capita and public debt) our analysis aims to highlight to what extent the welfare state can support the real disadvantaged categories of its citizens, especially in times of economic downturn.

1-27

Authors: Agnes Ghibutiu

Over the last decade, members of the World Trade Organization (WTO) have increasingly resorted to preferential trade agreements (PTAs) as a means to further the market-opening and rule-making agenda. Particularly visible is this trend since 2013, with numerous new PTA negotiations being launched, including by WTO members accounting for substantial shares of world GDP and trade. The paper discusses the recent surge in trade regionalism through the lens of the multilateral trading system governed by the WTO. It aims to highlight the systemic as well as economic and geopolitical factors that are driving the new PTAs, and also distil their potential effects upon the world trading system. According to its findings, the fresh impetus to regionalism should be seen as a shift in focus rather than a fundamental course change in the evolution of the regional agenda, and the factors underlying this shift should be sought in the structural transformations that have marked the WTO in the context of the changing global political and economic environment.

46-64

Authors: Papatulică Mariana

The tense political context created by the conflict between Russia and Ukraine, and the security risks entailed to the transport routes from the Caspian Sea to Europe, represented an increasing threat to EU security of energy /gas supply . Dependence on a small number of suppliers, some of them dominant or uncertain, such as Russia, made EU vulnerable to “divisive” tactics and threats of blocking energy supply routes. More than half of the gas consumed in the EU comes from third countries and more than 1/3 from Russia. But Europe is well positioned geographically to benefit from the important changes looming in the coming years, in the changing configuration of gas flows worldwide. After the identification and extensive exploitation of shale gas in the United States, mankind faces a potential surplus of natural gas that needs, however, an adequate infrastructure to reach the consumers and erode market dominance of traditional exporters, headed by Russia.

82-95

Authors: Răzvan Voinescu, Manuela Unguru

The aim of this article is to highlight the determinants of economic competitiveness that could simultaneously support long-term economic convergence and to identify necessary adjustments for public policies that would help achieve this objective. The analysis suggests that the Romanian public policies should focus on those objectives that enhances sectoral objectives, namely: i) strengthening macroeconomic outlook and improving the quality of public management; ii) sustainable development of human capital through education and training; iii) improving the quality of business environment.

109-123

Authors: Alina Ligia Dumitrescu, Lucia Iordache

In the past ten years since joining the European Union, Poland recorded not only economic growth, but economic performance and social development. Poland got both production and consumption on a sustainable basis over the last ten years and was the only EU member state that successfully managed to avoid recession. In 2010, according to the Statistical Office of Poland, it was recorded a steady growth rate of 3.9%, one of the best results in the EU, compared to the average of 2%. Growth is expected to remain over 3% in the period 2015-2016, supported by solid domestic demand, an improvement in the labor market, the increase in real disposable income and not least by a strong investment activity. The article examines the pillars of economic growth, with the main objective to highlight how this member state managed to achieve a sustainable economic growth and a good performance in attracting EU funds.

141-155

Authors: Simona Zamșa

The article presents synthetically the sugar market outlook for 2014 – agricultural seasons 2013/2014 and 2014/2015 – highlighting the main factors influencing 2014 and 2015 sugar prices evolution. We also present the role of main actors on the world sugar market (major sugar exporting and producing countries 2014). On the basis of the analysis of refined sugar stock prices at London (Stock) Exchange, we conclude that, in 2014, (a) sugar prices dropped compared to those recorded in 2013, and (b) the price volatility decreased in relation to previous years. The downward trend of sugar prices was maintained in 2015

1-25

Authors: Agnes Ghibuțiu

The year 2013 witnessed an outstanding rise in the pace and scale of negotiations on regional trade agreements (RTAs). While RTAs are not a new phenomenon, current negotiations involve multiple parties and/or major trading countries that have a significant combined economic weight, i.e. mega-RTAs. This paper looks at the recent surge in trade regionalism and addresses some of the key issues related to the potential impact of mega-RTAs upon the world trading system and global trade patterns. It examines the peculiarities of the new mega-RTAs and the factors underlying their proliferation, and discusses the main concerns raised by their foreseeable impact on excluded countries and the wider trading system. The paper finds that, if successfully concluded, mega-RTAs are likely to have far-reaching implications for the world trading regime, affecting its transparency and coherence. Nevertheless, the adverse effects could be cushioned through a revival of trading nations’ interest in the multilateral Doha Round talks.

48-59

Authors: Sarmiza Pencea

There were 2587 bilateral investment agreements (BIT) in the world by the end of 2012 and in about 1700 of them one of the parties was an EU member state. This has become a great disadvantage for the EU, both as a potential FDI receptor and as a source of investment capital for other countries. Similarly, the EU-China investment relationship is regulated by 26 separate agreements of the EU members, a single BIT having become by all means necessary for simplifying, updating and upgrading regulation of the bilateral relationship, in accordance with economy needs and the trends in the field. The paper looks at the state of mutual investments, sheds light on the objectives, stakes and benefits of a single EU-China BIT, on the negotiation hurdles and the necessary prerequisites of success. It concludes that for the EU success depends on previously harmonizing the interests and attitudes of the member states and giving the Commission a clear mandate, which they completely assume and suport.

82-103

Authors: Emilia Bălan

Significant climate change implies natural disasters with negative consequences in the short term. Also, when their frequency is high, there are negative effects in the long term as regards economic growth, development and reduction of poverty. The main objective of this paper is to analyse floods in Europe (including Romania), from the viewpoint of their effects. Among the natural disasters, floods have a major economic and social impact. Taking into account their scale and frequency, floods cause considerable loss of life and damage to property, and a better understanding of their effects, by both citizens and decision making authorities, can prevent future development of this devastating phenomenon.

126-142

Authors: Julia Stefanova, Tsvetoslav Stoev

The main purpose of this paper is to make an overview of the development of the institutional and market framework toward the full integration of the EU capital markets. It analyzes the progress at EU level for overcoming the still fragmented capital markets in the aftermath of the global financial and economic crisis and the current initiative for the creation of EU capital markets union. Besides, our paper evaluates the market factors driving the creation of a pan-European capital market during the last fifteen years.

157-176

Authors: Lucia Iordache

In the context of globalisation and EU Member States’ efforts to return to a sustainable growth path, merger control by the European Commission guarantees the development of companies in a dynamic way in order to become stronger and more competitive, both on the EU Internal Market and global markets. However, some mergers may reduce competition in the market to the detriment of EU businesses and consumers, in particular by the creation or strengthening of dominant positions in the relevant markets. The central objective of EU merger control, as an important tool of EU competition policy and law, is to effectively prevent mergers from resulting in anticompetitive effects în the Internal Market. This article focuses on the main components of merger control system and the implications of enforcing the rules in this field for exploiting the full growth potential offered by the EU Internal Market, and for achieving the key goals of the Europe 2020 Strategy. The experience of over ten years of the European Commission has shown that there is scope for further improving certain areas of EU merger control and the White Paper published by the Commission in July 2014 outlines the steps towards making control procedures simpler and more efficient.