Transcript TRANSITION IN THEORY AND PRACTICE

BASIC ECONOMIC QUESTIONS
DISTINCTION AMONG ECONOMIC SYSTEMS
- PROPERTY RELATIONS
- DECISSION MAKING
• WHAT
- maximization of utility, product market, consumers,
restrictions, planner
• HOW
- maximization of profit, labor and capital market,
producers, restrictions, planner
• TO WHOM- product and factors market, planner
• WHEN
- capital market, planner
THE CHANGES OF THE ECONOMIC SYSTEM
Ownership
State or social
Private
Centralised
state/
centralised
Soviet Union
private/
centralised
South Korea
Decentralised
social/
decentralised
Yugoslavia
private/
decentralised
USA
Management
COMPONENTS OF TRANSITION
•
•
•
•
•
•
•
•
•
•
•
Privatization
- objectives - efficiency, justice, democracy
- complexities of privatization
- privatization models
- outcomes of privatization
Macroeconomic stabilization
- assumptions and Washington agreement
- transformational depression
Microeconomic restructuring
Creation of a new economic system
A Case: Slovenia
DILEMMAS OF PRIVATIZATION MECHANISM
Free distribution
to whom
to everybody - to employees
- equally
- by age
- by years of employment
Patterns
-
direct
indirect
Restitution
in kind
compensation
Sales
to whom
to citizens - to foreigners
Patterns
- stock market
- auctions
- workers-managers by outs
- debt equity swaps
- direct sales
- increase of capital
PRIVATIZATIONS IN “OLD” EU COUNTRIES
Austria
Belgium
Denmark
Finland
France
Greece
6
Ireland
Italy
Germany
Netherland
Portugal
Spain
Sweden
UK
(1)
10
2
2
8
34
1998
2
10
5
22
11
5
44
(2)
1994
1995
1994
1999
1994-95
81.05
1999
1997-99
2000
1994
1997
1998
2000
1986-87
(3)
82.00
100.00
94.95
81.47
67.22
60.44
82.50
69.73
75.58
77.81
76.72
53.44
81.06
86.80
(4)
45.49
57.25
63.00
68.20
26.27
5.19
50.00
36.85
40.79
49.71
30.45
26.35
43.00
8.78
(5)
2.69
3.67
3.01
9.14
84.23
4.26
4.44
85.21
46.65
13.91
19.32
44.55
13.09
98.88
(6)
1.27
1.47
1.72
7.10
5.79
5.22
7.18
2.17
3.55
17.65
7.64
5.51
7.04
(1) Number of companies; (2) the year of utmost activity; (3) share of government before privatization;
(4) share of government after privatization; (5) value of privatized assets bill €; (6) value of
privatized assets in GDP of 2000
PRIVATIZATIONS IN CEE COUNTRIES
Czech Republic: a rigid socialist system, 96.7% of production in state industries,
Vaclav Klaus, shock therapy to market without adjectives, restitution (100.000
units), small privatization - sales (12300 units), large privatization – public auctions,
public tender, direct sales, sales of shares for vauchers, employees stock ownership
plans; vauchers collected by private investment funds, direct sales of companies
Avia Praha, Skoda auto, Tabak Kutna Hora, banks, telecomunications etc. To foreign
owners
Estonia: small scale privatization in 1990, large scale Privatization Act of 1992direct sales to foreign investors, vauchers in 1994 marginal, Eesti Telekom, Estonian
Air (Denmark), Estonian Shipping Company (American/Norwegian), Tallina Vesi
(utilities), electricity, banking sector
Hungary. “gulash socialism”, centralized privatization for small scale privatization,
management by-outs, former owners, new phase in 1995 by selling companies to
multinationals, golden share in some companies
PRIVATIZATION BAROMETER
THE OWNERSHIP STRUCTURE OF LISTED
COMPANIES IN SOME EU COUNTRIES
Country
(1)
(2)
(3)
(4)
(5)
EU average
Slovenia
Poland
Hungary
Lithuania
Norway
Italy
Sweden
Finland
Denmark
UK
Greece
Germany
4
18
30
9
0
25
10
9
8
7
0
0
6
19
25
2
7
31
17
30
10
9
19
2
25
45
32
23
9
7
4
16
19
28
2
26
51
19
17
16
29
20
4
12
8
27
13
7
16
15
34
14
29
8
39
73
53
34
14
40
74
26
32
22
18
(1)
public, (2) non-financial companies, (3) financial companies, (4) households, (5) foreigners
SHARES OF FOREIGN STOCK IN CEE
TRANSITION COUNTRIES
Country
stock FDI/GDP in %
1994
1999
2003
Czech Republic
Estonia
Latvia
Lithuania
Hungary
Poland
Slovakia
Slovenia
11.0
9.2
7.6
0.7
17.1
4.1
6.1
9.2
14.1
19.3
13.9
5.7
25.3
5.8
4.2
9.5
48.0
77.6
35.1
27.2
51.8
24.9
31.5
20.7
Share of foreign banks
in assets 2001
90.0
98.9
65.2
78.2
88.8
68.7
85.5
20.6
MACROECONOMIC STABILIZATION
Assessment of economic situation: D>S, Washington agreement;
Increase of Supply: liberalization of imports, pure socialist
production goods;
Decrease of Demand: price liberalization, restrictive credit policy,
restrictive fiscal policy; freeze of wages, fixed exchange rate;
Results: economic depression, measured and actual, unemployment,
social diferentiation;
Slovenian transition model; ignorance of Washington agreement,
gradualism, floating exchange rate
THE ASSESSMENT OF ECONOMIC SITUATION
IN SOCIALIST COUNTRIES
Aggregate supply and demand curves
Prices
Demand
Supply
P
Ps
Shortage
Qds
Q
Qss
output
TRANSITION MODELS IN CEE COUNTRIES
1.Baltic
EE, LT, LV
2.Visegrad
3. Slovenia
CZ, HU, PL, SK
SI
Privatization
sales to
foreigners
sales to
foreigners
Stabilization
fixed ex.rate
switching
fiscal discipline adaptable
floating
adaptable
Social Considerations
Restructuring
absent
absent
present
by FDI
important
decentralized
Problems
CA deficit
emigration
CA deficit
budget deficit
balance
EMU problems
MODEL
neoliberal
embedded
neoliberal
neocorporativist
Starting position
free distribution
MW by-outs
TRANSFORMATIONAL DEPRESSION
120
index 1990=100
110
100
Vzhodna
Evropa
CEE
90
80
CIS countries
70
nekdanja SZ
60
50
90
91
92
93
94
95
96
97
98
99
00
JOBLESS GROWTH?
16
unempl.
ra te
%
93
14
94
95
2000
01
97
12
02
03
99
10
96
04
05
98
GD P g ro w th %
8
0
1
2
3
4
5
6
SUSTAINABLE GROWTH?
8
CA/GDP
%
99
98
97
03
6
04
96
2000
02
01
05
4
95
2
94
0
93
GDP g ro wth %
-2
0
1
2
3
4
5
6
EXPENDITURES FOR HEALTH AND EDUCATION
1994-2003
14
% GDP
13
12
11
10
9
8
CZE
EST
H
LAT
LIT
PL
SLK
SLN
GINI COEFFICIENTS, 2000-2006
40
LT
Gini(2000)=28.4
Gini(2006)=30.2
EE
LV
35
PL
HU
30
RO
MT
CY
E U 15
SK
25
20
BG
CS
SI
SOCIAL COHESION INDICATORS IN NMS
2000
2006
Public expenditures/GDP
41.6
40.5
Gini coefficient
28.3
30.3
Inequality coefficient
4.35
4.91
Social Security
Expenditures/GDP
11.9
10.9