The Main Features of the Trade-Political Framework in CentralEast European Countries

Abstract

Though the CentralEast European countries, i.e. the Czech Republic, the Slovak Republic, Hungary and Poland, are much less “open” to the world than market economies of a similar size, they were — and still are — much more sensitive to changes in their external environment. At present this is due mainly to the fact that their economy is still very energy demanding. Consequently, all major changes in the volume and/or costs of their fuel imports have serious repercussions on their economic performance. The introduction of world prices in trade with the former USSR merely led to a five-fold increase in the import costs of Soviet fuels and caused a loss of about 3/4 bill. US $ in each of these countries only in 1991 — an amount which represented between 0.3 to 0.8 percent of their GDP. The vulnerability of the economies of these countries is also due to the very high share of so-called “sensitive items”¹ in their exports, as the import of these goods is subject to restrictions world-wide. (To consequences of this we shall come back in part 3.3 of this chapter.) The third and most important reason for their vulnerability was the dominant orientation of their foreign trade to East European markets, especially to that of the former Soviet Union. According to official statistical data based on official exchange rates, the share of COMECON countries in their overall trade reached 68 to 77 percent in the middle of the 80’s (Table 3.1).