Industrial transition models review on Slovenia, Romania and Czech Republic

Transcription

1 Industrial transition models review on Slovenia, Romania and Czech Republic Vladimir Kvetan Institute for Economic Research Slovak Academy of Sciences

2 Review Hearing 7 th march Ljubljana / Slovenia Academic view on transition process Jozef Mercinger Economic transformation process in Slovenia Gheorghe Zaman Economic transformation process in Romania Milan Žák Economic tranformation process in Czech Republic Practical point of view Josef Zbořil Restructuring in the chemical sector in the Czech Republic Samo Hribar Milič Restructuring in the Slovenian industrial sector Vanda Pečjak Restructuring in the Slovensian chemical sector Angela Pop Restructuring in the Romanian chemical sector

3 General tasks of transition process Privatization and private sector building Price liberalization Liberalization of foreign trade Monetary convertibility Slovenia and Czech Republic creation of national currency Heading to EU (mid 90 s) Restructuring the labour market Restructuring of foreign trade orientation

4 Starting points of transition Slovenia Different position compared to others No hard core communism and centralisation Part of Yugoslavia concentrated on industry for western teritories Tradition in self managing companies Short war with Croatia Romania Centralised economy Relatively underdeveloped industry Rural areas connected to agriculture

5 Starting points of transition Czech republic Part of Czechoslovakia peacefully spitted Highly centralized economy More final goods oriented industry compared to Slovakia Advantage in Prague as a seat of foreign trade organizations

6 Transition process background Slovenia Gradual approach Ignoring Washington agreement with assumption S>D Floating immediately Romania Effective mix of gradual reforms and rare shock therapy Czech Republic Shock therapy

7 Privatization process Slovenia Privatization equation ( (1-x)*40)+(20+x*40)=100 10% Pensioners funds 10% Restitutions 20% Development funds 40% social property 20% employees 0<x<1 x=1 small successful companies, majority of workers and management x=0 large unsuccessful companies, state property, PF, RF 0<x<1large successful companies, auctions for vouchers

8 Privatization process Romania Slow process 3 stages setting up commercial societies with private or mixed capital privatization law allows selling and buying the shares and state assest 1998 ongoing process - Mostly foreign strategic partners In 2006 only 71,6 % of GDP (by preliminary data) were made in private sector Czech Republic Small scale privatization SMEs Direct sales Restitutions Large scale privatization (vouchers)

9 Restructuring of industry Slovenia Retiring rather than firing Strong social dialoque Cautious approach to FDI Experience in Acquisitions rather than green field investments Not much technology transfers Increased imports more than exports Specialization within a multinationals Strong monopolies Income account deficits GDP vs. GNP FDI not positive or negative The policy was NOT TO HAVE AN INDUSTRIAL POLICY (Milič)

10 Restructuring of industry Romania Restructuring industry not a key role in transition process deindustrialization Wrong policy decisions (subsidies to wages rather than technology progress) Positive effect of FDI due technology transfer Czech republic Restructuring done by the system jump to water and swim Only key (network) industries were kept state owned as a social pillow FDI as a strategic partnership, neither saints or evil (Zbořil) Tunneling

11 Present state of industrial restructuring chemical industry Slovenia s success factors Fast and rational reactions to changes High investments to technology Openness to foreign investments take the best out of FDI (Pečjak) Professional leadership Employment policy following business needs good social mix

12 Present state of industrial restructuring chemical industry Czech republic Operation facilities survived the shareholder s shocks Further foreign strategic investors arrived There have been some victims but not too many causing not too much losses Looking back the privatization was fairly smooth and fast and ultimately, succesfull Romania Key factor of success Investment in modern equipment Re training of employees Environmental investments Customer orientation

13 Conclusions and findings Privatisation was an essential tool for industrial policy Not a clear industial policy in all cases Decentralised approach without state interventions Institutional quality is basic element FDIs are beneficial in greenfield investments Gradualism vs. shock therapy???

14 For more insight to transition process Kiglics Istvan, Rebuilding the Market Economy in Central East Europe and the Baltic Countries, Akademiai Kiado, Budapest, 2007, ISBN

15 Thank you for your attention