YUSUF UZEL 15815558356 HARUN UZUN 39098142286

YUSUF UZEL 15815558356 HARUN UZUN 39098142286

YUSUF UZEL
15815558356
HARUN UZUN
39098142286
20 Years of Economic
Transition
• Transition as such has progressed over the
past 20 years a slowdown in general is
unavoidable and even reversals are likely
,particularly in the areas of finance and
trade.All transition countries are facing
fiscal difficulties,which are a threa to much
needed growth inducing investment in
education.Like im mature capitalist
countries increased government is
unavoidable,although sector specific
industrial policy and risky.
•
• Original consept of the ‘Washington Consensus’
has failed to fulfil expectations of growth and
development, the state of the art seems to be
confusion.
• The Washington Consensus approach to the
specific combination of shock like transformation
and macro economic stabilization.
• The Washington Consensus was a common
understanding of the Washington based
instititions IMF and World Bank and American
think tanks to solve the structural balance of
payment problems.
• The policy recommendations were:
• Fiscal discipline,implaying the redirection of the
public expentiture priorities toward fields offering
both high economic returns and potential to
improve income distribution,such as primary
care and primary educations.
• The elements were:
• Tax reform,interest rate liberalization,a
competitive exchange rate,trade
liberalization,privatization,deregulation,secure
property rights.
The consept of the ‘Washington Consensus’ was stylised by the so
called ‘j-curve’ of economic transformation.Its messag was that after a
little dip of ‘transformational recession’growth of income would multiply.
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Country
Czech Republic
Hungary
Poland
Romania
Russia
GDP İN 2007
130
134
158
113
93
Trends in male life expectancy at birth
• This figure shows that rapid mass privatisation
as an economic transition strategy was a crucial
determinant of differences in adult mortality
trends in post communist.Protagonists of rapid
mass privatisation were Russian and some other
CIS countries as oppesed to Poland and other
European countries
• Rapid mass privatisation leads to high levels of
unemployment ,which then encouraged an
unhealthy lifestyle including hig levels of alcohol
consumption ,which ultimately leads higher
mortality rates.
The Impact of The Global Crisis
• The accelerated decline of growth rates
• A dramatic decline of capital inflows
• Changes in the prices of oil, gas and also
manufactured goods
• Changes in the export markets for
transition economies
• Changes in the Foreign Direct Investment
Figure 7: Effectiveness of antitrust
policy between 1999 and 2007
Ranked between 1 and 7, whereas 1 indicates that in the specific country effectiveness
is lowest and is highest with 7.
Source: Hölscher/Stephan 2009
Figure 8: Intensity of local
competition between 1999 and
2007
Ranked between 1 and 7, whereas 1 indicates that in the specific country intensity is
lowest and highest with 7. The bars for 2001 do not directly compare with other years
due to a change in method.
Source: Hölscher/Stephan 2009
• The first country European country to
approach the IMF for help in the global
crisis was Hungary. Hungary was bailed
out by the IMF with 12 billion Euros and
further
• Latvia followed suit and there are
negotiations with the IMF are going on with
Belarus and the Ukraine at present
Conclusions
• As the nature of the current crisis is of
global character, one should not expect the
transition countries to solve the problems
by themselves
• Like in mature capitalist countries these
countries need to attempt to protect their
core financial systems by improving its
governance and structure
• A major challenge will be to maintain
access to finance for the growth driving
Small and Medium size Enterprise
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