Washington, March 12 (RFE/RL) - The World Bank says that
the nations of Central and Eastern Europe and Central Asia saw an
increase in foreign direct investment in 1995 of almost 50 percent
over 1994 to 12,000 million dollars.
The bank, in its annual World Debt Tables report released today
in Washington, says privatization with foreign investor participation
helped spur the flow. Kazakhstan and Uzbekistan, for example, opened
their tobacco industries while Hungary saw the "most spectacular
rise" to 4,200 million dollars in foreign direct investment.
This compared to 1994 when the region experienced a fall in the
sales of state-owned enterprises. The bank says The decline in 1994
may have been due to the slowdown in Hungary and the Slovak Republic
where governments re-examined privatization programs and strategies.
For the entire region, which for the bank includes not only the
nations of Central and East Europe and the former Soviet Union but
also Turkey, Greece, Malta and Cyprus, export earnings in 1995 "more
than outpaced the seven percent increase in external debt."
The bank says that debt stocks rose last year to an estimated
380,000 million dollars, with Russia, Turkey, Poland and Hungary
together accounting for 65 percent of the region's outstanding debt.
The composition of that debt "differs widely," adds the bank,
noting that Hungary and Turkey owe a very small amount to official
creditors while Poland owes about 75 percent of its debt to official
creditors while Russia has an "almost equal balance of official and
While debt was up seven percent, the indicators and ratios for
the region were generally improved. The bank says the debt to export
ratio for the region "improved to 144.6 percent in 1995 as compared
to 153.7 percent in 1994." The lower the ratio, generally, the better
because it indicates that export earnings can more readily pay for
Within the region, however, the bank says some countries, like
Russia, saw their debt to export ratio rise (to 169 percent) while
Bulgaria saw its ratio improve (to 162.2 percent) because of a 15
percent increase in export earnings and Poland lowered its ratio to
182.2 percent with a 19 percent increase in export earnings.
In the aggregate, says the World Bank, there was a total resource
flow to the region in 1995 of 26,700 million dollars (including both
private and official resources), which was unchanged from 1994.
However, the make-up of that flow changed significantly, with
official flows (from other countries and international institutions)
declining 16 percent to an estimated 9,400 million dollars, and
private capital flows increasing by 11 percent to an estimated 17,300
Bank officials say that while official flows are important,
especially for some of the countries of the former Soviet Union and
former Yugoslavia, the increase in private flows indicates a
continued move toward global markets. Of course, they add, the
private flows are "still heavily concentrated" in Hungary, Greece and
Turkey, but Poland, the Czech Republic and Russia are increasingly
drawing private capital.
Private debt -- loans from banks and other private financial
institutions -- declined further in 1995, says the bank, as a result
of the large repayments falling due on commercial bank loans and
bonds contracted in previous years in addition to a slow down in
borrowing by Turkey.
However, says the bank, Europe and Central Asia were able to
maintain access to markets and continued to attract "the third
largest regional share of portfolio investment flows." It says the
"Czech Republic, Estonia, Romania and Russia were among the
first-time issuers (of bonds) in 1994."