Target setting for SEE 2020 strategy RCC Headquarters Sarajevo, Bosnia and Herzegovina 24 April 2012 Update for the South East Europe Investment Committee

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

Transforming the SEE 2020 Vision SEE 2020 Vision adopted at the SEE Ministerial Conference: i.Integrated Growth to deepen regional trade and investment linkages; ii.Smart Growth – innovation and competition based on value-added rather than labour costs; iii.Sustainable Growth – private sector competitiveness, entrepreneurship, greener and energy-efficient development; iv.Inclusive Growth – skills development, employment creation &labour market participation by all; v.Governance for Growth – improve the capacity of public administration to strengthen the rule of law and reduce corruption. A set of headline targets to be adopted at the next Ministerial

The proposed process Nov 2011 Apr 2012 Jun 2012 Sep 2012 Nov 2012 Vision adopted First draft targets Targets discussed Second draft targets Written procedure & third draft SEE Min SEE IC Targets discussed SEE IC Final draft targets Targets adopted SEE Min

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D (GERD) b.Business expenditure on R&D (BERD) c.Tertiary education attainment d.GDP per person employed e.High technology exports as a % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as a % of GDP b.Entrepreneurship c.CO 2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Ratio of estimated female to male earned income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as a % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality An initial set of dimensions for target setting is proposed at this meeting

Agree about the process  Is the proposed process adequate to arrive at a result for the Ministerial?  What are the specific constraints to take into account? Get input on target setting:  Are the chosen dimensions relevant?  Which ones need to be added or deleted?  Which dimensions are within the scope of the SEE IC?  If not within the SEE IC, which forum can assume their monitoring?  Wherever possible, give a level of ambition for the target dimensions presented Objectives for this session

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D (GERD) b.Business expenditure on R&D (BERD) c.Tertiary education attainment d.GDP per person employed e.High technology exports as a % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as a % of GDP b.Entrepreneurship c.CO 2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Ratio of estimated female to male earned income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as a % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality Dimensions for Integrated Growth

Integrated Growth: Regional trade openness in goods

Integrated Growth: Global trade openness in goods

Integrated Growth: Total value of trade in goods SEE

Integrated Growth: Estimated software piracy rates

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D (GERD) b.Business expenditure on R&D (BERD) c.Tertiary education attainment d.GDP per person employed e.High technology exports as a % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as a % of GDP b.Entrepreneurship c.CO 2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Ratio of estimated female to male earned income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as a % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality Dimensions for Smart Growth

Smart Growth: Gross expenditure on R&D EU-27 SEE

Smart Growth: Business expenditure on R&D

Smart Growth: Tertiary education attainment

Smart Growth: GDP per person employed

Smart Growth: High technology as a % of manufactured exports EU-27 SEE

Smart Growth: Internet usage EU-27 SEE

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D b.Business expenditure on R&D c.Tertiary education attainment d.GDP per person employed e.High technology as % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as % of GDP b.Entrepreneurship c.CO2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Gender ratio of income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality Dimensions for Sustainable Growth

Sustainable Growth: Trade balance in goods as a % of GDP

Sustainable Growth: Entrepreneurship Note: The EU average is based on data from France, Germany, Great Britain, Italy, Poland and Sweden only

Sustainable Growth: CO 2 emissions

Sustainable Growth: Energy efficiency

Sustainable Growth: Fossil fuel consumption EU-27 SEE

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D (GERD) b.Business expenditure on R&D (BERD) c.Tertiary education attainment d.GDP per person employed e.High technology exports as a % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as a % of GDP b.Entrepreneurship c.CO 2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Ratio of estimated female to male earned income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as a % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality An initial set of dimensions for target setting is proposed at this meeting

Inclusive Growth: Employment Note: EU2020 foresees an increase of employment in the category which is to evolve from 70.3% to 75% in 2020

Inclusive Growth: Gender ratio of income Note: The data for EU-27 and SEE show exactly the same ratio: 61.9%

Inclusive Growth: Poverty headcount Note: EU2020 foresees a reduction by 20 million, or 17% of the number of people at risk of poverty or social exclusion

Inclusive Growth: Early leavers from school EU-27 SEE

Agenda Introduction and objectives Target setting for Integrated Growth Target setting for Smart Growth Target setting for Sustainable Growth Target setting for Inclusive Growth Target setting for Governance for Growth

i.Integrated Growth a.Regional trade openness in goods b.Global trade openness in goods c.Total value of trade in goods d.Estimated software piracy rates ii.Smart Growth a.Gross expenditure on R&D b.Business expenditure on R&D c.Tertiary education attainment d.GDP per person employed e.High technology as % of manufactured exports f.Internet usage iii.Sustainable Growth a.Trade balance in goods as % of GDP b.Entrepreneurship c.CO2 emissions d.Energy efficiency e.Fossil fuel consumption iv.Inclusive Growth a.Employment b.Gender ratio of income c.Poverty headcount / People at risk of poverty d.Early leavers from school v.Governance for Growth a.Government debt as % of GDP b.Percentage of firms saying that unofficial payments are frequent c.Rule of law d.Regulatory quality Dimensions for Governance for growth

Governance for Growth: Government debt as a % of GDP

Governance for Growth: Percentage of firms saying that unofficial payments are frequent EU-10

Governance for Growth: Rule of law OECD

Governance for Growth: Regulatory quality OECD SEE

Alan Paic Head OECD Investment Compact for South East Europe Private Sector Development Division Organisation for Economic Co-operation and Development (OECD) Thank you for your attention