If you are convinced that internationalization is an effective way to grow your business and that you need to start exporting or to diversify your current exporting activity, the next question is: where to? Over recent years, Irish SMEs have learned that the Irish market alone is not enough to support a long-term growth strategy of any scale and given the uncertainty around Brexit and its aftermath, the time has now come to look further afield.

Mentions of the U.S and Mexico are valid, yet Irish companies do not necessarily have to cross the Atlantic to get a flavour of what benefits globalization can deliver for their business in more accessible markets much closer to home. Eastern Europe, excluding Russia and the former Soviet republics, is a region comprising some 14 sovereign nations, many of them full members of the European Union and the Single Market with a population of 115 million and a combined GDP of over $1.4 trillion and growing.

While we often refer to Eastern Europe as a single entity, as if it were one homogenous block of countries, in reality this is a very diverse region geographically, economically and culturally, that stretches from the cold shores of the Baltic Sea in the north to the warm waters of the Adriatic in the south and from capital cities such as Prague and Ljubljana in the West, both further west than Vienna in Austria, all the way to the Black Sea coast and the borders with Turkey in the East.

By far the largest country in the region, both demographically and economically, is Poland with its population of over 38 million and its GDP of over half a trillion dollars growing at a steady clip. Poland is a diverse economy with many opportunities for Irish exporters in sectors such as food, technology, infrastructure and business services. Together with the Czech Republic and Slovakia, it forms a highly developed and compact geographical sub-region with a market of nearly 55 million people and an economy with a combined GDP of $795 billion. All three countries are members of the EU single market.

Another highly economically developed sub-region of interest to Irish exporters is that formed by another three EU members – Slovenia, Croatia, and Hungary. Slovenia is also a member of the Euro zone and is the Eastern European country with the highest GDP per capita in Eastern Europe at over$25,000. This region has a population of 16.1 million and a combined GDP of $254 billion and again represents an area of considerable potential for Irish exporters.

While the economies of Bulgaria and Romania are less well-developed in comparison to those already discussed, these two countries, which share a long common border and a coastline on the Black Sea, have been developing their economies steadily since they joined the European Union and also offer opportunities to Irish exporters looking to the future. Together they have a population of 26.7 million and a GDP of over $260 billion.

In summary, the various regions and countries of Eastern Europe provide a fertile ground for Irish exporters with considerable opportunities for the future both as export markets themselves and as locations for manufacturing and distribution operations exporting into Germany and the other large European economies. The major economies of the region are all members of the single market, are readily accessible, have well-developed infrastructure and are developing steadily benefiting from their proximity to the large economies of west-central Europe.

As an Irish exporter, to be successful in the region, you must know your market and the value that your offering provides to that market. Therefore, you will need to develop and implement a realistic and coherent strategy that quantifies the time, money and effort that you need to invest in researching and developing the market and that covers all the significant practical aspects of finance, logistics and routes to market, strategic partners, distribution, localization and language, and so on.

Here are some facts and figures on the 14 countries that make up Eastern Europe to give you a flavor of the size and diversity of the economies of the fourteen countries of Eastern Europe.

1. Poland – EU Member, Non-Euro Area

• Population: 38.4 million
• Nominal GDP: $510 billion       
• Nominal GDP per Capita: $15,000
• Capital: Warsaw

Ireland’s trade relationship with Poland is unique among non-English speaking countries. While other EU markets may be richer and more populous, strong personal and professional ties between the two nations makes Poland easily accessible to Irish companies.

Poland ranked in the top 14 countries of shipments by dollar value during 2016 and imported well over $186B during the same year, making it the 19th largest importer in the world. It bodes well for Ireland that one of its largest imports are packaged medicaments, while vehicle parts, cars, and crude petroleum remain as the top three most imported products

2. Czech Republic – EU Member, Non-Euro Area

• Population: 10.6 million
• Nominal GDP: $196 billion
• Nominal GDP per Capita: $19,800
• Capital: Prague

Thanks to its strong manufacturing tradition, educated workforce and central geographical location, the Czech Republic has become one of the most attractive places for investment in Europe. In 2016 the Czech Republic imported $138B, making it the 25th largest importer in the world.

The fastest growing import of the country in 2016 is vehicle parts – representing 6.43% of its total imports – followed by computers, cars, and packaged medicaments.

3. Albania – Non-EU Member, Non-Euro Area

• Population: 2.9 million
• Nominal GDP: $14.1 billion
• Nominal GDP per Capita: $4,900
• Capital: Tirana

Albania is an upper middle-income country with a GDP per capita of USD 4,300 (2015) and a population of approximately 2.9 million people, more than half of who live in urban areas. A member of the WTO, Albania is also a signatory to the Central European Free Trade Agreement.

In 2016, Albania imported $4.65B, making it the 87th largest importer in the world. Its import annual import rate has also increased over the last five years – from $5.12B in 2011 to $4.65B in 2016. Its fastest growing import is composed of different commodities and materials such as food, machinery, and textiles. Refined petroleum and cars are also two of the most significant imports of the country.

4. Bosnia & Herzegovina – Non-EU Member, Non-Euro Area

• Population: 3.5 million 
• Nominal GDP: $14.4 billion
• Nominal GDP per Capita: $4,600
• Capital: Sarajevo

Bosnia and Herzegovina is a transitional economy with a population of approximately 3.8 million.  The Central Bank estimates GDP growth in 2017 could range between 2.5% and 3.1% depending on the successful implementation of economic and political reforms.

In 2016 Bosnia and Herzegovina imported $9B, making it the 73rd largest importer in the world. The most recent imports are led by refined petroleum which represents 5.07% of its total imports, followed by cars, which account for 3.78%, crude petroleum at 3.2%, and packaged medicaments at 2.8%

5. Bulgaria – EU Member, Non-Euro Area

• Population: 7.1 million
• Nominal GDP: $56 billion
• Nominal GDP per Capita: $7,900
• Capital: Sofia

The World Bank rated Bulgaria as the 30th country for ease of doing business. AT Kearney also ranks Bulgaria as number one in Europe and ninth globally as an outsourcing destination. The Nomad Capitalist also describe the financial situation in the country as “stable, with a debt-to-GDP ratio that is just 1/6th of US levels.”

In 2016 Bulgaria imported $28.4B, making it the 50th largest importer in the world. The most recent imports are led by crude petroleum which represents 6.65% of the country’s total imports, followed by variety of other products accounting for 4.6%, and packaged medicaments at 3.5%

6. Croatia – EU Member, Non-Euro Area

• Population: 4.5 million
• Nominal GDP: $57.9 billion
• Nominal GDP per Capita: $14,000
• Capital: Zagreb

Located in the heart of central and eastern Europe, Croatia has made significant progress in overcoming transitional and legacy issues associated with the war since its independence in 1991. Although Croatia’s traditional trading partners are Italy, Germany, and Austria, there are opportunities for Irish companies.

In 2016 Croatia imported $21.6B, making it the 54th largest importer in the world. Its fastest growing import is cars which represent 4.13% of its total imports, followed by crude petroleum at 3.86%.

7. FYR Macedonia – Non-EU Member, Non-Euro Area

• Population: 2 million
• Nominal GDP: $10.4 billion       
• Nominal GDP per Capita: $5,000
• Capital: Skopje

Macedonia is a developing market that offers Irish companies an excellent opportunity to expand overseas. Receiving approximately €100 million of EU funding per year, the country can support projects in infrastructure, social policy and education, and agriculture. These projects provide opportunities to Irish companies looking to do business overseas.

In 2016 Macedonia imported $6.74B, making it the 79th largest importer in the world. The most recent imports are led by Platinum which represents 12.3% of the country’s total imports, followed by refined petroleum, which accounts for 5.89%, and laboratory ceramic ware at 3.5%

8. Kosovo – Non-EU Member, Euro Area

• Population: 1.9 million
• Nominal GDP: $7 billion       
• Nominal GDP per Capita: $3,400
• Capital: Pristina

The Republic of Kosovo is Europe’s youngest country – but has maintained positive economic growth rates over the past recent years. Kosovo is working to improve the investment climate by strengthening the legal environment necessary to attract and retain foreign investment.

The January 2017 report of Kosovo Agency Statistics states that the country’s imports from EU countries were around 63.8 million euros, or 43.4% of total imports, an increase of 11.3% from the previous year. 17.5% of imports comprise mineral products; 12.9% are prepared foodstuffs, beverages, and tobacco and 12.1% are machinery, mechanical and electrical equipment.

9. Montenegro – Non-EU Member, Euro Area

• Population: 622,000 
• Nominal GDP: $4.4 billion       
• Nominal GDP per Capita: $7,100
• Capital: Podgorica

The local government supports the import and export industry in Montenegro through a series of measures to liberalize the trade regime. To become a member of World Trade Organization, the Montenegrin authorities had lowered customs duties and removed tariff and non-tariff barrier.

In 2016 Montenegro imported $2.25B, making it the 99th largest importer in the world. The most recent imports are led by Refined Petroleum which represents 6.17% of its total imports, followed by cars, which account for 3.85%, and packaged medicaments at 2.4%

10. Romania – EU Member, Non-Euro Area

• Population: 19.6 million
• Nominal GDP: $205 billion      
• Nominal GDP per Capita: $11,800
• Capital: Bucharest

Located in south-east Europe, Romania is considered as the seventh largest member of the EU by population. It is a member of the EU, the World Trade Organization, and other international bodies.

Romania imported $74.4B in 2016, making it the 32nd largest importer in the world. Its leading growing import is composed of variety of products which represent 4.06% of its total imports, followed by vehicle parts at 4.02%, and packaged medicaments 4.02%

11. Serbia – Non-EU Member, Non-Euro Area

• Population: 7 million
• Nominal GDP: $42.4 billion       
• Nominal GDP per Capita: $6,050
• Capital: Belgrade

The growing services sector mostly dominates the economic landscape of Serbia. It also has become an investment destination for manufacturing and processing industries and offers considerable potential for Irish businesses as well.

Serbia imported $19.2B in 2016, making it the 56th largest importer in the world. The most recent imports are led by a variety of products which represent 16.8% of the total imports of Serbia, followed by vehicle parts, which account for 4.55%, and crude petroleum at 3.6%

12. Slovenia – EU Member, Euro Area

• Population: 2.1 Million
• Nominal GDP: $52 billion     
• Nominal GDP per Capita: $25,300
• Capital: Ljubljana

Slovenia is one of a group of 9 emerging markets in Central and Eastern Europe (CEE) which offers long-term growth prospects. It acts as a gateway to southeastern European markets and has strong historical links with the nearby markets of Croatia, Serbia, and Bosnia and Herzegovina.

In 2015 Slovenia imported $27B, making it the 68th largest importer in the world. The most recent imports are led by refined petroleum which represents 6.26% of its total imports, followed by cars, which account for 5.74%, and packaged medicaments at 3.3%

13. Slovakia – EU Member, Euro Area

• Population: 5.4 million
• Nominal GDP: $89 billion
• Nominal GDP per Capita: $16,400
• Capital: Bratislava:

Slovakia is a member of the EU, so European business practices and standards apply. There are no significant cultural differences to consider so adapting to their culture is reasonably easy. Slovakia’s economy is converging rapidly towards the living standards of advanced Organisation of Economic Cooperation and Development (OECD) economies.

In 2016 Slovakia imported $67.3B, making it the 35th largest importer in the world. The most recent imports are led by vehicle parts which represent 11% of its total imports, followed by broadcasting equipment, which accounts for 5.54%, and cars at 3.1%

14. Hungary – EU Member, Non-Euro Area

• Population: 8 million
• Nominal GDP: $144 billion
• Nominal GDP per Capita: $14,700
• Capital: Budapest

Situated in the heart of the Carpathian basin, it is an ideal place for Irish companies to set up, serving as a gateway to the Central and Eastern Europe (CEE) region. It ranks 48th in the World Bank’s Ease of Doing Business report. However, the report places Hungary at 110th place for protecting investors.

In 2016 Hungary imported $91.4B, making it the 28th largest importer in the world. A variety of commodities led its fastest-growing imports at 6.12%, followed by vehicle parts at 5.65% and packaged medicaments at 208%.

To learn how we at Alba Consulting can help you to formulate and implement strategies to bring your business onto the global stage, contact us today at +353 1 415 1252 or email us at info@albalogistics.com