72. the Czech and Slovak Federal Republic: a Economy in Transition, by Jim Prust and an IMF Staff Team, 1990
Total Page:16
File Type:pdf, Size:1020Kb
Occasional Papers of the International Monetary Fund 72. The Czech and Slovak Federal Republic: A Economy in Transition, by Jim Prust and an IMF Staff Team, 1990. 71. MULTIMOD Mark II: A Revised and Extended Model, by Paul Masson, Steven Symansky, and Guy Meredith. 1990. 70. The Conduct of Monetary Policy in the Major Industrial Countries: Instruments and Operating Procedures, by Dallas S. Batten, Michael P. Blackwell, In-Su Kim, Simon E. Nocera, and Yuzuru Ozeki. 1990. 69. International Comparisons of Government Expenditure Revisited: The Developing Countries, 1975-86, By Peter S. Heller and Jack Diamond. 1990. 68. Debt Reduction and Economic Activity, by Michael P. Dooley, David Folkerts-Landau, Richard D. Haas, Steven A. Symansky, and Ralph W. Tryon. 1990. 67. The Role of National Saving in the World Economy: Recent Trends and Prospects, by Bijan B. Aghevli, James M. Boughton, Peter J. Montiel, Delano Villanueva, and Geoffrey Woglom. 1990. 66. The European Monetary System in the Context of the Integration of European Financial Markets, by David Folkerts-Landau and Donald J. Mathieson. 1989. 65. Managing Financial Risks in Indebted Developing Countries, by Donald J. Mathieson, David Folkerts-Landau, Timothy Lane, and Iqbal Zaidi. 1989. 64. The Federal Republic of Germany: Adjustment in a Surplus Country, by Leslie Lipschitz, Jeroen Kremers, Thomas Mayer, and Donogh McDonald. 1989. 63. Issues and Developments in International Trade Policy, by Margaret Kelly, Naheed Kirmani, Miranda Xafa, Clemens Boonekamp, and Peter Winglee. 1988. 62. The Common Agricultural Policy of the European Community: Principles and Consequences, by Julius Rosenblatt, Thomas Mayer, Kasper Bartholdy, Dimitrios Demekas, Sanjeev Gupta, and Leslie Lipschitz. 1988. 61. Policy Coordination in the European Monetary System. Part I: The European Monetary System: A Balance Between Rules and Discretion, by Manuel Guitian. Part II: Monetary Coordination Within the European Monetary System: Is There a Rule? by Massimo Russo and Giuseppe Tullio. 1988. 60. Policies for Developing Forward Foreign Exchange Markets, by Peter J. Quirk, Graham Hacche, Viktor Schoofs, and Lothar Weniger. 1988. 59. Measurement of Fiscal Impact: Methodological Issues, edited by Mario I. Blejer and Ke-Young Chu. 1988. 58. The Implications of Fund-Supported Adjustment Programs for Poverty: Experiences in Selected Countries, by Peter S. Heller, A. Lans Bovenberg, Thanos Catsambas, Ke-Young Chu, and Parthasarathi Shome. 1988. 57. The Search for Efficiency in the Adjustment Process: Spain in the 1980s, by Augusto Lopez- Claros. 1988. 56. Privatization and Public Enterprises, by Richard Hemming and Ali M. Mansoor. 1988. 55. Theoretical Aspects of the Design of Fund-Supported Adjustment Programs: A Study by the Research Department of the International Monetary Fund. 1987. 54. Protection and Liberalization: A Review of Analytical Issues, by W. Max Corden. 1987. 53. Floating Exchange Rates in Developing Countries: Experience with Auction and Interbank Markets, by Peter J. Quirk, Benedicte Vibe Christensen, Kyung-Mo Huh, and Toshihiko Sasaki. 1987. (Continued on inside back cover) ©International Monetary Fund. Not for Redistribution Occasional Paper No. 72 The Czech and Slovak Federal Republic An Economy in Transition By Jim Prust, Jeremy Carter, Adrienne Cheasty, Benedicte Vibe Christensen, Leif Hansen, Nadeem U. Haque, and Tessa van der Willigen International Monetary Fund Washington, D.C. October 1990 ©International Monetary Fund. Not for Redistribution © 1990 International Monetary Fund Library of Congress Cataloging-in-Publication Data The Czech and Slovak federal republic: an economy in transition / by Jim Prust ... [et al.], p. cm. — (Occasional paper : no. 72) 1. Czechoslovakia—Economic policy—1965— 2. Central plan- ning—Czechoslovakia. 3. Mixed economy— Czechoslovakia. 4. Czechoslovakia—Economic conditions—1945-I. Prust, Jim. II. Series: Occasional paper (International Monetary Fund) : no. 72. HC270.28.C92 1990 338.9437'009'048—dc20 90-47707 CIP ISBN 1-55775-169-2 Price: US$10.00 (US $7.50 to full-time faculty members and students at unversities and colleges) Address orders to: External Relations Department Publication Services International Monetary Fund Washington, D.C. 20431 U.S.A Tel: (202) 623-7430 Cable: Interfund ©International Monetary Fund. Not for Redistribution Contents Page Preface vii I. Evolution of the Economic System and of the Economy 1 The Economic System 1 Domestic Economy 1 Foreign Trade and Payments 3 Economic Developments to 1985 4 II. The Czechoslovak Economy in the Late 1980s 7 Output, Incomes, and Expenditure 7 Sectoral Performance 8 Investment 8 Employment, Wages, and Prices 11 Employment 11 Wages 12 Prices 12 Fiscal Developments 13 Overall Budgetary Trends 13 Revenue and Expenditure Trends, 1985-88 13 Developments in 1989 14 The 1990 Budget 15 Monetary Developments 16 External Developments 17 Foreign Trade 18 Geographical Distribution 19 Trends in Volume and Prices 19 Services and Transfers 20 Capital Account 21 External Debt and Debt Service 21 Official Reserves and Other Foreign Assets 23 Exchange System 24 III. Reform: Economics of Change 26 Reform Efforts up to 1990 26 Policy Issues 26 Production and Growth 26 Prices 28 Employment and Wages 29 Financial Intermediation 29 External Issues 29 Demand Management 30 Measures Taken and Policy Intentions 30 111 ©International Monetary Fund. Not for Redistribution CONTENTS Page Appendices 1. Structure of Government Finances 32 2. The Financial System 37 3. Exchange and Trade System 40 4. Czechoslovak Statistics 45 5. Appendix Tables 47 Boxes 1. Czechoslovakia and the IMF 2 2. Czechoslovakia: Political Background 5 3. Czechoslovak Economy at a Glance 10 4. Energy in Czechoslovakia 27 Tables II. 1. Summary Indicators of Output, Expenditure, and Prices, 1970-89 7 2. Investment, 1970-89 9 5. Developments in Wholesale and Consumer Prices, 1970-89 12 6. Consolidated General Government, 1975-90 14 7. Budgetary Sudsidies, 1975-90 15 8. Monetary Survey, 1970-89 16 9. Balance of Payments in Convertible Currencies, 1968-89 18 10. Balance of Payments in Transferable Rubles, 1968-89 18 11. Indices for Export and Import Values, Volumes, and Prices, 1970-89 20 12. External Debt in Convertible and Noncovertible Currencies, 1970-89 22 13. Servicing of External Debt in Convertible Currencies, 1980-89 23 14. Official External Reserves and Other Foreign Assets, 1970-89 24 15. Exchange Rates, 1970-90 25 Box 3 3. Social Indicators 10 4. Economic Indicators 11 Box 4 16. Energy Use in Selected European Countries 27 Appendix 5 Al Derivation of Gross Domestic Product, 1980-88 47 A2 Net Material Product at Current Market Prices, 1970-89 47 A3 Net Material Product at Constant Prices, 1970-89 48 A4 Money Incomes and Expenditures of the Population, 1970-89 48 A5 Financial Position of Enterprises, 1980-89 49 A6 Industrial Production, 1970-89 50 A7 Agricultural Production, 1970-89 50 A8 Energy Balance, 1970-89 51 A9 Construction and Housing, 1970-89 52 A10 Employment by Sector, 1970-89 52 A11 Average Monthly Earnings in State and Cooperative Sector, 1970-89 53 A12 Structure of General Government, 1975-88 53 A13 Components of General Government Revenue, 1975-90 54 A14 Components of General Government Expenditure by Economic Category, 1975-90 56 iv ©International Monetary Fund. Not for Redistribution Contents Page A15 Components of General Government Expenditure by Function, 1975-90 57 A16 State Bank of Czechoslovakia, 1980-89 58 A17 Monetary Survey, 1970-89 59 A18 Enterprise Credits from Banks, 1980-89 60 A19 Average Interest Rates on Bank Credits, 1980-89 61 A20 Average Interest Rates on Deposits, 1980-89 61 A21 Balance of Payments in Convertible Currencies, 1968-89 62 A22 Balance of Payments in Transferable Rubles, 1968-89 64 A23 Balance of Payments in Nonconvertible Currencies, 1968-89 65 A24 Composition of Exports to Nonsocialist Countries, 1970-89 66 A25 Composition of Exports to Socialist Countries, 1970-89 66 A26 Composition of Imports from Nonsocialist Countries, 1970-89 67 A27 Composition of Imports from Socialist Countries, 1970-89 67 A28 Geographical Composition of Exports and Imports, 1970-89 68 A29 Exchange Rates, 1970-90 69 A30 External Debt Service and Official Reserves in Selected Eastern European Countries, 1985-89 70 Charts I. 1. Net Material Product, 1980 and 1989 8 2. Sources of Monetary Expansion, 1984-89 17 3. External Balance in Convertible Currencies and Transferable Rubles, 1970-89 19 4. External Debt and Debt-Service Liabilities, 1980-89 21 Appendix 1 5. General Government Revenue, 1980-89 33 6. General Government Expenditure, 1980-89 35 The following symbols have been used throughout this paper: ... to indicate that data are not available; — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist; - between years or months (e.g., 1989-90 or January-June to indicate the years or months covered, including the beginning and ending years or months; / between years (e.g., 1989/90) to indicate a crop or fiscal (financial) year. "Billion" means a thousand million Minor discrepancies between constituent figures and totals are due to rounding. The term "country," as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.