Page |
Explanatory notes......................................viii |
Abbreviations......................................ix |
Preface......................................xi |
Part One |
CURRENT ECONOMIC DEVELOPMENTS |
Chapter 1 THE ECE ECONOMIES AT MID-1998 ......................................3 |
1.1 The global context and the situation in the western market economies ......................................3 |
(i) Diverging performance and increasing instability ......................................3 |
(ii) Economic crisis in East Asia ......................................4 |
(iii) The economic situation in western Europe and North America ......................................6 |
(iv) The short-term outlook ......................................9 |
1.2 The transition economies ......................................11 |
(i) The economic pattern in the first half of 1998 ......................................11 |
(ii) Financial distress in Russia ......................................22 |
Part Two |
ENTERPRISE AND BANK RESTRUCTURING IN THE TRANSITION ECONOMIES |
Papers from the ECE Spring Seminar, 1998 |
Introduction by the Economic Analysis Division, UN/ECE ......................................29 |
Chapter 2 ENTERPRISE AND BANK RESTRUCTURING IN THE TRANSITION ECONOMIES |
Robert I. Mochrie, Mark E. Schaffer and Alan A. Bevan ......................................33 |
2.1 The nature of market orientation ......................................33 |
(i) Enterprise structure ......................................33 |
(ii) Bank structure ......................................34 |
2.2 The starting point and the nature of transition ......................................35 |
2.3 Restructuring in the enterprise sector ......................................37 |
(i) Adjustment by state owned firms ......................................37 |
(ii) Enterprise performance and ownership ......................................40 |
2.4 The banking sector in transition ......................................42 |
2.5 Bankruptcy, creditor passivity and enterprise restructuring programmes ......................................45 |
(i) The role of bankruptcy in market economies ......................................45 |
(ii) Bankruptcy, creditor passivity and soft budget constraints in transition economies ......................................47 |
(iii) Alternatives to bankruptcy ......................................48 |
2.6 Managing the transition in the banking sector ......................................52 |
(i) Stock problems: the role of government ......................................54 |
(ii) Privatization as a policy objective ......................................54 |
2.7 Current issues ......................................56 |
(i) Banks as agents of enterprise restructuring ......................................56 |
(ii) Banks as owners ......................................57 |
(iii) Entry ab initio ......................................58 |
(iv) Foreign institutions ......................................60 |
Discussion of chapter 2 by Marek Belka and Eugen Jurzyca ......................................64 |
Page |
Chapter 3 BANKING SECTOR REFORM IN THE TRANSITION ECONOMIES – A CENTRAL BANKING PERSPECTIVE |
Elmar B. Koch ......................................67 |
3.1 The relevance of the topic ......................................67 |
3.2 Some major caveats ......................................68 |
(i) Interdependence, comprehensiveness and complexity ......................................68 |
(ii) Eastern Europe – a diverse group of countries ......................................68 |
(iii) Sound banking – a vision emerging ......................................68 |
3.3 Growth and finance – the important link ......................................69 |
(i) Introduction ......................................69 |
(ii) Selected factors in stimulating growth ......................................69 |
3.4 Banking supervision – status and Core Principles – a must in avoiding crashes ......................................76 |
3.5 The supportive role of foreign banks ......................................76 |
3.6 Non-bank financial intermediaries and conglomerates – high on the watch list ......................................77 |
3.7 Conclusion ......................................77 |
Annex to chapter 3: Illustrative list of indicators of robust financial systems ......................................79 |
Discussion of chapter 3 by David M. Kemme and István P. Székely ......................................82 |
Chapter 4 ENTERPRISE AND BANK RESTRUCTURING IN RUSSIA |
Evgeny Gavrilenkov ......................................87 |
4.1 Introduction ......................................87 |
4.2 Macroeconomic climate and microeconomic performance: current trends and selected problems ......................................88 |
4.3 Balance of payments and capital flight: how Russian money can be used abroad ......................................91 |
4.4 Russian firms: some aspects of firms’ behaviour ......................................94 |
4.5 The banking sector and its role as an intermediary between savings and investment: were there |
Discussion of chapter 4 by Silvana Malle ......................................99 |
Chapter 5 A CASE STUDY: THE CZECH PRIVATIZATION AND SUBSEQUENT STRUCTURAL |
Pavel Mertlík ......................................103 |
5.1 Introduction ......................................103 |
5.2 Investment funds ......................................104 |
(i) Definitions ......................................104 |
(ii) The first wave of the Large Privatization (1990-1992)......................................104 |
(iii) The second wave of the Large Privatization (1993-1994) ......................................104 |
(iv) Change in the regulation of IFs in 1996 ......................................105 |
(v) Further institutional change in 1998 ......................................105 |
5.3 Capital concentration ......................................105 |
(i) Major factors behind reconcentration ......................................105 |
(ii) Subsequent changes in the structure of ownership ......................................106 |
(iii) Results ......................................106 |
(iv) Role of the banks ......................................107 |
Discussion of chapter 5 by Marie Lavigne ......................................110 |
Page |
Chapter 6 ENTERPRISE RESTRUCTURING IN EAST GERMANY |
6.1 Introduction ......................................111 |
6.2 The twofold policy strategy for enterprise restructuring: privatization and subsidization ......................................113 |
6.3 Enterprise restructuring: some considerations ......................................114 |
6.4 Database ......................................115 |
6.5 Enterprise restructuring: results on an aggregate level ......................................116 |
(i) Sectoral specialization ......................................116 |
(ii) Exports ......................................117 |
(iii) Productivity and unit labour costs ......................................118 |
6.6 Enterprise restructuring: evidence from the DIW enterprise panel ......................................119 |
(i) Ownership change ......................................119 |
(ii) Overall performance of enterprises and obstacles ......................................120 |
(iii) Capacity utilization, incoming orders and market access ......................................123 |
(iv) Investment strategies ......................................124 |
(v) Profit situation and inadequate equity capital ......................................125 |
6.7 Conclusions ......................................126 |
Discussion of chapter 6 by Michael Kaser ......................................129 |
Part Three |
STATISTICAL APPENDIX |
STATISTICAL APPENDIX ......................................133 |
Corrections to Economic Survey of Europe, 1998 No. 1 ......................................161 |
LIST OF TABLES |
Table...................................... Page |
|
1.1.1 Annual changes in real GDP in east Asian countries, 1996-1998 ......................................5 |
1.1.2 Quarterly changes in real GDP, 1997-1998 ......................................7 |
1.1.3 Real GDP in the ECE market economies, 1995-1998 ......................................10 |
1.2.1 Basic economic indicators for the ECE transition economies, 1995-1998 ......................................12 |
1.2.2 International trade and external balances of the ECE transition economies, 1995-1997 ......................................13 |
1.2.3 GDP and industrial output in the ECE transition economies, 1997-1998 ......................................14 |
1.2.4 Retail trade in the transition economies, 1996-1998 ......................................15 |
1.2.5 Consumer prices in the transition countries, 1996-1998 ......................................17 |
1.2.6 Total and industrial employment in the transition economies, 1995-1997 ......................................18 |
1.2.7 Registered unemployment in the transition economies, 1997-1998 ......................................19 |
1.2.8 Trade performance and external balances of the ECE transition economies, 1997-1998 ......................................20 |
1.2.9 CIS countries’ trade with CIS and non-CIS, 1997-1998 ......................................21 |
2.3.1 Change in total industrial employment in selected transition countries ......................................37 |
2.5.1 Survey of 50 Czech manufacturing firms in 1994 ......................................48 |
3.3.1 Banking supervision ......................................75 |
4.2.1 Real industrial output by sectors, 1990-1997 ......................................89 |
4.2.2 Allocation of loss-makers among large- and medium-scale enterprises by sectors, 1996-1997 ......................................89 |
4.2.3 Profits in Russian Federation enterprises by sectors, 1991-1997 ......................................90 |
4.3.1 The aggregated 1997 balance of payments: revised and prior revision ......................................91 |
4.3.2 Balance of payments of the Russian Federation, 1994-1997 ......................................92 |
4.3.3 Alternative estimates of the exports and imports of the Russian Federation, 1995-1997 ......................................92 |
4.3.4 Reconstructed balance of payments of the Russian Federation, 1994-1996 ......................................93 |
4.4.1 Top 10 Russian enterprises by sales, 1996 ......................................94 |
4.4.2 Top 10 Russian enterprises by profits, 1996 ......................................94 |
4.4.3 Top 10 Russian enterprises by market value, 1996 ......................................94 |
4.5.1 Selected indicators of Russian commercial banks, 1996-1997 ......................................97 |
4.5.2 Top 10 Russian commercial banks as at 1 January 1998 ......................................97 |
6.1.1 Indicators of the economic catching up in eastern Germany, 1991-1997 ......................................112 |
6.1.2 Structure of eastern German gross value added, 1990-1996 ......................................112 |
6.2.1 State of privatization in eastern Germany at the end of 1994 ......................................113 |
6.2.2 Selected economic support measures for eastern German companies, 1991-1996 ......................................114 |
6.5.1 Gross production in manufacturing, 1991 and 1996 ......................................118 |
6.5.2 Exports in manufacturing, 1991 and 1996 ......................................119 |
6.6.1 Eastern German manufacturing firms according to ownership status, 1991-1996 ......................................120 |
6.6.2 Eastern German manufacturing firms facing problems in the market, 1991-1996 ......................................120 |
6.6.3 Selected problems perceived by manufacturing firms in eastern Germany, 1991-1996 ......................................121 |
6.6.4 Manufacturing firms in east Germany facing problems in the market, 1995 and 1996 ......................................122 |
6.6.5 Selected problems for manufacturing firms in east Germany, 1995 and 1996 ......................................122 |
6.6.6 Capacity utilization and incoming orders in eastern German manufacturing firms, 1996 ......................................123 |
6.6.7 Distribution of turnover of eastern German manufacturing firms, 1996 ......................................124 |
6.6.8 Investment per employee in eastern German manufacturing industry, 1995-1996 ......................................125 |
6.6.9 Plans for investment and leasing of eastern German manufacturing firms for 1997 ......................................126 |
6.6.10 Profit situation perceived by east German manufacturing firms, 1995-1996 ......................................127 |
A.1 Real GDP in the ECE market economies, 1983-1997 ......................................135 |
A.2 Real private consumption expenditure in the ECE market economies, 1983-1997 ......................................136 |
A.3 Real general government consumption expenditure in the ECE market economies, 1983-1997 ......................................137 |
A.4 Real gross domestic fixed capital formation in the ECE market economies, 1983-1997 ......................................138 |
A.5 Real total domestic demand in the ECE market economies, 1983-1997 ......................................139 |
A.6 Real exports of goods and services in the ECE market economies, 1983-1997 ......................................140 |
A.7 Real imports of goods and services in the ECE market economies, 1983-1997 ......................................141 |
A.8 Industrial output in the ECE market economies, 1983-1997 ......................................142 |
Table...................................... Page |
A.9 Total employment in the ECE market economies, 1983-1997 ......................................143 |
A.10 Standardized unemployment rates in the ECE market economies, 1983-1997 ......................................144 |
A.11 Consumer prices in the ECE market economies, 1983-1997 ......................................145 |
B.1 Real GDP/NMP in the transition countries, 1980, 1984-1997 ......................................146 |
B.2 Real total consumption expenditure in the transition countries, 1980, 1984-1997 ......................................147 |
B.3 Real gross fixed capital formation in the transition countries, 1980, 1984-1997 ......................................147 |
B.4 Real gross industrial output in the transition countries, 1980, 1984-1997 ......................................148 |
B.5 Total employment in the transition countries, 1980, 1984-1997 ......................................149 |
B.6 Registered unemployment in the transition countries, 1990, 1993-1997 ......................................150 |
B.7 Consumer prices in the transition countries, 1989-1997 ......................................151 |
B.8 Producer price indices in the transition countries, 1989-1997 ......................................152 |
B.9 Nominal gross wages in industry in the transition countries, 1990-1997 ......................................153 |
B.10 Merchandise exports of the transition countries, 1980, 1985-1997 ......................................154 |
B.11 Merchandise imports of the transition countries, 1980, 1985-1997 ......................................155 |
B.12 Balance of merchandise trade of the transition countries, 1980,1985-1997 ......................................156 |
B.13 Merchandise trade of the transition countries by direction, 1980, 1985-1997 ......................................157 |
B.14 Exchange rates of the transition countries, 1980, 1985-1997 ......................................158 |
B.15 Current account balances of the European transition countries, 1990-1997 ......................................159 |
B.16 Inflows of foreign direct investment in the transition countries, 1990-1997 ......................................160 |
LIST OF CHARTS |
Chart...................................... Page |
|
1.1.1 Average monthly nominal exchange rates against the dollar, January 1995-June 1998 ......................................4 |
1.1.2 World commodity prices, January 1995-May 1998 ......................................5 |
1.1.3 Quarterly changes in real GDP, 1996-1998 ......................................8 |
3.3.1 GDP growth and inflation in transition economies, 1991-1997 ......................................71 |
3.3.2 Financial indicators in eastern Europe, 1993-1998 ......................................73 |
4.2.1 Inflation and real growth rate of payables, 1993-1997 ......................................90 |
4.3.1 Quarterly capital outflows and increases in the stock of payables, 1994-1997 ......................................93 |
4.5.1 Interest rates in Russia, 1996-1998......................................96 |
6.5.1 Production and the volume of new orders in east German manufacturing industry, January 1991 to September 1997 ......................................117 |
LIST OF BOXES |
Box...................................... Page |
|
2.3.1 The Hungarian bankruptcy framework ......................................38 |
2.5.1 The Polish bank and enterprise restructuring programme ......................................50 |
2.5.2 Konsolidacni Banka – the Czech Consolidation Bank ......................................51 |
2.7.1 Bank failure in transition economies – a comparison of the Czech Republic, Latvia and Romania ......................................59 |
Table of contents
