x pasodusy sup np yo arwme Bup9q 3 ‘Aayssaaqp Bumumuos ayy wand id op “puey saoqpesd Suquodas jeuore due st sias viep vweadommg arp Aq papint Selamat oj uojeenson swouooa Nn oth Popncnt Soqo5 ep suorfar aan jar di MalAiono unogUn e apiaoid 0 “pavunsqns aq rou] ow tes (08 yspunurwio3 atp Jo [01 yueunMop ayy 21) asuapuedsp wed 's =p ceirenb or da ppe frou erp soouaraptp J foacarour ‘owe oy) jo oueU aM o9pus 8 aouailiontp “oxDMOY ‘J SOE a4} Jo SOU 30 YpwO UT AIGATaSGO 2q im snons#uuop suOHMASUE “Kuve "Teunt0y ny ‘COU Jayearau) voAMpoxas uoReDANUILZED jofou ‘esin9 aomoser aip ‘ICE JO 212 Pa ‘Suey pemanas “Kgapoe ofutoueos jo jaaaq Mo] MAoRdnss00 Sut 5s oso muopemojeta yams ous 1s spMUNIOD FE -prEMOHYsrENs /Aap afUIOUDIe JO nb on Bus ‘ou ysud ysrumuauor ay smug ‘sangraf wound ‘pansay aq 0} sysoypody ang “papnysu0d aq 0} juno SuuzoysueN aup jo Surppoqua aap ‘Bury nn pue uoponpard ayy se Ypns “eoureuzoszed am way, aoryd Supe; st dn St yom Sug moyos ayy Uy amy Jo awos Surpppes Jo streaut Ajeue yeonarooyp sapeaig oy Are -ca8if pun sponf Jo mayarano ue aprxord oF PONACIAR TVORMdWA JO * MAIATAAO TALLVUVdINOD V % s19- Gog“ -01 gp fon ‘sonnet senegal pooyp Sunjooy owe Sure, snot TeUOHTMSUY MAL AL, (Oct) “ONOSKVTIM wrod uysyy of Ago fo feouany 25) prot #2 outs et) NOS oxen 31 Ae panyps) werzarae apps pn Fea 2OHOE NL essepoon 1002) "N. aoeasng Aq pw wren, Aq syo0g uasey 4 on ‘Saayoodaieg onuowoog fo uo -wopssen jo -ou ons ods ‘gouty auonorg pana Jo sito tay uy Burs Ing Budioun sotysaen pee qwaedoyersc 1002) °D “HO “Te-o¢ de tn PMY ~ OK MON nna Aaeyuoy 32090} [aGON (9861) A SVOAML opi nary fo ous Rusyion) ~asiqesost enowors 0002) *¥82¥1 1A su0pu07 pu ayoradnseg ‘wousundy fo sopoUarA aL (6561) sag fsantin oB620 purl pov oe fas mes a, iy fae ars ge) By ‘EDT Said MaTAISOA:¥SM/0 820 =a mpun suoqspep so dene uy shzan yds 6061) "V OOSSEAL Oe CL NYMANHY1ce on borrowed data, coherence and relibi compensate for standardization and loss ‘our assessment may or may not overlap with data providers. On Catching up ‘Overcoming backwardness! and catching up with more advanced nations has been a dominant concem over the past two centuries in Central and Eastern Europe! Also, when transition started the belief of immediate welfare gains hhad been strong, both in the profession and by the public at large. Fat consequences of discontinuing distortive practices were seen to be tr hhand. As it is known, instead of the immediate improvement a period of recession evolved, that lasted longer and was more costly in ‘bs and output than most analysts would have expected (more on i, 1994 and Winiecki, 2002). As can be seen from Table 2 in the ly Central European countries, ie. a minority from among the ‘ing economies that managed to surpass the pre-crisis levels of out- that in open societies, and especially in the age of the information and com- ‘munications technology revolution people no longer judge their lot on the ‘basis of past experience. The constant comparisons to the Jones’ ie. to neigh- ‘bors both within the society and across societies is an everyday experience, amply documented by Eurobarometer and many other public opinion surveys. i to assess if the level of development is now closer in the Appendix we cee that ‘the Westin total hns sever sen a rece 1986-2002 period despite frequent statements to the contrary end. If we disentangle numbers we see one single year, 199, when output in the European Union contracted, by 0.3 per cent. As growth in ‘Western Europe was positive between 0:1 and 41 per cent in each of the years, ‘whereas in the United States growth was between 0.4 per cent and 44 per cent ‘in contemporary debates the texm ‘globalization replaced incorporate hithoro excluded countzies slong the course of rome level reaching a least 0.75 the European Cental Bank, based in the time span of 2 months. This umber of theoretical and practical considerations 6 inesch opm xr except 1991 (when a drop of 0.6 per cent was recorded), thus devel- tance, measured in dollars, grew both between the US and Western Europe, as pp. 234-235), Since these numbers already reflect those corrections which are "eee for purchasing power party adjustment th problem of stance plp- able indeed, Looking at Western Europe the very slow growth of the defining economies of the European Union, particularly of Germany, France and Italy comes to the fore. By contrast the fesiest GDP growth is recorded by the richest EU nation, Luxem= burg. Signs of the much-discussed Irish miracle can be seen, and Finland too, ‘overcoming the crisis of 1992-98, triggered by a poorly timed financial liberal (Paunio etal, 1992), registers high growth, though e volatile one. Allin telling that size and success do not seem to correlate (refuting the litera- ssion with scale economies). Looking at the Souther members, one observes Greece catching up since 1997, ie. since the successful switchover from profligate to sound finances (that culminated in this country’s joining the euro-zone in 2001). By contrast, num- bers of Portugal show the consequences of the Guterres Government neglect- ing structural reforms and fiscal prudence in 1999-2002. Therefore growih in 1.999, has not been faster than in the core EU. ain, one of the latecomers both to BU and euro-zone, we can Spanish eatching up was based on a closed market that was gradually ized. Following the ‘cure’ Spain entered the club of counties with sound money, and growth, this time non-inflationary, also resumed since then. The re Aznar Government of 1996-2008 has adhered to fiscal prudence and instituted structural reforms at good times. As a consequence, Spain is one ‘of the few big EU countries that do not struggle for meeting the criteria of the Stability and Growth Pact and is not advocating the softening up of the Pact. Meanwhile, Spanish growth is above the EU average, thus catching up here con- fiues. Already a sketchy overview of the numbers should make us agnostic in terms of a variety of economic Signs of convergence are not obseronble: some countries do catch uy Tichest ones show no sign of ist and grow quicker or not, Size of the country, often involves regional economic integration, docs nol seemt to matter that much for success. On the other hand, as we shall the concluding chapter of this monograph, the propermix tions do matier. Lacking these, as in German reunifica- to ossification and slowdown in the period following ven either by history or by country size, further or may not result in catching up. membership in the EW 2”« 8% 24) 0) wane vou oA9} ‘eusog se yon “socuim SUN ruoodos {fay avowsafuny uo, ‘Smmpind fen ‘cIVIONA uae ‘allem © pue ayes a8uelpxa panyeArono Ue Jo UORVUIqUIOD ay} 10} payunod>e puto Azeroduray © 0; ouro9 yas 2 Sasn woRtaTTgNd paw anoge ayy Wh TUEH PH toy Rouen uy passant sun Aletoedso 2D YEO -speAyeuw sno 10 palqne xq 20} aznsvour snp Aydele 04 astias axeut s20p If 240 ‘dso poraseydtna) uonmuos rence we unin Biido muuoysten ‘payeayjaad samnquoa Aouoray0 jusopoUu-ap autos oydv0q <09t4d © ; se paydanoe st snp aout sop ‘pamseaur st aurTIopiad sTu0u Ise UBaMAjaq ayer BBUEYDXS yinox8 gdp Aq ysanmouD 1661 WOH Kpeasye Keo ANSE, sanurouoog Sururoysuedy, a1p Jo aoueULOyseq pue HOROMpOs ‘iosonot Une prone jue ua 105809138 “eu0 Suurouon9 jwoAa[or DI0t 3 a9yar say wrosy asoxy Bune ‘yuano:8 snouafopue /uoneAout owe Jo woasKs yeapeniq pure 499 990K JTaYM SATUNOD ow Rupsas9c wuagsa dope senu09 Ke 50 runos paoueape 3527] “(e66t ypenqusog sofepnyy Aq paurejdxo yexy se) e2prjod oof pur Jona] yeyrowsdojanap uooajoq enxot © tx 03 wzO8 “Age] pu aourerg ‘Aur ‘sepeoap 40} “pauue(d uaaq pey sayerg Inyeg aup Ul ‘rurouooe ‘osty “eoeds yia0g p ‘may ‘sapeo9p Xs nus starouoe wor; pasado aq 0} sem Jey Savy PIMOA ywYY ypssous =yoy/008 pue eIURgTy ‘enIaAoIg ‘pug ‘Ymor3 pue ArAoer “GAD Jo ‘pure ado ayewiaqry 30u saop Kauows pumos yeup St 2/9hf, wtoss a|qeaiasqo Ose SBM,“Looking across the region we can observe the resumption of 1994 onward. The trae dividi is, however not this year, b and Albania after 1997) ‘onset of growth took much longer in Independent States wus despite impressive current growth ¥ post-1999 period be and even more Ukraine have still a lor ge in regaining their lost output levels, thus incomes. ‘Our Table 2 shows also that the recovery of growth is by no means aulomat- jc, and countries like Croatia, Bulgasia and Ukraine seem to struggle with the from the extreme case of Belarus, where the quality of economic report plus available information does not allow for giving a solid picture. ‘Moving to the Commonwealth of Independent States 1 truly im first insight is that though the performance of the postSoviet space ously dominated by Russia, thus the two co-evolve, the overlap complete. Contrary to the impression one may gain ‘sources only, Russia is not an outlayer, a representative of calustrophic filre important to call attention to the optical misperception caused by the regi standardization by the ECE Secretariat. The fact that 1969 is taken as a baseline sportant fact that in Russia the contraction of economic actio- 9, and 1992 was a year of disintegration.’ Thus a 21.2 per year covers up ity started alren ‘cent drop of activity should by no means be attribuied to transformation, whatever we think about the merits and de-merits of contemporary policies. ‘As a matter of fact this Russian — and the comparable Uleainian ~ figure is 2 Thesessons fortis delay are explained by the fact that transformation inthe NS started two sfely speaking toe years 1992-1994 have been spent on state building, NOT reforms, was talk of referme in each ofthe nev independent states, in reality vsismanage- ‘ment was dominant. More on tat in our Rassia chapte, and the literature quoted thers, ‘Rusia sone accounts for about to thirds ofthe joint GOP of N/T, two terms used iter- ake account ofthis circumstance, the truly traisformation-related reces- sion in Russia and Ukraine had been neither deeper nor more protracted than in Central and Eastern Europe. On the other hand, given that the two contrac- tory factors were added together, the recovery of the Putin/Kuchma years ‘must be seen in proper perspective. Russia in 2002 was still only at 68 per cent of its pre-crisis levels, Ukraine at 47.3 per cent only. First these are by io means identical performances. Knowing the protraction and foot-dragging in Ukraine, the superior performance of Russia perse isa proof i delivering better results on the same grounds/rui in the early 2000s these two countries may have looked as truly growth poles in Europe, the level of activity should not be forgotten ;portant follow-up insight from thi ysis, supported by mono- sessments of the empirical de fn -g. Réthi, 2003; Mau and rer over a lack of elementary co-ordination among various dimen: ¥ Russian government epp2- attribute the outburst of sequent elections of December 1993 had an anchor, in the form of an elected and universally accepted Presidency (and a much weakened legislation), ‘while espiring ‘he quality of most regional stasis during the 1990s.«6 1 25104 51 ‘gO Oy Sups039y au au onzosgo wed 9M 2 appar We BUPOO] “elssmy ‘oquioUs pasodxa asour AITe swonwuzayuT sir Ite parenbo og ‘sueaus ot Aq ‘pINOYS SIN a Te $1.47 ponasd inf su poBpnl ag Rypany ws ways tuo yon aya pun apm ssoutsng “na an papaanxa Atprey Sey JC JO MOU ALP YET 01 Bunysny “paisedso dq aacy pied astrayO TeNN YsePoeg feuoAUTHAT ayy wosj 3 pones pur ‘Aouaprsaxy aip yo samuapusy BurzequeD ap POISE 389M 949 Jo Aye ur se vissmy yo UoHEBerdde ovens our, “Tope Zaquiaados 11 to 59 Bumoy[ey soouwse yeUOH fay) tano aferoa] ou sey eISSMyL Bly AqBuruteisns 4q parssse poled aoer8, snyy (sareumse (5002) AL 0} Buypuoooe sx) 1 eID Jo 1499 fod /[ 04 g wos) wonDaT|oD xe Jo ywouancsdust oro\t esauIong yutese puv uoNeapay EIsany ayp JO Pa!qN opis © OFUY PIseMyy DK “sanyod jo Aomutad, ay souareytp 1ofeus ay, ing fenuo> wroy) porlsstp Aroowp atp Suoye ‘ei pue hq “patordzayuy aq ued yeu worse pouogruofsung jo s1e—k any aaioeqo om g66L-POGT ET “past|dio22e waq pey Trp SOR |IOLLd akp 270M SOUL ‘nvjso8ing Suope uonexZayuisip jo aoueprone ‘Aotaprsaud v pue ayms-uOReU E30 tuorear3 “Moa © UL STIOUNAIANOS OME pure BUD UUPEAWOUIAY.> y2isy Jo sureiZoid yuoueBeueursist Suansor {woo uaeq pey ‘ere yorA0g ox Sump Ape: ojutsrp oruouceng “oyey8 Syred auo oy pur axed yo siaioy Ur payeary aq PIROYE QG6I~GR6E ‘PuEKIadA UeISSM ow dre Us oy, 1g fenboayfan ayudoaeys Aq, payeinysod amnyeas> puontsuen ut owes? jo jued v ase] moy Apoex9 uo 404 se PomH9e iOU 1d yong Sunes vp ancy saop uo suseyms yo uonwzitet. (eco ‘sous ue ‘ot gem ‘opqeseop Jey joey tL] "quaUTOATALD pouOyat ood Bunya u99q ee yi 209 ss -adiuoo xp 248 'g6]-676 30 worssandag 3waID aXp o} asdeyjo> YatA0g-1s0d at aredwos 0} endorddeur pure Suypesystu 8 1ee-ve7 “4d “26651 ‘pysmoysoy) sBurpuyy 1eypreo yo aanioddns at 10% "UtseX ZO {p) surSueus ayy uo safueyp yen{ yuosatdan yuapKo YUM asn Supgeur ‘sod tus yoni Jone op papuay uouova wnresm in 'g661 3sNENy UT AouoLIno weIssMy ada ruvodorng [ex uO: okA Yi soUepr-NLe: peoids ‘sjutod atheuaaiod 21 Jo 980; nd p: y8nowg jo Azoysty /sosinoostp wey roxyex sassaoord |e: “egen UO JOYE “7E6L BP! OF HUH ioqns at nao & pute z90U0 UH Br (pan|ossip auoz 2|qni axp pute) poonpossurax yyurqounte Jo Aqodouour Areqouow 34 fored ° aaraot0> duo pros spreaiuo Fe6t WO Ao sepayod Jo [pal aip vy “posraure‘Markets are at the level typi .derdeveloped countries. In sum, it is no terms of security and in terms of the latier’s tolerating non-payments. The pen- surprise to see weak overal jance sustaining. The landlocked and dis- tration of the US at the turn of the century and following 9/11 appreciated the the country for FDL Jocal leaders as ‘bastions and guardians of stability in the region’, in the fight at all least, a country of France's population, Ukraine needs to against terrorism ld be seen from the very outset (van Selm, 1997) that there 5. Finally we should not forget what is an established fact (cf, Drabek, 1986; erent in Ukrainian independence. On the one hand, all endow- Rosefielde, 2003) that rents, natural and human factors would have predestined the country for poli ‘prosperity. On the other hand, the ingppropriale policies, weak institutions, corrad- fot of time and ing corruption a ig inaction could develop into factors seriously hindering East Germany, Bulgaria, Albania and Romania have amply demonstrated, development. Stabilization took much longer, privatization wes much slower, nd actording to the regular surveys of the EBRD (2008), institution building uch lees successful than in Russia, let alone Poland, The impressive growth eee ee ates ofthe post-1999 periods have still left the Ukraine with about half of its pre- Overviewing overall macroeconomic performance from the production side ‘isis GDP levels, that is comparable to a post-wer situation. Low activity levels hhas shown distinct categories among the post-Communist countries. Only Gre known to be harmful to social capital and a divided oligarchie power struc- Central Europeans may qualify as a success. Its surprising and runs against the cd in the literature. widespread perceptions to see the Baltic States, Southeast Europe and Russia in the same ~ medium ~ category. Is hard to overlook that historic and politcal processes, leading to the disin- tegration of formerly existing, and somehow still functioning states dominate cover economic strategies.® Whatever ‘system designers’ or advisors or changing st, mention should be made of the pariah state of elites conceived and theorized, this remained subordinate to such processes as Europe, Belarus, led ‘populist leader, the re-elected President Luka- ‘war, disintegration, un-settled armed conflicts and the legacy of the eroding shenke, Surprisingly the economic indicators are not so bad’? as the name of imperial bureaucracy. Kixgyzstan, having adopted several times radical poli- the country is, and the traditional explanation, of Russia paying the bill, also cies, may be a case in point does not seem to be supported by ECE data for the post-2000 period. Colonial heritage does seem to matter. ‘The longer a country spent in the Tn order to explain these cases the role of special circumstances needs to be Soviet empire, the more it adapted its institutions, strategies and behavioral considered. First, as long as a ~ despotic, but somehow still functioning ~ state norms to Soviet needs/ commands, the higher these costs were to be (Winiecki, fe in existence, this allows those in power to co-ordinate economic processes 1091). And indeed, if we look at the numbers of the Baltic States, or the depth. via bureaueratic co-ordination, much the same way as Communists managed of the transformational recession in Eastern Germany, itis hard to eschew this to eschew open arses in the 1970s and 1980s. A couple of further factors need conclusion. to be considered, that apply basically to the two Central Asian cases. ‘The resource base also seems to matter, though much less than traditional 1L The resource-based, mono-cultural economy allows for the continued exis- trade theories and endowment-based views would have suggested. In case of tence of centralized systems, a evidenced inter alia by the Middle Bast. Such sophisticated, industrialized, urbanized countries like Ukraine, availability of a structure does not require and allow for more sophisticated forms of control. these was of no big help. By contrast, in the traditional Central Asian societies, "2 The traditional society, based on clans and the extended f author the first 15 years, resource abundance helped to avoid the worst, ity of the elder is till around. This isa fertile ground for centralized policies. 0 carry the danger of resource curse for the future. 3. Nation building from above, as typical in post-colonial settings, is in the tify any common tr y, especially not along the lines of poli- making, This state and nation building is often perceptible to the cult of the cies adopted. Cixcumstance mattered, as did choice, but their interaction has leader, who embodies the nation. The dynastic macriage between the Kazakh proven to be much more complex than abstract theories and initial policy sug- and the Kyrgizrolers have alzeady let a taste of it to be felt. But the Uzbek and gestions would have had it. Since this point has been neatly elaborated in the ‘Turlanen leadership is of the same genre. literature, with reliance on a broad analytical-econometric arsenal (de Melo et special relationship to the former colonial power, in al, 2001) let us just reiterate, that the concept of ‘optimal policy mix’, or ‘opti- so fares Belorussian indicators, without exception, are above the average ofthe NI, this A refeeshing new initiative, tying to rover the vicious cisco offered by the new norma- sm aga elaive oacens in ite own category \ivesanalytieal Book by (Collier eta, 2003) 35sadeysqe, ‘Bugqueg “svonAsut pe fue ‘saneo jo “yy ery yeyuawusoas!) pu so ‘(meurop are spraypsnay uosstiad ato UPL 15344 1) sproyasnoy uorstiad ont) Jo aur 50m stu, Buysnoy 20} 89 saad mo] roped oquiouos9 6} payepR 4790 1b moi8 woRduinsuios Aue _upiseg. UT Os[Y “spPAA| (onrsearduar Axon yOu YSnoxp) snotsoad sme poutedaa siasaq uondumsue> (its) e661 Aq army ‘puro st uondaoxa rofeur at, ‘[O3] 390] wyeax 0} apEDap & AAU Yoo 3 FASKD aL UM ‘yaar wordunswED sisuo-aud a4 anon 07 8 aan SouIUTIOD [esaADS YEN 988 0} WEAK S13, suoneu 50 pesidsaprm aun kq pousrpuans ie pur siojswei5 0 Kem hq ‘aout aul ALIOHOAL JO 3800 a4 juoyine jwepuadap aounosas jo ansuayeTEND jeans Jo MOENUDDAOD aU O9fE UEISIPFEZE JO ‘spuutioyad sjunouro9e 290d ueysz.(2z0y Jo ag0> Uy "PYSSNy] TOAD¢OY, JOU iuprezeyY pure eae “uEsZABaTy puyy ar siaUTIO}rAd YeaIood sup FuOUTY “porqousaa AySucays uaaq soy ypu. suoo pun aoumuuofiod spuouada dos 3d jenrouuz9a08 404 uloos moaq> 39 isuodsay Aue pouinsse you sey e1eOX) ‘ayy arrow you s9op (faraq spsHD-axd at mopaq iia ad gr mnoqe Aiqrumsaud) sea Buses Te6T aX a8ED TPO a Uf seoreye ‘sioutoHod 203s oxy BuoUTe axe eUaAoIg PUP puEIOd “(Cia ‘aqereduioo you st z0yeoqpu ayp sNtp "WoIssadar EUONeALO} “sue Jo 04 moog ayy weeq aaey YsMUE YTYar ‘e66T Woyy Kuo URL siequrmt ‘ruo36a Jo a5v9 ut) pray axp apf eHEEAD PUL eRDAO|G ‘puBjog ‘off su Zp, “stone7tferouad auros 10) sole snyp ‘Ssanond un1ay-uoy e yuasaid 529%), 20 ‘aun 24 pu cone aac souyng 07 oy 31 (ore out jo sone mau pue INNER TEAC aug 0} anp) Squreyrooun ones zopun Sump>e asowp 40} Ayr; seushoyjod Aur 10s wunrayp zofeu v aroyaxoU, ‘OUI Jo UDWOUN Ye Ut =aro> uonuyap £q vondumsuos juasan> pire uordunnstios aanyny af 2° URUt -aseaur pure tondumsuos ‘puey Layo axp US ‘Moge aFFNOIq asany ssaifloud jeuatew oy &q Jomod ut as0up Jo (fous afipnl sioion ‘soot ard 5) Moy ynoge eapr ue sn saat xtpuaddy 5 pure ¢ ga, 03 BuPON ynporg apsouOC] ssorp Jo wOHEZTIAA spay pounytadno Ajjemoe exp axon pajond Zann “repi0 ‘uonnjoaa 2tp 30) (p96) aseayd sxAupjog (ae wor209 0} UOHE ‘ssaooid tp ssasse 0} Ajay are saRODOS Moy az0,OROKH “UORICUN JO ng Bump po8ueyp ancy x} smu *p9zqBM t99q Sey dip Moy se BuDjoo] oxy ‘soURUTIOsFed Jo woNFSocurooap ayy ov TY am BUAROT Slop 2up uy ‘ssooons ueip peardsaprea arour waaq sey OMypE} ALSYAK ’soKWOUD? Surauojsuen ax pla 950 ap Iq PeepUl Seu SIU) ‘azeLOQELA TEM sisKteue Jaye] pure ‘sisans morasaao ysayj ap Apeaste sy “WaLOWTp ale sauo Addeyun Je Dues oyp are soeareur Adday je omy yous Surureydo “euarey etry 01 sprom Azoyonpon 5 foo, 027 Jo aartioddns am sSuqpury 100 ‘eon et] jouorar atp ‘monsopy oF Kytqysttodsax sano Butssed, yo Aout [iene atau! oxrasop os[e SIN Ueadoing, UoudojeAap srwoUODe yaysOEad sO} ‘fom op Sutaed 205 a 004 pu 9p] 001 9q Apeadye our yuouTBAjoats SHUEY oma -suexjeq xp ur eatoego am Feu oy aaiSap afize] & 0} uTquasaK VOR “nyoao pue Lroyeny © yplan ‘tn9[qoud e Jo axort ona aq Aeuu stsesmN ayy ma 244] unoo ayy yey “PES osye sn 397] “MANY Haz} Buoy a\p sof yen apog you ews SAT, acudus] 10 punos 0} 0u raxamoy, ‘uot¥ar ayy Jo uoRBPDaidde ue pur souTifar asaxp Jo ‘un wWAysiy (eee-o5c 4d “eo0e “waapypes) sionsosqo aprsino a sjeus paicunop eruELTqZON HOUT ‘SOg6L aEL au UL peazds AfopiM sea ey © “pvans femype x0y sauufBar anodsap Jo Axyiqess [PULA] axp ae {HU 0} You ued UN 9f yf “(wusHfeIweUNEPUTY DRALe|s| OF ayuys dupe “uorssaiddo Surpnput) seayp zoy yeardAy susojqord ype pasate Sayaoos pun sououose jmuojeo-ysod ywordsy wisy Tex. Jo wae A Ul “ASoyone Aoyiod yeuonetado we UeYs Ze suommysut ynq SumpAue, ~ 907 Aim{ Us pau ims waaq Apeayye seu (19 axA 204 Aotjod pooyzogyfdrau poo! gard aq y4Siut svat poyarvasae saad 11 52 jd jo uossn|os aun 7 P| tue 2q 1UBUE STL “pOMaTO 94 UU BupBeawsa fo yd jou s1 SIN evadoune 24 po}s WOU OW 84 ‘sojuiouooa jou ur ays “OLOFeIOKp rununt)-jo0d fo 9ar0n8 49 YoYo 78 0 U]sJapout peuljp élwozseu tery oxpea sossa0ced perstdu9 ea eaudqeue Kaze 0} wisas you ssop Atopafex uoRtstin} [eurInterestingly, and in lin the bottom year in terms polices. This means no more and no less that the fus gradualism, radical or socially sensitive altematives, has placed. In case of Bulgaria 1997, in case of Latvia 1995, in case fn Russia 1999 and in Kyzgizstan 1997 was the worst in terms of personal con- sumption. This finding indicates that also in terms of consumption, the end. result of economic activity is a function of a variety of factors. The contribution {or the responsibility) of policies of the government, especially measures relat- ed to transforining the economic system, might well have been heavily over- emphasized in explaining the outcomes. What is clear from available evidence is that countries that have been delaying # for whatever reasons, suffered more avd longer, than ones that 1d policies. This ‘means no more and 10 less, that pol veylyshyn and van Roden, 2008, arguing in the same line) ‘Last but not at all least, consumption levels do not immediately and fully correlate to activity indicators. This reflects the circumstance that the decision between consumption and investment, growth and debt, saving and con sumption is always and everywhere a political public choice matter: Weak gov- emments in Moldova, might well be unable to withstand pressures for more redistribution and goverment sponsored consumption. On the other hand, Strong governments, a9 the Czech or the Hungarian ones in the 1990s, could ‘effectively withstand the usual pressure for more immediate consumption, "Turning to inoestment it needs to be stressed that economic science knows precious little about the way investment and grovrth is correlated (Blomstrm. Et al, 1996; Solow, ed. 2001; Erdés, 2003 offers a broad analysis of the literature and competing interpretations). What is clear is that investment and growth ire related, that the relation is conditioned largely by the system of financial {ermediation and that growth is finally a function of innovation, that may or say not be endogenized, depending on the theory concemed. The role of allo- ‘ation has particularly been highlighted by the failure of the socialist experi- ‘ment, with the East European economies ng 5~7 per cent more in ment ‘growth in the 1950-1985 period, than their West European counterparts did (Heitger, 1991 provides det statistical evidence for this point). Since the interconnection between growth, policies and institutions is ane of the focal points in economic theory, we shall Some back to these broader issues in the concluding chapter of this mono- ‘graph, on ‘Institutions and growth’ ‘What we know currently more than in previous monographs is twofold. guarantee the amply demonstrated. In other words, in line with established insights from economic theory, the allocation mechanism and related institutions also matter, 38 for success. These are the points under which we survey the investment data presented in Table # of the Appendix. In this latter respect we also are aware that the idea of creating capital markets quickly, of making the equity market the rgjor mechanism of capital allocation, as advocated by adherents of mass privati- zation, has nowhere materialized in the region. Therefore, the efficiency of alloca- fon does remain a prob een hoigh linc on extemal capa market icing in coun jee FDI and resultant asset ownership by forel is substantial, does alleviate the problem. oe ‘These considerations prop up when we look at Table 4. The leading country is Croatia, where again the later starting point needs to be considered, Stil, even accounting for that we can observe @ high investmentlow growth sce- nario, that is in line with what we know of continued state dominance of the Croatian banking system (until the 2001-2002 period). The second in the rank- ing is Poland, known for its high investment-high growth scenario. However, the slowclown in 2002-2003 is indicative of the limitations of growth by more factor accumulation alone, The third in the ranking is Slovenia, another quick- y growing transition country, Interestingly and in ine with macroconomie ory, in the long terms perapectioe more investment and more consumption go han ‘nhard (and ven versa) ee In the group of laggards we find Armenia, whare state failure and the still largely unsettled military conftict with Azerbaijan, the role of Russian troops and the resultant lasting uncerininty are no good signs for investors. In the second worst place, unsurpri we find Ukraine, where overall conditions are known to be generally business hostile, This is dominant despite recurrin ish tax exemptions granted by 2 cash-strapped government, wishing to an independent, westward-looking economy (van Zon, 2000). Capita the last few years also emerged. Last but not at all least this group includes Russia, where capital flight in the 2000s account for 25 to 30 (!) per cent of recorded export intakes. ‘The latter number excludes shuttle traders, chelno, accounting for a substantial part of Russian trace and the social safety net alike. This fact st two conclusions to be drawn. First, the emphasis in internat on rescheduling Soviet debt as a major policy component (alternati leverage) has been grossly overrated in the entire ppost-1992 period.” Second, the Putin presidency, despite 2 number of mea- sures at structural reforms instituted in 2000 convincing, Russian domestic investors of the virtues and profit ig at home rather ‘This should have been self evident following the Communist experience when lastingly vestments could only temporarily compenaate fo consequences of misallocation of resources —a major cause of the sloweown of Soviet growth This is vil nce is of enpital ighw or a ot panasand st 300 vow ou yu ata sad eon sand (ost ZOGE) WEEN an ‘sromod [020 JO. ant 4p uo Kjuo aya uma ¥eAo|soypoz 243 50 ou are sasy aid “Ayzouine yesqua9 OW sf TaN ‘auo> samnyeay Suruyjap autos ‘adorns fo Kanng 9 jo-aydeyp jeondjeur aip se fom Se aA JO today wonsiiys, ay Aq pavtodad ‘Auemar “seouayiadea noua oyna, juod ysqumauiuory-jsod ov sonsousss Sudop aap, omy Sung “adnosd Aaynco srotiea at Suowe zip uanoud fy ao 0 pousoday oe “wy vo F280K som 1 8 IOs vats uonetedioo a Suen eye Soe, ay Jo Bupuey yey gut sy “sassepo2d puouosoosvUt Jo YoHeUTpro-09 Aqaraiy ‘stioe s7uioueD no[e> 1UALUISSALL {ro} pypurzey axe “ura 33 ‘ayerapoU ou jenedso "uoneyu jo saves YBIY erp oUt Aq aqnop pinoe sasqeuE “expojor} Jo move axp jp) worBax ays Wy AnueD Luv UE Sse) ‘ze Yyoq Sumfosyto> £3 ‘woe op 08 1 ayeatad pure yaar 4740 30%. “roysttea jo sawa4 Aqrea amp Jo saypeordde anuouoss euaualtadxa, pur je Tupauco-ou, Jo Sumpans ayy wales ‘mou hq snsuastio2 sea[> © potliouro auDy S940 WO] ‘Auer 30oN ‘Aoqod 50 33604 quowXoyduroun pur vonepuy woREuoysuEsT, Jo APIS [PROS OU, “énunoo yeyy uy wioisKs Bupqueg paeuturop zopIsuyy ‘poeneastd uo Ayqe>pseq v Jo MOU aM EU Bu seq) Kou aquimu iepIDAOTS, uy "fangqnop #401 & ous ‘uekreqrozy 405 sxoquunnr 0:90) rou099 ueadosny Aa, poursnaropard Axe ydoao0 a1 JF UBAD ae GIN atp pue ad Suoue aouvpien yea:to fundamental reasons for inflation. First, the government penditures by printing money or credit emission, irrespectiv Economie consequences, Second, being weak, the central authorities are une fable to resist pressure groups calling for more outlays (subsidies) debt forgive- ness, Thereby it spends more than it originally intended. The out eit tage ot inflation (in extreme cases, as in the last years of soci controls are lifted, while prices had been distorted, for « long time, and shortages prevail, a one-shot corrective inflation is by and lnxge inevitable, {if for no other reason than because of technical difficulties of and information al shortages in managing money supply under the new conditions. This does hot need to last longer than 2 few months, But under conditions of transition from dictatorship #0 democracy, and also while new states emerge, central authority often had eroded. Law enforcement had, by definition, weakened by tionary changes, as well as by the lack of formal, universally accept- cy of new powers. This obviously held in Russia, ‘most post-Yagoslav cases. Abolition of shortages and finding new price rela- tives happens via trial and error, thus the rise of price levels is practically ie. inev' “Third, especially for NIS counties, money creation had remained decentralized for much too long. As explained by contemporary accounts (A: Layard, eds, 1993; Michalopoulos and Tarr eds, 1994) the political preserving the leading role of Russia within the NIS and the trade fems, also supported by IME, of saving intra-NIS trade, allowed for this situa~ tion to sustain for nearly three years in 1992-1994, Parallel money creation happens also if and when independent commercial banks are created. These are technically capable of money creation via credit granting. The more the gov- i the socialist dinosaurs, the big one town-ore factory establishments, ot electorally motivated to buy gricultural interests, the higher the probability of lastingly soft cred- iting, of tolerating non-payments, of the re-emergence of barter. "A fourth factor contributing to inflation is backward-looking indexation that tended to be quite widespread . Not only public sector wages, but pensi insurance rates, mortgages and many more contr with a tradition of backward rather than forward looking contracts. This cre- ated inertia” Finally mention should be made of the sustaining soft budget (Komai, 1996 and 2001; Kornai-Maskin-Roland, 2008) that have been counter- vailing a variety of governmental efforts to introduce financial discipline in nomics and in paris. convictions. A less general, more country-specific issue follow, namely the w Fes do oe get oo infin In explaining hi, we ne kel to eth xk egorization offered above, as well as the divergence among post-Communist ‘economies is an empirically testable hypothesis Ie-we look at Table 5, we see a first group, composed of Armenia, Georgia and of course, more than once, Yugoslavia. In these cases, central government. Thus the central bank could exert no control over the ‘processes. War, especially in poor countries, tend to be financed by money Soviet disintegration. Haphazacd, mostly improvised px ment and state building add up in the very poor ness of the central government ‘what degree we can deline: the two, For 2 weak government may be tempt late away those nominal incomes that had been lobby groups of various Belarus and Romania are the prime examples, ment have born resemblance to practices known from Argentina and Brazil in their respective pre-reform economic histories. ‘A fourth insight is that disinflation does not require «flourishing economy, not even a strong stale, as postulated by much of the policy-oriented and political science literature, especially in area studies. Successful stabilization in Bosnia in 1995-1996, in Latvia in 1998-2002, or in tiny and vulnerable Macedonia in 11996-2002 all are proving our point. Fifth, as we could see from the Table, sustainable disinflation is not a matter of months in democracies, and if state building is also arc ‘may even last longer. For itis hard to overlook, that democratization implies the emergence and organization of formal structures of interest representation. These include a broad overview of the zlevant global experience is avaeble in (isch, eta, 2002)% “suo snug ww sing 09 se 9 yooundoydisun yo oes somo ep lao em 8 BUO| SY aup ur oyu ywourhojduro r moynafiny, poyeo — Sururereq paz -yord pur A ISA} PUE YEE UdDAnIag ypinb Jo woreHED qeontod otf 07 BuypsosDe yas arom sa8eyA “a[qyssodium 0} ue Sunny apeur sey siuowafuexre seu Joqey UewEIeS 35094 Bu -Adoo atopy juoudo|duroum jo sowex yBiy Surueysns wy ss0yyns ose 1}qndoy| onemouiag weuts99 xow303 oy ‘Kim0xe30 youen JsoKpE pue paoueape sour ‘saoujsiumasp yepods 4q pourgjdso oq deus Jo 28> on ‘andy, saver wourKoydrau ysry oy sheae pure szoypAz0x9 pea Stuy, “stoutzoyiad ys10% 30 dnox8 ay) Aq partoddns aq 0} sureas joutieo Z9p|sut pat og WED sat 1e7 “haeSummpy siawofied 3829 ayy SuoU 1 wa9q sey ‘Gol xejnBax uaDep e puy pue apiacrd PHAN {omar Fur wv uy (Z'd 3002 ‘Seazpury) ,ss0UsNg a ‘suo jo ssoursng a4 1M $208 ayeIs & ‘sto ee ‘soquLoUOSD UE[e_ AYR JO VO! Yue eM Jo vorPynzIsop vet ag fo wood nocd abu. as op euonIpes oi idaoxa ‘SIN ay UN EM fnox8 Aquos juoudoyduroun YB “uno uvadomg asayq eur syanscU i ‘punoqas oruowoo yeu) ansasq0 04 ~ pzoput ‘BuLmssear aainb put jord >rurouovaoDet snoties w oy padojanap soos par 330 Ax] 0} SUC urdn Suymoys are swrojas ueudeys yeep wpe e u2aq SUK Bary PURO WN potsed ¥OOG-N00K BUF JO UMOPAOIS PayeUT dtp p f pomp juo st agueuoyiod poo sAreungy asaid kyzeap Aton ot “uorup, weadoung 2xp sgqaid ayy, syjoxoy uMop Bunwols =pasut yo '5a8r9 va “uogooypal Psi si, "sa1ulou0y> ‘auiAojduraun paiaisifau Jo syeaa] saysiy vena Supzaysider uaag sey PREDAO|S, juniojrad s2)8 pur alg ose IMq "eHEAOIS pure purefog AqouteL ‘SopoUOD But cunopied poof Azaa ay jo autog ‘4109s ayp ure|dxa 0) poryoauT aq yountes auO|e spo] Ay Inq ‘ep{eAo|g Ul) suukouTOndsdunt enced ‘panrasqo aq pinod von ayy fo Susuossom v poured {ul Taaoa1oyq “wistundo ay Aq 203 padoy se vovaurouayd yuOIs Ajo wae Su C002 20022661 2% “wen & pauret ne Aa ‘asoxp qzosqe pynoo ssausng areatsd matt pue xoypas Aa raourun Big aus, suondnastp jueypnsoE ad pus oanoad aus Jo auo yemp ‘ABpayMOwT ‘uraxy soneo0s anes u20q pey sadueyo Jo 1383N0 oysuen Jo suro]qozd [e203 ey 9661-256 ‘yousutoo sf pyneo gu jo soyes uty Uy) 104REx ‘aiexopoUT ng "UESTIAqZN PuE tueitoy axe suondooxo ng) ui pa@iowo yeu) Zapro yoxTeUr mou yp uNpopFa te ple ‘TOU D>E-AOOGRNAY © Ht 109 90 L661 22 aouaprud yeosy oF snrenop 661 #3ny smu punos 6 Kouour ea uoddey we stu, 21 soAvod yo an wou) poet TOM ba oop soasmnoxd pi0-09 onesieamng ta asdins 50 3109jon’ in Poland and many other transforming soci- suntries with the poorest record, Poland with nis needed not js tivial, but elso from the point of view of equity, that might seem less $0. ‘Turing to the NIS, we enter a certain time joumey. The best performers in ‘of unemployinent are Azerbaijan, Moldova, Tukmenistan and Kyrgyz~ that is, societies where change from Soviet patterns has remained the least case scenarios are represented by Armenia and Rt where low activity levels and ongoing state desertion (not to be equated ‘atization) explain the outcome. Firms are no longer held responsible for {ng people on their payrolls only in order to retain their Moscow residence per- a value they add to the firm. In the atteining sufficiently high activity levels deregulation alone is unable to take are of the labor maricet. Still in comparison with Southeast Europe the virtues fof more, rather than less, liberalized labor markets become palpable. Suonming up our findings, statistics did reveal some theoretically important 1, disinflation has been a must; there is no way to eschew stabiliza- tion. nterest of central state power, of investors, of savers, of the socially vulnerable alike, We have not encountered any growth could be resumed without ~ even less prior to ~ stat Called ‘alternative economic policy’ advocates suggested in 990s, There is also no trade-off between growth and price stability: on the contrary, those countries that tried to grow irrespective of inflation suffered more in cumulative terms. Actually, if we look at the numbers under the angle of adop- tion of the euro, itis hard to overlook that Poland and the Czech Republic actu- ally were outperforming, in terms of nominal convergence, the three best per- formers of the euro-zone in the 2000-2003 period. Second, activity levels do matier. As we have seen economic growth is the answer to many problems, inchuding social ones. It is also an exigency, since Societies in post-Comumunist countries have revealed their public choice in favor of high, rather than zero or low growth scenarios. One of the reasons ‘why societies are disenchanted fs, that delivering on this promise was rudi- mentary in all countries except Poland and Slovenie. Experience of the latter, * Fora detailed theore! small busines sector see empirical overview on conditions for bottom-up growth af the ly (Melnsyre and Dallago ed, 7003) 46 porations ism is getting the state Btration out of busines, Our curvey of post-Communist empir rural self-sufficiency ventures, where the logic ofthe traditional peasant fam- ‘predominates. This indeed a cheap way, and also an effiient way of ding extreme poverty and sowing the seeds of entrepreneurship (Bauer, defense mechanisms hardly create dynamic comparative advanta tse an he macolevel I foro ctor sor than th consraps put by ‘backward societies and lacking infrastructure on jeuruen capital formation, this strategy is likely to backfire already in the medium run, This is trivial as long, as sourees for long rum growth are simply not being browght about by these defen- sive - survival rather than future-oriented — strategies of crisis management. yyment in transforming societies. This lends additional sup- ‘Milton Friedman (1968) about the Phillips curve s, post-Communist economies have developed “in some countzes upto 40 perc played by mass entoliment to pl ‘entire social fabric‘afueyp jeansongs ols 5 ipo aYy UE oN 800 yqnop fiunseo soueusioyiod iho Aqatonn ‘Atop apen jo oveuetdxe axour aney 0} UETIAY-WeEIMs Jo sHe aU 0} ssou2s0j9 au punoy ay “suuse} ajaioUOD Ul “apes 10J 1aHeUL s9Op Aydesfoa “eonord avy (Qe) 9965 tesBo08 onmouooo wou Jo ypeoude 2g wo Bu Sey AMOR e's popeBaisy WA “DVE] BpEDOP w UA FE OF ZHEL MES UA Z stumutaso aug ut Autouod9 paso[> 390Ut Nt 8 SUNOJSE WERENT (x8 v ‘Taye apeoap puy am aoerd nays pur wonesa 'guq gre 0} mur gy wos Sureox8 jo dor oy “soggt PUY sOZ6L suodxy - opuy, .ap-u9pun wos} ayy ur syuTeds ~eysoquo2 ot Turqsasard jo quoumnaysur sofeur B se u9eS sf uoRAadUOD [eUsBP? ft aetna prnoo re SHI aso) JO pen y soda oe saupes sped 9 19 Jo puRpeay TerASNpUE UL pur yurunuoy-ysod tomod [eysnput aenp sequin otf wO3y fopeord 39 pop sanuraord pire az") aup jo saDustiadxo peg fue 3t'289 ue voneAoUT “yjens8 fo saaznos snowaBopua 0} siosaiqap 34 ys todurs yep Ose J]2394 32g Pa2Mpouel 29 0} S0OEAIO3 papeutiap aed Sey ueuEINg Wia}seG Pt “yao Suspends aaaud s 1 sIonpox “ies pure spoo8 payioduat joo ‘syuodca Buyowos® Aigunssuao of pow7eL syde: un 1 200e ‘uBisy-weBtoyy-AeMvUDOID) FOIeqEP 7 “fea ap Jo saBueYpr a yout 0} z9jar sn 32] Lowpymne yes 81 ‘yojsnppuo> aATyeUIOU atf 3 OF joy soueurwop sopisut Surziseydius-ap pur juow Aopdwaun uwadomng ways JO 10 *Ayunwioddo siuy Jo aanvoy “fudBungy jo souastedxe ap) mba pun juz out ue sue ou Aq yBnown portox lucia ayy se ‘saunyea oyfoads weup saujex‘samuTOUOD9 10%}Croatia, with exports growing from 4.3 bn $ to amere £6 bn $a decade later. {tis hard to overlook, that the heritage of the Yugoslav model of inward-looking industrialization and self-management (insider dom- ‘by regional seclusion) seems to have exerted a major influ- octreme case of path dependence, since not even Slovenia is ssions.™ ‘seems reasonable to restrain our analysis to the nor NIS exports and , since intra-NIS trade is still state controlled and ‘accounted for in clearing currency, thus numbers are not truly comparable ‘with the rest. Also from the point of view of re-integration in the global econ- omy the non NIS numbers are more meaningful. Total NIS exports to non-NIS (fer abroad, dalnee znrubezhie) increased from 51 bn $ to 113.6 bn §, less then twofold, which is not very impressive if we take account of the dominant role of fuel and energy that experienced a major price hike in the post-1999 period. Interestingly, the siar performer of the NIS in the decade under scrutiny was Kazaklistan, increasing (basically fuel) exports from 1.4 bn $ t0 6.0 bn, a four~ fold increave. The second best is Tajikistan, increasing its 100 mn $ exports to 440 mn §, a 44 times increase, reflecting, of course, also the very low starting level. The third best is no one else but Ukraine, incressing its non-NIS exports {bn §, 235 times inerease, comparable thus to Siovakia, one of the best in the Central European group. Finally the leaders include Azerbaijan, inezeasing exports from 0.75 to 2-1 bn §, less than threefold in a decade. Tin the middle group we find Russia, with its Western exports growing, from ‘bn $ in 1992 to 86 bn §, twofold in @ decade, despite the sizeable oil wind id related natural gas price increases. This number already foreshadows ‘major problems in Russian industrial competitiveness. It is no secret that, owing to the large military-industrial complex, there could have been a sizeable poten tial, both in termes of human capital and in terms of technology, for restructur- ing and creating a modern, manufacturing-based export sector And while nobody doubted the gargantuan difficulties of managing the process, a decade should have been enough for getting the process started. This has not hap- i ter alia, by Presidential chief advisor Ilarionov rce curse. If industrial restructuring, does remain ‘Russia's long term growth rate are bound to be prisingly for many of ‘Turning to the current low activity levels). "The worst performer of the NIS in terms of exports is Tuxkmenistan. Itis not only the initial and final points of 0.9 and 1.3 bn $ deserve attention, but the very big volatility showing up in export revenues. This is 2 clear indication of underdeveloped, weather-dependent economy. The fluctuation with a factor ‘of 4 is extreme even compared to developing countries lborated in the empirical analysis of Simonet (2001) showing the directand politically Tontinulty from the Yugoslav selemanaged firm to the de facto menage- nent owned Slovenian large fis We sll come buck to the broedr implications of this in the Russia and China chapters 50 growth potential. Lacking export revenia metic (preceding economic anal process. This is followed by the general the generel development theory and literature quoted at the beginning of this subsection, why outward orientation is the only way for small open economies to flourish (Which, of course, a world of difference from claiming a unilinear development path). The moze one believes that lasting peace should rest on improved economic performance, the more disturbing the inebility of Southeast Europeans to improve their export performance may look. Indeed, ifthere is an operational role of EL good neighborhood policies this would require active involvement, in terms of market opening and technical assistance alike in helping the region overcome its economic stagnation. The decisions of the EU Council of Thessaloniid in June 2003 point already to this direction, though ina very general fashion. Import Markets: Potential or Problem-Field? capecity n the second approximation the capacity fo absorb foe pono ~ioestments thet comes to it Therefore, such big capital Importing for the world economy, as the entire Sub enough to sustain this line sy Cobingat Tile fallow no get an oven, ‘Here again, for NIS we ana~ non-NIS imports, that being indicative of the processes ve other countries as well pee 1 decade following 1992, which is an increase of 2.5 times. This is in ine with the dynamics of overall export growth analyzed in the preceding BLes jasse um SB uape Sut ou Aq HED 6 1X9 Sit Jo stwOA aseT amp Aq MoH|OY AtPEDRUOL ain sai8ap yey 0} 'woneorp P & woy SUPfOo, joud apen ws mmueSumpy Rursueyo 30 ny "UIsANIe JeUsEETLTAAO8 Ag aUtoaf|aa0 aq POS 3 els ST O} aoureyequat suton9q anny peoiqe anve you op Aa4p uo Afar 0} sonu s0}908 AB.ou a jueu8eys woayar sy sumaxp jeuowrse9 sop 064 Jey Ssa5s0 OF are 944 7 ‘0S 40 LM amp Jo suo}susustp yp Ur “at “su youn estsmiL ay) 40 ypo7D ou EUR a uetssmy YL ‘SIN aznuD : $uq er9 wo: eu swnspple] sf somrojied ysto% puodes aif], jay o.oo ris seouuado ws ‘ounpise angioddns pry pate ‘sauaajar ano Suoue no yuan 249 "yeIuap paseamep 1M '§ Ua Ze 0} Pe p pouseusd1 ‘SI9],9KE MOOSOW, juose ado yse9} of. “iy ordeo parejas se8 pue yclins v siajsiBar osfe ueisiptezey emp Buy 19 30 303% ug sore 04 § ug 279 woay Sus eyodust ny sy sowusoprod ys0q pany oy, “eseOs>UH sau Te Bh Suapus pur Zeb Vt $ ug ay'0 Tews Ajjenbo ue rg], ‘2svarSUT SOUTH gp B smu Sula ‘uoperopay ueresny| yoppaue 0} Ates109 ayy 0} soun0> Aqe2zasdtua ‘Buguado of pay sx Buoy aymo31099 ws 85200 ‘ty 'sdnou8 sony aip axeduros oa 3 -(ouInjoa SHOIDIA B SMOpeYsaxo} ado aporapou syp add 70 afar 28: (Kasom a10jar asatp Jo ssoupaqapul BuTMox9 BY, *$ UG gh ZT Wg} max syxodt jystfou soLnunoD BY, 39 Jo Ae] B autadz0n0 OF pa peau ‘sauuy gy @ Buysoyst Sar" 979 toys yyanor8 js0%k Po wiosy “eNoNsy Aq paransifou u20q set UoWRaL se aquopent 2) Bude angss20x9 ud9q 30u Sey pus fq uz0q soy Busuodo faq 39944, u00 30d gg arose j aydeyp-qnslacks any empirical footing and runs directly counter to Russian economic interest. This 2 an important insight, also for future foreign policy analyses. "These longer ren time series also disprove claims (e.g. van Brabant, ed, 1999; Welfens, 1999) that NIS and Eastern Europeans ellegedly undertrade among themselves, The 16-18 per cent of intra-Eastem European trade that emerged in the past four to five years is entire! calculated diligently in many places 15 years or so. if there is anything surprising, it is the continued developing countries, both on the export and on the imy astern furopean countries. Many of these nations registered spectacular trade growth in the last quarter of a century, and this region seems to have missed out on the ensuing potentials. Tf is equally interesting to observe, that Central and Eastern Europe has remained much more important for Russia es a market than the other way ground. Eastern Europe, as we sav, has been an important source of funding Russian activities, most importantly imports from the West. This feature is for Russia Central Europe Tine with what most gravity models, ave been forecasting for over the last groups, but also within them could be denonstr . Bade terms the Baltic countries take the lead, and only Central Europeans can lain success, though to 2 lesser degree. By contrast, both NIS and Southeast ‘Sarope has been shown to be stagnant, where trade inefficiency, slow restruc- turing, more state intervention and less restructuring, that lead to import sub- Situton form a classical developmental vicious circle, For prospects of growth in small open economies are not unrelated to tade performance. From among the Visegrad countries Slovakia and the Czech Republic are the best performers in the longer run, however their accomplishments do not match that of the Baltic states. Meanwhile, structural analyses also support our Gaim that the Baltic miracle has come to a halt in the past few years. This otwithstanding is no doubt, especially on the basis of import statistics, that ‘only the Baltic states and Central Europeans are underoay to global economic inte~ fgrion, whereas the “Rests urlikely to join the ‘West’ unless the processes Sescribed in this chapter fundamentally change. “As final conclusions to the trade chapter we must recall what had been pre- sented on activity and consumption levels of the Baltic countsies, Success in trade, therefore, should not be directly equated to economic pro gener- al, though the two are related, Also we should recall the road to giobalization, but this is avery unilateral, on strained to the financial and fuel sector, and tohave the broader stim- Ulland trickle down needed for a successful modemization of those societies * {This a tong established insight in interrational economies, see Kédér (1994) and TB (1986) 54 ‘This also implies very low levels of joining both international tra: 2h interna de and finance even compated to Central Bazopeans (hat ade much less in absolute ems, than comparable counties in terms of population, such es Switzerlan or the Netherlands, for thet matter). bauauauis eon External Finance External finance is a basic concern for any small open economy. Fj ‘socialist and developing country experience indlests that unless sound poll cies are eustaining, the inability to finance imports regularly becomes a straint on growth (the earlier mentioned stop-go cycle emerges). This is cally because of the phenomenon spending, sooner rather than later, tr latter may well be bridged for a while, but only for a finite time span. Thus, disequil ‘emerged and has been sustaining. In other words, the grow! sustaining. In other words, rh of export revenues does not keep pace with import demand any longer prob: em generated primarily, but by no means exclusively, by Poland. The NIS, by flight. This has been increasing since 1999 despite harsh measures to discipline entrepreneurs and control capital outflows. Given that the big outflows happen from countries though by no means at the household or corporate — In case of the East European country group a sizea! 10-15 per cent of regular export revertues sustains, which is cle and cannot be sustained witho repercussions. In case time clearly dominated by Ru: ed in current account surpluses, with inward foreign investme: aging sgn for such ambitious of 2001 forecasting 6-7 per cent annual growth rat decade ofthe 2006, Also one Wonders = joning the arionov (2003) ~ if indeed, capital shortage is the crux of Russian economic ills. We may also ask, what if the Paris and London Club tisint and private debiors had written of Soviet era debts, whether or not it could indeed have con- tributed to Russian economic recovery. The ritual references to debt and capi- tal shortage seem, in the light of the summary numbers, rather oft-repeated, 55& sh uBar oy paso} sea ue euoges nua asoua‘sainseaur aatstatjardutto> Jo Syuoumsosratia Ax092q0 St JQ 3p stoUdopeaap Uo omer oYp UF MIA snstiosuOD OU ¥ St aT—y, aay v ssass0q aM, 0c. ~ puawysoany sa0}C1 WStaso 2 01 swiaas suounsantn amp UBI—H0; Kem e sf aun paziue230 0 peas ayy pu siory o yo9 Buszmoor w axsuypo “wajqozd mn o4 140 Aqpesou R04 sipyap_ uonoucluy azeylam [20]: OU JoYO UE siUaURvAAUE O; amn@ysuE- 20) ‘s0aqap Jo ano Suysor8, yo olzeuaas aup 30} moyre AIpzey yo Ssouaannadwos pam pue uapyjo moj Aysnow 3 uq gf Afareg 01 g'g wo mas8 potted owes axp ur s}z0dx 2u08 zonou sey (yayap Waumuzano8 jeroU4a8 yu29 20d ¢ 1940 Ai “spoyjarosye) Aauiour Jo on: Too up aiqnop sais swaunsoaut ‘ayeaued st aqeP & rout ox tv 30261 248 fo wo sqep aansoBnf ayy ony os40m St ux sted 9°68 0} oyyaE pu ¢p0z, Aa uN sod greg WENN SS OW OH 900, uae sod g'og toss Umer’ sey, Aumoa atq Jo 1q—p TeUrAX (9 “HOO Suvg) uoneurropay qussax aroull 0: HugpLo0sy “worsEBa0e IE JO 8900. sepyod =u Suowwy ‘6661 ous UALOr? Aysnones tray Moudoonap sty), sonvonax wodx jo > 20d fas sypyap aratea aqua yy mou au "WIATeT 9g oF Swl00s ea uauos oy punoud con ay soveurozied wodxo wun we auDyAp Yorfod oF paredwios Aypersodsa ‘Tjews Yoo} yBnory EYpYop UetTeZing “yWaURsn(pe TeMPNas jo si902 aBpUg oF jwYep WAM pouOn ‘ose 000z asus pue ‘ssoupargapul i514 aan 0} pares xtgnday ype saneaiasuos sy jsutedle oBucys yumyodut We UL ‘paaysbur og ou pynioo ‘xoRewUaLIO pAeALINO BUN yo y1eay aug we 51 Yoryen‘somuaas jade Siyenar8 Rucazyfns puo RuspSo1 Buryeo> eepuny oxy "PULL ZDKHO AN UO “STEAK antssad]Ns amp WE BATON Jopied wpa ysaq aup Buraarype s,Auume> ats oF panginuoe “qnop puokog fe jUOUNLIDAGS Ustfog Axesodursywoo ayy z0 woos Sunpearq aprsord prp pap aun “puvy, U0 atf UO ‘sseurannnaduio9 jo aewaouy paypeda auf 09 Pa] }Ou ‘Sey sity ‘Sroquinut 3tp Wos} U9es aq ED se TDABMOL “W4EP 0 JyUIBUNLIO.) JO quad sod ¢6 fo a112a 0} pare sqny> WopUer] PUL YO BLA WOYAA 'S66T IEE oh pauTeas gop sto ‘paapuy IPD su ficouaoe ysiied aHi WF MoOpaoTs uy 13 ‘aide oy ploy 517266 Duts HMUTO Saxe STI aauIg ‘pULIOd Aq pasoisiGor st yep waHEiq yp aden wssieey OF Bum, Tam se weyspjaqzn] 10) 2609 2 fequazy ut w0.99 juawuysaau oxy emp AypuOMaIOU st ny oy Te[RUES SuoIssnoradlat YES pasoysrdan st 18h pnidos fpuaps yng jus v ‘peaisul Axsapur spooS yourns ‘ s ajdoad uw pg & pu uonmansqns woduut wo aazqende> ‘gig v you st oazasqo am eye TOAOMOL poyear porrad gg6r-sod au ul saIes noo atot|ea OUTED} St a0 Sty By, "HORLERE 109 SIN Werssny]-uou 4p BuOUTe WoL (0) siauSror0} paurzoyur sso] 1oadxo 0} Jou jouujsoauit Jog paUtzopu 3824 ‘5103500 Vasowioyping Suloueuy pue wmnjas Jo SUORYpUND WOH} paweHEAe yond ou sf alot 20, “paeAUE|SAAS yom WEN \sawwop paou yuounsonut ue so Bucomparing the numbers in Ta 11, but also on the corporate level evidence, that there is an immediate relationshi etweon FDI and export growth. The micro-foundation of this in the region are too small to be interesting for the era of global sourcing, itis next to impossil jer web of inter-firm relations if the habit of ‘do it yourself” defence sector to convert its capacities to civil industri chines and the like, is clearly indicating how important is the constant ard intimate ‘markets and those ging them (possessing labels, is. If Russian i tobe traced back to the lack of FDI and thus lack of market access and tors, civic airerafts, phot zt capabilities, export performance of the country can indee: ciency of transformation, checked by intemnations empirical evidence, as well as to control the ‘sense to take the long term perspective. Table 11 may serve as Tt does ensure cross-national comparability of statistical xe otherwise not the case in the region. ‘One observation relates to the sporadic num that could be collected ever Europe started from 2 ‘a growth of 35 times. Russia started also from a low 100 mn $ in 18 recorded a growth of 25 times, to 25 bn in terms of annual inflows.» These numbers indicate that the region remained a marginal player in the 1500 bn (2000) and 500 bn (2002) lows, with Poland, the biggest recipient of a mere 7 bn $ in 2001 1998-2004 period. This san interesting insight, since in the general 2DI literature and business expe- rience would forecast that capital invests where it has already invested, for experience and search costs push business executives in a conservative direc- tion, However, the strengthening locational competition and the strong decline inBDIin the early 2000s have not allowed for once acquired advantages fo su3- tain without additional efforts. cture changes. This indicator corrects for jency’ of capital importing strategies. In this second approach the leading countries ere Estonia, Slovakia and Lithua- nia, whereas the laggards are the successor states to the former Yugoslavia ‘Jes worth mentioning that numbers provided by EBRD: Transition Report, 2002. London, Substantially differ from the ones reported in Table 1 for reasons that are not ‘sources. The only common 1g performance indicators and rec these aa sue, (except for Croatia and Macedor the post-Yuugoslav states have rem Furopeans, The drift between would like to see and what we do observe in the Balkans, Explaining this outcome Gli ‘ial role of nationalism, in part derived from self-manageme: the lack of liberalization among the factors delivering this out nomic logic may, and often does, get subordinated to other considerations. ‘From amongst the NIS countries, where big hopes have been cherished, ized. The leading countries are Russia and Kazakhstan since several years. This is clearly a sign of an unfriend- ly business climate that sustains aznidst annual new initiatives at favorable ‘treatment, tax brakes and the like. Russia and Kazakhstan could, in theory, te resembling to East Asian and Latin American italim in a neologoisin re-baptized to ‘crony capitalism. This means, in short, that meeting the expectations of the political class and of state bureaucracy is much more of a component of business success, than meeting consumer needs, domestic ‘Taming surprising to see that a country of France’s popula- tion regularly receives only as much FDI as the two tiny Baltic states, Latvia and Lithuania taken together. This implies an FDI intensity of one tenth of the two pioneering states. Interpreting this sad outcome one may recall a general insight, namely that endowments though allow for success, do not guarantee them. Waiting at the time of Ukrainian independence 2 book, published three years later, Bert van Selm (1997) has rightly invoked this insight for Ukrainian eco- nomic perspectives. He underscored the puzzle that exists between the techni- ite favorable Ukrainian starting position and the weak institutional and social capital that preconditioned soft and incoherent policies. The latter left Uleaine in a bad shape and much more dependent on Russian markets than favorably starting Baltic countries. Given the common starting hard to overlook the different trajectories and not to relate these at could, in terms of development theory, become an object of major investments in a modernization drive that was t0 follow, according to official projects, the East Asian miracle, However, allthis remained in the realm. of poetry, Centralized power structures on their ovr, lacking all additional % This paradox i going to be expanded i greter detail in our chapter on Transnational mare kts ant local politics 599 lr 0 5083 sop su URTEY SE -emoade oy aounjas Azewsoens agen "soAeU [A194 ALO SMOKE mon Hp stsoUpod Ay 2 cans v rojo an 39] sonssy yuryodny gepun Sunpe a1our uaae 20) f syoup Butssed uy sapumnos 2g 01 ‘Aguows wate 2 rc ay 30 ui pe “pouad o0e'4 zone hag pure neg 10] Jo adoy aup ut ‘amssaid [e108 1 e aus OD pdr Se Ypns ‘S101 foxJod pue sajoxjdoo| spurouosaoxeut 30 ‘Ajanten e Buryooprano ‘sBunep syaup se solnUNOD LoTSs—LDE Mot atA YeAL OF PE Puy syyzeut jeideo poured ¥O0Z-00% aMH ut ‘pasput puy ‘sjods queuLsaaut se yoam] aip saoueyua ag aup wana uy suroisks Axoyopn Bos yeuonwu Jo soupjsisar-sisaD 60 yom se AynqeInoqe> /6 (AB au yo -romaure3y 4 se SUD UEUY sey shunoaoe pe i> Jo dutuado aus yooe vs wou uesdowng if 35043 “21 ‘dnow® raumAUOT ax UF ey TUTOR YRLOM SE If ‘yea pajonb amjerou yequauidojeasp zopeorq a4: Aq wondo “Aayens Bupyooy preaat, Kut “0 Jo ufis¥ ospe st [cud 88>] ‘|e YpNs Joy pardo aaeyy 0} Uioos aeWA erTEATOY, sdeyad pur eneaoig ase ing ‘SIN ava Atuo 20U sf af “ui0y 0} stead AueUE doo youoyeusiy src oworgO fo WOT, jqnon war ayy, “nos fyun09 aug 01 Sur -aouromogred atjuny Aq panoadu aq o1 spoaut tontsod unosoe quaLzN9 ‘top yunonoe WaLin9 auTEjEqEBAUNCD ~ pIAOYS duo can yo wat JoNnOUTE YoA O7 TELE EAST 0} p> ‘in Suysel ‘a9qgz af £q eRAOIS pe AreSUNEL oqurouoco-oneut 9q 0} uanoud sey ssooord LOE, aU, im poateys ssaooid au 9K eu aatosqgo 0} Sunsoze9ut sav ur aed sa TE aigu, woot ams yp UasIOM J94p2Nj P| ‘squuiBor ydnuoo pue uno 9y3 s9x0 peardsdimensions, in all the areas ans ilar fashion, thus our interpre a subjective, coincidental one fer in a lasting fashion. Simi with the time passing the Moreover, that the Communist legacy is no longer a defining factor of longer term development seems alseady plausible (and should be proven in the rest of the Communism, both favorable and unfavorable.” This also impli specifically post-Commmunist type of transition is indeed over. If for no other reason no fiture convergence car be expected among those countries that are cur- rently analyzed together, for reasons of convenience end tradition, not only by the UN agencies, but a large part of the analytical literature as well. B) Some of the thisty counties studied in the Tables do emerge, others do not. Various indicators mostly, though not always, co-evotve. This is a good sign, supportive of the coherence of our grouping. Development and progress, contrary to utopian and revolutionary views, is not at all pre-ordained, not jobalization’. ‘the any case (even human development indices would lastingly have improved where economic indicators deteriorated. Activity levels in most of the countries in the region are still at very low levels, thus social and economic considerations all dictate further growth, There is no room for calling for less growth along the Lines of the Ciub of Rome thinking in these countries, as long as they still have to find their way back to where they once used to be, in terms of consumption and ‘welfare in general. B) tis possible to interpret success and failure in economic change within a singular theoretic! framework. This is though a trivial scientific requireme: is most often not met by the rather postmodern transitology literature, but also much of the broader developmental literature lacks such a focus. The story can be arranged around the now canonical SLIP (stabilization, liberalization, insti- tution building and privatization). Those who follow this line have changed realty, not only new discourses have been constructed about what success is and what qualifies as failure, F) Soft policy options have not proven socially more sensitive or sensible. On the contrary, long-term data unambiguously show that those following a non-SLIP This is s moze radical version of the findings of de Malo et al (2001), in line with Hiavrylysnyn and van Roden (200), 2 line, experimenting wit unanimously worse, a especially savings, investment, banking, development, There is no way to break out of rece: savings-intermediation-investment-ceinvestm: not recreated. Capital markets and banking, all other allocation mechanism matter for growth. FDI does act as a pace-mnaker, small but very important for the overell modemization process. Reinvestment also matters. In other words, the post- ‘communist context does not call for an entirely new brand of economic thinking, as suggested in several of the broad overviews quoted in the Foreword and in this chapter, and advocated most recently by Kazmer and Konrad (2004). Standard economics will do, at least serve as a basis for analysis and recommendation. ‘The analytical frame, describing the munis experience in terms of market failure therefore simply flawed. H) Once regular market institutions are in thei place, diferent quality emerge ‘that can be elaborated and solved in a context-specific mare ermance to health cae systems areas where public where trial and error solutions emerge will prevail. joining the European Union these is unl ve the peculiar tasks tat enc of he thirty eoities fc, ‘There remains a sizeable market for further analysis as well. This is an issite to be discussed in a separate chapter. 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Euzope-AsiaStudes, vol. 55.0. 3. pp. 408-485. Rostov). (1997): Comparing two depressions: 1929-33 and 1989-93, in: ZECCHINI, S.e. Lesson fo he Economic Trani sdemie Publishers for OECD, pp.205-240. Rostowsx, J (1995): Macroeconomic Instablity ix Post snunist Economies. Oxford: Oxiord Press. sacsonva, €. 2003} Understanding Cental Asian economic models. In: JOSH, N, ed ‘Conia Asi: Te Great Game Repaged. Des: New Centary Publications, pp. 198-256. ‘su, B.van (1997): The Up. London: Routledge Sone Med 2003) Sotont, Red. (2001): Landmark Papers on Econonic Growit, Chetenbam/UK and Nor slgar Publishing Ce. ipeading in manufacturing under vansition: A comparative salts f eight countries, In: BARA, Zand Csr eds: Sal Economie’ Adjastment fo Giola! Tendencies. Budapest: Aula Publishing Howse forthe European Association for Comparative Economic Studies, pp. 245-274, ssuvzta, P00); The Russi Market Economy. Helsnk: Kikimora Publishers. ‘Toro A.(0986): Kempaato etnyok~ add endl neglect. (New theoretical app- reaches fo comparative advantage), Budapest: Kozgazdaség é Jogi Konyvkiad, LUN Bronomis Comission for Europe 200); Econ Sureay of Europe, no, 3. Genava and Type Economies. London: Routledge output in post-Comacarist ane ‘ane pp. 5-20. ae the inks? World Economy, vol 25.0.9. pp. 1139-1168. Zon, H, van (2000). The Political Ecanomy of Independent Ukraine. Basingstoke and London: ‘MacMillan, 66 Table 1 Real GDP in Western Europe, North America and Japan, 1988-2002 (Percentage change over preceding year) SA 22 Od 21 Barope and North America Source: UN ECE Surmy, no 1/2003. p. 213, + Anal changes are calculated from chained national currency sees. 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TTS Tre 00d 0 Se9 709 08 L% TH CHS C09 SLL Tie 4% vont oY 508 29. 904 E99 VIN SUD 95 Cis ose LG T19 See 6zOr OHOL Sm) LULTeOLCHOE 166 TSS £05 869 TH PIE STS WUE OSE S3o OOOT E95 Ses 9a CFE Lae Tal 65 UEP H¥ LO) OSI TIL L7H TE TOOL SHA Hum SSNLECOL ODOL 695 $95 TH TH6 69S 698 69 ExT #6 OVOL — ouANMeY HHT vom StH 962 YL 19 79 Ele 01 Ses CIO ELL Gze OTOI 066 5 G28 Sos HO GUL TH TUL Loe SLL 19 CLL EER GOs ODOT 79 enon. ooeeeeueouse zac ore core restovol =~ = === = pu a, GeLLOROL¥LOL OS FER OW Tw GOR FLL 6s TH 8 OOS UOT Kel. ti BeOL SOL 61s 646 G6 FOS BUR HE 69 TRL CER H's ODOL_~ edema weed Peor SOO S15 6G $5 906 UR PvE 69: TRL Eee YEH ODOL ~ slo “ice We OR GET OGL LOGE HEHE HEAL HAT EKGL ZEGL TEL DESL GGL OH "BI WOE GO Gest GGL UAEL HEE ST GT SS Cast TAL OAL GAOL OWE (oot=696r ‘s=rPu)) 002-6861 ‘DR6L ‘SID 249 puv adacneg wo}sUS oH GWNZECID PL TalTable 4 Table 5. Real gross fixed capital formation in Eastern Europe and the CIS, 1980, 1989-2001 Consumer price indices in Eastern Europe and the CIS, 1990-200 Cris, 19690100 or ears yar eat heres) CAmual average, percentage change over preceding year) 1880 1965 1950 1991 1992 1959 1994 1995 1996 1997 1999 1999 2000 2001 ee eee ee ee Rigen ~~ 100 BO AT G2 G9 TAB S66 47 60S 731 MA IOLE ‘Albani = $5 11 850 25 80 127 51 M3 01 - 31 53 = 100.0 885 945 926 108.2 1488 183.5 188.1 1808 173.9 190.7 Bosnia and Gab Repattic = = 1000 979 71a 828 830 905 1084 1173 39 1147 135 1195 1283 Herzegovina 594.0116205 4218.338 £25. S835 -I21 2 UB 49 06 17 ‘Estonia = 100.0 105.3 1106 123.2 1448 161.1 1374 155.7 169.9 | 1B os ry 47 1000 29 831 $10 §26 929 BEF %B 1036 1173 1262 1338 1379 1 . BS B85 13 729 O62 620 121710583 187 26 102 73 5B tine O° ono Ski 27 Me 218 297 290 350 ook aad 500 62 54 1Uk2 6615166 7S 20 96 37 52 35 54 47 1 leat Cee Ae eae ieee ieee aes tal GenRepubic'a9 S67 irs 100 91 89 84 106 21 39 47 8 Poland 1246 1000 752 719 736 757 826 96.2 115.1 140.1 160.0 1709 17546 1602 180 202010782096 479 29 Bl Nl 106 35 39 58 35 Romania 163.7 1000 644 440 48.9 529 639 683 722 734 82 OI 89 75 BS 0 BO 26 191 WS Ws 4 M2 101 99 82 SH Slovekia = = 1000 748 7L5 677 66.0 67.1 879 1004 M5 909 920 1008 WS 172.2 9512 1031 357 250 177 65 47 24 28 24 19 Slovenia = = 1000 BBS 771 854 974 1138 123.9 138.2 1539 1836 180.2 51 Néa1OeS4101 720 395 M7 SB Si OS 19 15 04 ‘The former — 1000 958 79.9 736 673 741 790 76 736 725 72 - i 5858 703 453 369 332 M1 198 151 17 74 102 55 19 rp ep taceson : Si M2 207 mer Tei 322 88 9 93 Ge GT MS ZS oun 10 86 79 US 95 305 107 720 1 0 HG, 34 2 102 m1 134 nd G1 G1 67 MMS 0 70 38 ‘fsa = = = = 1000 610 1153 945 199.8 393.7 4104 4022 412.7 497.7 3516 115.0 2073 317 2L0 185 99 B84 81 65 90 BE 76 I ee ee ee eS a ee ee ae | Thelormer S966 HOB ISTLOGNO M266 tea 28 09 INO GTS 2S Tt nD ec aya 9 maz mo «| «—=«(iuca SOLO AaeCQsnsQ2aRALU7SEHNOM SOS 252 0A M41 75 OA 193 Resale <> ne 72 9 2S eS Us Ba 2 Mg) meme” G9 Man ravarameanorns 7 Maa a7 07 “Gs 42 10 pee | Ranta 61 tee SIastimnr cago ms Ws 36 08 Be 1a 1s 28 tpiect — son0 5650 203 638 ond 660 s0B aa Std | ==Sseres” «47 MT OTLZLisDSLDIVG TS 7 G9 732 BOT IHS OLE HE a | Grogs 2 ar restos metane a nS esta Ge 7 Rn. aono ots 4 67 a m1 me 19a 73 rez ms ms | Mamidwan SB Tas LatemeRsODIS 392 173 73 MA TA BS 60 ee SS a eee ea aeecaraleart tae inact tara es | Keg «§5. a9 seein a1 29 3 Me 10s 38 187 70° 22 | Mpuiieet 57 ea tsoca mois 299 5 8 77 m3 HS oa Sa Sours: UN ECE Survey, no 2/2004, p. 44. Moldova Huan,” $2 160015287670 300 1974 78 47 WA 857 08 216 160 Felson Thjkisan” $9 np ezz0296493909 6e21 «eA 54 401 TS 79 a6 122 Teton §7 He Gatmmmamstuanan By eg? Unare 54 40 raise rcsenia o767 #02 189 106 227 282 ho OB Uainen 28 75 “cust ites res OsaNO a9 | eps ei ota ‘Soares UN BCE Suey no 2/2008, 45. \ j | |ee w soynuneo yan Jomo) yp suautore you Ged yp spn st suounhoydinoun pas8oy 8 yams pe saps eon. one expo ees ak Suss99 Oey pe 1g "ope eps) wowed ays apes BaRprseelepIMsWEyse WEST | i | et onc oxo ZO woe O90 Is60 WhO OWT aavO ‘yore 0 fonins 238 Nn HS oct OmZ OSL tes Tec oT Wee GIT i ovo Ho eo WED eaO GVO sePO GEO ZO «oro ba ou ca aut va vo ost oot om yer sk = - warming 290 YAO 6H daG0 8H OL SECO BHO OOO coro mare, «= |g LCCC we OTe TT RO £1099 90% COC) OOS ea SuSE LOS LOOSE UaCIY seeeY — sirw FSVDOL 9SCEOT OOLEL DOO, LINE GEOR GORGE TBD aeinad i = eu eur sus Fo ost eek oe OM TH CH ee wep | = Gh Hel Set cot G6 TH oct om eH EM as wz0 s6r0 HIZO aD I8eO iLO BHO ETD wUTD seLO SION cur0 UFO RYO TO so SHLD SHED CeO OcrD HORN ce co ro re ee yo wy 99 es sy Te - pong | = Sm so FO eo ed co eo ZT eo veto wo eco sco aD oF ate uo woe” SiouON we ce oo GF ty ge St 90 co yD eo suo GOED HF) PIGD HOD ORD alKO GHEY 6D seLD — weNRAaNY Bee cee ee ee See eee eee st09 069 ony gee sige cz EC cSEL ST mEL SDN =F toes OR CHE Oe oe WE SE BL TL WO ~ 99 sels TES OVS Uah9 gs OoeE ere uae : suo sGco ter) swt TOLD au gs «OO 6D wD SYN Le ce 6 ca ee cu om 06 we ty es eo abo zo eatd oveO est Hero oerD = soy) 6% Ges ATE ONT eH HT cack TDL ACD HEL SION Fst at aL We ot et st om or go co sive ‘eee woes oun. Ines zs awe ae Oe sepa i te te re oc Te F or so zo To - woe oWst s1Z0 wed ed TieD TED BcCO IED HELO SDN Foose me ce ge ge ce Ty 1 ot soo Vet GW Ged S00 Ted ToO ce90 EOD SZ HePL—ueingaey OS SS ye te Ob me WE Be OF oO - wo zd SAK) OM aetD TED MH sO wD se7d SOON i oc se te ec we op Gt tm et so - Gea, ro, fo tz) oD eo ey sary =" nay Pete at at ME el Tt Tt eo co zo - sCU7OH SGML SHewe LeL9L Sor LOE 9B GET Weis SOMOS Te ¥6 Gul SH oy OU fs Le o9 e9 se - rove tent ction Sizer clean Sestak eon tages = Oe Tyo ty 9S 18 TZ C8 06 9 99 So 9F Be ce UGT ORT SAVE BET LOT WRT eS coe wnesaog = Gu 9% FL VE 9S CR LM OR OTE 9m OW ~ cect eropaney J agnday Asong nope ngndod ast SUE GIET WIL MeL ect aeeL cL OL GEL sou, ~ ae Se ay VOY LW see 99 OOS cH cm SH 26 ters HS HO WEE OI DIC 909 Taye aos = Gi Oz Oo 9H BH FA SH HI Sst cer Lor voce sme Geol sein Oe CARR SHEE sro Oye meng Ge GML BEL TOL 9G GEL GT PEL PL FH vO SUL ST SEO Ze Mee Ie Gwe OL Zoe Gey OMI | Ta oa SO St cor ee 99 6 GOI FOL ze OF su UE 9a eu 9M SU Gs Yat Eat 99 ga LM SOL Gat Gal OM Ze Le Se TM sat vo est TH eco sero asa > Ge ve ome ce oe - = = = - - = SH 69! CH Ye BH ect ou om ou om v6 s6 | mY = ect owl em evi em cn eu re pelea ~~ adomyussea ci a oon URE Ue eeZD SEES YODUOL ESTOL WELL LASS Lp y alone Toe one ctw A661 966 —SEGT—_— WSL ABL (saogop wore) To00e-2661'S19 24 pueden wo}503 fo soda asyumptoyy Zain, fo us 42) {pouad fo yuo ‘aoiof tno9 Justuhojduoun poussiSoxy 000-0661 S19 91 peo ado ware ‘oom‘Table 7 (continued) oe ree ee Tom iss ae Use eRe 46536168 538 10075 158 2589 2821 5200 370 3110 4324 S886 7665 8551 9830 57365 73928 TSASS §56%4 97.810 97.508 108436 12.6 S aness 20751 2765 24.764 20350 23606 25226 PAW) 3O7SS 96047 26286 31.716 90479 40805 42521 25 102 1420 1283 Loto 1399 23752978 18079 12625 10358 1125 16445 15585 18347 TWSEL InG48 22408 2099 17.955 37S 24263 ‘Source: UNECE secretariat enlcolations, based on national statistical publications and direct communications from national statistical ofies. "Souren UN ECE Survey, no 2/2008, p. 47. % sports of Eastern Europe and the CIS, 1992-2001 Billion dollars) 30 0501 + Russian Goskomatat data eduding trade by physical persons (shutle trade) ‘cade flows not croseing the Russian borders suchas of-bosed fish sales and nat Jes under debt repayment agreements with former CMEA counteles. Table 8.‘oy yooe/2 00 foams >a NUNS 5m et WoL LE OME HHL OTT 9ST eH LIE 6G Fm Le fudopnog comoues ye ¥5) 919 Ce co TH Ew Bz G6 COL sO Fe THE sz Yo | MORAN OUL LOL GOL 95 Ot LoL Ize Sst THE sUL SSE O9e Lx se edomg ume 00E 080 GOOF 0001 For ODE GoOT eAOL doe ont Gear TT GoOT For PHEA sHOK Tle WR WH TH GZ 6 Lee 9M COT TWH Fst SAI LR Cr AudopAaT spo ym 99 Z5S 985 ONS oO 995 LO 907 9% Los 6us S95 Se To | PrdoDMG Tit vou OWE GUL UHL SoL Cet Ho TSE THE Cz Ose ore Sie cdogUDMS Fook DoOL GODT Gat wor OBOE Got FIN: OONT CDK GOO GDOL Cont Teor PreK sHObA Shay poo oneepag wee ee V6 60 86 G6 86 TOL Lo SR 98 6B GOL THT COE EOF Sudomma ojo poset 299 LW 999 co LOL Gy EW 9G) TH TIO yT ees Ces Ga PRONG [an per au Fat Pu Cat Let Gat cut ver eo Te Cot Bat edo Get FOL FIL C8 98 OU Dz OFT OM G9 Sul To EM Bm 3 spon nus bw ost 98% 90 Mme Ye CH BSL UH Boe LOE ese 99 Oty oda UREN Gor D901 BUY CUOL BOE OBOE CAO OIOT Godt GeO: HOHE POE GodE Boar PHey SeOKT 99 br) ©9 go o% e% o8 ¥Y 9% BT OM cm ve got dmdojaC owes ys YUL GZL Oke HEL CO 9 SO Oz GID Sus 0 BoE So USC FaloomN Z9L CHL 99T 9 ELL OM SM LAL Set EOI Lol FOL gET HI edomgumiers oF ce Te zy Ve 9M OD Fe CO HH vat out Tw Ta Ea aie 0% Coe #0 Ew 9H GH HH SH LoL Oe Se TR se sImN ME sede 8 juot, epem see oadaing wrased ‘ue HOWE GOW HL HHL SL HOT SGOT VOL EAGT cot TOOT os Ont (quanuad ‘op 04'S) ZOOT-O6BE ‘O86T woroaNp fq ‘oxyosopag we pu adosng wine fo apn. expump.ayy GAIL ‘00 OROL COOL AML OAL CLE NADL GDOL GANT BoE ODE EOE 4000/0 aang a Nn ses ‘ermine sip wenden Tew une GOLGL eH case OSE seBTE OLE ~ sal saxyenes RRCTL OGL GWE YOOOE SEITE oAYHE TELS = ess ait yun waz met aE eT Oe MET ALT = = se ¥ “aopeapag uso vor wom SOIC gPveC oRLOF sasKe coeTE MMP one corse Ute seNKE soouE ¥otzE ase = = SG LFEL KOKI ESVPEL OOLTLL EELEDL EIT serCy soRRS WES 10671, ABT AOLEL onwZT OLLOL soe tses LOEW Slee sct9ee SEFee SOOKE MAT LSS GIOWR SIEGE Ws OWL OFZ MEL LOE Soe GEL wCL sO wave omz oe set Oey TU mz mT S69 916% GOTS 5D GIL PD BBS moe UEBe SLC5K 96K ORTTE SARL ALLL SOOLL TAL GALL OSG ioe oo ist eGL OAL Rat «SGT. WAL «SGT (HOE (eanumaos) @ a14e