- Luis Valdivieso
- Published Date:
- January 1999
For further reference, see Marcelo Selowsky and Ricardo Martin, “Policy Performance and Output Growth in Transition Economies.” American Economic Review. Papers and Proceedings. Vol. 87 (May 1997), pp. 349–53: Ernesto Hernández-Catá. “Liberalization and the Behavior of output During the Transition from Plan to Market.” Staff Papers, International Monetary Fund. Vol. 44 (December 1997). pp. 405–29; and Jeffrey Sachs and Wing Thye Woo, “Structural Factors in the Economic Reforms of China, Eastern Europe, and the Former Soviet Union.” Economic Policy: A European Forum, Vol. 9, No. 4 (April 1994). pp. 101–45.
IMF support to the Baltics, Russia, and other countries of the former Soviet Union has also encompassed broad-ranging technical assistance and training, and this type of support has been provided to each of these countries.
Azerbaijan also uses the ESAF combined with the EFF.
For a discussion on progress with fiscal reform, see International Monetary Fund. World Economic Outlook, World Economic and Financial Surveys (Washington, May 1998).
For further reference, see International Monetary Fund, forthcoming. States of Market-Based Central banking Reforms in the Baltics, Russia, and Other Countries of the Former Soviet Union (Washington).
For further reference, see Ishan Kapur and Emmanuel van der Mensbrugghe, “External Borrowing by the Baltics. Russia, and Other Countries of the Former Soviet Union: Developments and Policy Issues.” IMF Working Paper 97/72 (Washington: International Monetary Fund, June 1997); and. John Odling-Smee and Basil Zavoico, “External Borrowing in the Baltics, Russia, and Other Stales or the Former Soviet Union: The Transition to a Market Economy,” IMF Paper on Policy Analysis and Assessment 98/5 (Washington: International Monetary Fund, June 1998).
While most countries have made considerable progress in the production and reporting of economic data, the information used in this paper should be interpreted with caution and only as indicative of trends.
Countries falling in the first three groups were classified according to the liberalization index presented in Martha De Melo, Cevdet Denizer, and Alan Gelb. “Patterns of Transition from Plan to Market,” World Bonk Economic Review, Vol. 10 (September 1996), pp. 397–424, There are several alternative classifications, including the most recent one prepared by the EBRD in its 1997 Transition Report. According to the EBRD classification, Russia would be ranked among the most advanced reformers, together with the Baltics; Armenia, Georgia. Ukraine, and Uzbekistan would cluster among the intermediate reformers group, together with Kazakhstan, the Kyrgyz Republic, and Moldova: and Azerbaijan, Belarus, Tajikistan, and Turkmenistan would have the lowest rankings in terms of reform.
Stanley Fischer, Ratna Sahay, and Carlos Vegh, “Stabilization and Growth in Transition Economies: The Early Experience,” Journal of Economic Perspectives, Vol. 10 (1996). pp. 45–66.
For a discussion of the factors inhibiting growth in these countries sec European Bank for Reconstruction and Development, Transition Report 1997: and International Monetary Fund, forthcoming, Growth Experience in Transition Economies (Washington).
The measurement of the deficits in high-inflation countries has a large inflation component; hence, the levels of the overall deficit in percent of GDP should be interpreted with caution.
For an estimation of the primal) deficit that would be needed to stabilize the ratio of public debt to GDP at its current level in Russia and Ukraine see International Monetary Fund. World Economic Outlook, May 1998. pp. 102–103.
The most prevalent form of quasi-fiscal operations has been directed and subsidized credits through commercial banks. More subtle and difficult to identify forms of quasi-fiscal deficits have arisen in connection with the extension of public sector guarantees on commercial borrowing by enterprises.
For evidence of the importance of developing securities markets in reducing the inflationary effects of fiscal deficits, see International Monetary Fund, forthcoming, Disinflation in Transition: The Experience During 1993–97(Washington).
See EBRD,Transition Report.
This chapter draws upon the material presented in International Monetary Fund. World Economic Outlook, May 1998. For a more comprehensive and updated account of the impact of the Asian crisis on transition economies in general, and on Russia and Ukraine in particular, see International Monetary Fund. International Capital Markets: Developments. Prospects and Policy Issues (1998), and World Economic Outlook, October 1998.
For a comprehensive account of the crisis that unfolded in Russia during the summer of 1998. see International Monetary Fund. World Economic Outlook, October 1999,
In November 1997, it was announced that as of January 1, 1998, the crawling hand vis-á-vis the U.S. dollar would be replaced by a mechanism under which the ruble is allowed CO fluctuate within a 15 percent band OH either side of a year adjusted central rate vis-á-vis the dollar of 6.2 (new) rubles per U.S. dollar during 1998–2000. Within this wider band, the Central Bank of Russia maintains a narrow corridor that permits small fluctuations from day to day. The Central Bank of Russia has indicated its intent to continue its policy of a gradual exchange rate crawl aimed at keeping the real exchange rate broadly unchanged.
The stock market in Ukraine, which is still relatively undeveloped and little traded by nonresident investors, was not Strongly affected by international spillover effects.
Interest rates and exchange rate arrangements have remained stable in the first few months of l998.
The importance of differences in domestic economic conditions and economic policies is also reflected in diverging credit rating movements. Since December 1997, Moody’s Investor Service, Fitch IBCA, and Standard and Poor’s have revised Russia’s outlook progressively downward, citing a worsening of fiscal pressures and a weakening of the external payments flexibility.
The Estonian stock market index rose more than 150 percent from the beginning of 1997 to the middle of October, and in 1997 the current account deficit, net of foreign direct investment, amounted to about 6 percent of GDP.
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