Thursday, 23 March 2017: 17:10
The Visegrad Group - consisting of Poland, the Czech Republic, Hungary and Slovakia - has demonstrated progress in converging with the 28 member states of the European Union since their transformation, as measured by relatively higher gross domestic product (GDP) per capita growth rates. They have also experienced a slow, yet steady increase in revealed comparative advantage (RCA) indexes related to the Organization for Economic Co-operation and Development (OECD) International Standard Industrial Classification of All Economic Activities (ISIC) Revision 4 methodology, which accounts for the export composition changes in high tech goods. However, a closer and deeper analysis indicates that the GDP per capita growth rates in these countries have not been as impressive in recent years, especially since 2008. The increases in RCA indexes related to high tech goods has not translated into positive changes of value added in world value chains of Visegrad Group exports. In fact, the value added is minimal compared to the value contribution of developed countries as it relates to labour cost components of the exported goods. This trend, as observed in recent years, indicates a dramatic slowdown in the improvement of international competitiveness of the Visegrad Group on one hand, and suggests a need for revision of RCA as an indicator of international competitiveness on the other hand. In other words, the use of the RCA index should be supplemented by world value chain analyses for exported goods by these countries, to reflect real changes in the competitive position of the countries in question. Additionally, this may suggest a need for the revision of the pro-growth economic policy strategies of these countries conducted so far, if they are to upgrade their competitiveness position.