Privatization in the Transition Process Recent Experiences in Eastern Europe [antikvár]

Preface This compendium originated in an international workshop on Privati-zation Experiences in Eastern Europe organized jointly by UNCTAD and the KOPINT-DATORG Foundation for Economic Research at Budapest (Hungary) in May 1993. It follows an earlier joint project in the form of an international conference in la te 1989 on economic liberalization in "pre-tran-sition" Eastern Europe and a publication entitled Foreign Economic Liberalization: Transfvrmations in Socialist and Markét Economies (Westview Press). The focus on privatization reflects the central role assigned to it in the current process of transition. Our aim has been to review the very different experiences in privatization of four countries -Poland, the Czech Republic, Slovakia and Hungary- that have advanced furthest towards markét economy, using the latest information available with a view to identifying the problems involved and altemative ways of dealing with them. This task has required close attention to be paid to the economic realities of for-merly socialist countries and the practical experience with privatization, instead of relying on a priori reasoning. In this respect, our approach differs from most treatments of the subject thus far, which have had a strongly ideological flavour. The orthodox view is that rapid and widespread privatization of state-owned enterprises is the key to stabilization and growth of the formerly socialist countries, and takes it for granted that this is feasible. However, experience to date provides few grounds for continuing to think thus. To be sure, creating a strong priváté sector must continue to be the centrepiece of systemic transition. But, the process of creating a markét economy, and the relationship between privatization and economic development, have proved to be much more complex than were anticipated. Furthermore, privatization has turnéd out to be not only a part of the recipe for establish-ing a markét economy, but alsó an issue in party politics having, in many instances, little connection with the originál concepts underlying the transition. More important, the unexpectedly steep decline in production and incomes that has taken place in all East European countries, and the accom-panying social polarization, have highlighted the need for an objective analy-sis of privatization, both large and small, and a weighing of the pros and cons of different ways and means of privatization and of creating a "new" priváté sector based on domestic and foreign capital. Alsó economic realities have increasingly demanded that the question of how to raise efficiency in state-owned enterprises should be prominently included in the agenda of economic reform.