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
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