” “The relaunch of Eastern Europe” “

The UN Conference on trade and development (UNCTAD) published its 2002 Report on investments in the world in recent days. The Report calculates the flows of direct foreign investment (DFI) of which the various countries are the beneficiaries and, at the same time, the ability of national economies to attract such investments, with particular attention to the role of the multinationals in world economic development. DFI flows were halved in 2001 in comparison with the previous year. But the Report for 2002 does not confirm this trend: indeed it registers a slight growth of investments in central and eastern Europe in the previous year. According to the 2002 Report on investments in the world published by UNCTAD, the flows of direct foreign investments towards 14 of the 19 countries of central and eastern Europe increased by 2% in 2002, rising from 26.5 billion dollars in 2000 to 27 billion. The flows remain for the most part concentrated in some countries. In 2001 Poland, the Czech Republic, the Russian Federation, Hungary and Slovakia received three-quarters of the DFI flowing into the region: and these countries, with the exception of Slovakia, already dominated the scene since the early 1990s, thanks to programmes of incentives to attract foreign investments implemented by their respective governments. Last year, most of the other countries of central and eastern Europe registered a growth of investment flows also thanks to their stability, to higher than average growth rates and the various privatizations currently in progress. Slovenia, for example, has opened up such key sectors as telecommunications and banks to foreign investment. Some of the biggest increases in DFI in the region, however, only represent a recovery over the extremely low levels of 2000, as in the case of Yugoslavia, Macedonia, Belorus, Bosnia and Herzegovina. But even this favourable trend is lacking in Bulgaria and in Latvia. The Report points out that most of the 25 biggest non-financial multinationals present in central and eastern Europe maintained their growth rate in 2001, continuing the trend of the previous year. Nonetheless, while the majority of Russian and Slovene enterprises are expanding abroad, some Czech, Slovak and Polish businesses are being subjected to large-scale restructuring which often involves their withdrawal from foreign activities. Some two-thirds of the investors interviewed at the end of last year envisage good prospects for DFI towards the countries of central and eastern Europe for the next three to five years: these countries ought, it is thought, to draw advantage from the transfer of capital to more competitive markets which is expected to follow the present phase of economic recession. That is the highest percentage of positive replies for all the regions included in the survey. “The political situation in our country is judged fairly stable” – explained Msgr. Marian Gavenda, spokesman of the Slovak Bishops’ Conference – and this undoubtedly encourages investors. Moreover, the imminent entry of Slovakia into the EU has required changes in legislation and technological renewal which have made our economic system better able to interact more effectively with the economies of EU member states and not only with them. Another feature of interest to investors is the process of the privatization of the big state corporations now underway in the country, decided by the government to curb the economic crisis that had produced a huge growth of foreign debt and rise in unemployment. All this is taking place not without traumas for citizens who see, at times, state enterprises which were once considered mainstays of the country’s economy, and for which generations of Slovaks worked, being sold off at very low prices. The Slovaks’ capacity for hard work – before the advent of a regime that claimed to cancel individual creativeness – was famous throughout Europe”. Chiara Santomiero