Resource information
The study reviews the performance of
four transition countries - Albania, Azerbaijan, the Kyrgyz
Republic, and Moldova - in the areas of private, and
financial sector development, identifying both their
achievements, and challenges, to extract beneficial reform
efforts, and alternative approaches, setting the pace for
sustainable growth. These countries were selected because
they are among the poorest in the region, whose problems are
seemingly intractable, and have been largely detached from
the international marketplace until the transition began.
Thus, in terms of history, resource endowment, and proximity
to markets they are viewed as "late reformers" in
economic development, and competitiveness, despite policy
reforms. Enterprise arrears, and soft budget constraints
have been a significant problem in many transition
economies, more often than not, manifested as some fiscal
tightening occurred to offset budget constraints. Hence, a
core challenge of the transition is to reduce the role of
government from all encompassing presence, towards a
professionally managed model, and one which provides high
service delivery, strengthens civil institutions, and plays
an effective regulatory role in a market economy. This
requires improved financial discipline, reasonable fiscal
policy, and structural adjustment, while privatization that
promotes concentrated outsider ownership, and foreign
participation, should be favored.
