Polish Parliament passes mass pri-vatization bill. In July Poland’s Parliament, the Sejm, approved the so-called enfranchisement bill, which stipulates that every Polish adult receive a share of state assets. Tenants of municipal or cooperative flats will be granted full or part ownership rights to their homes. Others will receive coupons in special funds managing shares in companies undergoing privatization. The ruling Solidarity Electoral Action coalition sees the enfranchisement bill as an act of historical justice for those who did not benefit from earlier legislative provisions granting free shares to workers of privatized companies. The Democratic Left Alliance and the liberal Freedom Union opposed the bill, claiming it would hurt public finances.

Poland’s economy expands, but unemployment remains high. The Central Statistical Office reported in June that Poland’s economy grew 6 percent in the first quarter of 2000. The figure represented an improvement over last’s year 1.4 percent first-quarter growth, but it was slightly lower than the 6.2 percent registered in the fourth quarter of 1999. Economic growth is expected to reach 5.2 percent in 2000, up from 4.1 percent last year. Meanwhile, unemployment stood at 13.5 percent in May, down from 13.7 percent in April. By the end of May, 2.45 million people were registered as jobless in Poland.

Gazprom board shaken up as production declines. The government and minority shareholders of Gazprom gained control of the company’s board at the annual meeting held June 30, ending the broad autonomy management at the giant gas company had enjoyed. Management lost control of two of the six seats it had held on the 11-person board, while minority shareholders gained two seats. The government, which owns 38 percent of Gazprom, retained five seats but stiffened its control by installing Dmitry Medvedev, a top Kremlin aide, as chairman. Medvedev replaced Viktor Chernomyrdin, who officially represented the state but was considered a closer ally of management.

Gazprom Chief Executive Rem Vyakhirev warned shareholders that 80 percent of the company’s gas production comes from old fields with declining production. Gazprom has the world’s largest gas reserves, but widespread nonpayment of bills and low gas charges set by the government have left the company with insufficient funds to invest in new fields. Production this year will decline by 20 billion cubic meters to 525 billion cubic meters, according to management. At the beginning of the year, unpaid bills amounted to 151.7 billion rubles ($5.43 billion), roughly half of 1999 sales of 306 billion rubles and three times net profits of 46.6 billion rubles. (Jeanne Whalen, Wall Street Journal).

Health system in Russian Federation receives low WHO ranking. Russia’s health system ranks 130th out of 191, according to a report by the World Health Organization (WHO) issued in June. The ranking places the Russian Federation in between Peru and Honduras (table 2). Of the former Soviet republics, only the Kyrgyz Republic, Tajikistan, and Turkmenistan ranked lower than the Russian Federation, which trailed significantly behind Kazakhstan ( 64th) and Belarus (72nd). France’s health system ranked first in the world, followed by Italy’s system. The United States ranked 37th. According to the Moscow Times, Health Ministry spokesman Aleksandr Zharov said the report was based on 1997 data and does not reflect the current state of the Russian healthcare system. WHO’s assessment was based on five indicators: the overall level of population health, health inequalities (or disparities) within the population, the overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts), the distribution of responsiveness within the population (how well people of varying economic status find that they are served by the health system), and the distribution of the health system’s financial burden within the population (who pays the cost).

Ukrainian premier reports economic achievements. Prime Minister Viktor Yushchenko told parliament 15 July that GDP grew 5 percent during the first half of 2000. Budget revenues increased 10.5 percent during the first six months of the year, and almost all of revenues were collected in cash rather than through barter or offsets. Yushchenko noted that this year’s growth had enabled the government to pay off debts to pensioners and cut back on unpaid wages to government workers, increasing real income 11.8 percent. Yushchenko said there is no immediate threat of a new financial crisis. Inflation is on the rise, however, increasing 1.7 percent in April, 2.1 percent in May, and 3.7 percent in June. The annual rate of inflation is expected to reach 18.7 percent by the end of the year. Tourism will continue to rise during the summer months, which could help hold back a rising current account deficit.

GDP could increase 4.75 percent in 2000, according to the governmental Institute for Macroeconomic Analysis and Development. The deputy director of the institute, Janez Sustersic, said the revision of the forecast from the original estimate of 4.0 reflects higher exports as a result of higher GDP growth in EU countries this year. He said GDP growth next year is expected to be 4.0–4.5 percent. Last year GDP rose 4.9 percent. Strong growth is expected in the EU, and improved growth is expected in Croatia and the Russian Federation. The EU accounts for some 67 percent of Slovenia’s total exports, Croatia 7 percent, and Russia about 2 percent. The current account deficit is expected to remain unchanged from last year at about $600 million, or 3 percent of GDP. Due to the small FDI inflow, most of the deficit is financed from foreign loans.

OECD urges structural reforms. The Organization for Economic Cooperation and Development (OECD) said in a mid-May report that Slovakia needs to vigorously pursue structural reforms in the banking and financial sector and curb its fiscal deficit. The report identifies the need for deep restructuring of large enterprises as the "Gordian knot" of the Slovak economy and warns of the danger that widespread financial fragility in Slovakia’s enterprise and financial sectors could put pressure on the state budget. The report acknowledges that the government has taken steps to recapitalize large state banks and transfer bad loans to state debt institutions but warned that failure to reform the corporate sphere would limit the benefits of financial restructuring. The report forecasts economic growth of 2.0 percent in 2000 and 3.0 percent in 2001, inflation of 10.0 percent in 2000 and 8.0 percent in 2001, and a registered unemployment rate of 18.5 percent this year and 16.0 percent next year in Slovakia.

The private sector makes up 75 percent of the country’s GDP. The figure is 85 percent in Hungary 75 percent in the Czech Republic, and 65 percent in Poland.

U.S. and Vietnam Sign Trade Agreement. Vietnam signed a trade agreement with the United States July 14. The agreement reduces tariffs on a broad range of goods and allows foreign firms to participate in key businesses, including telecommunications and banking. The deal is likely to provide a huge boost to the country’s apparel and manufacturing industries, increasing exports by $800 million a year and creating hundreds of thousands of new jobs, according to the World Bank. The unemployment rate in Vietnam is 7.4 percent, and every year 1.2 million new workers enter the job market.

Western donors toned down their criticism of Vietnam’s slow pace of economic reform at the annual review meeting after Vietnam’s economy grew 6 percent in the first half of 2000. But World Bank Country Director Andrew Steer cautioned that trade liberalization and reform of state enterprises and the banking sector should make more progress in order to reverse the sharp decline in foreign investment. Foreign investment fell to $1.4 billion last year, after peaking at $8.6 billion in 1996, largely on fears that economic reform was stagnating.

In mid-July Vietnam opened its stock market, the Ho Chi Minh City Securities Trading Center. Four firms are listed on the exchange, on which trading takes place three days a week. Six brokerage houses will trade the stocks and bonds the government is planning to float.