Doing business in former Soviet-Block countries.

With the demise of the Soviet Block, the countries of Central and Eastern Europe have started to built their own market economies and are eager to do business with Western democracies. The long duration of the monolithic political, military and economic block devastated the cultural, moral and economical fiber of the satellite countries, some of which had more or less democratic traditions in the pre-World War II time. Yet, the people have st remarkable resilience and a strong desire to become a part of the free world. This contribution deals with the historic background and current developments, shows how these are related and presents some recommendations which may be useful for those interested in doing business in this region. In the last nine years or so the region of Eastern and Central Europe has undergone the most momentous changes imaginable. The monolithic Soviet block fell apart, Germany has been reunited, and the Soviet Union, Yugoslavia and Czechoslovakia have ceased to exist. The newly formed independent countries established governments by democratic elections. The challenges for these new governments are formidable; namely, to dismantle the rigid administrative and planning system typical for the communist system and to replace it with a political democracy and a market-based economy. Additionally, they are striving to develop greater contact with the rest of the world. The development of political democracy and individual freedom brought many economic improvements for the people. The supply of goods and services has improved immensely as new opportunities have emerged for everyone to amass wealth through their initiative, hard work and response to market demands. On the other hand, these changes appear to bring about some far less beneficial aspects: joblessness, economic insecurity, fear for the future and despair. The social and industrial infrastructure in many countries has all but collapsed, crime has increased immensely, social tensions have escalated and poverty has spread [1]. These factors have contributed to a general antipathy towards business enterprise which is still widespread in most of the countries of Central and Eastern Europe. This is likely to dissipate as private ownership increases and real competition between private business will exist. This paper will deal with the situation in a selected group of Central/Eastern European Countries, the so called "Visegrad Group" (named after a treaty) which appears to have achieved the best results so far and has a long record of business relationship with the rest of the world.