The sta rting positions o f the fo rm e r sm all soviet b lo c countries w ere d iffe re n t. According to the unequal transform ation pace up to now a
fu rth e r d ive rsification can be expected.
W h ile Poland’s economy has grow n fo r at least th re e years, the Czech’s and H ungaiy’s have on average shrunk slig h tly, and th e decline in B u lg a ria ’s and Romania’s p ro d u ctio n has been severe (C h a rt 1). The som ewhat larger yearly C D P shrinking in Slovakia in com parison w ith the Czech R epublic can be explained by th e division o f th e fo rm e r federal state, by unfavorable heavy industrial structures, and by econom ic policies o f m ore gradualism . D istortions as w e ll as in e ffic ie n t branch- and firm - structures in Romania and Bulgaria are also responsible fo r th e c u rre n t d iffic u ltie s in the transform ation. In the past a core o f the econom ic p o licy in these co u n trie s has been the developm ent o f basic m a n u fa ctu rin g branches. They em ploy a big share o f the labor pow er and dem and huge quan tities o f raw m aterials, energy and infrastructure resources. N ow they have become the most im portant receivers o f state subsidies and credits— at th e expense o f o th e r possible p ro d u ctio n s and com panies w ith b e tte r
T A B L E 1
G D P per Capita 1994 and G DP G row th Rate 1991-1995 G DP G row th Rate
C o u n try GDP/capita, $ 1990 1991 1992 1993 1994 1995*
B ulg aria 1.210 -9.1 -11.7 -15.0 -4.2 -1.0 0.0
H u n g a ry 3.010 -3.5 -11.9 -4.5 -2.3 1.0 2.0
P oland 2.160 -11.6 -7.6 1J5 3.8 4.0 5.0
Rom ania 1.062 -5.6 -12.9 -13.6 12 0.0 0.0
Slovakia 1.671 -3.0 -15.8 -8.7 -4.1 -2.0 2.0
Czech 2.526 -2.0 -14.7 -7.1 -0.3 2.0 3.0
R e p u b lic________________________________________________________________
*Percent change on year earlier
•*E stim ate
Source: D IW B erlin; IF O In stitu te M unich; The Vienna In s titu te fo r _________ Comparative Economic Studies_____________________________________
GDP per Head 1994 and real GDP 1995* as % on 1989
C H A R T 1
GDP/head, $ GDP-index 1995*
100%
90%
א 80%
70% о 60% <=
ד 50%
״ 40%
» 30%
£ 20%
10% 0%
בש œ
*estimate
СОI
כ
Source: Statistisches Bundesamt
Theofanis Stavrou and John Lampe - 978-3-95479-686-1
00063378
perspectives. These other branches contain increasing grow th potential and are bound to p u ll the economy out o f its crisis. B ut th e y have yet to be pro m o te d su fficie n tly.
H owever, stru ctu ra l changes in southeastern E urope can be fo re - casted: th e share o f services in th e G D P is expected to rise at the cost o f th e m anufacturing share as the B ulgarian example has proved (C hart 2).
T his tendency is observed in Romania and in th e o th e r fo rm e r socialist economies, and can be understood as a “ stru ctu ra l norm alization.” W estern in d u s tria l countries have relatively sm all in d u stria l and a g ric u ltu ra l shares o f th e ir G D P, e.g., Germ any 39% and 1%, respectively, and the U.S. 29%
and 2% .3
166 Ognian Hishow
C H A R T 2
S t r u c t u r a l c h a n g e s o f B u l g a r i a s G D P
03 Transport
■ Trade and services Agriculture
Industry and manufacturing 100
50Ä
1996 1990 1992 1994
as of 1994estimate
Source: IMF
W h ile Poland, the Czech R epublic, and H ungary started a consis- te n t reform program w hich aimed at the s w ift in tro d u c tio n o f more m arket elem ents in th e ir economies, Romania and B ulgaria have been tim id ly longer to launch sim ilar changes. They lost precious tim e and caused a lag in th e ir steps o f transform ation com pared to th e Vishegrads. W h ile p ro - d u ctio n decline in the central European countries co u ld s till be braked, Bucharest and Sofia were am bivalent about how to create the transform a- tio n . B ulgaria strongly fe lt the pressure o f its external debt and credito rs o f the London C lub, and it introduced a price lib e ra liza tio n in the spring o f
1991— roughly a year la te r than the so-called B alcerow icz plan had been in tro d u ce d in Poland. Romania hesitated somewhat longer and re lu cta n tly agreed to shock therapy.
There are d iffe re n t reasons fo r the reform delay in both countries.
The im p e rfe ct party structure in Romania appears as a m ain obstacle to the
reform s. T here are no p ro p e r coalitions there. N ot o n ly do th e fo rm e r com m unists represented a fte r the re vo lu tio n by th e F ro n t fo r N a tio n a l S alvation o f p resident Io n Ilie scu (now renam ed as the Party fo r Social D em ocracy) have a hostile a ttitu d e towards privatization and “ capitalism ,”
b u t th e strong Rom anian nation alist oppo sition battles also against the
“ d ic ta tio n o f th e foreign agents”— and especially against the in te rn a tio n a l fin a n cia l e n titie s, such as the IM F and the W o rld Bank. Ilie scu and his ru lin g Party fo r Social Dem ocracy depends in the Romanian parliam ent on th e backing o f th e extrem ely nation alist rig h t w in g P arty o f N a tio n a l U n ity , whose leader S ilvio F unar rejects “ foreign in te rfe re n ce .” O n th e o th e r side th e dem ocratic opposition, u n ite d p re d o m in a n tly w ith in the D em ocratic C onvention, is not strong enough to persuade voters to support consistent reform s. I t is d iffic u lt to judge w hy th e ir reform proposals are tim id . T hey should have to include n ot o n ly p riva tiza tio n , b u t stronger m onetary p o licy and intensive enterprise restructuring.
In B ulgaria the conviction in th e necessity fo r reform s has p re - vailed since th e collapse o f the o ld system. However, Bulgarian p o licy has n ot been able to u tiliz e the in itia l confidence in the m arket powers to boost p riv a tiz a tio n and reduce the influence o f orthodox com m unists, w ho s till exercise s tro n g in flu e n c e , especially in the co u n trysid e . S im ila r to Rom ania, th e B ulgarian p o litic a l landscape is dom inated by the com m u- nists. Nevertheless, in Bulgaria one meets, at least u n til now, a dual p a r- lia m e n t stru ctu re w ith only le ft- and rig h t-w in g p o litica l e n titie s and w ith - o u t a center o rie n te d party. S im ilar to some central European countries, th e re has been strong anticom m unist o p p o sitio n , even i f o n ly as o f 12 D e ce m b e r 1989. I t is in s titu tio n a liz e d th ro u g h th e U n io n o f D e m o cra tic Powers (U D F ), w hich te m p o ra rily (1991-92) has been th e ru lin g party.
F o r these reasons both south European countries w ent backwards in com parison to th e ir Vishegrad com petitors. W hether they can jo in th is group in th e next years seems unlikely.
In Y ugoslavia4 the in d u stria l o u tp u t decreased between 1989 and 1993 at an average m onthly rate o f 2.4%. A t the beginning o f 1994 th e in - d u s tria l o u tp u t index declined at 28.1% com pared w ith 100% in 1989.
M eanw hile it seems th a t in Yugoslavia the bottom has fallen o u t o f the in - dustry, and in d u stria l o u tp u t is lik e ly to rise as a result o f a launched p ro - gram o f econom ic recovery. T his program has been in tro d u ce d since February 1994. A fu rth e r im p o rta n t m acroeconom ic sta b iliza tio n e ffe c t seems to be th e e lim in a tio n o f the hyperinflation w ith the launching o f th e program . Since January 1994 the general price level has been kept at a con- stant level in the firs t h a lf o f th a t year.9
Theofanis Stavrou and John Lampe - 978-3-95479-686-1