Prepared by Juan J Fernández-Ansola, Bhaswar Mukhopadhyay, and Kari Udovički.
Havrylyshyn, Oleh, Ivailo Izvorski, and Ron van Rooden, 1998, “Recovery and Growth in Transition Economies 1990-97: A Stylized Regression Analysis,” IMF Working Papers WP/98/141. Also see Berg, A., E. Borenzstein, R. Sahay, and J. Zettlemeyer (1999), “The Evolution of Output in Transition Economies—Explaining the Differences,” IMF Working Papers WP/99/73.
As an example, pending legislation in the Federation would link disability benefits for military invalids and surviving family to prevailing military wages, which are well above average wages. These benefits could instead be aligned to benefits provided for civilian work-related injuries or disabilities.
Money (narrow) amounted to 14 percent of GDP at end-1999, 50 percent of which was held in the form of cash outside the banking system. Domestic currency demand deposits held by households, private enterprises and other were equivalent to only 1 percent of GDP.
The authorities will need to ensure that the banking system is suitably strengthened before the introduction of deposit insurance.
Large enterprise privatization, originally envisaged to begin by end-1999, is unlikely to start before mid-2000.
In the Federation, a major issue in this regard concerns the existence of “waiting lists” for employees that were declared redundant by their employers as a result of the effects of the war. As the Federation Labor Law stands, it places a burden on employers equivalent to a severance payment of at least nine months for each of the 70,000 workers on waiting lists.