CEE needs to play the Asia card
The region’s economic growth is healthy but over-reliant on the rest of Europe. Asia beckons.
Central and eastern Europe is slowly emerging from the financial crisis thanks to a recovery in economic growth. The region’s output rose by 4.2% in 2010, according to the European Bank for Reconstruction and Development, with the forecast for roughly the same this year.
Although this growth rate marks a respectable turnaround from the steep decline that the region suffered in 2008 and 2009, it still lags behind Latin America and Asia ex-Japan. As Thomas Mirow, president of the EBRD says, the region is falling behind in the competition for global capital and investment.
Central and eastern Europe, more so than other emerging market regions, remains dependent on the economic performance of the western world. Its recovery last year, aside from the surging oil price for the commodity exporters, was largely attributable to the unexpectedly strong showing by Germany, still the pivotal economy for the region’s fortunes.
Greater interaction with Asia, the growth engine of the global economy would boost the former Communist bloc. These countries just have to look at how Latin America has changed over the past decade as a result of Asian trade and investment to understand why.
Trade between China and Latin America has grown 16-fold in the decade up to 2009 according to the UN, albeit from a low base.