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The current state of economic development in the Black Sea region

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Abstract

Following a series of necessary but wrenching economic transformations, the Black Sea region enjoyed a lengthy period of growth that ceased suddenly with the 2008 global financial crisis. While the worst is over for most, the countries face a number of immediate challenges such as managing the current downturn, effecting reforms to improve competitiveness and return to sustained growth, managing relations with the highly influential European Union, and facing longer term challenges such as poor demographic trends and emerging environmental issues. Regional cooperation remains underdeveloped and represents an area of untapped potential to help achieve economic objectives.

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... In order for the region to be a dynamic entity creative collaboration among the countries is required and common prosperity should be promoted. The areas of collaboration in which countries may be interested in are the ones that they have a comparative advantage or the ones they wish to develop Gavras (2010). Those areas include energy, transport, finance, telecommunications and environment. ...
... The main drawbacks resulted in the decline of the Black Sea region were "the collapse of the old production and distribution systems, the unhealthy or missing legal frameworks, the not-running financial sector, the inconsistent structural reforms, the macroeconomic instability with high levels of inflation and no fiscal control, the establishment of the structures and institutions of the new states"Gavras (2010 :6). 3 This period of time brought a number of shocks, volatility of energy prices, the Russian financial crisis, the earthquake in Turkey and the crisis in Kosovo, that in a way influenced the Black Sea region but in another they benefited itGavras (2010). ...
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On the coasts of the Black Sea, across the coastline of six countries (today), 32 important medieval and byzantine port-cities have flourished the last decades. Those port-cities facilitated the merchandise shipping from Europe to Central Asia and faraway China, through sea roads and routes followed not only by merchandisers and travelers but also by emperors and pilgrims. This paper constitutes a summarized literature review of the economic history of some of the most important Black Sea port-cities, counting from the 19th century, through 20th century and up to the present. It also seeks to examine the reconstruction and development of those port-cities after the demise of the Ottoman Empire, a number of Wars, political changes and finally through the economic and political transition of the Black Sea area. Additionally, the paper reviews the Black Sea trade routes followed by the merchants of the examined period. We conclude on current comparative advantages of the wider region and the perspectives for socio-economic development.
... That is true up to this day, as its geostrategic position, and the continuous conflicts, with most notable last one between Ukraine and Russia over the Crimean Peninsula, the Black Sea region is still struggling to find its way to stability and economic prosperity. The region is characterized by lack of economic development, lack of social cohesion, of security and of stability, hindering this way economic and trade cooperation (Gavras, 2010;Alexandridis and Antoniadis, 2013). ...
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The aim of this paper is to investigate the impact that oil and gas sector has on the global competitiveness of the economies of the countries of the Black Sea Region, measured by the Global Competitiveness Index, with the use of unbalanced panel data techniques for the period from 2006 to 2015. Factors concerning oil and gas sector as fuel exports, oil and gas prices, oil rents, and governance are used as independent variables. Both fixed and random effects models are estimated, and the validity of these models is assessed with the use of Hausman test. Our results are discussed and compared to relevant literature concerning other oil and gas producing regions.
... From the beginning of the 21st century to the 2008 world economic crises, the region had sustained growth, with high levels of trade and investment, but following the collapse of financial markets the growth of the Black Sea region was interrupted sharply (Gavras, 2010). ...
... It remains unclear whether regional growth rates can be restored to previously high levels, or whether growth will normalize at a lower level. 21 As far as it concerns AMPS, looking at Table 6, we can say that in Bulgaria they are located either in Varna or in Sofia, the Capital with no port; in Romania Costanta is the most important Romanian port but our results say almost every AMPS are in Bucharest. Georgia and Ukraine have both AMPS split respectively between Poti and Tbilisi and Odessa and Kiev. ...
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The new global economy framework is characterised by strategic economic centres formed around networks of goods, financial and information flows that constitute the today's social morphology of our societies. In this scenario almost every international company or firm develops its own structure and positioning plan by evaluating the business opportunities linked to each possible future branch office. Of course, the way to do business differs a lot considering that can be affected by customs, language, culture, laws, geography, infrastructures and business mind-set for instance and this is why developing a strong relation between the main headquarters and the world spread company's offices has become needful for a company to be successful. The shipping sector is not an exception, on the contrary all the shipping companies, especially the liner ones, due to the nature of their business are forced to establish regional offices to cover the global market. In particular, this analysis has been conducted with a focus on the Mediterranean and on the different positioning strategies adopted by one of the biggest liner carrier in the world, the German company Hapag-Lloyd.
... The economic situation in the region has a direct implication on the political dynamics between the countries. Currently, the Black Sea states are going through sectoral reforms taken on in the past long period of transition, which was marked by a drastic economic decline of the newly independent Black Sea countries [33]. This phase was characterized by the collapse of old economic systems, political polarization, absence of legal frameworks and instability of financial sector [24]. ...
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It is often claimed that the Black Sea is one of the most degraded seas in the world. Management to rehabilitate the Black Sea requires cooperation between the coastal countries to be successful. However, regional cooperation in the Black Sea is poorly coordinated and lack concrete outcomes. This article analyses the performance of the Black Sea Commission in terms of enabling and fostering effective regional collaboration between the Black Sea coastal countries. The results indicate that the measures undertaken by the Black Sea Commission are effective in terms of enabling scientific and project based cooperation between the Black Sea countries. The cooperation around regional and national institutional reforms to tackle the Black Sea environmental problems is found to be weak. Despite the existing mechanisms and willingness of countries to cooperate, the implementation of the established strategic action plan for the environmental protection and rehabilitation of the Black Sea is limited. Most of the limitations of the Black Sea Commission's regime are found in its institutional and legal frameworks, which constrain the effectiveness of collaborative efforts of the Black Sea countries. To be fully functional, the collaborative governance regime of the Black Sea Commission has to be improved. Recommendations as to how these may be addressed to enhance the regime's capacity to ensure effective marine collaborative governance in the region are presented in this article.
... Since 1992, the region has been able to export threefold, and its imports have more than doubled. 27 Yet it is still suffering from a lack of diversification in exported goods, incomplete trade policy reforms, and a poor investment climate, which hampers full integration into the global value chain. ...
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The Black Sea has been a site of conflictual relations for centuries, though changes since the end of the Cold War have allowed for the emergence of a cooperative environment. Because of the region's strategic location, controlling it represents an exceptional geopolitical value, which attracts international attention and interests in the region's future. This paper argues that the increased attention to, and various policies toward, the region by the US, the EU, and the Russian Federation have not always attested to prosperity; instead, they have at times induced the emergence of conflictual situations, threatening regional and international stability. Alternative approaches, based more upon a regional outlook than upon global calculations, may have better values to offer.
... It was at this time that the Black Sea Economic Cooperation (BSEC), which included all Black Sea states 1 , was established as a Turkish initiative. The BSEC defined the Black Sea as a political entity (Manoli, 2012) All these activities and initiatives clearly show that there is an existing widespread understanding of the importance of economic cooperation in the area (Gavras, 2010) and an established network of various bilateral and multilateral agreements. These, however, often have overlapping agendas and questionable contribution to the process of economic cooperation in the area. ...
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Since the early nineties, the Black Sea region has witnessed fundamental geopolitical changes and significant shifts in its regional context and dynamics. In an attempt to react to the altered circumstances after the collapse of the Soviet Union and to address an increasing number of common challenges, the Black Sea states have jointed efforts in various regional cooperation activities. Throughout the years, the Black Sea cooperation has evolved with different speed and success, reflecting the difficult regional circumstances and attracting increasing external involvement. Today, more than twenty years after the first cooperation activities have been launched, the Black Sea cooperation is still shadowed by persisting historical rivalries, unrecognized territorial entities, ‘frozen conflicts’ and security threats. As a result, despite the many pressing problems of regional character, the cooperation efforts are currently showing rather limited outcomes. Seen against this background, the current paper presents a study of the main challenges and the existing potential for further development of the Black Sea regional cooperation.
... 351 Industry also experienced difficulties in 2008 as the indices for industrial output stood at 96.9% of 2007 numbers. 352 The mining and metallurgy, chemical and machine building industries -which are very low valueadding ones 353 -encountered severe problems 354 that can be attributed to the lack of technological innovation. 355 Also, most of the steel producers' production is insufficient. ...
... 351 Industry also experienced difficulties in 2008 as the indices for industrial output stood at 96.9% of 2007 numbers. 352 The mining and metallurgy, chemical and machine building industries -which are very low valueadding ones 353 -encountered severe problems 354 that can be attributed to the lack of technological innovation. 355 Also, most of the steel producers' production is insufficient. ...
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Currently, the Black Sea Region1 is not as integrated economically as to allow one to outline some common development trends of all regional economies. The most of the region’s nations (Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Moldova, Romania, Russia, Serbia, and Ukraine), except Greece and Turkey, are post-Communist countries. The purpose of this paper is to highlight the economic development difficulties of the post-Communist Black Sea Region and to examine the key economic problems of all the countries encompassing it in the context of the ongoing financial crisis.
... Since the countries of the Black Sea region have resorted to certain special governmental bailout programmes in support of their financial institutions and real estate businesses (Gavras 2010;Gavras and Iorga 2009), there is a danger of the development of a zombie economy. This threat may become quite real if the financial crisis continues long enough to enable the zombie firms to take solid root. ...
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