Foreword

• Author: Pradeep Mitra/Willem Buiter
• Profession: Chief Economist Europe and Central Asia Region. The World Bank/Chief Economist and Special Counsellor to the President. European Bank for Reconstruction and Development
• Pages: xv-xvi

A decade and a half has now passed since the collapse of communism in Central and Eastern Europe. In that period, countries of the region have had to overcome the legacy of an inefficient socialist economy and to adopt market principles. The challenges have been enormous, especially in South Eastern Europe. Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, and Serbia and Montenegro have had to deal with internal conflict, and all of the countries-including Albania, Bulgaria, Moldova, and Romania-have faced, to varying degrees, high rates of poverty, political uncertainty, and an infrastructure weakened by years of neglect.

The struggle has been unique in each country. And considerable progress has been made. Bulgaria and Romania look forward to accession to the European Union in 2007, and the European Commission has recommended that the European Council open membership negotiations with Croatia. The other South Eastern European countries recognize the need for further economic reform and are poised to meet the challenge. This book-a collaborative effort between the World Bank and the European Bank for Reconstruction and Development-not only assesses how each South Eastern European country is faring, but also provides guidance regarding where they need to turn next in their efforts to build a market economy. The book points out that to restore and consolidate peace and stability in the region, the countries must raise their levels of domestic and foreign investment. A weak investment climate undermines the prospects for economic growth and poverty reduction and jeopardizes the stability of the region. But to create a climate that will...