| The Vienna Institute for International Economic Studies - WIIW |
Upswing of privatization-related FDI in CEECs in the late 1990s
The economic performance differences among the Central and East European
countries (CEECs) are to a large extent due to different speeds and ways
of privatization. Sale to foreign strategic investors has proved to be
the most efficient way of privatization. Annual inflows of FDI have fluctuated
in accordance with major privatization deals. Since 1997 an upswing of
FDI due to more privatization sales can be documented in several CEECs.
Companies turned into subsidiaries of multinational corporations may prosper
provided they are assigned a proper position in the international corporate
network and given access to new technology and capital.
Banking structures in Eastern Europe
The transition process of the banking sector in the CEECs is more or
less completed (with the exception of Slovakia), but costs have differed
from country to country. Foreign banks will continue to play a major role
in the financial system of the CEECs while the remaining domestic credit
institutions will be mainly small and medium-sized banks. Hence, the question
will be to what extent the domestic banks can bear up against the international
pressure (specialized niche players, regional suppliers). Nevertheless,
the financial sector of the CEECs will be a fast-growing market in the
next few years.
The rubber and plastic products sector in the CEECs
In the CEECs, as in most other economies, the rubber and plastic
products sector is small compared to other sectors of manufacturing – in
terms of production, employment and exports. Yet it is one of the most
dynamic sectors of the economy, has a dynamic and sometimes even employment-creating
role and achieves an above-average EU export-market share. Accelerating
domestic demand and good future prospects have attracted foreign investors
to the whole region. The only flaws in the overall positive picture of
the sector are large imports and possible environmental considerations.