In 2004 the two issues of the Economic Survey of Europe provided a review of current macroeconomic developments and an assessment of the short-run outlook in the UNECE region with special emphasis on south-east Europe and CIS.

For the eight east European countries that entered the European Union in 2004, a major challenge is to catch up with the higher real incomes in the existing Member States of the EU. In this context, the first issue of the Survey included a study analyzing the problems and prospects of harmonizing the tax systems in these countries with EU norms and rules. A second study showed how product differentiation could contribute to the reduction of large disparities in per capita income and rates of growth between countries in the region. There was also a special chapter dealing with poverty in the transition economies.

One of the major challenges facing the member States in the UNECE region is finding ways to foster the competitiveness and growth of their economies as well as meeting the new challenges posed by the advance of the knowledge driven economy. Supportive public policy and efficient public institutions are important factors in shaping the competitiveness of nations and in accelerating economic development and growth. With the aim of identifying some of the main tasks and responsibilities of UNECE governments, the UNECE Spring Seminar 2004 dealt with the topic "The competitiveness of nations and economic growth in the UNECE Region". The participants at the Seminar discussed factors promoting economic catch-up processes, the determinants of competitiveness in the knowledge-based economy, and the role of governments in fostering competitiveness and growth in the private sector.

The second issue of the Survey 2004 included a study on various dimensions of competitiveness in the countries in the UNECE region. This study, based on a paper presented at the Spring Seminar, showed that the deteriorating capacity competitiveness, especially in ICT infrastructure, is one of the main factors hampering the low-income countries in the region. It concluded with some policy recommendations.

The UNECE contributed to the review of commitments of the OSCE by preparing a report on the "Investment climate" in the UNECE region which highlighted the current investment climate in eastern and central Europe and the CIS, discussed the prevailing bottlenecks in attracting foreign investment and suggested some policy recommendations. The UNECE has also been involved with the OSCE in jointly developing a conceptual framework for the early warning mechanism. A brainstorming seminar was held in Vienna in November to take stock of the existing early warning mechanism and decide on the future path of action.

The UNECE organized a Post-Transition Economic Policy Forum, which offered the opportunity for a wider public debate among policy-makers on major economic problems that are specific to the present stage of development in the countries that have basically completed the transition process towards market economy systems. The Forum's Expert Group aims to come up with policy conclusions and recommendations that are relevant to the post-transition phase.

Nobel Laureate Joseph Stiglitz delivered the 2004 Gunnar Myrdal lecture on "The Process of European Integration and the Future of Europe". In his presentation, Professor Stiglitz pointed out that information asymmetries often intervene in capturing potential gains from trade liberalization, privatization, and deregulation. While referring to European integration, he cautioned against a single rigid model of European integration based on ideology and encouraged the promotion of a pragmatic and flexible model such that the European institutions could effectively adapt to the changing landscape of the integration process.

The UNECE and the United Nations Population Fund (UNFPA) co-organized in cooperation with the Government of Switzerland the European Population Forum 2004 on the theme "Population Challenges and Policy Responses". Held in the context of the decennial review and appraisal of the implementation of the Programme of Action of the International Conference on Population and Development (Cairo, 1994), the Forum considered important, newly emerging population changes, examined the challenges they pose and identified the best policy responses to them. Most of the work on population ageing carried out by the UNECE focused on the follow-up to the UNECE Ministerial Conference on Ageing (MiCA) (Berlin, 2002). A workshop on "Sustainable Ageing Societies: Indicators for Effective Policy-Making" was organized in Madrid, in April 2004. The UNECE also continues its work on the census microdata samples project, which is being funded by the US National Institute on Ageing, and its involvement in the Generations and Gender Programme (GGP).

Major challenges for 2005 remain ensuring that the Survey makes relevant contributions to the discussion of economic issues important to UNECE member States. Against this background, the first issue of the Survey 2005 will include a special chapter dealing with relative output and productivity growth in the US and three Nordic States. It will analyse whether reforms undertaken in these three countries have followed the US model or whether they provide a new European model of a reformed welfare State. With a view to contributing to financing for development as outlined in the Monterrey Consensus, an occasional paper on domestic savings in eastern Europe and the CIS will also be published.

The UNECE Spring Seminar 2005 will deal with the topic "Financing for development in the UNECE Region: Promoting growth in low-income transition economies". Major issues to be discussed are factors that affect strategies for development and growth, economic integration and trade, and financial management and sustainable growth in resource-rich economies.

In line with the Memorandum of Understanding between the Secretariats of the UNECE and the OSCE, the UNECE will contribute to as well as coordinate the preparation of the report on the monitoring and review of the economic and environmental situation in the UNECE region. In 2005, the UNECE will take the lead in the review of commitments in the areas of "Integration, trade and transport".

As part of the follow-up to MiCA an expert seminar will be held in April 2005 on "Care Provision in Ageing Societies: What are the Policy Challenges and How to Address them?" The seminar will be co-organized by the UNECE and the International Institute on Ageing (INIA) in Malta in collaboration with the European Centre for Social Welfare Policy and Research and the Institute for Older Persons and Social Services, Madrid, Spain. Work on the census microdata samples will be continued in collaboration with a consortium of European and North American data archives and research institutes. Several countries will in 2005 start or continue with survey data collection for the Generations and Gender Programme.