Item | Page |
Explanatory notes | viii |
Abbreviations | ix |
Preface | xi |
Chapter 1 OVERVIEW AND POLICY ISSUES | 1 |
1.1 Overview of the ECE economies in late 1998 | 1 |
1.2 Policy lessons from the Russian crisis | 7 |
(i) Institution building | 8 |
(ii) Political will in democracies | 10 |
(iii) Second-best solutions | 10 |
(iv) Broader implications | 11 |
Chapter 2 RECENT MACROECONOMIC DEVELOPMENTS IN THE ECE REGION | 15 |
2.1 The global context | 15 |
(i) Turmoil in financial markets | 15 |
(ii) Deteriorating performance of the world economy | 17 |
2.2 The economic situation in western Europe and North America | 20 |
(i) Recent macroeconomic developments | 20 |
(ii) Monetary conditions and fiscal policy | 26 |
(iii) The short-term economic outlook | 28 |
2.3 The transition economies | 30 |
(i) The global financial crisis and its impact on the ECE transition economies | 30 |
(ii) The economic pattern in the first three quarters of 1998 | 48 |
Chapter 3 FOREIGN TRADE OF TRANSITION ECONOMIES | 71 |
3.1 Introduction | 71 |
3.2 Eastern Europe and the Baltic states | 75 |
(i) Trade performance in the first half of 1998 | 75 |
(ii) Trade balances | 81 |
(iii) Outlook for trade in the wake of Russian and global financial turmoil | 85 |
(iv) Changes in relative factor intensities of exports to western Europe | 88 |
3.3 Trade of the CIS countries | 94 |
(i) Russian Federation: trade with non-CIS countries | 94 |
(ii) Other CIS countries: trade with non-CIS countries | 97 |
(iii) Intra-CIS trade | 99 |
(iv) Recent trade policy developments in the CIS | 103 |
Chapter 4 EXTERNAL FINANCIAL DEVELOPMENTS IN THE TRANSITION ECONOMIES | 107 |
4.1 Introduction | 107 |
4.2 Current account developments | 107 |
(i) Current account balances | 107 |
(ii) Growth of trade in goods and services | 109 |
(iii) Current account imbalances and vulnerability | 111 |
4.3 External financial developments in the transition economies | 113 |
(i) Net financial inflows | 113 |
(ii) Funds raised on the international financial markets | 117 |
(iii) Foreign direct investment | 120 |
(iv) Capital inflows after the partial Russian default | 123 |
Page |
|
4.4 Official reserves and external debt | 125 |
(i) Foreign currency reserves | 125 |
(ii) External debt | 125 |
4.5 Outlook for current account balances, financing and FDI | 127 |
Annex table to chapter 4 | 131 |
Chapter 5 A NOTE ON PRODUCTION SHARING IN RUSSIA | 135 |
Abstract | 135 |
5.1 Introduction | 135 |
5.2 PSAs and their international application | 136 |
5.3 State of development of PSA projects in Russia | 137 |
5.4 Russia’s PSA law | 140 |
(i) Background and objectives of the initial version | 140 |
(ii) Obstacles to projects under the PSA law | 141 |
(iii) The remaining legislative agenda | 143 |
5.5 The macroeconomic considerations | 144 |
5.6 Recent developments, prospects and policy choices | 145 |
(i) The stalling of PSA legislation | 145 |
(ii) In the shadow of world commodity markets | 146 |
(iii) Tighter financing constraints | 147 |
(iv) Conclusions | 148 |
STATISTICAL APPENDIX | 151 |
LIST OF TABLES | |
Table | Page |
2.1.1 World commodity prices, 1996-1998 | 19 |
2.1.2 Depreciation and appreciation of east Asian curencies against the dollar, 1997-1998 | 20 |
2.2.1 Quarterly changes in real GDP, 1997-1998 | 22 |
2.2.2 Growth contributions to quarterly changes in real GDP, 1997-1998 | 22 |
2.2.3 Consumer prices in the developed market economies, 1997-1998 | 24 |
2.2.4 Standardized unemployment rates in the developed market economies, 1996-1998 | 25 |
2.2.5 Real GDP in the developed market economies, 1996-1999 | 29 |
2.3.1 Selected economic indicators in the Russian Federation, 1993-1998 | 35 |
2.3.2 Baltic states’ and eastern Europe’s trade exposure to the CIS market, 1992, 1997 and 1998 | 45 |
2.3.3 Export exposure of selected transition economies to the Russian Federation and CIS, as a share of GDP, January-September 1998 | 46 |
2.3.4 General government budget balance in selected ECE transition economies, 1992, 1996 and 1997 | 46 |
2.3.5 Basic economic indicators for the ECE transition economies, 1996-1999 | 49 |
2.3.6 International trade and external balances of the ECE transition economies, 1996-1998 | 50 |
2.3.7 GDP and industrial output in the ECE transition economies, 1997-1998 | 52 |
2.3.8 Retail trade in selected transition economies, 1997-1998 | 53 |
2.3.9 Consumer prices in the transition economies, 1997-1998 | 58 |
2.3.10 Producer prices in industry in the transition economies, 1997-1998 | 62 |
2.3.11 Wages and unit labour costs in industry in the transition economies, 1997-1998 | 63 |
2.3.12 Total employment in transition economies, 1995-1998 | 65 |
2.3.13 Registered unemployment in the transition economies, 1997-1998 | 67 |
3.1.1 Foreign trade of the ECE transition economies by direction, 1996-1998 | 72 |
3.1.2 Trade balances of the ECE transition economies, 1993-1998 | 73 |
3.1.3 Changes in the volume of foreign trade in selected transition economies, 1995-1998 | 74 |
3.2.1 Foreign trade of the CEFTA countries by direction, 1996-1998 | 76 |
3.2.2 Foreign trade of south-east European countries by direction, 1996-1998 | 77 |
3.2.3 Foreign trade of the Baltic states by direction, 1996-1998 | 78 |
3.2.4 Trade by commodity in the CEFTA countries, 1994-1998 | 79 |
3.2.5 Trade by commodity in south-east European countries, 1994-1998 | 80 |
3.2.6 Trade in selected commodity groups in the Baltic states, 1994-1998 | 82 |
3.2.7 Foreign trade price developments in selected east European countries, January-June 1998 | 83 |
3.2.8 Baltic states’ and eastern Europe’s exports to the Russian Federation by commodity, 1994-1997 | 87 |
3.2.9 East European and Baltic countries’ exports to western Europe in respect of factor intensity, 1993-1996/97 | 90 |
3.2.10 East European and Baltic countries’ exports of manufactures to western Europe in respect of factor intensity, 1993-1996/97 | 91 |
3.3.1 CIS countries’ total trade, 1996-1998 | 95 |
3.3.2 CIS countries’ trade with CIS and non-CIS, 1996-1998 | 96 |
3.3.3 Non-CIS trade of the Russian Federation by selected commodities, 1994-1998 | 97 |
3.3.4 CIS countries’ trade with the Russian Federation, 1994-1997 | 101 |
3.3.5 International barter trade of selected CIS countries, 1995-1997 | 102 |
4.2.1 Current account balances of eastern Europe, the Baltic states and the CIS, 1995-1998 | 108 |
4.2.2 Foreign trade in goods and non-factor services of eastern Europe, the Baltic countries and European members of the CIS, 1996-1998 | 110 |
4.2.3 Shares of current account deficits covered by FDI inflows, 1996-1998 | 112 |
4.3.1 Net capital flows into eastern Europe, the Baltic countries and European members of the CIS, 1995-1998 | 114 |
4.3.2 Net capital flows into eastern Europe, the Baltic countries and three European members of the CIS, by type of capital, 1995-1998 | 114 |
4.3.3 Foreign portfolio investment in east European, Baltic and European CIS countries, 1996-1998 | 115 |
4.3.4 Medium- and long-term funds raised on the international financial markets by eastern Europe, the Baltic countries and the CIS, 1993-1998 | 118 |
4.3.5 Bond issues planned for completion in 1998 | 121 |
4.3.6 International equity issues of eastern Europe, the Baltic countries and the CIS, 1994-1998 | 121 |
4.3.7 International credit ratings of eastern Europe, the Baltic countries and the CIS | 122 |
4.3.8 Foreign direct investment flows of east European, Baltic and European CIS countries, 1996-1998 | 123 |
4.3.9 Indicators of foreign direct investment in east European, Baltic and European CIS countries, 1996-1998 | 124 |
4.4.1 Official reserves and total external debt of eastern Europe, the Baltic countries and European members of the CIS, 1996-1998 | 126 |
4.4.2 Indicators of external debt of eastern Europe, the Baltic countries and European members of the CIS, 1995-1998 | 127 |
5.2.1 International petroleum agreements: distribution of production sharing agreements and concessions in the 1990s | 138 |
5.3.1 Production sharing agreements in the Russian oil and gas industry on which negotiations were initiated prior to PSA law | 139 |
5.4.1 Taxation system applying to oil production in the Russian Federation under the concession (T/RA) system | 141 |
5.4.2 Lists of subsoil blocks to be developed under PSA legislation | 143 |
5.5.1 Estimated impact of the production sharing regime on oil production and tax revenue | 145 |
A.1 Real GDP in the ECE market economies, 1983-1997 | 152 |
A.2 Real private consumption expenditure in the ECE market economies, 1983-1997 | 153 |
A.3 Real general government consumption expenditure in the ECE market economies, 1983-1997 | 154 |
A.4 Real gross domestic fixed capital formation in the ECE market economies, 1983-1997 | 155 |
A.5 Real total domestic demand in the ECE market economies, 1983-1997 | 156 |
A.6 Real exports of goods and services in the ECE market economies, 1983-1997 | 157 |
A.7 Real imports of goods and services in the ECE market economies, 1983-1997 | 158 |
A.8 Industrial output in the ECE market economies, 1983-1997 | 159 |
A.9 Total employment in the ECE market economies, 1983-1997 | 160 |
A.10 Standardized unemployment rates in the ECE market economies, 1983-1997 | 161 |
A.11 Consumer prices in the ECE market economies, 1983-1997 | 162 |
B.1 Real GDP/NMP in the transition economies, 1980, 1984-1997 | 163 |
B.2 Real total consumption expenditure in the transition economies , 1980, 1984-1997 | 164 |
B.3 Real gross fixed capital formation in the transition economies, 1980, 1984-1997 | 164 |
B.4 Real gross industrial output in the transition economies, 1980, 1984-1997 | 165 |
B.5 Total employment in the transition economies, 1980, 1984-1997 | 166 |
B.6 Registered unemployment in the transition economies, 1990, 1993-1997 | 167 |
B.7 Consumer prices in the transition economies, 1989-1997 | 168 |
B.8 Producer price indices in the transition economies, 1989-1997 | 169 |
B.9 Nominal gross wages in industry in the transition economies, 1990-1997 | 170 |
B.10 Merchandise exports of the transition economies, 1980, 1985-1997 | 171 |
B.11 Merchandise imports of the transition economies, 1980, 1985-1997 | 172 |
B.12 Balance of merchandise trade of the transition economies, 1980, 1985-1997 | 173 |
B.13 Merchandise trade of the transition economies by direction, 1980, 1985-1997 | 174 |
B.14 Exchange rates of the transition economies, 1980, 1985-1997 | 175 |
B.15 Current account balances of the European transition economies, 1990-1997 | 176 |
B.16 Inflows of foreign direct investment in the transition economies, 1990-1997 | 177 |
LIST OF CHARTS | |
Chart | Page |
2.1.1 International share prices, January 1997-October 1998 | 17 |
2.1.2 World commodity prices, January 1996-October 1998 | 18 |
2.1.3 Average monthly nominal exchange rates against the dollar, January 1997-October 1998 | 19 |
2.2.1 Business cycle indicators for the European Union and the United States, January 1994-October 1998 | 21 |
2.2.2 Quarterly changes in real GDP in the developed market economies, 1995 QI-1998 QII | 23 |
2.2.3 Nominal short-term interest rates, January 1996-September 1998 | 27 |
2.3.1 Forex reserves, central bank refinancing rate and yield on T-bills in the Russian Federation, 1995-1998 | 32 |
2.3.2 Ex-post real interest rates on short-term commercial credit in the Russian Federation, 1995-1998 | 36 |
2.3.3 Share of barter and share of loss-making enterprises in Russian industry, 1993-1998 | 37 |
2.3.4 Indices of real gross industrial output in the Russian Federation, 1993-1998 | 37 |
2.3.5 Russian Federation: stock of payables arrears as percentage of 12-month GDP, 1995-1998 | 38 |
2.3.6 Wage arrears in the Russian Federation as percentage of the economy-wide monthly wage fund, 1993-1998 | 38 |
2.3.7 Measures of Russian domestic debt burden, 1994-1998 | 40 |
2.3.8 Measures of the relative weight of Russian domestic debt, 1994-1998 | 41 |
2.3.9 Stock market indices in selected transition economies, 1 January-31 October 1998 | 42 |
2.3.10 Indices of the nominal exchange rates of selected transition economies against the dollar, 1 January-31 October 1998 | 44 |
3.1.1 Specific western demand for selected transition countries’ exports, 1993-1998 | 74 |
3.2.1 Dynamics of indicators of export competitiveness in selected countries of eastern Europe, 1994-1998 | 84 |
3.2.2 Changes in composition of east European and Baltic countries’ exports to western Europe in respect of factor intensity, 1993, 1996 and 1997 | 93 |
4.3.1 Interest rate differentials in selected transition economies, 1995-1998 | 116 |
4.3.2 Interest premia on sovereign bond issues of selected emerging market economies, 1997-1998 | 119 |
4.3.3 Bonds and loans arranged by the transition economies, 1997-1998 | 120 |
5.1.1 Investment and output of the Russian Federation oil and gas industry, 1990-1998 | 136 |
5.2.1 Financial structure of the Priobskoe PSA project | 137 |
LIST OF CHARTS | |
Box | Page |
1.1.1 Humanitarian aid for Russia | 4 |
2.3.1 Goskomstat revision of Russian unemployment | 68 |
TABLE OF CONTENTS
