Effectiveness of Trade for Landlocked Countries

Effectiveness of Trade for Landlocked Countries Columbia College

International Business MGMT 338

Effectiveness of Trade for Landlocked Countries

Landlocked countries trade figures are among the lowest in the world due to many constraints but increasing their accessibility and connectivity efficiency such as decreasing the transport time of goods and streamlining border procedures are vital to landlocked countries in increasing trade and wealth.

1. Introduction of landlocked countries

Landlocked countries trade figures are among the lowest in the world due to many constraints but increasing their accessibility and connectivity efficiency such as decreasing the transport time of goods and streamlining border procedures are vital to landlocked countries in increasing trade and wealth.

1. Landlocked Countries

1. Hungary

Geography

Hungary is surrounded by Austria, Croatia, Slovenia, Serbia, Romania, Slovakia and Ukrain. It is about the size of Indiana with a terrain of mostly flat to rolling plains; low mountains along the Slovakian border.  Hungary is landlocked and located, Central Intelligence Agency, (2015), “astride main land routes between Western Europe and Balkan Peninsula as

well as between Ukraine and Mediterranean basin; the north-south flowing Duna (Danube) and Tisza Rivers divide the country into three large regions.”

Government

Hungary form of government is parliamentary democracy. It consist of executive branch, legislative branch and judicial branch.  In the executive branch, the current Chief of State is Jano Ader since May 10, 2012 and current Prime Minister is Viktor Orban since May 29, 2010.  The president is elected by the National Assembly and has a term limit of 10 years.

According to Central Intelligence Agency, (2015), Hungary has a “unicameral National Assembly or Orszaggyules (199 seats; 106 members directly elected in single-member constituencies by simple majority vote and 93 members directly elected in a single nationwide constituency by party list proportional representation vote; members serve 4-year terms).”  The highest court, Curia or Supreme Judicial Court.  Its members are the Curia president, vice president, and approximately 76 judges organized into 16 civil chambers, 3 criminal chambers, and 4 administrative chambers; Constitutional Court which consists  of 15 judges including the court president and 2 vice-presidents). (Central Intelligence Agency, 2015)

Trade

It is the 40th largest export in the world.  Its export figures in 2013 includes export of $100B while importing $95.2B resulting is a positive trade balance of $5.45B. Also in 2013, its GDP was $133B and GDP per capita was $13.5K. (Simoes and Hidalgo, 2011)

According to the Simoes and Hidalgo, (2011) “The top exports of Hungary are Cars, Vehicle Parts, Spark-Ignition Engines, Packaged Medicaments and Computers, using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum, Vehicle Parts, Petroleum Gas, Broadcasting Equipment and Packaged Medicaments.”

The top export partner of Hungary are Germany, Romania, Italy, Austria and France.  While the top import origins are Germany, Russia, China, Austria and Slovakia. (Simoes and Hidalgo, 2011)

Transport

Goods transports in Hungary are through the railway, surface roads, inland waterway,  and pipeline transport.  In 2014, the majority of goods transported are (descending order) through roads, air, rail, pipeline, and waterways transport  (Ksh.hu, 2015).

Trade Agreements

Austria – EU member. Croatia – EU member Slovenia – EU member

Serbia – FTA with EU, February 1, 2010

Romania – EU member Slovakia – EU member

With the exception of Serbia, Hungary is surrounded by its fellow EU member states so there are free movement of goods, people, services and capital within its members. The lone non-EU neighbor has a free trade agreement with the EU that entails liberal trade movements.

Economic Outlook

Growth is expected to proceed on a more moderate and stable path going forward after hitting a five-year high in 2014. Continued gains in the labor market should support growth next year, however, it remains unclear if the government can prevent a significant moderation in investment going forward. FocusEconomics Consensus Forecast panelists see GDP expanding 2.8% in 2015. For 2016, the panel sees GDP expanding 2.4%, which is unchanged from last month’s forecast. (Focus Economics, 2015)

1. Austria

Geography

Austria is a landlocked country about the size of South Carolina and shared its borders with Czech Republic, Germany, Hungary, Italy, Liechtenstein, Slovakia, Slovenia and

Switzerland. The terrain is mostly mountains in the west and south, mostly flat or gently sloping along the eastern and northern borders. (Central Intelligence Agency, 2015)

Government

Austria has a Federal Republic type of government consisting of the executive branch, legislative branch and judicial branch.  The executive branch currently has Heinz Fisher (since July 8, 2004) as President and Chancellor Werner Faymann (since December 2, 2008).

The bicameral Federal Assembly consist of Bundersrat (62 seats) and the National Council (183 seats). The highest court is the Supreme Court of Justice consisting of 85 judges organized into 17 senates of 5 judges. (Central Intelligence Agency, 2015)

Trade

Austria is the 28th largest export economy in the world and the 9th most complex economy according to the Economic Complexity Index (ECI). It has a well-developed market economy and skilled labor force.  Its complex economy consist of a large service sector, a relatively steady industrial sector, and a small agriculture that is highly developed. In the past three years, its economic growth has been slow at less than 0.5%. Its unemployment rate is at 5.6%, which is low compared to its neighbors but is a historic high for Austria. Its top export are equipment and machinery, automobiles and parts, paper products, metal goods, iron, steel chemicals, textiles and foodstuffs.  Austria’s main export partners are Germany, Italy, France, U.S., Switzerland, and Slovakia (Central Intelligence Agency, 2015).  Its natural resources