TRANSFORMATION TO MARKET ECONOMIES
TRANSFORMATION TO MARKET ECONOMIES
As we have already discussed, historically planned economies differ greatly in terms of the commitment and progress they have made toward achieving the goal of transforming their centrally planned economies into market economies. At one extreme is the former German Democratic Republic (GDR), which has been reunited with and in fact is being absorbed into the German Federal Republic. At the other extreme is Cuba, whose leader, Fidel Castro, Some HPEs want to in reference to the political liberalization and other changes within Eastern Europe, said, "We are witnessing sad things in other socialist countries, very sad things. We are astonished at the phenomena that we see." These differences are important when assessing whether and when a country might become a market economy. It is likely that in the foreseeable future HPEs will
be at different points along the continuum. The nearer countries are to the central-planning end of the continuum, the more Western business managers will encounter situations traditionally associated with business in CPEs.
It is also important to realize that attaining a market economy is not necessarily a panacea for economic success; in fact, most of the world's LDCs would qualify as market economies. Economic development is a very complex process, and there have been very few successes in the twentieth century. In essence, the HPEs vary widely in terms of factors that may affect their growth, with or without a high degree of transformation. These factors include educational attainment, endowments of natural resources, national co-hesiveness, access to investment capital, industrial structure already in place, experience in entrepreneurial endeavors, and infrastructure development. For companies contemplating East-West commercial activities, the countries' development potentials should be examined along with their prospects for transformation.
As we have already discussed, historically planned economies differ greatly in terms of the commitment and progress they have made toward achieving the goal of transforming their centrally planned economies into market economies. At one extreme is the former German Democratic Republic (GDR), which has been reunited with and in fact is being absorbed into the German Federal Republic. At the other extreme is Cuba, whose leader, Fidel Castro, Some HPEs want to in reference to the political liberalization and other changes within Eastern Europe, said, "We are witnessing sad things in other socialist countries, very sad things. We are astonished at the phenomena that we see." These differences are important when assessing whether and when a country might become a market economy. It is likely that in the foreseeable future HPEs will
be at different points along the continuum. The nearer countries are to the central-planning end of the continuum, the more Western business managers will encounter situations traditionally associated with business in CPEs.
It is also important to realize that attaining a market economy is not necessarily a panacea for economic success; in fact, most of the world's LDCs would qualify as market economies. Economic development is a very complex process, and there have been very few successes in the twentieth century. In essence, the HPEs vary widely in terms of factors that may affect their growth, with or without a high degree of transformation. These factors include educational attainment, endowments of natural resources, national co-hesiveness, access to investment capital, industrial structure already in place, experience in entrepreneurial endeavors, and infrastructure development. For companies contemplating East-West commercial activities, the countries' development potentials should be examined along with their prospects for transformation.
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