RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
RFE/RL NEWSLINE Vol 2, No. 59, 26 March 1998
HUNGARIAN GOVERNMENT, MULTINATIONALS LAUNCH
INVESTMENT COUNCIL. The Hungarian government, the 28 largest
multinational companies in Hungary, and the U.S. and German Chambers
of Commerce have set up an Investment Council, which will coordinate the
country's economic policy and investors' needs, Hungarian media reported
on 25 March. The two co-chairmen of the council are Finance Minister
Peter Medgyessy and Gyorgy Mosonyi, Royal Dutch Shell's managing
director in Hungary. The council will deal with issues related to
telecommunications, energy sector, agriculture and food processing.
Meanwhile, General Electric has announced it will invest $50 million in
Hungary over the next three years, creating 500 new jobs. Multinationals
currently account for 25-30 percent of Hungary's GDP. MSZ
ROMANIAN PREMIER FACES CHALLENGE FROM WITHIN
OWN PARTY. Prominent members of the National Peasant Party Christian
Democratic (PNTCD) met recently in Brasov to draft a letter expressing
"apprehension" about the party's "deteriorating image and isolation" and the
party's neglect of the "national dimension"-- an allusion to concessions
made to the Hungarian minority. The group called for Premier Victor
Ciorbea to be replaced by PNTCD Secretary-General Radu Vasile. It also
said a party congress must be called to discuss those issues, RFE/RL's
Bucharest bureau reported. Also on 25 March, the first vice chairman of the
national Liberal Party, Valeriu Stoica, said the ongoing political crisis must
be solved "even if the price is the sacrifice of the premier." MS
Copyright (c) 1998 RFE/RL, Inc.
All rights reserved.
RADIO FREE EUROPE / RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
RFE/RL NEWSLINE Vol 2, No. 60, 27 March 1998
HUNGARIAN CABINET SAYS NO DAM AT NAGYMAROS. The
government on 26 March rejected building a dam at Nagymaros as part of
the Slovak-Hungarian Danube hydropower plant project, Hungarian media
reported. Government spokesman Elemer Kiss said studies will be carried
out only on the effects and feasibility of constructing a dam at Pilismarot,
some 8 kilometers from Nagymaros. He added that the cabinet's decision is
based on environmental considerations. The government is setting up a
committee under Environment Minister Ferenc Baja and Transport,
Telecommunications, and Water Minister Karoly Lotz to oversee the effects
and feasibility studies. MSZ
ROMANIAN PARLIAMENT MARKS UNIFICATION WITH
BESSARABIA. A special joint session of Romania's bicameral parliament
on 26 March marked the 80th anniversary of the Bessarabian parliament's
decision to unify the province (present-day Moldova) with Romania.
Greater Romania Party leader Corneliu Vadim Tudor said his formation
would like to use the occasion to pay "particular homage" to wartime leader
Marshal Ion Antonescu. Tudor remarked that "those who condemned him to
death" in 1946 do not let him rest in peace even now. And he argued that
Romania must not hurry to sign the basic treaties with Moldova and Russia.
Speaking for the Hungarian Democratic Federation of Romania, Dezideriu
Garda said that what happened in "Russified Moldova" demonstrates that
"no nation can be de-nationalized." MS
ECONOMIC DIVERSITY OF THE FORMER YUGOSLAV
by Michael Wyzan
A popular joke in the former Yugoslavia asks, if one returned to
Europe at some distant point in the future, how many countries would one
find? The answer: nine, namely, the EU and the eight regions of the former
So far, only five new states have emerged from socialist Yugoslavia.
But Kosovo and Montenegro are increasingly restive, and some Vojvodina
politicians are demanding that the province receive as much autonomy as
Belgrade grants Kosovo (although Kosovo's autonomy may in itself be
Despite similarities stemming from their shared inheritance, the four
escapees and Federal Yugoslavia have little in common economically. Each
bears a certain resemblance to one or more transition economies elsewhere.
Their analogs run the gamut from the most developed Central European
countries to the poorest, most strife-ridden, and least reform-friendly lands
of Central Asia.
Slovenia is a stable and prosperous Visegrad country and member of
the Central European Free Trade Area. Even so, its economic policy and
performance are distinct from its Central European neighbors. External
imbalances are modest and declining: the trade deficit reached $767 million
in January-November 1997 (less than 4 percent of GDP and down from
$1.04 billion in January-November 1996) and the current account surplus
$70.1 million in 1997. A manageable external account distinguishes
Slovenia from the Czech Republic, Poland, and Slovakia and makes it
compare to Hungary in this respect.
However, unlike Hungary in 1995 and the Czech Republic in 1997,
independent Slovenia has never experienced an economic crisis. Also,
unlike most other Visegrad lands, Slovenia has not attracted significant
amounts of foreign investment (less than $1 billion through October 1997),
although its attractiveness for investors is increasing.
Slovenia will probably maintain its slow but steady economic
growth and cautious economic policy. It lacks Poland's or Hungary's
dynamism but at the same time has eschewed Czech Prime Minister Vaclav
Klaus's propensity for ideologically-inspired policy mistakes and the Czech
Republic's fundamental disagreements over policy among political parties.
Political factors have isolated Croatia from the EU. Despite its
relatively advanced and reformed economy, it is not even considered a
candidate for accession, a distinction it shares only with the Federal
Yugoslavia. Like Slovakia, it is isolated from Europe for political reasons.
And it also has in common with that country a rapid GDP growth (5.5
percent in Croatia and 5.9 percent in Slovakia last year) and worrying
external imbalances (projected at about 11-12 percent of GDP in both in
1997). Another similarity is privatization methods that favor enterprise
insiders and those connected to ruling political elites.
However, Croatia has a more diversified economy than Slovakia's,
with more world class firms, such as drug-maker Pliva, which in April 1996
became the first company in the region to be listed on the London Stock
Exchange. Croatia's economy is inextricably tied to Europe, while
Slovakia's tendency to drift eastward in its economic relations is hardly
possible in a country never part of the Soviet trading bloc.
The other three former Yugoslav republics have features in common
with certain former Soviet republics. Macedonia, like Moldova, has
generally exhibited sound macroeconomic policies and has taken unusually
long to resume economic growth. Macedonian social product increased by
1.4 percent in 1997, following 0.7 percent growth in 1996 (the first year it
registered a positive figure). Moldova's GDP rose last year for the first
by 1.3 percent.
On the other hand, Macedonia remains in the good graces of
international financial institutions--unlike Moldova, whose parliament voted
in December to double the budget deficit over that agreed with the IMF.
Federal Yugoslavia's anti-reform orientation can be compared only
to that of Belarus (and perhaps Turkmenistan and Uzbekistan), while its
isolation from international institutions is unsurpassed. It shares with
Belarus respectable economic growth from a low base: Federal Yugoslavia's
GDP rose by about 6 percent and Belarus's by 10 percent in 1997.
Like Russia, Federal Yugoslavia has regions where federal
institutions are irrelevant for day-to-day life (Chechnya and Kosovo) and
often displays hostility toward secessionist republics that colors its
economic policies. It quarrels over border demarcation and succession
questions, while Russia hassles its neighbors over their treatment of ethnic
Russians, pipeline routes, shares of oil deals, and customs issues.
Bosnia bears some similarities to similarly civil-war-ravaged
Tajikistan. Both states, along with Albania, have received funding from the
IMF's Emergency Post Conflict Assistance. Bosnia's economic recovery has
been under way longer than Tajikistan's and appears stronger; the former's
GDP grew by 50 percent in 1996 and about 30 percent last year, while the
latter's first positive figure was in 1997 (1.7 percent). Bosnia's dependence
on the world community is unrivaled in recent world history; the IMF has
even gone so far as to appoint foreigners to head its central bank.
The author is an economist living in Austria.
Copyright (c) 1998 RFE/RL, Inc.
All rights reserved.