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Western Press Review: Economic Reform And Corruption In The East

  • Ron Synovitz



Prague, 15 April 1997 (RFE/RL) -- Western press commentary today focuses on economic developments in Eastern Europe and the former Soviet Republics.

FINANCIAL TIMES: Central and Eastern Europe don't attract high levels of investment

Correspondent Kevin Done writes an analysis on this week's board meeting of the European Bank for Reconstruction and Development in London.

Done says: "Central and Eastern Europe is failing to attract high levels of foreign direct investment because of uncertainty and gaps in the legal framework, deficient taxation systems, and corruption and crime." Quoting speech by EBRD President Jacques de Larosiere, Done says that lack of confidence in the region is still leading to "large-scale capital flight in particular from Russia and other parts of the former Soviet Union." He says deficient taxation systems impose "excessive constraints on the activities of potential investors. . . Investors need stable regulations and have to be able to enforce contractual or shareholder rights."

Done concludes by supporting the EBRD president's view that "much still remains to be done in the longer term tasks of institution-building and institutional reform." De Larosiere says "corruption, crime and the 'arbitrary interference' of some officials in private sector business" remains a source of concern. These problems have "complicated or even compromised" the bank's own operations in some cases, said De Larosiere.

FINANCIAL TIMES: International financial institutions are lining up behind Yeltsin's new cabinet

Moscow correspondent Chrystia Freeland writes a news analysis on the World Bank's announcement yesterday of a $6 billion loan program that would be disbursed to Russia during the next two years. Freeland writes: "The World Bank pledge... suggests international financial institutions are lining up behind Russian President Boris Yeltsin's rejigged cabinet and its renewed commitment to economic reform." She says the program "will be disbursed primarily as adjustment loans to the government to help ease the social burden of the transition to capitalism."

Freeland also notes a preliminary agreement with Russia on a $100 million loan guarantee for an international aerospace project called Sea Launch. She says the loan is "innovative for the World Bank because the institution will not actually lend the money, but will instead provide a guarantee against political risk for commercial creditors." The Sea Launch project brings together companies from Ukraine, Russia, Norway and the United States.

INTERNATIONAL HERALD TRIBUNE: The level of corruption in Ukraine is breathtaking

An editorial in today's edition suggests that the United States should cut back its aid to Ukraine unless Kyiv starts to make real progress on reform. The editorial says: "The institutional corruption of the Ukrainian political economy and its slow progress on reform pose a real dilemma to the West. The United States has more than enough experience to know that pouring aid into dysfunctional regimes solves no problems -- and often exacerbates them. Ukraine is approaching that point. The strategic goal of helping Ukraine is sound. But in the end, Ukrainians will have to act in ways that make such help possible, not to say productive."

The editorial notes that the United States has, at the insistence of Congress, already "given about as much foreign aid to Ukraine as to Russia" -- despite the fact that Russia has three times the population. The newspaper says that "if Ukraine establishes itself as a prosperous democracy, Russia is far more likely to follow suit. If, conversely, Ukraine fractures or collapses, its failure is likely to sharpen Russia's latent imperial tendencies." In the meantime, the newspaper concludes, "the level of official and unofficial corruption in the country is breathtaking."

FINANCIAL TIMES: Kazakhstan is dangerously close to a fiscal crisis

Turning to Central Asia, Charles Clover writes an analysis in today's edition about Kazakhstan's growing debt burden. Clover says the Kazakh economy is "dangerously close to a fiscal crisis resulting from a building-up of payment arrears which now total half the country's gross domestic product." He says: "Most Kazkah officials blame the tight monetary policy prescribed by the International Monetary Fund for the bankruptcy of many of the country's enterprises."

But Clover argues that much of the crisis is due to "simple insolvency. . . Enterprises cannot pay their bills because they are owed money which they cannot collect. Clover says the real "underlying reasons for the payments arrears are elusive because data detailing exactly which enterprises owe money to which are considered an official secret." He concludes that "most of the uncollectable debts received government sanction under Kazakhstan's haphazard privatization program."

Albania and Croatia



Western press commentary today also examines recent developments in Albania and Sunday's local elections in Croatia.

FRANKFURTER ALLGEMEINE ZEITUNG: Italians don't want Albanians in their country

Heinz-Joachim Fischer writes an opinion column in the German paper today on the relationship between Italy and Albania. Fischer says the Italian parliament approved a plan for an Italian-led multinational peacekeeping force in Albania for one simple reason. "Italians simply do not want Albanians in their country. . . Italians do not always say this aloud, neither in government circles nor in coffee bars. But they behave this way."

Fischer says: "The problems of Albania should be solved in that country or else the Italians will have to accept the immigration of more Albanians." Fischer complains that Italians are upset "about a few thousand Albanians while in Germany alone, more than 300,000 refugees from Bosnia found asylum without the world noticing it. . . The Italians like to say all the poor people of the world should go to Germany if the Germans like it."

LONDON DAILY TELEGRAPH: Critics of the Albanian mission point to similarities with Bosnia

A report yesterday by Balkan correspondent Julius Strauss notes that Italian Prime Minister Romano Prodi was greeted with cheers when he arrived in the Albanian port city of Vlore for weekend talks. But Strauss also notes critics who say "the attempt to bring aid to Albania could run into trouble if fighting breaks out between the forces of (Albanian President Sali) Berisha and those of the rebel-held south, which remain implacably opposed to (Berisha's) regime." Strauss says the critics "point to the parallels between the Albanian mission and the UN intervention in the former Yugoslavia in which foreign troops were sucked into the Bosnian conflict by military commanders intent on holding their governments to ransom."

FINANCIAL TIMES: The Italian-led intervention is the most important policy initiative by Rome in years

An editorial in today's edition says that Prodi demonstrated "his considerable powers of survival" last week by keeping his government intact while getting parliamentary approval for the Albanian mission. The newspaper says: "The Italian-led intervention amounts to the most important foreign policy initiative by Rome in recent years, and as Mr Prodi argued, a question of national pride." The editorial concludes that Prodi now needs to show that "he is a leader as well as a survivor."

FRANKFURTER RUNDSCHAU: Tudjman said that those who oppose his party are against Croatia's sovereignty

Turning to Zagreb, an editorial in today's edition criticizes Croatian President Franjo Tudjman's rhetoric leading up to Sunday's local elections. The newspaper takes offense at Tudjman's comments that those who oppose his political party, the Croatian Democratic Union (HDZ), are against the "sovereignty of Croatia." The newspaper says: "Such statements made by politicians in democracies are enough for them not to be elected." The newspaper laments that Tudjman's governing party has "incurred only slight losses in the elections."

HANDELSBLATT: Croatia's elections will not change the power structures

In an opinion piece for the German financial newspaper Josef Abaffy today says that Croatia's elections "will not drastically change the power structures of President Tudjman, who holds the country at short tether." Abaffy says the ballot "reflects the general mood clearly -- a slight swing for the HDZ (and) the strengthening of opposition parties, especially those in the political middle ground."

Abaffy concludes that "any other developments would not have been good for the country." He says: "A stronger HDZ would have forced a trend toward a strengthened Tudjman authoritarian rule (while) a radical weakening of the HDZ would bring unrest sparked off by economic partners and would, therefore, endanger the democratization and stability of Croatia."

(Translations of German press by Dora Slaba.)
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