Comparison of HPEs
Comparison of HPEs
Western firms are more willing to expend resources where they see greater opportunities. Their perception of opportunities is thus mirrored by their expansion plans. In a 1990 survey of CEOs from the United States, Western Europe, and Japan, 34 percent included Eastern Europe and only 13 percent included the then USSR in their next five-year capital-spending plans. Within Eastern Europe, intentions were polarized by area. There was a much higher intent to exploit opportunities in Czech and Slovak, Poland, Hungary, and what was East Germany than in Yugoslavia, Romania, Bulgaria, and Al-
bania.59 Unfortunately, there are no similar surveys for other HPEs; however, China seems to be perceived as a high-opportunity area. After the Tiananmen uprising, there was some "wait-and-see" attitude on the part of Western companies, but this was quickly replaced by a sharp increase in the number and value of all types of contracts between China and Western firms.60 There is only fragmentary evidence about most other HPEs, such as Myanmar and Vietnam; however, this evidence seems to indicate that there is some interest, although not very strong, in business from the market economies.
A useful way of comparing HPEs is illustrated in Fig. 10.1. The horizontal axis rates European HPEs (except Albania) on the basis of economic development potential, and the vertical axis compares them on the likely change of economic system through reforms and transformation. The plotting closely parallels the capital spending plans for Western firms within the region, e.g., the GDR and Hungary are nearest to the desired northeast corner of the matrix and were also included in more Western investment plans. There seems
to be a near consensus that the former GDR is the area most likely to succeed. It not only had the highest level of human and infrastructure development, but its unification with the former West Germany will give it the capital and resource mobility that it needs to develop rapidly.
Western firms are more willing to expend resources where they see greater opportunities. Their perception of opportunities is thus mirrored by their expansion plans. In a 1990 survey of CEOs from the United States, Western Europe, and Japan, 34 percent included Eastern Europe and only 13 percent included the then USSR in their next five-year capital-spending plans. Within Eastern Europe, intentions were polarized by area. There was a much higher intent to exploit opportunities in Czech and Slovak, Poland, Hungary, and what was East Germany than in Yugoslavia, Romania, Bulgaria, and Al-
bania.59 Unfortunately, there are no similar surveys for other HPEs; however, China seems to be perceived as a high-opportunity area. After the Tiananmen uprising, there was some "wait-and-see" attitude on the part of Western companies, but this was quickly replaced by a sharp increase in the number and value of all types of contracts between China and Western firms.60 There is only fragmentary evidence about most other HPEs, such as Myanmar and Vietnam; however, this evidence seems to indicate that there is some interest, although not very strong, in business from the market economies.
A useful way of comparing HPEs is illustrated in Fig. 10.1. The horizontal axis rates European HPEs (except Albania) on the basis of economic development potential, and the vertical axis compares them on the likely change of economic system through reforms and transformation. The plotting closely parallels the capital spending plans for Western firms within the region, e.g., the GDR and Hungary are nearest to the desired northeast corner of the matrix and were also included in more Western investment plans. There seems
to be a near consensus that the former GDR is the area most likely to succeed. It not only had the highest level of human and infrastructure development, but its unification with the former West Germany will give it the capital and resource mobility that it needs to develop rapidly.
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