OECD Transition Economies Programmes

Free prices, free trade, free labour markets, privatization and competition transformed the economies of the Czech Republic, Hungary, Poland and the Slovak Republic. The multiyear efforts of economic stabilisation and structural transformation brought about large benefits. The four countries became magnets for foreign direct investment and a new growth pole in Europe. Inward FDI went from zero in 1990 to an average of about 61% of GDP in 2007. Real GDP per capita expanded more than twice as fast than in most OECD countries. Furthermore, accession to membership to the OECD and the European Union helped to lock in the progress achieved so far.

How did the OECD contribute to this progress? In the pivotal year of 1990, OECD members made a strategic choice to assist the historic transition process underway in what was then Czechoslovakia, Hungary and Poland. Within a year, the OECD established the Partners in Transition Programme (PIT), which served as an anchor in the uncertain early stages of transition. The OECD further engaged in Programmes for Russia, South East Europe, the Baltics and the former Soviet republics. OECD advice hopefully contributed to improve policy design and implementation in those countries.

Throughout our work, we learned that macroeconomic stabilisation can only be achieved if there is steady progress in the area of structural reform and institution building. Our advice in this field contributed to establish strong and effective competition policies and institutions in those countries. Not only that, nowadays, competition agencies in those countries are full partners with the OECD in the promotion of competition laws. With the opening of an OECD Regional Centre for Competition, a joint venture with the Hungarian Competition Authority, our work has expanded to the Central, East and South-East European regions.

Ladies and Gentlemen:

This twentieth anniversary invites us not only to commemorate but also to exercise our freedom to think and reform. These are again challenging times that require to re-double our efforts to achieve a stronger, cleaner and fairer world economy. The experience of former communist countries and their achievements should be a source of knowledge and hope for our own future.

To close, let me borrow President John F. Kennedy’s words, when announcing the ratification of the OECD Convention in 1961: “United, there is little we cannot do in a host of cooperative ventures. Divided, there is little we can do – for we dare not meet a powerful challenge at odds and split asunder.”

The OECD is living testimony of the value of these timeless words, of cooperating and working together for a better world. The road ahead is full of challenges. But it is also a road to progress that promises far better times for our countries if we get it right. It is a journey we look forward to travelling together.