Page 59 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes Table 3.1: Overview of Reforms

Bulgaria Czechoslovakia Hungary Poland Romania Yugoslavia
Price reform All prices Prices freed in Domestic Most price Most prices 75% of price
except those sector believed pricing restrictions still freed by Dec.
freed in Feb. to be freed since ended Jan. controlled 1989
1991 competitive 1988. More 1990. 10% of
than 92% prices now
now free controlled
Privatisation Planning to Started National 8,000 firms to Privatisation Ownership
privatise privatising Property be privatised. bill sent to issue difficult
state firms. small Agency set Eight sold so Parliament. because of
No time- businesses. up. 130 of far. Foreign Plans to decentralised
table set Foreigners can 3,000 salable share limited privatise 50% nature of
bid only if firms to 10% of capital worker self-
citizens don’t privatised in without stock of management
buy 1990 permission economy over system
3 years
Foreign trade As of Jan. As of Feb. 1991, 90% of No restrictions All citizens All public and
1989, all exporters of imports free on imports. and private firms
firms free to goods in short from control Export foreigners can can conduct
conduct supply must restrictions on now conduct foreign trade.
foreign trade. have licenses, as 15 items hard currency 87% of imports
Decree of must importers accounting for trade free from
Feb. 1990 of petroleum 1% of total restriction as of
liberalised products and exports Feb. 1990.
importation munitions Tariffs low,
of all goods. uniform; quota
300% duty restrictions on
imposed on some imports
all exports
except art
Convertibility Importation Liberalised in Net export Resident Started Convertibility
and 1991, but local earnings convertibility phased for commercial
exportation currency not held until for current transition to transactions
of leva necessarily year-end in transactions. convertibility since Dec.
prohibited convertible front Profit 1989.
(non accounts repatriation Government
convertible) with limited; use of suspended
National net hard convertibility
Bank currency into US$ for
earnings repatriation at
controlled end of 1990
Exchange rate Since Feb. Crown fixed Front is In Jan. 1990, In Feb. 1991, Dinar pegged
policy 3,1991, leva against US$ fixed against zloty dual to deutsche
has floated. subject to a basket of devalued from exchange rate mark subject to
Rates agreed periodic currencies, Zl 6,000/US$1 system periodic
daily by adjustment. In subject to to Zl introduced. In adjustments.
commercial Dec. 1990, periodic 9,500/US$1, Nov. 1990, leu Rate of Din
banks and devalued 17% to adjustments bringing devalued to 7/DM 1 set
clients 28 official rate in leu 35/US$1, Jan. 1990,
posted by crowns/US$1. line with Devalued on revised to Din
National One rate for all street rate, Apr.1, 1991 to 9/DM 1 in
Bank on types of legalised at leu 60/US$1 1991 for all
following transactions same time. transactions
day. One rate Exchange rate
for all types set against
of US$ for all
transactions kinds of
transactions

Source: P. K. Vasudeva, International Marketing, Excel Books.

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