12 - Economic Transformation and the Policies for Long-Term Growth

Summary

INTRODUCTION

This conference volume has focused mainly, though not exclusively, on issues and experiences related to stabilization attempts of economies in transition during the past five years. The essays presented have been informative and interesting, with conclusions that will be very useful to policy makers. The contributors to this volume have examined the role of monetary and exchange-rate policies; the importance of reducing the fiscal deficit; the relationship between the fiscal deficit, inflation, and the exchange rate; the importance of economic liberalization; and so forth. Thus, much of the analysis and discussion has been directed at the role of macroeconomic policy.

I will not try to add to that rich discussion or comment on any particular presentation. Rather, I will address a different and, I hope, complementary, question: What economic issues should worry the economic minister of a country in transition once the macroeconomic situation has been brought into some acceptable balance? By “acceptable balance” is not meant that the country has no inflation, no fiscal deficit, and no problems with the balance of payments. Instead, it simply means that the macroeconomic problems have become more or less manageable and not much worse than those prevailing in countries that are not in transition.

Problems such as high inflation and balance-of-payments crises generally require the full and urgent attention of policy makers.