Academic journal article Journal of Southeast Asian Economies

Reintegration of Formerly Centrally Planned Economies into the Global Trading System

Academic journal article Journal of Southeast Asian Economies

Reintegration of Formerly Centrally Planned Economies into the Global Trading System

Article excerpt

I. Introduction

A novel part of the globalization process during the final decades of the twentieth century was the reintegration of formerly centrally planned economies into the global trading system. These countries contained a third of the world's population at the start of the 1990s and, even excluding China, they contain more people than either the European Union (EU) or the North American Free Trade Area (NAFTA) (Table 1). Moreover, as members of the Soviet-led Council for Mutual Economic Assistance, Vietnam, Mongolia, and the Eastern European countries were largely isolated from the market-driven international economy.

TABLE 1
European and Asian Economies in Transition

                                    GNP per                GNP per
                       Population   capita    Population   capita
                       (million)     (Us$)     (million)    (US$)
Country                mid- 1992     1992      mid-1999     1999

Central Europe
Slovenia                   2        6,540          2        9,890
Hungary                   10        2,970         10        4,650
Estonia                    2        2,760          1        3,480
Czech Rep.                10        2,450         10        5,060
Latvia                     3        1,930          2        2,470
Slovak Rep.                5        1,930          5        3,590
Poland                    38        1,910         39        3,960
Lithuania                  4        1,910          4        2,620

Eastern Europe
Belarus                   10        2,930         10        2,630
Russia                   149        2,510        147        2,270
Ukraine                   52        1,820         50          750

Balkan & Caucasus
Bulgaria                   9        1,330          8        1,380
Moldova                    4        1,300          4          370
Romania                   23        1,130         22        1,520
Georgia                    6          850          5          620
Armenia                    4          780          4          490
Azerbaijan                 7          740          8          550
Albania                    3           LM          3          870
Croatia                    5           LM          4        4,580
Macedonia FYR              2           LM          2        1,690
Yugoslavia                11           LM         11           LM
Bosnia & Hercegovina       4            L          4           LM
Asia
Kazakhstan                17        1,680         15        1,230
Turkmenistan               4        1,230          5          660
Uzbekistan                22          850         25          720
Kyrgyz Rep                 5          820          5          300
Mongolia                   2           LM          3          350
Tajikistan                 6          490          6          290
China                  1,162          470      1,250          780
Laos                       4          250          5          280
Vietnam                   69            L         78          370
Cambodia                   9            L         12          260
Other
German Dem. Rep.          17           LM       n.a.         n.a.
North Korea               23           LM         23            L
Afghanistan               22            L         26            L
Myanmar                   44            L         45            L

NOTES: n.a. = not available in the source; since 1990 the German
Democratic Republic forms the Eastern Lander of Germany; in 1992
lower income (L) is less than $675 and lower middle income
(LM) $676 to $2,695; in 1998 L is $755 or less, LM is $756 to $2,995.

SOURCE: World Bank data from Worm Development Report 1994, pp. 162-3,
228, and World Development Report 2000/2001, pp. 274-5, 316.

Since the late 1980s, the challenge has been, and continues to be, to manage this reintegration so that all countries benefit from greater specialization and trade on the part of the transition countries, while minimizing the inevitable adjustment costs. …

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