Abstract
The economies of the Soviet Successor States (SSS) are in transition from command-administrative systems in which only limited markets existed, and in which money and financial phenomena played only a passive role, to market systems where the money supply and interest rates are expected to exert an active influence on the economy. The advent of macroeconomics in these transitional economies presents new problems for policy-makers in influencing the direction of their economies. One of the most important new policy variables for policy-makers in these emerging states is inflation. How the policy-makers deal with this problem is crucial to the activities of foreign investors.
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Notes
This should not, however, be played down too much since it will be an important clause when these markets are developed. I am only stressing the fact that it may have been included as a means of mimicking Western central bank laws and had little to do with the Kazakhstan government’s concern for the securities market.
Though excluded from the present analysis, the Estonian law on central banking Zakon ESSR o bankakh exhibits the problem of failing to separate the central from the commercial banks in the application of such monetary policy instruments as the setting of the discount rate. This is evident from art. 7, sect. 4, which states that: ‘the Bank of Estonia will consult on the acceptance of decisions as stated in articles 18, 19, 28, 35 and 49 (each of which deal with discounting, reserve requirements and general monetary policy) with the commercial banks and their union associations’. Fortunately, none of the laws analysed here have the problem so explicitly stated.
Employees of Promstroibank, Moscow, informed the author in Jun. 1991 (six months after the commercialisation of the special banks) that they still received a credit plan from the government.
This point is difficult to prove and can only be backed by anecdotal evidence. It will take more than a privatisation decree to break the bonds between the former employees of a once integrated network of banks.
Data from David Johnson of PlanEcon, Jan. 1992.
That is, with a nominal GNP estimate for 1991 of 1667 billion roubles (PlanEcon estimate, Jan. 1992).
Jan. to Apr. 1991 was used for the comparison, as Apr. 1990 data for Sberbank were not available.
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© 1996 Patrick Artisien-Maksimenko and Yuri Adjubei
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Lewarne, S. (1996). The Financial Context for Foreign Investment. In: Artisien-Maksimenko, P., Adjubei, Y. (eds) Foreign Investment in Russia and Other Soviet Successor States. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-24892-6_4
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DOI: https://doi.org/10.1007/978-1-349-24892-6_4
Publisher Name: Palgrave Macmillan, London
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