How green is your country? A new index to measure countries’ compliance with environmental standards was announced by the World Economic Forum in Davos. The Environmental Sustainability Index is designed to track and rank 56 countries. According to the initial findings, Norway is the world’s most environmentally friendly country, while Vietnam is the least so. Switzerland had the best institutions for enforcing environmental compliance. The index project was financed by a $200,000 grant from a nonprofit Canadian foundation. It uses data from local governments, the OECD, and the World Bank.

Central Eastern Europe

EU Negotiations start with Latvia, Lithuania. The Baltic states have begun talks on joining the European Union with the "second wave" entrants, the others being Malta, Bulgaria, Romania, and Slovakia. For the purposes of entry talks, EU legislation and rules are divided into 31 topics or "chapters." Latvia has announced readiness to start discussion on 15 chapters that pose no major hurdles. It needs time to prepare the remaining 16 chapters, which include agricultural policy and environmental regulations. Lithuania is prepared to start talks on seven chapters. Among the new hopefuls, Latvia is seen as the second most advanced candidate after Malta. Both Latvia and Lithuania hope to complete their membership negotiations during 2002.

Baltic agricultural output down last year. All Baltic countries recorded significant drops in agricultural output last year. The devaluation of the ruble in fall 1998 halted their agricultural exports to Russia. According to preliminary information from Estonia’s national statistics office, the country produced 12 percent less milk and 11 percent fewer eggs last year than in 1998. The number of cattle also fell. Latvia’s grain harvest was 19 percent. smaller than in 1998 and beef production fell 14 percent. Grain production in Lithuania fell 25 percent last year, while milk and egg production fell about 10 percent.

Croatia

New economic program. This year’s budget will be 5 percent smaller than last year’s in nominal terms, Finance Minister Mate Crkvenac announced. Inheriting a depressed and chronically mismanaged economy, the new government of Prime Minister Ivica Racan promises economic growth, integration with the West, and higher employment. It has also pledged to reduce state expenditure and taxes, review the process of privatization, and reform the pension and health care systems. Production and real wages last year were on average 90 percent of the 1989 level, and at present the country is still suffering from a recession that began in late 1998. The leading sectors—tourism, shipbuilding and agriculture—remain in difficulty.

Hungary

EU accession seen boosting eco-nomy. Analysts at Salomon Smith Barney (SSB) believe that the gates of the European Union will open to Hungary in 2004, and that Hungary will definitely be included in the first round of new admissions, along with Slovenia. The report predicts strong investor interest during the period leading up to accession, similar to that witnessed in Italy, Spain, Scandinavia, and Greece during their periods of convergence before the introduction of the euro. The structural reforms being carried out in preparation for integration will result in a balancing of the economy, a reduction in interest rates, and appreciation in real terms of the currency, leading to better conditions for financial investment than ever before.

Even more shares in foreign hands. The proportion of Hungarian shares in foreign hands continued to grow in the last quarter of 1999, according the National Bank of Hungary’s quarterly report on securities ownership. Foreigners now own four-fifths of all Budapest Stock Exchange shares, up from two-thirds two years ago. Foreign investors financed the Hungarian national debt with $1.8 billion in "hot money" by the end of the year.

Poland

Poland is urged to speed up EU entry process. The European commissioner for enlargement, Günter Verheugen, has urged Poland to speed up its preparations for accession. So far, Poland has provisionally completed 9 of 31 negotiation chapters. Of the balance, 14 remain open, and the rest will be opened in the next few months. Several of the most difficult chapters remain, including agriculture, regional policy, immigration, and budget and financial control. Agriculture, which employs more than one-quarter of Poland’s population of 39 million, is expected to prove particularly troublesome.

Romania

Five chapters ready for EU talks. Romania will open membership negotiations with the European Union on five chapters—research, education, foreign and common security policy, and small and medium-sized companies. The government on March 16 approved a key medium-term economic strategy paper that calls for non-inflationary and sustainable economic growth. The document is considered essential for the country’s talks with the EU.

Y2K austerity budget. The new budget is based on 1.3 percent expected economic growth, 27 percent inflation (halved from last year) and envisages a deficit of 3 percent of GDP. Prime Minister Mugur Isarescu said it was "unacceptable for taxpayers to contribute more money to the state budget than all companies put together." Tax evasion is widespread and is said to account for at least one-third of the whole economy.

Moldova

Privatization is the key. Moldova may default on its debt payments for this year if the parliament does not pass laws related to a memorandum the country has signed with the IMF, Prime Minister Dumitru Braghis was reported as saying on March 16. If Moldova fulfills the memorandum, which calls for the privatization of key companies, it will be eligible to receive external financing. The prime minister said the cabinet is not sure it will be able to pay some $81.3 million in debt payments due this year without external financial assistance. This year’s budget is based on 2 percent GDP growth and calls for a budget deficit equal to 2.4 percent of GDP.

Rewarding cybersuffix.md. John Harris, president of the Florida-based Domain Name Trust, noticed that US doctors are keen to attach "md", meaning medical doctor, to their domain names. However the suffix denotes Moldova. Under a 25-year contract, signed with Moldova’s Republican Centre for Informatics, an arm of the transportation and communications ministry, Moldova so far has made $200,000 by permitting its use. The country is using the money to develop its Internet facilities.

Russia

Ten-year growth strategy. German Gref, president of the nongovernment think-tank Centre for Strategic Research, charged by Vladimir Putin to work out a 10-year development program, announced that short-term reforms would focus on taxes, customs, and property rights. Yevgeny Yasin, one of the most liberal members of mid-1990s governments and a member of the board of the think-tank, told reporters that the initial measures that he expected parliament to pass would include the second part of a long-awaited tax code, a land code, bankruptcy law amendments, which are key to selling off tottering factories, and shareholders’ rights legislation. Yasin said he supported some government interference in the economy in order to modernize and restructure it, such as forming state banks, financed by loans, to support exports and key industries like technology. Gref said Putin wanted a strong government to make a fair business environment and enforce it throughout the country.

Gref in particular said the government would seek to defend intellectual property. The lack of federal funding for the courts had caused them to fall under the influence of "business circles and regional authorities." He said the government will regain control of all its law-enforcement bodies by restoring funding. "We clearly understand that such a situation is intolerable," said Gref. "It must be changed."

Drink, disease, and depression eat away at Russian population. The population of Russia fell by almost 800,000 last year. There are now almost three million fewer Russians than there were when the Soviet Union collapsed. Most experts expect the decline to continue because the birth rate is low, with abortion common, and the death rate is high, with formidable alcohol abuse, a failing public health system, a growing AIDS problem, and a shockingly high suicide rate. The State Statistics Committee reported that the population at the end of 1999 was 145.5 million, 2.8 million fewer than in 1992. Births fell to 1.215 million while deaths increased to 2.14 million. The Russian press reported earlier this month that for every birth in the country there are two abortions. Georgetown University’s Murray Feshback predicted recently that with the birth rate falling sharply, and the death rate climbing, Russia’s population would dwindle to 80–100 million by 2050.

Russian oligarchs’ pre-election asset grab. Two of Russia’s best-known "oligarchs," Boris Berezovskii, head of LogoVAZ, and Roman Abramovich, head of Sibneft, revealed they are in the process of acquiring controlling interests in two of Russia’s largest aluminum smelters, Bratsk and Krasnoyarsk. It was also announced that LogoVAZ has acquired a controlling interest in the Novokuznetsk Metallurgical Combine in Kemerovo Oblast. With these acquisitions, the Berezovskii/Abramovich tandem will control an estimated 60–70 percent of Russia’s aluminum industry—10–20 percent of the world aluminum market. Aluminum is one of Russia’s most lucrative industries and, like oil and gas, provides a steady flow of hard currency from exports.

Critics of Russian utility overhaul take aim at Chubais. A high-voltage political battle is raging over how to overhaul Russia’s electricity system. Critics from all sides have been taking aim at Anatoly Chubais, the architect of Russia’s privatization program and current head of electricity monopoly RAO Unified Energy Systems, as he prepares a pilot restructuring of several of the 70 power stations under his control. The goal of the restructuring, Chubais has said, is to modernize the outdated system by selling parts of it to private investors. His critics accuse him of attempting to transfer valuable power assets to friends and financiers of the Union of Right Forces, his political party, which won seats in the new parliament.

Salaries are too low. At 1,520 rubles a month, about $62, average pay is intolerably low in Russia, according to First Deputy-Premier Mikhail Kasyanov. He said that the government has made little improvement since the August 1998 crisis, with average pay now only 74 percent of what it was before the crisis.