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date=9/22/94
      type=closeup
    number=4-07743
     title=Central Europe's Reform-Minded Former Communists
    byline=Pamela Taylor
 telephone=619-1101
  dateline=Washington
    editor=Phil Haynes

Content= // inserts available in audio services //

Intro:   The presence of so-called "reformed communists" in the
         governments of so many Central European countries has
         given rise to concerns in the West about the future of
         economic reform there.  Some analysts, for example,
         point to the slowdown of the privatization of
         inefficient state-run companies.  Others say some
         Central European economies are doing surprisingly well
         as they pursue measured reforms while holding on to
         aspects of their social welfare systems.  VoA's Pamela
         Taylor takes a look at how economic reform is coming
         along under the stewardship of Europe's former
         communists:

Text:    The first alarm bells rang in Lithuania, when former
         communists were returned to power in the 1992 elections.
         Then came the dramatic defeat of Poland's reformist
         leaders by former communist party members in 1993.
         Hungarian voters followed suit in May of this year.  But
         few Western politicians and area analysts see a return
         to the communist policies of the past.  Stejfan
         Mestrovic [steh-fahn mess-trow-vitch], an East European
         specialist from Texas A & M (Agriculture & Mechanics)
         University, says if anything, these governments are
         moving to the right politically, which may or may not be
         good for economic reform:

Tape:    cut #1   Mestrovic       runs  [:43]

         "The phenomenon that we've seen is that most of the
         (new) "democrats" are former communists, that's
         something we have to live with.  However it's my
         impression that most of them at the present time are
         committed to trying to emulate the West, to Western
         reform and trying to implement free market reform.  We
         just have to get comfortable with the fact that these
         are former communists and we have to get comfortable
         with the fact that many of these countries are now
         moving to the right.  And the reasons for this are the
         church and nationalism, this is a phase that in fact is
         not that peculiar to Eastern Europe.  There is,
         unfortunately, in Italy and France, a movement to the
         right - and Germany as well."

Text:    Other area specialists agree that the trend in Central
         Europe is more toward the right and nationalism rather
         than back to the left.  Michael Parrott, editor and
         publisher of the London-based "East European
         Privatization News", thinks some of the new leaders are
         as commited to economic reform as the reformists they've
         replaced:

Tape:    cut   #2    Parrott       runs  [:51]

         "In Hungary, Hungary has been slow but steady in its
         privatization program and the new socialist government
         doesn't seem to want to slow the privatization down at
         all.  In fact they're now talking of trying to complete
         all privatizations within two years.  Even in Poland,
         where there are about 7 thousand companies yet to be
         privatized, there is a feeling that they've got to get
         all this completed in two or three years one way or the
         other.  The encouraging signs are I suppose in the Czech
         Republic, they have virtually completed their
         privatization.  It's only admitedly in a sort of
         theoretical transfer from the state to private sector
         but still these companies need to be restructured and
         they need more capital."

Text:    Mr. Parrott cautions, however, that in the countries of
         Central Europe's Southern tier, former communist leaders
         are not so reformed:

Tape:    cut  #3   Parrott     runs   [:50]

         "The ones that really cause some concern are countries
         like Slovakia, Romania, Bulgaria which are absolutely so
         divided politically that nothing really seems to get
         started.  Slovakia's meant to be doing a second stage of
         its mass privatization program this autumn but there are
         elections in a few weeks time and we don't know what's
         going to happen after that.  Romania has had so little
         success with its initial mass privatization program that
         its having to try and launch another version of it which
         is another source of political controversy.  And in
         Bulgaria they're just about to launch a mass
         privatization program but the prime minister's just
         resigned and there again, there's a big question mark
         about what's going to happen. So in those countries it's
         rather discouraging."

Text:    Economists say the Southern tier countries should look
         to the example of the Northern big three.  They point to
         the recent dramatic reduction of Poland's debt to
         Western banks and Hungary's announcement it will begin
         privatizing five state gas distributing companies.
         Rudolph Tokes (Turkish), a professor of political
         science at the the University of Connecticut, says both
         moves will tend to encourage foreign investment.  But he
         warns that emerging nationalistic interests are still
         going to create problems:

Tape:    cut  # 4   Tokes       runs   [1:08]

         "We don't particularly mind (it) in the United States or
         in Western Europe if a foreign multinational controls
         one economic asset or another but there, those countries
         are so vulnerable to encroachments on their economic
         identity or economic sovereignty, that they immediately
         feel they are being colonized.  Take for example Poland,
         the Czech Republic, Hungary you had a lot of Western
         capital coming in, now what did they invest in?
         Building bridges, highways, telephone networks?
         Absolutely not.  They bought into breweries, candy
         factories, retail establishments, food stores,
         supermarkets and this sort of thing. You have locally
         produced stuff in Eastern Europe and you look at the
         shelves in the supermarkets and find everything coming
         from Western Europe.  Now why do Poles, Czechs and
         Hungarians need Danish cheese, forgive me, when they
         have splendid products of their own?  Because the
         management of those big chains is Western European and
         they would like to sell their own products."

Text:    Professor Mestrovitch, however, thinks many Central
         Europeans are delighted by this "westernization"
         process.  But he warns of the consequences if greater
         foreign investment is not forthcoming:

Tape:    cut  #5    Mestrovic      runs  [:30]

         "Eastern Europe has always wanted to be a part of
         Western Europe, you know. We're the ones who labeled
         them "Eastern Europe".  They're really going to be
         asking "is the West going to help in this experiment"?
         All the countries of East Europe want to restructure
         their debts and they're making the initiatives on their
         own accord.  What they're really waiting for is a
         helping hand.  If they don't get it, the prediction is
         very easy, they're going to go back to their
         nationalism.  Some of their nationalism may turn ugly as
         it has in the former Yugoslavia."

Text:    For the West the paradox remains unresolved:  whether to
         make massive investments in Central Europe now and head
         off further nationalist destabilization or wait for
         further reforms to create a more stable environment in
         which to invest.  (Signed)

neb/pam/pch
22-Sep-94 6:08 pm edt (2208 utc)
nnnn

source: Voice of America

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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

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Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
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