Some Trade Policy Issues in the Transition to a Market Economy in Eastern Europe

Since 1989, Central and Eastern European countries, including Poland and Hungary, have been in the process of transition from planned economies to market economies. The common goal for these countries has been to gain membership to the European Union (EU). Based on the framework of the agreement for Poland and Hungary by the G24 1) developed nations, Japan provided these two countries with cooperation focusing on the transition to market economies. Japan's cooperation began with the acceptance of trainees from Poland and Hungary in 1990, followed by an expansion of target countries to Czechoslovakia, Romania, Bulgaria, Yugoslavia, and Albania. At the time of this evaluation, JICA's cooperation in Central and Eastern European countries was led by the acceptance of trainees, and expanded to the dispatch of experts, development studies, project-type technical cooperation, and the Japan Overseas Cooperation Volunteers (JOCV). Currently, grant aid cooperation schemes are also being implemented. Ten years has passed since the efforts designed to bring market economies to Central and Eastern European countries begun. The transition in Poland, Hungary, the Czech Republic, and Slovakia2) has shown significant progress, and joined the OECD. However, there are countries where economic transition is slow, and still under way. Against this background, this evaluation targeted past JICA cooperation related to the transition to market economies in Poland and Hungary. The objective is to utilize the evaluation results to improve future cooperation policies related to the transition to market economies in Central and Eastern European countries, and also derive recommendations and lessons to improve the formulation and implementation of future cooperation projects. 2. Evaluated Projects