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Table of contents

Explanatory notes

Abbreviations

Preface

Chapter 1 AN OVERVIEW OF THE ECONOMIC SITUATION AND SELECTED ISSUES IN
THE ECE REGION

Chapter 2 THE GLOBAL CONTEXT AND THE SITUATION IN THE WESTERN MARKET
ECONOMIES

2.1 The global context

(i) The general pattern

(ii) The economic and financial crisis in East Asia

2.2 The economic situation in the western market economies

(i) Convergence and divergence

(ii) The components of demand

(iii) The labour markets

(iv) Costs and prices

(v) Fiscal policy and monetary conditions

Chapter 3 THE TRANSITION ECONOMIES

3.1 The general context

(i) Expectations, outcomes and outlook

(ii) Short-term outlook

3.2 Crises in emerging markets: implications for the ECE transition countries

(i) Introduction

    • The impact of the Asian crises on the external sectors of the European

transition economies

(iii) Are the transition economies prone to financial instability?

(iv) Policy implications for the transition economies

(v) A case study of a transition economy: the Czech currency crisis of 1997

3.3 Output and demand

(i) Output

(ii) Demand

3.4 Costs and prices

(i) Overview

(ii) Consumer prices

(iii) Energy price adjustments

(iv) Producer prices in industry

3.5 Labour markets

(i) Overview

(ii) Employment

(iii) Unemployment

3.6 Trade and payments

(i) Overall trade results

(ii) Trade of eastern Europe and the Baltic states

(iii) Trade of the CIS countries

(iv) Current account developments and financial indicators

(v) External financing and FDI

(vi) Current account prospects

Chapter 4 THE THREE CAUCASIAN ECONOMIES, 1991-1997

4.1 Economies in extremis

(i) Turmoil after independence

(ii) State deconstruction

(iii) Dual tasks in state rebuilding

(iv) Predictability in administration

4.2 Macroeconomic developments

(i) Output

(ii) Domestic imbalances

(iii) External trade

(iv) Payments relations

4.3 Policy instruments and stabilization

(i) Monetary stabilization under new currencies

(ii) Extracting new revenues

(iii) Restructuring expenditure

4.4 Transforming institutions

(i) Privatization

(ii) Agrarian reform

(iii) Property protection and regulation

(iv) Financial institutions

4.5 Resource utilization

(i) Labour

(ii) Agriculture

(iii) Mineral resources

(iv) Environmental damage

(v) Caspian hydrocarbon politics

(vi) Infrastructure

(vii) International capital and aid flows

4.6 Social conditions

4.7 Concluding remarks

STATISTICAL APPENDIX

 LIST OF TABLES

2.1.1 Appreciation and depreciation of east Asian currencies vis-à-vis the dollar, 1996-1998

2.1.2 Average monthly share price indices in the transition economies, 1997-1998

2.1.3 Economic indicators for east Asian countries, 1994-1997

2.1.4 International bank claims on east Asian countries, 1994-1997

2.1.5 International banking claims on East Asia by nationality of reporting banks

2.1.6 The importance of East Asia in the merchandise trade of the ECE region in 1996

2.1.7 Revisions to IMF forecasts of world output growth, 1997-1998

2.1.8 Annual changes in real GDP in east Asian countries, 1996-1998

2.2.1 Growth of real GDP in the ECE market economies, 1995-1998

2.2.2 Major components of demand in the ECE market economies, 1996-1997

2.2.3 Total employment in the ECE market economies, 1994-1997

2.2.4 Standardized unemployment rates in the ECE market economies, 1994-1997

2.2.5 World commodity prices in dollars, 1994-1997

2.2.6 Productivity and unit labour costs in the ECE market economies, 1995-1997

2.2.7 Consumer prices in the ECE market economies, 1995-1997

2.2.8 General government net lending and gross debt in the ECE market economies, 1995-1997

2.2.9 Interest rate spreads in western Europe: national rates less German rates, 1996-1998

3.1.1 Basic economic indicators for the ECE transition economies, 1995-1998

3.1.2 International trade and external balances of the ECE transition economies, 1995-1997

3.2.1 Financial indicators for the transition economies and selected east Asian countries, end-June 1997

3.2.2 Financial indicators for eastern Europe, the Baltic countries and European members of the CIS, 1996-1997

3.2.3 Monetization in selected transition countries: share of monetary aggregates in GDP, 1994-1997

3.2.4 Savings, investment and external balance in the Czech Republic, 1992-1997

3.3.1 GDP and industrial output in the ECE transition economies, 1996-1997

3.3.2 Share of major sectors in GDP in eastern Europe and the Baltic states, 1992-1997

3.3.3 Share of major sectors in GDP in the CIS countries, 1992-1996

3.3.4 Growth of industrial output by branch in eastern Europe and the Baltic states, 1995-1997

3.3.5 Growth of industrial output by branch in the CIS countries, 1995-1997

3.3.6 Gross output of agriculture and construction in the transition economies, 1992-1997

3.3.7 Contribution of final demand components to real GDP growth in selected transition economies, 1993-1997

3.3.8 Composition of final demand in current prices in selected transition economies, 1995-1997

3.3.9 Real consumption in selected transition economies, 1994-1997

3.3.10 Retail trade in the transition economies, 1994-1997

3.3.11 Investment in selected transition economies, 1994-1997

3.4.1 Consumer prices in the transition countries, 1996-1997

3.4.2 Energy prices in Poland, July 1997

         

        • Change in household energy prices and their contribution to the total consumer price inflation in selected transition

        economies, 1995-1997

         

        • Producer prices in industry in the transition countries, 1996-1997.

         

        • Wages and unit labour costs in industry in the transition economies, 1996-1997

3.5.1 Total and industrial employment in the transition economies, 1994-1997

3.5.2 Evolution of private sector employment in selected transition economies, 1990-1996

3.5.3 Registered unemployment in the transition economies, 1996-1997

3.5.4 Gender specific labour market indicators in selected transition economies, 1985 and 1995-1997

3.5.5 Share of women in total employment by industry in selected transition economies, 1992-1997

 

3.6.1 Foreign trade of the European transition countries by direction, 1995-1997

3.6.2 Trade balances of the European transition countries, 1993-1997

3.6.3 Foreign trade in eastern Europe and the Baltic states, changes in volume, 1995-1997

3.6.4 Trade intensity coefficients of east European and Baltic countries with selected partners in 1996

3.6.5 Imports of capital goods and transport equipment in selected European transition economies, 1992-1996

3.6.6 Trade openness of east European and Baltic countries, 1990-1997

3.6.7 CIS countries’ total trade, 1995-1997

3.6.8 CIS countries’ trade with CIS and non-CIS, 1995-1997

3.6.9 Non-CIS trade of the Russian Federation by selected commodities, 1994-1997

3.6.10 Non-CIS trade of selected CIS countries by commodity groups, 1995-1997

3.6.11 Main partner countries in intra-CIS trade, 1994-1997

3.6.12 Commodity structure of intra-CIS trade of selected CIS countries, 1995-1997

3.6.13 Current account balances of eastern Europe, the Baltic countries and European members of the CIS, 1995-1997

         

        • Foreign trade in goods and non-factor services of Eastern Europe, the Baltic countries and European members

of the CIS, 1995-1997

3.6.15 Foreign trade in goods and non-factor services of eastern Europe, the Baltic countries and European members

of the CIS, 1995-1997

3.6.16 External trade in goods and services of the European transition economies, 1990-1996

3.6.17 External trade in services of the European transition economies and the European Union, 1996

3.6.18 Official reserves and total external debt of eastern Europe, the Baltic countries and European members of the CIS,

1990, 1996-1997

3.6.19 Net capital flows into eastern Europe, the Baltic countries and the European members of the CIS, 1995-1997

3.6.20 Net capital flows into eastern Europe, the Baltic countries and the European members of the CIS, by type of capital,

1994-1997

3.6.21 Foreign portfolio investment in east European, Baltic and European CIS countries, 1995-1997

3.6.22 Medium- and long-term funds raised on the international financial markets by eastern Europe, the Baltic countries

and the CIS, 1993-1998

3.6.23 International credit ratings of eastern Europe, the Baltic countries and the CIS

3.6.24 International equity issues of eastern Europe, the Baltic countries and the CIS, 1994-1998

3.6.25 Foreign direct investment flows of east European, Baltic and European CIS countries, 1995-1997

3.6.26 Indicators of foreign direct investment in east European, Baltic and European CIS countries, 1995-1997

4.2.1 Government revenue and expenditure in relation to GDP in the Caucasian economies, 1991-1997

4.2.2 Consumer price indices in the Caucasian economies, 1992-1997

4.2.3 Direction of trade in mirror statistics for Georgia, January-September 1996

4.2.4 Direction of registered trade of Caucasus economies, 1988, 1995-1997

4.2.5 Balances of registered trade of Caucasian economies, 1988, 1995-1997

4.2.6 Balance of payments of Armenia, 1994-1997

4.2.7 Balance of payments of Azerbaijan, 1994-1997

4.2.8 Balance of payments of Georgia, 1994-1997

4.2.9 Alternative estimates of balance of payments of Georgia, 1995-1997

4.2.10 Net position of entities in the Caucasian economies with respect to banks reporting to the BIS, 1993-1997

4.3.1 Real exchange rates of new Caucasian currencies against the dollar

4.5.1 Projections of working age and total population in the Caucasian economies, 1995 and 2010

4.5.2 Migration from and into the Caucasian economies, 1989-1995

4.5.3 Occupational distribution in the Caucasian economies, 1996

4.5.4 Land use in the Caucasian economies, 1989

4.5.5 Hydrocarbon production and forecasts in Azerbaijan

4.5.6 Foreign direct investment into the Caucasian economies, 1993-1997

LIST OF CHARTS

2.1.1 Nominal national exchange rates against the dollar, January 1994-January 1998

2.1.2 International share prices, January 1994-February 1998

2.2.1 Consumer and business confidence in the European Union and the United States, January 1990-January 1998

2.2.2 Diverging economic performance in western Europe, 1992-1997

2.2.3 Quarterly changes in real GDP and major expenditure items in western Europe, 1992-1997

         

        • The contribution of final expenditure items to annual changes in real GDP in western Europe, North America and

Japan in 1997

2.2.5 Standardized unemployment rates in the ECE market economies, 1982-1997

2.2.6 Consumer prices in the ECE market economies, 1982-1997

2.2.7 World commodity prices, 1995-1998

2.2.8 Inflation expectations in the European Union, 1983-1997

2.2.9 Nominal short-term and long-term interest rates in Germany and the United States, January 1994-February 1998

3.2.1 GDP in selected transition economies, 1992-1997

3.2.2 Official reserves of the European transition economies, 1993-1997

3.2.3 Composite stock market indices in selected transition economies, 1997-1998

3.2.4 Interest premia on sovereign bond issues of selected emerging market economies, 1997-1998

3.2.5 Official foreign exchange reserves as percentage of monetary aggregates in selected transition economies, 1994-1997

3.2.6 Short-term interest rates in selected transition economies, 1995-1997

3.2.7 Exchange rate and interest rate in the Czech Republic, 1993-1997

3.2.8 Foreign exchange reserves and cumulative trade deficit in the Czech Republic, 1994-1997

3.2.9 Monthly trade flows and trade deficit in the Czech Republic (moving averages), 1994-1997

3.3.1 Gross industrial output in selected transition economies, 1995-1997

3.3.2 Total investment outlays and their structure in selected transition economies, 1991-1996

3.4.1 Consumer prices in the transition countries, 1995-1997

3.4.2 Consumer prices of non-food goods and services in selected transition countries, 1992-1997

3.4.3 Relative price changes within the consumer price index in selected transition countries, 1992-1997

3.4.4 Consumer prices of energy and non-energy items in selected transition countries, 1995-1997

3.5.1 Changes in employment by broad sector in selected transition countries, 1989-1996

3.5.2 Registered quarterly unemployment rates in selected transition countries, 1991-1997

3.5.3 Gender specific relative employment growth index by sectors in selected transition countries, 1992-1997

3.6.1 Specific western demand for selected transition countries’ exports, 1993-1998

3.6.2 Share of eastern Europe and the Baltic countries in world trade, 1986-1997

3.6.3 Share of intra-industry trade in total trade in manufactures between western Europe and the east European economies,

1962-1995

3.6.4 Imports of capital goods and their share in gross fixed capital formation, 1992-1996

3.6.5 Cumulative FDI/capita, 1990-1997

LIST OF BOXES

2.2.1 Subsidizing job creation