Policy conclusions

Abstract

It is widely recognised that no reform has had farther reaching effects on the transition than the liberalisation of foreign trade together with its corollaries of external currency convertibility and exchange rate adjustment. Trade expansion, in particular, has provided the strongest impulse to economic recovery, has raised the level of competition in the domestic market and has created incentives for economic restructuring and investment. With such a record, these external policies do not seem to require any reorientation, but they need to be fully implemented in the reforming countries that are lagging behind, while in the other transition economies, they should evolve in response to the needs of closer economic integration into a wider market area. In all CEECs, there is still a large potential in foreign trade and investment that has not yet been harnessed for the purpose of accelerating economic growth.