| The Vienna Institute for International Economic Studies - WIIW |
In the 18 months to mid-1997 the former Soviet republics in the CIS
continued their varied efforts at nation-building, financial stabilization
and enterprise reform. Patterns of change in industry, trade and employment
observed since the first months of the breakdown of the USSR have continued.
However the long-awaited return to growth in the CIS as a whole is still
not happening despite upturns in particular sectors and in some of the
worst-hit small economies. The budgetary situations in the individual CIS
states, and with it the good inflation records and increasingly predictable
exchange rates, will remain extremely fragile.
The currency board in Bulgaria: First experience
As of 1 July Bulgaria introduced a currency board arrangement which
replaced the previously functioning central bank. The Bulgarian lev is
pegged to the German mark for an indefinite period of time. The currency
board arrangement is likely to provide the much-needed anchor for macroeconomic
and financial stabilization. The new reform-minded government has expressed
its commitment to push forward with the needed painful reforms and, in
particular, to accelerate the restructuring of the enterprise sector. So
far the government and its policy enjoy a sufficient degree of credibility.
A faulty transformation? Enterprise restructuring and competitiveness in the Czech Republic
Czech firms have adopted a wide range of strategies during the process
of economic transformation. Any sweeping generalization that they have
not tried to adapt is clearly untenable. Nevertheless, current economic
performance confirms the failure of the Czech economy to achieve stable,
self-sustaining growth. The roots can be found in weaknesses at the enterprise
level: the lack of vision by some managements; the fragmentation of industrial
structures; and the extent of financial difficulties which force even those
capable of formulating imaginative strategies into seeking out 'second
best' solutions.