The Vienna Institute Monthly Report 1999/2
SUMMARIES

Latvia feels effects of the Russian crisis
Latvia has been seriously hit by the impact of the Russian crisis due to its trade and financial links. A slowdown of economic activity and a rise in the unemployment rate became apparent in the third and the fourth quarters of 1998. A substantial deterioration of the already high current account deficit (around 7% of GDP) should be expected, so risks of a currency crisis are on the rise. On the other hand Latvia boasts the lowest inflation rate among the Baltic countries and has a balanced budget. In recent years, it has stepped up reform efforts which were positively evaluated by the European Commission in its acquis-screening report in November 1998. The country’s inclusion in the first wave of candidates is likely in 1999 if the momentum of change is maintained. This may mitigate risks connected with the large external imbalances.
 

Potential size of migration from Poland after joining the EU
In the paper, the potential size of the flow of migration from Poland after joining the EU is estimated. The forecasts are based on two models: one concerning migrations from the South European countries (Spain, Greece and Portugal) during the period 1983-95 and one based on the interregional migrations in Germany after unification. The main conclusion is that migration flows may be much lower than commonly believed – provided the development level gap between Poland and the EU countries decreases over time.
 

Transition to a market economy and the post-Washington consensus
The course of events in the post-socialist economies has been influenced by policies based on the so-called Washington consensus. By now some unwelcome aspects of these policies can be identified, justifying a critical evaluation of the consensus itself. The paper formulates twelve major policy conclusions characterizing the emerging post-Washington consensus, better suiting the needs of economic policies in post-socialist countries.

 

 

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