United Nations

A/51/285


General Assembly

Distr. GENERAL  

13 August 1996

ORIGINAL:
ENGLISH


                                                   A/51/285
                                                                              


General Assembly
Fifty-first session
Item 98 (c) of the provisional agenda*

          *        A/51/150.


                SUSTAINABLE DEVELOPMENT AND INTERNATIONAL ECONOMIC
                  COOPERATION:  INTEGRATION OF THE ECONOMIES IN
                         TRANSITION INTO THE WORLD ECONOMY

                          Report of the Secretary-General


                                      CONTENTS

                                                             Paragraphs Page

  I.   INTRODUCTION .........................................   1 - 7    3

 II.   OVERALL SETTING OF THE TRANSITION PROCESS ............   8 - 22   4

       A.  The transition process:  expectations and outcomes   8 - 17   4

       B.  The recent macroeconomic performance .............  18 - 22   6

III.   INTEGRATION OF THE ECONOMIES IN TRANSITION INTO THE
       WORLD ECONOMY ........................................  23 - 38   7

 IV.   COOPERATION AT THE REGIONAL LEVEL ....................  39 - 91  10

       A.  Operational activities of regional commissions to
           assist economies in transition ...................  40 - 73  11

       B.  Cooperation with relevant subregional groupings,
           international institutions and other organizations
           to enhance technical cooperation among the
           economies in transition and developing countries .  74 - 77  17

       C.  Cooperation with the Organization for Security and
           Cooperation in Europe and the Mediterranean
           Countries ........................................  78 - 86  17

       D.  Subregional groupings ............................  87 - 91  19

  V.   COOPERATION AT THE GLOBAL LEVEL ......................  92 - 181 20

                                List of tables

1.   Economic activity in the European countries in transition,
     1992-1996 ........................................................ 38

2.   Changes in foreign trade values and trade balances by partner
     region in economies in transition, 1993-1995 ..................... 40

3.   Net capital flows into eastern Europe, the Russian Federation and
     the Baltic States, by type of capital, 1990-1995 ................. 44

4.   Lending to borrowers in Europe/Central Asian region by sector....  45


                            I.  INTRODUCTION


1.        The General Assembly, in its resolution 49/106 of 19 December
1994, requested the Secretary-General to submit a report on the
implementation of the present resolution to the General Assembly at
its fifty-first session.  In that resolution, the Assembly took note,
inter alia, of the relevant decisions of the Economic Commission for
Europe (ECE), decisions B (49) and C (49) of 26 April 1994 and the
relevant resolutions of the Economic and Social Commission for Asia
and the Pacific (ESCAP), 50/1 and 50/2 of 13 April 1994.
          
2.        In resolution 49/106, the Assembly called upon the United Nations
system to continue studying possible ways of enhancing economic and
technical cooperation among countries with economies in transition, as
well as with developing countries, identifying how the United Nations
system could strengthen cooperation while avoiding duplication, with a
view to encouraging greater participation by those countries in the
world economy.  The United Nations system was also invited to continue
its support for the efforts of economies in transition as they
transformed their economies and integrate them into the world economy
through, inter alia, adoption of the international standards and
practices of countries with market economies.

3.        The Secretary-General was also requested to submit a report on the
same subject in response to General Assembly resolution 48/181 of 21
December 1993.

4.        The present report provides information on the overall setting in
economies in transition, considering expectations and outcomes in the
transition process. Despite the severe problems affecting these
economies, the analysis shows that there has been a marked improvement
in macroeconomic performance in the last two years.  Encouraging
foreign trade developments, although with difficulties in maintaining
balance in the external accounts, would prove to be a further step
towards the integration of the economies in transition into the world
economy.

5.        With regard to technical cooperation involving the economies in
transition and developing countries, the report focuses on the work of
the two regional commissions, ECE and ESCAP, that widely provide
assistance for the transition process.  The report pays particular
attention to the cooperation with relevant subregional groupings,
international institutions and other organizations.  Contributions
from agencies and organizations are also summarized to provide
information on their role in assisting the economies in transition
during their transformation and integration into the European and
world economy.

6.        The transformation of the eastern European economies from a
centrally planned to a market-based system has proved considerably
more difficult than had initially been expected.  In the past two
years, however, their economic performance has been increasingly
positive, although considerable differences remain between them. 
Aggregate output in eastern Europe began to rise in 1994, increasing
to an average rate of nearly 6 per cent in 1995.  Recovery has been
more moderate and hesitant in the Baltic States; but in the Russian
Federation and most other members of the Commonwealth of Independent
States (CIS), the "transition depression" of output continued in 1995. 

7.        The Governments of countries in transition have made considerable
progress in establishing new market institutions and in integrating
their economies into the global economy, although their foreign trade
expanded steadily in 1994-1995, and it has become more geographically
diversified.  Over half of the trade of eastern Europe and the Russian
Federation is now carried out with the developed market economies, and
the European Union has become the main trading partner for all
countries in transition.  The increasing integration of these
countries into international financial markets has been reflected in
improving credit ratings, record borrowing in 1995 and more favourable
terms.  International links have been further strengthened by inflows
of foreign investment, which also reached an all-time high in 1995. 
Many economies in transition, however, remain dependent on official
development finance.


             II.  OVERALL SETTING OF THE TRANSITION PROCESS
                                                                          
         A.  The transition process:  expectations and outcomes               

                
8.        It is instructive to recall the expectations that prevailed at the
start of the transition process in 1989-1990 and to remember the
difference between those held by the population at large and those of
the political and economic elite.

9.        The initial reform programmes consisted of varying combinations of
stabilization measures, institutional reforms and structural policies,
including privatization.  Monetary and fiscal restraint was aimed at
reducing inflation, restoring financial equilibrium, and setting the
stage for a stable macroeconomic environment.  Liberalization of the
external sector would help to establish correct relative prices and
impose a measure of competition on the domestic market.  Resources
were expected to flow from loss-making firms into new, profitable
activities, which would be undertaken and managed chiefly by newly
emerging private entrepreneurs.  The overall level of social welfare
would rise, even though there would also be some "losers", especially
in the sectors which had enjoyed exceptional privileges under central
planning, namely, heavy engineering, metallurgy, mining and the
bureaucracy.  However, the adjustment costs were expected to remain
relatively limited, partly because of substantial foreign direct
investments which were expected to be attracted into the economies in
transition by low manpower costs and untapped markets.

10.       It was clear, at least for most policy makers, that the creation
of an efficient market system would take years.  But it was also
assumed that at least some of the benefits would materialize fairly
quickly, especially the elimination of shortages, improved access to
goods and services, and the liberalization of business activities. 
Although most reformist Governments did not set precise dates, they
expected economic growth to resume after a relatively short adjustment
period, perhaps within a year or two. 1/

11.       Popular expectations, on the other hand, were much more
unrealistic.  There was a widely held assumption that the substitution
of a market-based economy for a centrally planned economy would be a
rather simple exercise, and that the shift would bring about a
substantial and rapid improvement in the long-depressed standards of
living of the eastern European populations.

12.       The reality proved to be much harsher than either set of
expectations.  Recession and unemployment hit all the countries in the
region.  When the expected improvement was not forthcoming quickly,
the reformist Governments were accused of incompetence, wrongdoing and
corruption.  It was difficult for many people to understand why the
transition was such a painful experience.  The reform spread,
manifesting itself in frequent changes of government and in a shift of
political support in favour of opposition, sometimes populist,
parties.

13.       It cannot be denied, however, that the eastern European countries
have come a long way since they started their transition to a
market-based economy six years ago.  Democratic and pluralistic
political systems have been established; central planning and State
controls have been dismantled:  prices have been liberalized, most
eastern European currencies are convertible, and consumers and
producers are essentially free to make decisions according to their
preferences.  Inflation has been greatly reduced and endemic shortages
eliminated.  A large part of output is now produced in the private
sector, and domestic markets offer a large variety of goods and
services, comparable with that in western European countries. 
According to official national statistics, the non-State sector's
share in gross domestic product (GDP) already exceeds 50 per cent in
most of eastern Europe, an indicator of the considerable change since
1989, when the share was generally less than 5 per cent (except in
Poland, where it was around 30 per cent, largely because of private
agriculture).  Although these statistics must be treated with some
caution, the radical change in the ownership structure is clearly
evident.

14.       The Governments of countries in transition have also made
considerable progress in integrating their economies into the global
market economy:  most of their foreign trade is now conducted with
developed market economies at international prices and in convertible
currencies, and their international links have been further
strengthened by inflows of foreign direct and portfolio investment. 
Most of the countries in transition have made progress in adopting
international business practices, standards and norms, in many cases
with the support of United Nations programmes.  Many new market
institutions have been established and developed, such as stock
exchanges, monetary and credit instruments, anti-monopoly regulations,
and bankruptcy legislation. 

15.       Many of the essential foundations of a market economy are now in
place in many of the economies in transition.  But there are still
many missing or fragile institutions, and economic restructuring still
has to be pursued in most countries in transition.  Despite the growth
of the private sector, privatization of large State-owned enterprises
has proceeded slowly; and where privatization has progressed rapidly,
through voucher schemes, for example, effective governance and inflows
of new investment are often lacking.

16.       Another major obstacle to the reform process is the weakness of
the banks and other financial institutions.  The widespread failure to
reform the financial sector at the start of the transition has had a
number of effects, not the least of which is the accumulation of bad
loans by the commercial banks, which limits their capacity to finance
the enterprise sector.  Financial restructuring programmes, combined
with a radical change in the incentives faced by the managers of banks
and enterprises, are now priorities in most of these countries.

17.       Some obstacles to the restructuring of State enterprises, the lack
of funds for new investment and the rehabilitation of existing plants,
and the problems involved in the large-scale reallocation of
resources, could all hold back the reforms and contribute to high
interest rates and inflation.  The implications, actual or
anticipated, of restructuring for the distribution of income and
wealth are also a cause of some social consequences of the transition
which could slow down the envisaged reforms.


                  B.  The recent macroeconomic performance

18.       Despite the continuing and severe problems, there has been a
marked improvement in macroeconomic performance in the last two years. 
After falling, unexpectedly, by more than 20 per cent between 1989 and
1993, aggregate output in eastern Europe began to rise in 1994 and
increased at an average rate of nearly 6 per cent in 1995, although
intercountry differences are still wide (table 1).  Recovery has been
more moderate and hesitant in the Baltic States; but in the Russian
Federation and most of the other members of CIS, the "transition
depression" of output continued in 1995, although the fall in output
has decelerated sharply (figures on countries with economies in
transition are reported in tables 1-3).

19.       Rates of inflation 2/ have fallen in virtually all the economies
in transition and in eastern Europe at least five countries had
reduced them to single digits by the end of 1995.  Among the factors
behind this development, rising output and productivity have played an
important role in restraining the growth of unit labour costs. 
Nevertheless, annual inflation rates are still in the range of 25-40
per cent in a number of eastern European countries, and remain very
much higher in most of the CIS countries.

20.       Labour markets, however, have improved only slightly in eastern
Europe and have continued to deteriorate in CIS.  In eastern Europe,
the strong recovery of output has slowed the rate of decline in
employment and in a few countries it has started to rise.  There has
also been a slight fall in unemployment, although in most countries it
was still between 9 and 18 per cent of the labour force at the end of
1995.  Eastern European unemployment now shares a number of
characteristics with that in western Europe, namely, a
disproportionate number of young people out of work (26-46 per cent of
the total unemployed) and growing numbers of long-term unemployed.  In
the CIS countries, employment has continued to fall and unemployment
to rise, although unemployment rates are still relatively low compared
with those in eastern Europe because of disguised unemployment, such
as unpaid leave or part-time work.

21.       Two features of the recovery in eastern Europe should be mentioned
here.  The first is that in the faster-growing countries fixed
investment has begun to recover, in some cases quite strongly (the
Czech Republic, Poland, Romania and Slovakia).  This is a sign that
confidence in at least the medium run is being restored and that key
institutional reforms, as well as a reasonable degree of macroeconomic
and political stability, are being attained.  There are still many
obstacles to sustaining a high growth of fixed investment, but the
process is at least under way.  In contrast to eastern Europe, fixed
investment in the Russian Federation and most of the other CIS
countries continued to fall in 1995.

22.       The second notable feature of the recovery in eastern Europe is
that it has been supported by rapid growth of trade with the western
market economies, especially those of western Europe.  The expansion
of exports has contributed to the recovery of output.  But in a
dynamic sense, the more open trading relationships are supporting
economic restructuring, not only through imports of capital and
intermediate goods but also through greater participation in the
international division of labour and transformation of specialization
patterns.


 III.  INTEGRATION OF THE ECONOMIES IN TRANSITION INTO THE WORLD ECONOMY      

                                                                          
23.       The recent output recovery and further steps taken towards the
integration of the economies in transition into the international
trading system have been accompanied by encouraging foreign trade
developments, despite the difficulties of maintaining balance in the
external accounts.  In the initial stages of the transition, exports
from many of these countries surged in 1991-1992 but generally fell
back in 1993, while imports fell in 1990-1991.  More recently, both
exports and imports have been growing. 

24.       In 1994-1995, there was a steady expansion of trade throughout the
region (see table 2). 3/  There was a significant acceleration of
growth in the eastern European countries, particularly of imports,
with the exception of Hungary.  The volume of eastern European exports
is estimated to have risen by some 9-11 per cent in 1995, while
imports rose by some 16-19 per cent.  Faster growth of imports was
also a common tendency in the foreign trade of the Baltic States and
in the Russian Federation trade with CIS partners.  In trade with the
outside world, CIS exports have been growing faster than imports.  The
rapid growth of imports in 1995 led to a notable deterioration of
trade balances in the eastern European and Baltic countries, their
aggregate trade deficit reaching some US$ 20 billion.  Trade deficits
widened in most of the individual eastern European countries, with the
exception of Hungary, 4/ where the deficit narrowed, and Bulgaria and
Slovakia, where trade was in balance or showed a small surplus.  The
overall trade surplus of the CIS countries, including the Russian
Federation, improved considerably in 1995 and amounted to
US$ 34.1 billion.

25.       The European Union is now the main trading partner for all the
economies in transition.  Both exports to and imports from EU have
continued to grow, although the exports of some countries were
affected by declining demand in western Europe in late 1994 and early
1995.  EU accounts for some 58 per cent of eastern European exports
and imports, Germany being the major partner, followed by Italy and
Austria.  For the Baltic States, almost half of their trade is with
EU, while for the Russian Federation the share is about one third of
total trade.  Developed market economies account for some three
quarters of the eastern European trade deficit, and virtually all of
the Baltic States' deficit.

26.       In 1992-1993, the expansion of eastern European exports and
imports was mainly linked with the developed market economies, but in
1994-1995 their mutual trade increased at the same or even higher
rates than trade with the developed countries.  For the second
successive year, intra-eastern European trade grew strongly among the
six most advanced countries in transition, while Romania was the only
country in the region where there was a further decline in exports to
its neighbouring countries.  Poland had the highest trade growth with
economies in transition, including CIS and the Baltic States.  The
volume of mutual trade increased by some 18-20 per cent, which
reflects the recovery of industry in the eastern European countries. 
The mutual trade of the Baltic States was growing at the same rate as
the total, but trade with eastern European countries expanded faster. 
The dollar value of intra-CIS trade stagnated in 1995 after a large
fall in 1991-1993 and perhaps also in 1994; however, in volume terms,
it certainly continued to fall.

27.       Among the other notable changes in the geographical distribution
of trade, the very large increase in Russian Federation exports to
developing countries in 1995 (up by 83 per cent) should be mentioned. 
As a result, the developing countries accounted for some 16 per cent
of total Russian Federation exports, the highest share since 1991. 
Trade with the developing countries accounted for some 8-9 per cent of
the eastern European total; it rose marginally in current dollar terms
and showed little change in volume in 1995.  The combined trade
deficit of the eastern European region with developing countries has
deteriorated slightly since 1994.

28.       Notwithstanding the efforts in industrial reconstruction of the
economies in transition, the commodity composition of trade in the
period 1993-1995 reflects the persistence of a specific pattern of
demand in the main export markets.  During the past three years, the
only notable change was a fall in the export share of agricultural and
food products.  On the import side, a considerable drop in the share
of fuels and a more or less offsetting increase in the share of
manufactures, except machinery, was a common trend throughout the
region.  The share of machinery and equipment in the region's imports
more or less stabilized over this period at 30-32 per cent, although
there were large intercountry differences in this respect.  

29.       The expansion of eastern European and Baltic trade in 1994-1995,
particularly on the export side, was based on a combination of
favourable factors.  The revival of western import demand was one of
the most important, its impact being strengthened by greater access to
western markets and some improvement in export competitiveness.  For
the Central European Free Trade Agreement (CEFTA) countries, improved
market access under the association agreements with EU were a major
support for exports in 1993-1994.  For the three Baltic States, these
agreements were an important factor in 1995.  The impact of western
demand has been amplified by a strong recovery of import demand in the
eastern European region itself.  There is also a growing number of
preferential trading agreements among the eastern European and Baltic
countries.  

30.       The available data for early 1996 indicate some slowdown in the
rate of export growth, owing largely to stagnation or even decline in
western demand and to national currency appreciation in some
countries.  A further increase in imports in the first quarter of 1996
in many eastern European and Baltic States has resulted in a
substantial widening of trade deficits and increased pressure on their
current account positions.  In the Russian Federation, in contrast,
the trade surplus has increased further; exports rose by some 8 per
cent in dollar value, while imports declined by 8 per cent in
January-March 1996.

31.       In marked contrast with the pre-transition period, the trade in
services of the economies in transition has developed rapidly, often
exceeding the growth of merchandise trade.  In eastern Europe, exports
and imports of services grew by 28 and 27 per cent, respectively, in
the first three quarters of 1995.  In consequence, the surplus
continued to increase, to over US$ 3 billion, partly offsetting the
growing deficit on merchandise trade.  Nevertheless, the current
account deficit of eastern Europe doubled to $8.8 billion in 1995. 
The external service trade of the Russian Federation has also grown
quickly, but the deficit widened to US$ 6 billion in the first three
quarters of 1995, reducing the current account surplus to US$ 10
billion.  The strong expansion of foreign travel has influenced
markedly the current accounts of most eastern European countries. 

32.       Most eastern European countries and the Baltic States have made
considerable progress in integrating into the world financial markets. 
This has been reflected most dramatically in their increasing access
to various external markets and their ability to attract foreign
capital.  Eastern Europe has received significant capital inflows in
three consecutive years, those in 1995 reaching a record US$ 31
billion.  The chief destinations were the Czech Republic, Hungary and
Poland and the bulk was from private sources.  There were also large
inflows into the Baltic States in 1995 and, although much smaller than
in eastern Europe, they were high by world standards.  However,
progress in CIS has been slower in this regard.  There has been a
steady net outflow of funds from the Russian Federation since the
transition began, but there are indications of improvement.

33.       The credibility of economic reform programmes appears to explain
most of the large differences between the eastern European countries
in their ability to attract foreign investment.  In general, those
countries receiving little private capital have also failed to obtain
much official finance.  The exception is the Russian Federation, which
drew $5.4 billion from the International Monetary Fund (IMF) in 1995
and also appears to have used guaranteed export credits heavily.  By
contrast, eastern Europe has used these facilities sparingly and in
1995 made net repayments of US$ 2.8 billion to IMF.  Recent
developments suggest that private capital flows into a growing number
of  countries in transition appear to be sustainable.

34.       By mid-1996, Romania, the Czech Republic, Hungary, Poland,
Slovakia and Slovenia had all been rated by major international credit
rating services, the last five receiving an investment grade from at
least one agency.  For those countries with histories of debt
problems, essential preconditions for such a rating are an agreement
with IMF and normalization of relations with the Paris and London
Clubs of creditors.  In the past two years, Bulgaria, Croatia, Poland
and Slovenia have met these conditions and the Russian Federation
appears to be close to final agreement with the parties concerned.

35.       The improving perception of their creditworthiness enabled 11
countries to raise US$ 7.8 billion in medium- and long-term loans and
bonds in 1995 (compared with two countries obtaining US$ 1.7 billion
in 1991).  The record volume was achieved despite the virtual absence
of sovereign borrowing by a number of creditworthy countries.  The
terms of new finance generally improved, facilitated, in part, by
greater competition among international lenders.  Other indicators of
the deepening integration of countries in transition with
international capital markets are the rise in borrowing by private and
partially privatized corporations and municipalities (departing from
the past practice of uniquely sovereign borrowing), the use of a
broader range of instruments (for example, increasing use of
syndicated loans in addition to bonds), and further geographical and
currency diversification of financial sources.  Eastern European
borrowers have also made increasing use of international equity
placements, although their total volume is small compared with that of
their debt emissions.  Portfolio investments have become significant
sources of external funds in the Czech Republic and Poland (around
US$ 1 billion in each).

36.       The inflow of foreign direct investment into the European
economies in transition also reached an all-time high in 1995,
increasing over two and a half times to US$ 11 billion.  The upturn
greatly exceeded expectations, chiefly because privatization in
Hungary was more rapid than planned.  Nonetheless, many scheduled
privatizations did not go ahead.  Hungary and the Czech Republic
together accounted for almost two thirds of new inflows of foreign
direct investment in 1995.  In general, foreign direct investment in
the other countries in transition has remained modest, although
compared with their gross domestic product (GDP), flows into Estonia,
Latvia and, in 1995, Albania and the Republic of Moldova, have been
large.  Despite record foreign direct investment in 1995, neither the
required nor anticipated transfer of resources into the region has so
far materialized.  Although conditions vary considerably, this seems
to be due to the incomplete systemic transformation, including
inadequate legal frameworks, lagging privatization, insufficient
business infrastructure, and, in certain countries, political
uncertainty.  

37.       About one third of the net capital inflows into eastern Europe in
1995 were used to finance the area's current account deficit, with the
remaining US$ 25 billion going to boost official reserves.  The
greatly strengthened reserve position, representing over five months
of imports on average, has lowered some of the risks associated with
large capital inflows.  The reserves of the Russian Federation also
increased as a result of the current account surplus and borrowing
from IMF. 

38.       The Governments of countries in transition have made considerable
progress in establishing new market institutions and in integrating
their economies into the world economy, although the transformation
from a centrally planned economy to a market-based system has proved
more difficult than initially expected.


                IV.  COOPERATION AT THE REGIONAL LEVEL

39.       Given the nature and range of assistance required by the economies
in transition, the United Nations system coordinates its response to
demands for building sound human and institutional capacities for
managing the transition in the countries concerned.  This review of
international cooperation efforts in support of the transition begins
with the units of the United Nations system that are closest to the
countries themselves, the regional commissions.


        A.  Operational activities of regional commissions to assist
                           economies in transition
                                 
40.       The need to diversify forms and methods of assistance for the
integration of the economies in transition into the European and world
economy has been promoted by ECE, which includes in its membership 26
economies in transition. ESCAP, with nine countries in transition in
its membership, is also acting to solve problems faced by the
disadvantaged economies in transition.  Therefore, effective
coordination between the two commissions should ensure that technical
assistance to those economies is truly complementary and focuses on
areas of their competence.

41.       The primary objective of ECE and ESCAP technical cooperation
activities is to act catalytically to promote the self-reliance of the
recipient countries, so as to assist them in their efforts in the
management of the transition process.  The ECE intergovernmental and
expert meetings, workshops and advisory services are instrumental in
securing relatively rapid needs assessment in countries in transition. 
The analytical work of both commissions produced comparative analysis
of economic performances of the reform process and also of sectoral
policies, feeding the economic debate and helping countries to assess
their comparative advantages and weaknesses.

42.       ESCAP and ECE have already coordinated their assistance to the
economies in transition through regular exchange of information on
advisory missions, workshops, training activities and technical
cooperation programmes and projects.  Future cooperation between the
two commissions, with a view to avoiding duplication, could include
joint elaboration and implementation of activities, regular
consultations and provision of resource persons for the projects under
implementation.

43.       Cooperation with the United Nations system, EU, other
international organizations and institutions in the region, financial
institutions and the business community, as well as collaboration with
subregional groupings, has been strengthened in all aspects of the
ongoing assistance provided to the economies in transition, including
workshops, advisory services and training.

44.       The United Nations system has continued to provide regular
analysis of the economic situation in the countries in transition and
to offer policy advice.  Information provided in United Nations
documents and publications, such as the Economic Survey of Europe,
Economic Bulletin for Europe, Economic and Social Survey of Asia and
the Pacific and World Economic and Social Survey, as well as several
reports of specialized agencies, is detailed, region-specific, and
often not available elsewhere.  The analytical and statistical
activities of the United Nations system generally complement those of
other international organizations, thus providing policy makers with a
broader range of analysis and viewpoints than would otherwise be
available.


                     1.  Economic Commission for Europe

45.       Most regular activities of ECE are oriented to assist economies in
transition in the field of the environment, transport, statistics,
trade facilitation and economic analysis, which have been priority
areas since 1990. Industry and technology, energy, population, human
settlements, forestry and investment promotion are also covered by
ECE.

46.       In addition to the wide range of activities, ECE work of analysis,
data gathering and sharing feeds the discussion on the economic
policies in countries in transition.  The analysis of the economic
situation in these countries is based on contributions by
representatives of member countries who describe and comment on
conditions in their countries in a given field in the course of
discussions which serve mainly as an exchange of information and
experience.  It is also based on surveys or studies conducted by the
secretariat and reflected in a number of publications, the best known
being the Economic Survey of Europe.  In 1995, ECE issued 73
publications and 95 are planned for 1996.

47.       The negotiation of conventions and protocols, the development of
norms and standards and the agreement on European transport networks
all serve to harmonize action and facilitate exchanges between member
countries, by eliminating obstacles, simplifying procedures or
preventing unacceptably large discrepancies in standards of
production, particularly those relating to the environment or safety,
from being considered as factors of unfair competition.  

48.       Experience shows that a number of ECE norms and standards are
taken up by EU in its directives while, conversely, some EU directives
are used as a basis for adopting norms and standards at the regional
level within the ECE framework.  ECE technical assistance activities
support the implementation of guidelines, norms, standards and
conventions in all areas of the ECE programme of work.  In particular,
the successful cooperation of the member States and ECE is reflected
in 50 international agreements and conventions in the field of
transport, including standards for the automobile industry. 
Furthermore, ECE experience in the fields of norms and conventions can
be shared with other regions through their respective regional
commissions; this is the case with ESCAP for the Convention on
Long-Range Transboundary Air Pollution and its protocols.  This
Convention produced the first significant results between 1988 and
1993 with the reduction of sulphur-dioxide emissions by more than 30
per cent.  This is one of four ECE environmental conventions.  At the
global level, the ECE secretariat services the International
Convention on Transport of Dangerous Goods.  

49.       Current ECE activities take the form of training workshops,
advisory services for Governments and technical cooperation programmes
and projects.

50.       Since the end of 1990, almost 200 demand-driven workshops have
been held on different aspects relevant for the transition process. 
The results of the workshops are regularly reported and evaluated by
ECE, and the follow-up influences the work of the Commission as a
whole.  Several advisory workshops have been specifically oriented to
expedite the process of building awareness in the newly independent
member States of the role and functions of ECE in supporting the
reform process and in the integration into the European and global
economy.  ECE explored the possibility of reinforcing training for the
representatives of administration and the business community of the
countries in transition, in cooperation with the United Nations
Development Programme (UNDP), the World Bank and other institutions
and organizations, such as the European Bank for Reconstruction and
Development (EBRD), the Organisation for Economic Cooperation and
Development (OECD), the Joint Vienna Institute, the International
Labour Organization (ILO)/Turin Centre and regional coordinating
centres for training under ECE environmental conventions.

51.       The ECE Regional Advisory Services Programme, established in
mid-1994 as part of the process of decentralization of United Nations
technical assistance activities to the regional commissions, has added
a new dimension of services to member States and contributed to a
diversification of assistance to countries in transition.  The
activities of the Programme have been demand-driven by Governments of
countries in transition.  Regional advisers have provided advice on
policy and institutional issues and elaborated project ideas of common
interest to several countries.

52.       From July 1994 to September 1995, a total of 144 advisory missions
were carried out:  50 missions were to member countries of CIS, 48 to
the economies in transition in central and eastern Europe, 8 to the
Baltic States and 38 to donor countries.  In 1995, advisory assistance
was provided to Georgia, culminating in the elaboration of a
medium-term strategy of economic reconstruction, recovery and reform. 
Kyrgyzstan, Tajikistan and Ukraine have expressed interest in
receiving focused assistance. 

53.       Technical cooperation programmes and projects have been
implemented in specific areas of the ECE programme of work such as
statistics, population, transport, the environment, trade, forestry,
energy, industry and technology.

54.       ECE is actively participating in and working for the follow-up of
global conferences such as the World Summit for Social Development and
the Fourth World Conference on Women.  ECE and the United Nations
Population Fund (UNFPA) have formulated a population programme for
1996-1999, to support the follow-up to the International Conference on
Population and Development and the European Population Conference in
the region, particularly in countries with economies in transition. 
The programme will supply Governments and non-governmental
organizations with data, analysis and conclusions to monitor the
implementation of the Programme of Action of the International
Conference on Population and Development and the recommendations of
the European Population Conference.  Three projects on population
issues were conducted with the financial support of UNFPA.

55.       In order to promote communication with national statistical
agencies and other interested organizations, ECE coordinates its
programme of work with the Conference of European Statisticians and
the Statistical Office of the European Communities (EUROSTAT), which
provides the European Union with a high-quality statistical
information service.  ECE is also coordinating its statistical
activities with OECD as well as with the World Bank and IMF.  The ECE
statistical programme has recently been reinforced through UNDP
funding on social statistics.

56.       ECE activities in the transport sector are also devoted to
specific technical projects, such as the Trans-European North-South
Motorway project with the participation of 10 countries, and the
Trans-European Railway project, with the participation of 11
countries.  OECD and EBRD participated in the activities of the
projects.

57.       Three environmental technical cooperation programmes are being
prepared, on transboundary water management and protection, support
for sustainable investment decisions in fresh-water and sea-water
resource management, and mitigation of the environmental effects of
the military complex and conversion to peaceful uses.  Cooperation at
the secretariat level has been strengthened between ECE and the Danube
Project Coordination Unit.

58.       In the field of trade, a study on investment finance in the
economies in transition was prepared recently, as well as a guide on
real estate transactions in the economies in transition.  Other
guidelines were issued, on financing trade and private companies and
on new forms of project finance, including build, operate and transfer
(BOT) which will help economies in transition mobilize external
finance, particularly in infrastructure development.  A number of
other technical cooperation activities in trade facilitation are
carried out, mostly through advisory services, with the aim of
improving the efficiency and effectiveness of the procedures,
documentation and data exchange used in international trade
transactions.  Trade Facilitation Information Exchange (TRAFIX) is a
joint programme with ESCAP and several national trade facilitation
bodies, using the Internet World Wide Web, to increase awareness and
use of trade facilitation standards.  ECE is supporting ESCAP in the
preparation of a training guide.

59.       A preparatory assistance project to develop energy efficiency
demonstration zones in Bulgaria, the Czech Republic, Hungary and the
Russian Federation, supported by the UNDP Global Environment Facility
and extended to 1996.  The Energy Efficiency 2000 project has also
developed energy efficiency trade promotion activities and supported
the conversion of military industries to the manufacture of energy-
efficient technology.  A new activity on financial mechanisms for
energy efficiency investments in the Russian Federation began with
EBRD, the World Bank, Russian Federation commercial banks and western
European experts developing guidelines for an investment project.  The
technical cooperation programme "Promotion and development of a
market-based gas industry in economies in transition - Gas Centre"
covers a wide range of activities, with immediate priorities in
training, technical missions, publishing activities and database
development.

60.       In the field of industry, ECE is participating in a project on the
steel industry in Europe, which includes the World Bank, EBRD, the
European Union and the International Iron and Steel Institute (IISI). 
A pilot project was initiated on the environmental clean-up of sites
polluted by chemicals in economies in transition.  Draft model
agreements and legal guides have been produced with the aim of
facilitating business negotiations in economies in transition and the
dissemination of information on new forms of economic cooperation.  

61.       ECE has also developed a programme for the development of small
and medium-sized enterprises in countries in transition, aiming to
assist countries in transition in formulating national policy,
designing promotion programmes for such enterprises, developing
infrastructure and helping beginners to become entrepreneurs.

62.       The long-standing ECE mandate to initiate and participate in
measures for facilitating concerted action for the economic
restructuring of Europe is equally valid for present efforts to assist
war-torn countries and areas in the ECE region.  


     2.  Economic and Social Commission for Asia and the Pacific

63.       ESCAP has accorded high priority to assisting the economies in
transition in their transformation and to facilitate their joining the
region's economic mainstream.  The divisions of the secretariat have
refined and extended their programmes to address new issues and have
intensified their programme of activities in favour of these
economies.

64.       The following narratives of ESCAP assistance to the concerned
countries include:  (i) adoption of the international standards and
practices of countries with market economies, (ii) analytical
activities, policy advice and technical assistance to the economies in
transition, and (iii) possible ways of enhancing economic and
technical cooperation among countries with economies in transition and
with developing countries, in particular through cooperation with
regional and subregional groupings.

65.       The ESCAP secretariat has provided training in such areas as
macroeconomic management and reform, trade and foreign direct
investment, industrial restructuring and private sector participation,
transport and statistics.  Efforts have been made to ensure that the
economies in transition, in particular in all the Central Asian
countries and Mongolia, could obtain full exposure to the experience
of market economies and attain international standards and recommended
practices for operating a well-functioning market system.  National
training courses on national accounts systems were organized by the
Statistical Institute for Asia and the Pacific and the Statistics
Division of ESCAP to improve national statistical capabilities in the
economies in transition.  ESCAP has helped these economies in
adjusting their foreign trade policies in harmony with the agreements
of the Uruguay Round of multilateral trade negotiations. 

66.       In the field of transport, technical assistance was aimed at the
establishment of an appropriate policy framework for land transport
routes to be included in subregional, intraregional and interregional
(Asia-Europe) railroad linkages and networks.

67.       Analytical work and operational modalities for integrating the
economies in transition into the regional economic mainstream have
been clustered around three groups of activities:  (i) provision of
advisory, research and information services, (ii) the convening of
intergovernmental and expert group meetings, workshops and seminars on
various economic and social development issues, and (iii) provision of
training in accordance with specific requests from the Governments
concerned. 

68.       The Economic and Social Survey of Asia and the Pacific has been
monitoring and analysing the developments in the economies in
transition in the region and their progress in economic reform,
including their external trade links.  Other ESCAP publications
reporting on the implementation of economic reform policies, the state
of foreign trade and measures to merge the economies in transition
into the regional economy, include those on macroeconomic reform
policies in the disadvantaged economies in transition and management
of economic reforms.

69.       Advisory services on macroeconomic management, institutional
arrangements for export promotion, the implication of the Uruguay
Round agreements for regional economic cooperation, natural resources
management, transport and statistics were provided to most of the
countries.  At the request of the Governments concerned, courses of
lectures were organized on macroeconomic issues, including trade and
investment policies, for government officials, researchers and
representatives of academic institutions and technical assistance in
building macroeconomic models for policy analysis.  Technical advisory
services on remote sensing and geographic information systems were
rendered to the selected economies in transition.  The secretariat has
been providing advisory services to the Central Asian countries in
addressing the Aral Sea crisis.

70.       With regard to technical assistance, ESCAP has focused on
strengthening national management capacities in developing the
financial, industrial, infrastructural, trading and other
institutional framework required in managing transition to a market
economy.  Space technology application, the application of electronic
data interchange in international trade, and environment protection
were some of the new activities undertaken in 1994-1995.  The
economies in transition participated in a number of technical
cooperation activities on critical social issues and human resources
development.  A policy seminar on migration and development and a
regional seminar on population ageing and development were among
several projects implemented in this area.

71.       Regional cooperation among the countries of this group has been
identified as a substantive area in ESCAP activities.  In the context
of the recent emphasis placed on enhancing regional cooperation and
the strengthening of the subregional coordination system among the
economies in transition, the secretariat has provided support within
available resources to subregions, such as Indo-China and North-East
and Central Asia.

72.       A major focus of assistance to the Central Asian members of ESCAP
in their efforts to undertake market-oriented economic reforms has
been on macroeconomic management.  During the period 1993-1995, ESCAP
organized national workshops on economic reforms in each of the
Central Asian countries.  The major challenges remain the creation of
a competitive environment under new policy regimes to stimulate trade
and investment to meet diverse international standards.

73.       The ESCAP secretariat has sought close collaboration with the
Economic Cooperation Organization (ECO) in providing assistance
relating to the economies in transition.  All 10 members of ECO are
members of ESCAP.  The two organizations therefore took an early
initiative to establish a framework for cooperation between them. 
Accordingly, a memorandum of understanding was signed between the
executive heads of the two organizations at Istanbul, Turkey, on
7 July 1993.


    B.  Cooperation with relevant subregional groupings, international
        institutions and other organizations to enhance technical     
        cooperation among the economies in transition and developing  
        countries                                                     

74.       In order to adapt the work of both regional commissions to new
realities in the region, particular attention has been paid to the
relations and cooperation with principal partner institutions outside
the United Nations system - the Organization for Security and
Cooperation in Europe (OSCE), the European Commission, the Council of
Europe, OECD and EBRD.  Cooperation with subregional groupings within
the region has been further enhanced.

75.       The membership of the Council of Europe and its Parliamentary
Assembly is also growing closer to that of ECE, and the
complementarity of their mandates provides them with opportunities to
cooperate, mainly on the occasion of ad hoc events such as the Warsaw
Conference on Progress of Economic Reforms in Central and Eastern
Europe and assistance to the former Yugoslav Republic of Macedonia in
planning and conducting its 1994 population census.

76.       An appropriate division of labour is sought with institutions
which, within the ECE region, have more limited membership, with a
long-standing and strong secretariat.  This is the case for OECD and
the European Commission.  In the environmental field, it has led to a
partnership for implementing the environmental performance reviews
which, initiated by OECD, have been extended by ECE to a number of
countries in transition.  A similar type of partnership relation
(involving ECE, OECD and the Statistical Office of the European
Communities (EUROSTAT)) has developed in the field of statistics.

77.       Synergies with other organizations were also developed in norms-
and standards-setting, such as with the European Commission. 
Experience shows that a number of ECE norms and standards are taken by
EU in its directives while, conversely, some EU directives are used as
a basis for adopting norms and standards at the regional level within
the ECE framework. 


        C.  Cooperation with the Organization for Security and Cooperation
            in Europe and the Mediterranean Countries                     

78.       Cooperation between ECE and OSCE has been extended since the
Commission's last session in the spirit of the Budapest Summit
Declaration of the Budapest Summit of 1994 of the Conference on
Security and Cooperation in Europe.  In an effort to consolidate
cooperation with organizations having a similar membership to that of
ECE and a complementary mandate, ECE regularly supports the economic
dimension of OSCE activities.  This is demonstrated by the substantive
background documents prepared by ECE for the meetings of the Economic
Forum, the review of the Bonn documents and individual seminars
organized by OSCE on specific economic issues. 

79.       The ECE secretariat has contributed to the three OSCE economic
dimension events which have taken place since the Commission's last
session.  In 1995, it contributed to the Sofia seminar on the
Trans-European role of infrastructure in maintaining stability and
security in the Black Sea region.  It also prepared a written
contribution for the seminar on environmental rehabilitation.  The
secretariat's participation in OSCE seminars dealing with ECE subjects
is useful for both participants.

80.       For the Fourth Economic Forum, held at Prague in March 1996, the
secretariat was again invited to provide moderators and rapporteurs,
as well as a contribution on the two main subjects of the Forum: 
managing the social aspects and political risks in transition, and
building an economic climate of confidence to promote security.

81.       At the Fifth Meeting of the OSCE Ministerial Council, held at
Budapest in December 1995, the participating States decided to
intensify the dialogue with the five non-participating Mediterranean
States:  Algeria, Egypt, Israel, Morocco and Tunisia, now called
"Mediterranean partners for cooperation".  As requested by the
Commission in 1995, the ECE secretariat intends to cooperate, in its
areas of competence, with the informal open-ended contact group which
has recently been established at the expert level within the framework
of the OSCE Permanent Council, in order to facilitate exchange of
information.

82.       The increasing number of initiatives taken by international
organizations and regional or subregional groupings to strengthen
integration among countries of the Mediterranean and their cooperation
with other countries reflects a renewed interest in the present
situation and projects of the region.  These initiatives may, however,
lead to duplication of effort and inconsistencies if there is
insufficient information-sharing and concentration among the various
institutions concerned.

83.       Against this background, and as agreed during a special meeting of
Ambassadors from ECE member and non-member States of the Mediterranean
region, the ECE secretariat has made an inventory of existing
mechanisms of cooperation and initiatives under way in the region.  

84.       Among the seminars and workshops organized by ECE and open to all
member States, those of particular relevance to Mediterranean
countries should be increased.  The participation of the ECE
Mediterranean countries in meetings dealing with the elaboration and
implementation of norms and standards can foster their trade
relationships and their economic integration into the trade
facilitation and standards on perishable produce.

85.       Similar orientations should be adopted to facilitate the adherence
of Mediterranean countries to the environmental conventions on water
management, environmental impact assessment and industrial accidents,
as well as to the guidelines on integrated environment management in
countries in transition and to a number of legal instruments in the
transport sector.

86.       With regard to cooperation in the Mediterranean, other activities
will be pursued based on further consultations with EU, the Council of
Europe and the United Nations system.  ECE and the Economic Commission
for Africa (ECA) are cooperating, together with the other relevant
organizations, in activities related to the project on the
Europe-Africa permanent link through the Strait of Gibraltar.  It
should be noted that the two regional commissions submitted a joint
report to the 1995 session of the Economic and Social Council in this
respect.


                    D.  Subregional groupings

87.       Since the early 1990s, ECE and ESCAP, as well as various
organizations of the United Nations system, have been fostering
greater cooperation with the growing number of subregional groupings
that have been created in Europe and Central Asia for the purpose of
enhancing mutually beneficial trade and economic cooperation.  Most
notably, these subgroupings include the Baltic Council of Ministers,
the Baltic Assembly, the Council of Baltic Sea States, Black Sea
Economic Cooperation, Commonwealth of Independent States, the Central
European Initiative, the Caspian Cooperation Council, the Economic
Cooperation Organization, the Euro-Arctic Council of the Barents Sea,
and the Visegrad Group.  Many of the subregional groupings benefit
from the expertise and support of European institutions and United
Nations organizations active in the region, such as ECE, ESCAP, the
United Nations Conference on Trade and Development (UNCTAD), the
United Nations Development Programme (UNDP), the World Bank, IMF, the
International Organization for Migration (IOM), the World Trade
Organization (WTO), EU, Council of Europe, OECD and OSCE.  Selected
examples of cooperation between the ECE, ESCAP and subgroupings are
described below.

88.       ECE participates regularly in the Black Sea Economic Cooperation
(BSEC) ministerial meetings.  It provides advisory services, inputs
for technical meetings and support literature upon request.  ECE has
extended assistance particularly in the field of energy and transport. 
In 1994, it prepared a publication on the energy situation in BSEC
countries, "BSEC in energy: momentums and opportunities", for the
first BSEC working group on energy.  In 1995, ECE provided inputs for
the BSEC working group on transport and for the ad hoc group of
experts on transport networks.  It also made a significant
contribution at the OSCE meeting in Sofia, in November 1995, on
transport specific to the BSEC region.

89.       ECE has developed cooperation with CIS in areas where it has an
effective impact.  It has close relations with the CIS Statistical
Committee.  It has also established contacts with the International
Committee for Economic Reform and Cooperation, established in 1993
with the support of the CIS States, to stimulate trade and investment
among the countries of the region.  ECE cooperates on substantive
issues such as energy and infrastructure with the Economic Cooperation
Committee for the CIS countries.  A project on "The present situation
and prospects for the fuel and energy complex in CIS" was initiated in
1995, with the participation of all CIS Governments, through national
experts on energy matters.  The first meeting was held in Moscow in
September 1995, and further consultations are planned for 1996. 

90.       ECE has been represented at high-level meetings of the Central
European Initiative.  It also took an active part in the Initiative's
working groups on transport, environment and energy.  Most recent
initiatives include the ECE contribution to the meeting of the working
group on small and medium-sized enterprises to design a relevant
programme.  ECE also presented a position paper at the ministerial
meeting on international economic relations and foreign trade
questions held at Skopje, the former Yugoslav Republic of Macedonia,
in March 1995. 

91.       The ESCAP secretariat has sought close collaboration with the
Economic Cooperation Organization (ECO) in providing assistance
relating to the economies in transition.  A memorandum of
understanding was signed between ESCAP and ECO at Istanbul, Turkey, in
July 1993.  Since then, joint workshops and seminars have been
organized by ECO and ESCAP.  In addition, ESCAP initiated consultative
meetings among executive heads of subregional organizations, which now
take place annually.  ESCAP is currently involved in five studies to
complement the Asian land transport infrastructure development (ALTID)
project, and is involved in promoting border-crossing facilitation
measures and legal instruments which are consistent with those
developed by ECE, in order to ensure complementarity where regional
links to Europe are developed. 


                 V.  COOPERATION AT THE GLOBAL LEVEL

92.       The following agencies, bodies and programmes contributed to the
present report, providing information on their role in enhancing the
cooperation of economies in transition among themselves, with
developing and developed economies and with relevant international
institutions and entities:  the United Nations Secretariat, the
Department for Economic and Social Information and Policy Analysis,
the Department for Development Support and Management Services, the
Department for Policy Coordination and Sustainable Development, ECE,
ESCAP, United Nations Children's Fund (UNICEF), UNCTAD, UNDP, United
Nations Drug Control Programme (UNDCP), United Nations Population Fund
(UNFPA), United Nations Institute for Training and Research (UNITAR),
United Nations University (UNU), International Labour Organization
(ILO), Food and Agriculture Organization of the United Nations (FAO),
United Nations Educational, Scientific and Cultural Organization
(UNESCO), International Civil Aviation Organization (ICAO), World
Bank, IMF, Universal Postal Union (UPU), International Fund for
Agricultural Development (IFAD), United Nations Industrial Development
Organization (UNIDO), and the International Atomic Energy Agency
(IAEA).  These contributions are summarized below.

United Nations Secretariat

93.       The Department for Economic and Social Information and Policy
Analysis assists Governments, intergovernmental and non-governmental
organizations and private sector entities in determining development
and transition priorities and contributes to devising polices and
measures for fulfilling them.  This is done through two major types of
activity, analysis and technical cooperation.  The first entails
analysis of long-term economic, social and population trends, as well
as monitoring and assessing, from a global perspective, economic,
social and population policies.  The Department, working in
consultation with the regional commissions, UNCTAD, and the Bretton
Woods institutions, also seeks to identify emerging economic and
social issues of global importance and monitor short-term developments
in the world economy.  In this regard, the Department's World Economic
and Social Survey 1996, in its focus on investment in the world
economy, prepared a special analysis of the unique investment
situation and policy environment in the economies in transition.  In
the preceding year, the Survey for 1995 analysed the problems of
transition and adjustment at the microeconomic level.

94.       In the area of population, the Department also carries out
research and analysis through the study of mortality, fertility,
internal and international migration and urbanization, which include
the countries with economies in transition.  Of particular importance
are the periodic estimates and projections that include information on
population size, by age and sex, growth, mortality, fertility and
rural and urban distribution for all countries of the world.  In the
most recent assessment, World Population Prospects:  The 1994
Revision, a special chapter is devoted to the demography of the
countries with economies in transition.

95.       The other major cluster of activity is technical cooperation in
the areas of population and statistics.  In the first area the
Department executes projects such as those in Albania and Mongolia,
with a view to increasing the capacity of these countries to formulate
national population and related policies for the effective
implementation of the Programme of Action of the International
Conference on Population and Development.

96.       In the area of statistics, the Department has prepared a handbook
on national accounting:  use of the System of National Accounts in
economies in transition.  This handbook is expected to assist
countries in transition in their efforts to change from the Material
Product System (MPS) used by centrally planned economies to the System
of National Accounts (SNA) used by the rest of the world.  A workshop
was organized in this regard in St. Petersburg, Russian Federation, in
1994, which brought together national accounts experts from the
countries in transition and resulted in major recommendations.

97.       In addition, the Department collaborated with the UNFPA Country
Support Team in Kathmandu to carry out training on demographic data
collection for Central Asian republics in Ashgabad in March 1996.  In
May 1996, the Department also provided technical assistance to the
Government of Turkmenistan related to the processing and tabulation of
the 1995 population and housing census results.

98.       The Department for Policy Coordination and Sustainable Development
provided substantive support to the discussions on the Agenda for
Development, currently under negotiation by the Ad Hoc Open-ended
Working Group of the General Assembly on an Agenda for Development. 
The discussions cover, inter alia, the subject of the integration of
countries with economies in transition.
          
99.       In the first chapter, it is acknowledged that the special problems
and features of countries with economies in transition require
particular attention.  Achieving economic growth and sustainable
development is seen as being especially complex because these
countries are faced with a dual transition to democracy and to a
market economy.  The integration of these countries into the world
economy will have a positive impact not only on these countries
themselves but also on the global economy as a whole.  Promoting
effective cooperation in trade, economy, finance, science and
technology with all countries and regions is therefore especially
important.  In order to bring this integration about in a speedy
manner, the Agenda for Development notes that effective international
support for reforms in these countries is essential in terms of both
financial resources and institutional expertise.

100.               In the second chapter, it is reiterated that the
international community should support the countries with economies in
transition in their efforts to integrate into the world economy. 
Therefore, recommendations adopted at recent international conferences
and meetings regarding the specific needs of these countries should be
fully implemented by the international community and the United
Nations system.  To this end, the Agenda for Development proposes that
an appropriate strategy should be defined for strengthening solidarity
with these countries. 5/

101.               The Department for Development Support and Managerial
Services has the mandate to undertake technical cooperation programmes
for institution-building and human resources development in various
fields of activity for the benefit of developing countries.  IC is
further mandated to give special attention to the least developed
countries and the economies in transition.

102.       In fulfilling the above mandate, particularly in conjunction
with the countries in transition, the Department has established,
within its Development Policies and Planning Branch, a Coordination
Unit for Economies in Transition.  The Unit has organized a series of
interregional workshops and symposia to enhance the exchange of
information, among the countries in transition, on complex policy
matters critically important for their effective and smooth transition
to market economies.

103.         The Governance and Public Administration Branch, Division of
Public Administration and Development Management, has undertaken a
number of activities under UNDP-funded projects as well as within the
regular programme budget pursuant to General Assembly resolution
49/106.  IC is implementing a regional project that seeks to develop
and enhance democracy, governance, and popular participation in
central Europe and CIS.

104.               In pursuit of its overall policy of support to women in
development, the Department pays particular attention to assessing the
actual and potential roles of women in all the various development
activities.  Women in central and eastern European and CIS countries
are severely affected by the transition from a centrally controlled to
a market economy.  The Department is implementing a regional project
on women in development in central and eastern European and CIS
countries.  The overall objective of this project is to build the
capacity of these countries to address their gender concerns, support
their efforts to correct gender disparities and achieve gender-
balanced sustainable development.  Five gender in development units
have been established, in Armenia, Bosnia and Herzegovina, Croatia,
Georgia and the former Yugoslav Republic of Macedonia.  These units
function as focal points for national, regional and international
activities in promoting and coordinating all gender-related
programmes.

105.               In 1995, the UNDP Regional Bureau for Europe and the
Commonwealth of Independent States initiated the preparation of annual
national human development reports in 25 countries of the region as an
entry point to improve policy dialogue and policy formulation in that
region.  The Department was chosen as the executing agency for this
project.

106.         The relevance of these reports to the countries in the region
is considerable, in that basic information and statistics on social
and human development issues in the region are virtually non-existent
or inaccurate.  Even when they exist, many of these countries often
lack the capacity to analyse, interpret or disaggregate statistics and
other information.

United Nations Conference on Trade and Development

107.               In recent years, UNCTAD has regularly reviewed and analysed
the substantive issues and developments relating to the efforts of the
economies in transition to integrate into the international trading
system and their development implications.  This objective was also
endorsed during the ninth session of the Conference held at Midrand,
South Africa.

108.               A study on fostering integration of countries in transition
in central and eastern Europe into the world economy and the
implications for developing countries was published in October 1995. 
Other UNCTAD documents dealing with concrete issues of international
trade, such as the implications of the dynamism of large economic
spaces, give specific information on economies in transition.

109.               UNCTAD implements a growing number of technical cooperation
projects and activities aimed at supporting individual economies in
transition in their accession to the World Trade Organization (WTO),
for example Belarus, Latvia, Lithuania, the Russian Federation and
Uzbekistan.  Several other countries in transition have requested the
technical cooperation of UNCTAD in this area.  These technical
cooperation activities are implemented in cooperation with WTO.  In
August 1995, an UNCTAD/ESCAP seminar on WTO accession was organized
for Asian countries, including the Central Asian republics.  A
workshop of the CIS and Baltic States, on the development of regional
trade, payments and enterprise cooperation, took place in Chisinau,
Moldova from 9 to 12 January 1995.  The workshop addressed the
problems of declining regional trade which have seriously affected
production, employment and growth, and identified policy responses
likely to expand regional trade, payments and enterprise cooperation
among CIS and Baltic States.

110.               At the request of the Government of Egypt, UNCTAD, in
collaboration with the International Trade Centre UNCTAD/WTO (ITC),
organized a business week on trade and economic cooperation between
Egypt and central and eastern European countries, including CIS, which
took place at Cairo in December 1994.

111.               UNCTAD has assisted the authorities in Romania by taking
institution-building measures to enhance the training capacity for the
organization of maritime trade.  The European Commission is providing
financial assistance to instal the UNCTAD Rail Tracker module of the
Advance Cargo Information System (ACIS) on the Turkmenistan and
Uzbekistan section of the transport corridor.

112.               A review of the privatization process in Kazakstan was
undertaken.  In October 1995, UNCTAD, in cooperation with the
Government of Uzbekistan, UNDP and UNIDO, organized an international
business conference in Geneva on "Privatization in Uzbekistan -
Opportunities for partnership", which brought together 200 business
executives from a large number of countries and resulted in a number
of contracts on investment being signed.  The joint mission on the
restructuring of large industrial enterprises located in Kazakstan
included experts from UNCTAD, ILO, UNIDO, United Nations Volunteers
(UNV), Asian Development Bank (ADB) and European Bank for
Reconstruction and Development (EBRD), and the Government of
Kazakstan.

113.               The Trade Point Programme is a core component of the UNCTAD
Trade Efficiency Initiative.  There are currently 102 countries
involved in the Programme, of which 13 are economies in transition. 
The UNCTAD Automated System for Customs Data (ASYCUDA) programme has
now become de facto a worldwide standard for the automation and
modernization of customs procedures, documentation and data.  Projects
began in Armenia and Georgia in 1994.  ASYCUDA has been operational in
Armenia since June 1996.  The Governments of Azerbaijan and Uzbekistan
have shown interest in the system.  The UNCTAD computer-based Debt
Management and Financial Analysis System has been installed in
Belarus, Kazakstan, Romania and Ukraine.  A similar project is being
finalized with the Government of Uzbekistan.  A new software version
is currently being updated in countries in which the older version was
installed. 

International Monetary Fund

114. IMF has been actively involved in facilitating the integration of
the former centrally planned economies into the global trade and
payments system from the beginning of the process of transition.  The
Fund's contribution to the economies in transition has primarily taken
three forms:  policy advice, financial support, and technical
assistance and training.

115. Fund policy advice to economies in transition has included the
areas of macroeconomic stabilization, trade and exchange system
liberalization, economic restructuring (including privatization), and
the development of targeted social safety nets.  The Fund has also
given advice on issues that are unique to some economies in
transition, including rouble area issues and a customs union within
parts of the former Union of Soviet Socialist Republics.

116.               The Fund provided financial support for economic
stabilization and reform programmes in most of the economies in
transition, with actual disbursements amounting to nearly US$ 21
billion in the period 1990-1995.  Part of this assistance was provided
through a temporary special facility, the Systemic Transformation
Facility (STF), which was introduced in April 1993 and expired at the
end of 1995.  The Facility provided financial assistance to countries
facing balance-of-payments difficulties arising from severe
disruptions in their traditional trade and payments arrangements owing
to a shift from significant reliance on trading at non-market prices
to multilateral, market-based trade.  The Facility was designed to
serve as a mechanism to pave the way for these countries to move to
regular Fund arrangements.  It provided flexibility in the application
of the Fund's policy on financing assurances, permitting the Fund to
move more quickly in providing financing than it could have done
otherwise.

117.               The Fund has provided technical assistance to economies in
transition in five broad areas:  (a) design and implementation of
fiscal and monetary policies; (b) institution-building, such as the
development of central banks and treasuries; (c) collection and
refinement of statistical data; (d) training of officials; and (e)
review of legislation (or, in some cases, assistance with its
drafting). 6/  In planning and providing this technical assistance,
the Fund has collaborated closely with other suppliers of technical
assistance, on both a project and a programme level.  This
collaboration includes joint financing of technical assistance with
EU, UNDP and the World Bank, as well as with a large group of central
banks.  IMF has also attached great importance to helping with the
training of officials responsible for economic policy in these
countries.  The challenge for economies in transition is to sustain
and extend the progress achieved thus far.  The Fund is continuing to
work closely with these countries to assist them in their efforts.

World Bank

118.               The World Bank continued its support for the economies in
transition in such sectors as agriculture, education, electric power
and other energy sources, the environment, finance, industry, mining
and other extractive methods, oil and gas, population, health and
nutrition, public sector management, the social sector,
telecommunications/informatics, transport, urban development, water
supply and sanitation.  The figures on lending to borrowers in Europe
and Central Asia are clearly indicated in annex table 4.

Food and Agriculture Organization of the United Nations

119.               The activities of FAO in support of the economies in
transition in central and eastern Europe and CIS concentrate on
support for the implementation of economic and institutional reforms
undertaken since the early 1990s as they involve and affect the
agricultural and rural sector and, through assistance in approaching
sustainable development, on support for the integration of the
agriculture of these countries into the world economy.  In view of
resource limitations, the thrust of the role of FAO in Europe has
remained catalytic, particularly as regards the provision of technical
assistance services to these countries.

120.               The FAO Regional Conferences and the European Commission on
Agriculture have, throughout the 1990s, provided a much-appreciated
forum for presentation and review of the central and eastern Europe
agriculture and rural sector transition in a pan-European context.

121.               The framework of FAO activities has been support for the
recovery of the agricultural sector in these countries as linked and
dependent on the continuation of economic and institutional reforms in
the countries in question.
Since 1993, FAO has been supporting the organization of annual
ministerial consultations on agricultural policy which provide a
high-level forum for these countries to exchange specific experience
on the transition of the agricultural and rural sector.  A network to
research and promote options of agricultural policy has been
established with the assistance of FAO and provides policy makers in
central and eastern Europe with expertise and analyses in such key
areas as (a) international policy environment, including EU
enlargement, the GATT Uruguay Round Agreement on Agriculture, the
Central European Free Trade Agreement; (b) structural reforms,
privatization programmes, development of land markets and farm
restructuring, cooperative reforms; and (c) the place and linkages of
the agricultural sector with rural development, including gender
issues. 7/

122.         The central and eastern European and CIS members of FAO have,
from the beginning, been actively involved in the preparations for the
World Food Summit, to be held at Rome in November 1996.

123.               FAO is providing assistance to the central and eastern
European and some CIS economies in transition in developing and
implementing rural development issues and, where necessary, securing
social safety nets for rural populations.  A major study on the role
and status of rural women in the central and eastern European
countries is instrumental in designing a plan of action to assist
rural women in the transition and constituted a part of the
preparations for the Fourth World Conference on Women held in Beijing
in 1995.  Through its Investment Centre, FAO prepares investment
projects for financing by multilateral funding institutions.  In 1994,
34 missions of varying duration were mounted by the Centre in the
European region; the number increased to 45 in 1995.  The stimulus to
agriculture is significant, especially if the built-in multiplying
effect is taken into account.  It is foreseen that during the biennium
1996-1997 the Centre will be requested to increase its assistance to
central and eastern European countries.

124.         FAO has also a Global Information and Early Warning System, a
principal international source of data and analyses of current and
prospective supply and demand food and farm product balances in all
countries of the world.  The FAO-supported European System of
Cooperative Research Networks in Agriculture has developed a
subregional approach for supporting and networking research in the
central and eastern European countries, in liaison with the
Mediterranean subregion.  The establishment of a subregional office
for central and eastern Europe with a multidisciplinary team of
agricultural experts in areas selected as priority areas in the
countries of central and eastern Europe, and a policy assistance unit,
will strengthen the FAO presence in the field.  The ongoing
restructuring of FAO, along with the establishment of the subregional
office, will provide more focused and cost-efficient support for the
transition of these countries in agriculture and rural development.

International Atomic Energy Agency

125.               During the last few years, several new States in Europe and
Central Asia joined IAEA or became interested in its technical
cooperation programme.

126.        Following the technical visits to some CIS countries in 1992,
after their accession to the Nuclear Non-Proliferation Treaty, the
Coordinated Technical Support Programme was established in the areas
of nuclear material control and accountancy (at the State and facility
levels), physical protection, and nuclear import-export control, as
well as the related nuclear legislation, with the participation of the
following donor States:  Finland, Hungary, Japan, Sweden, the United
Kingdom of Great Britain and Northern Ireland and the United States of
America.  In 1994-1995, some other potential donor countries expressed
interest in participating in the Programme.

127.         Technical assistance to the countries in transition involved,
according to States' needs:  deliveries of computer hardware and
software, deliveries of communication and office equipment, deliveries
of specialized instrumentation, installation of physical protection
systems, and training.  IAEA projects with the countries in transition
have focused mostly on Belarus and Ukraine, which are still dealing
with the Chernobyl disaster. 8/

International Civil Aviation Organization

128.               The Technical Cooperation Bureau of ICAO is involved in
numerous technical cooperation projects in a wide range of countries
around the world.  The annual project value is approximately US$ 50
million.  These projects, which have various aviation objectives,
contribute to the development of the host country's aviation sector
and thus to its overall development and integration into the global
economy.  Numerous factors play a role in the process by which an ICAO
technical cooperation project is approved and then moves to the
implementation stage.  While some ICAO technical cooperation projects
may take place in countries that would be the focus of General
Assembly resolution 49/106 of 19 December 1994, ICAO does not target
its activities specifically to one group of countries as opposed to
another.  Consequently, the activities of the Technical Cooperation
Bureau enable ICAO to contribute in a general manner to the
implementation of the resolution.

International Fund for Agricultural Development

129.               In accordance with its mandate of providing development
assistance to disadvantaged rural communities to alleviate rural
poverty, IFAD focuses its support projects in countries in transition
on (a) rehabilitation of small-scale rural infrastructure, for
example, through rural works programmes, (b) promotion of rural
micro-enterprises and on-farm and off-farm employment and income-
generating opportunities, through formal and informal credit
programmes that are coordinated locally through village credit funds
and credit unions, and (c) strengthening of institutions to enable
them to serve the needs of the emerging private farming sector.  IFAD
commits resources and makes efforts to mobilize donor funds that are
tailored to training programmes for farmers and technical assistance
and training aimed at increasing the capacity of institutions involved
in project implementation.  IFAD also provides limited resources to
support the formulation of rural development of smallholders in the
rural sector.  To ensure the economical, environmental and
institutional sustainability of interventions, project beneficiaries,
institutions involved in implementation, and government agencies play
a strong role in the design of projects.

130.               IFAD has ongoing loans for projects in Albania (small-scale
irrigation rehabilitation and rural development), Armenia (small-scale
irrigation development), Bosnia and Herzegovina (livestock restocking
and development) and Kyrgyzstan (sheep development).  Three of the
projects are initiated by IFAD. 9/  IFAD ongoing loans to the region
are all on highly concessional (International Development Association
(IDA)-equivalent) terms.

131.         As requested by Governments and other international financial
institutions, IFAD is expanding its activities in the region. 
Projects in the pipeline currently include projects for Armenia
(agricultural services), the former Yugoslav Republic of Macedonia
(rural rehabilitation), Azerbaijan (pilot privatization and irrigation
development), Georgia (agricultural privatization and rural credit)
and Kyrgyzstan (agricultural development).  One of these projects is
IFAD-initiated and four are World Bank-initiated, with co-financing
from IFAD.  Several additional projects are expected to enter the
pipeline in 1996. 10/

132.               To improve the informational basis for projects aimed at
developing the rural sector in countries in transition, IFAD is
planning two major studies.  The first, a farm study covering the
Caucasus countries, would help IFAD identify potential target groups
for future interventions and assess the impact of ongoing land reforms
on rural communities.  The second study would assess the performance
of rural financial service systems financed by IFAD and other donors
in countries in transition, extracting lessons from past experience to
improve the design and performance of future projects.

International Labour Organization

133.               In the context of the integration of the economies in
transition into the world economy, an important aspect of the work of
ILO includes the transfer of know-how to its tripartite constituency,
enabling Governments, employers and trade unions to identify and adopt
sound employment strategies, taking fully into account both the
external and the domestic factors affecting employment and
development.

134.         Cooperation in rendering technical assistance to economies in
transition has been established between ILO and other international
institutions and organizations (UNDP, World Bank, OECD, and regional
organizations of developed market economy countries such as the
European Community) (Technical Assistance to the Commonwealth of
Independent States and Georgia (TACIS) programme and Poland-Hungary
Aid for the Reconstruction of the Economic (PHARE) programme).

135.               ILO has contributed reports on such subjects as "Combating
unemployment and exclusion:  issues and policy options", "The social
dimension of the liberalization of international trade", and "Toward
full employment".

136.               Several action programmes have been envisaged concerning
women workers, youth and older workers.  The importance of the
problems of each of these groups has been growing steadily in recent
years in economies in transition and the time has now come for a more
energetic effort to be undertaken in this respect.  ILO activities on
poverty alleviation take due account of the role assigned to it by the
World Summit for Social Development.  The ILO approach to dealing with
this problem comprises employment and job creation, as well as advice
on the creation of social safety nets for those in most need.

137.         Considerable attention has been devoted in ILO activities to
the issue of disabled workers in economies in transition.  A
publication has been prepared containing guidelines on active training
and employment policies for disabled workers in central and eastern
Europe entitled "Employment prospects for disabled people in
transition economies".  A survey on workers with disabilities in a
local labour market of Almaty has also resulted in a publication.  A
conference in Poznan, Poland, in 1994 reviewed labour market policies
in favour of disabled persons.

138.         ILO has also initiated the formation of an "Informal network
of foreign labour" among central and eastern European countries, to
meet the desire of the Governments to intensify consultation and
dialogue on bilateral and multilateral issues raised by these
movements.  ILO is supporting the network through the organization of
annual meetings, research and the dissemination of information.

United Nations Drug Control Programme

139.         UNDCP is particularly concerned with the rapid spread of drug
abuse, illicit drug cultivation and drug trafficking across eastern
Europe and the CIS countries.  Drug abuse is already moving forward as
one of the main causes of serious health and socio-economic problems
in practically all countries in transition of Europe and CIS.

140.               UNDCP has been endeavouring to assist the economies in
transition in reducing the negative socio-economic implications of the
drug problem.  The meetings held by the Executive Director of UNDCP
with the leading policy makers in eastern Europe and CIS have
demonstrated the existence, at the top level, of strong political will
to address the drug problem and its ramifications.  The results of
these meetings were instrumental in UNDCP analytical activities in the
region, and for its provision of policy advice and technical
assistance to practically all the countries in transition of Europe
and CIS.

141.         In the last two years, UNDCP has opened two field offices in
the region to cover five Central Asian countries and three Baltic
States.  Following the provision by UNDCP of legal assistance to most
of the countries in transition, many have acceded to the United
Nations drug control conventions and created interministerial drug
control assistance in institution-building, strategy development,
strengthening of control measures, reduction of illicit supply of and
demand for drugs, with a view to preparing suitable ground for
establishing subregional and interregional cooperation in addressing
the commonly faced drug problem.

142.               UNDCP has also developed the Subregional Drug Control
Cooperation Programme for Central Europe, which has permitted the
strengthening of commitment to drug control at different levels of
administration, starting from the top legislative and executive
bodies.  In March 1995, UNDCP signed a memorandum of understanding on
cooperation in the area of drug control with ECO.  It is planning to
provide assistance in the setting up of the Drug Control Coordination
Mechanism in the ECO secretariat, which would serve as a channel for
the development and implementation of coordinated regional-level drug
control projects.

United Nations Development Programme

143.               The Regional Bureau for Europe and the Commonwealth of
Independent States administers the activities of UNDP in Europe and
CIS. 11/

144.               In Bosnia and Herzegovina, the UNDP country office will be
working closely with government authorities and the United Nations
development agencies to design and implement reconstruction and
rehabilitation activities.

145.         For the countries in transition, UNDP directs its programming
efforts to assist these countries in the transition process.  The
programme framework for the region consists of several themes: 
democratization, governance and participation (including grass-roots
participation and promotion of local non-governmental organizations),
the environment, aid coordination and management, small and medium-
scale enterprises, gender, poverty and sustainable human development.

146.         The regional support programme for democracy, governance and
participation covers both regional and country-specific activities and
seeks (a) to strengthen democratic institutions and processes; (b) to
enhance governance; and (c) to increase people's participation and
strengthen the role of civil society in development.

147.               In the area of democracy building, UNDP focuses on support
for the establishment and development of ombudsman-type institutions
and independent judiciaries as well as support for the establishment
of human rights protection institutions (for example, the Centre for
Human Rights in Latvia, and ombudsman for the universities in Armenia
and the Russian Federation). 12/  In addition, the programme includes
a number of regional activities, meetings and workshops.

148.               Efforts in management development, civil service reform and
decentralization include support to national and local government
administrations, improvement of financial auditing and control at all
levels, capacity-building in the areas of foreign investment promotion
and negotiation, support for the development of participatory
approaches to environmental management and technical assistance to
develop Governments' capacities in the area of informatics.

149.         In the area of the environment, three regional water-related
environmental projects are being implemented in the region. 13/  In
addition, the Regional Bureau has a regional project on strengthening
radiation and nuclear safety which addresses the energy sector in
conjunction with environmental protection.  In the Russian Federation,
the Murmansk region - Barents Sea sustainable development project is
being implemented with funding from Capacity 21.  ECE is executing a
regional project on energy demonstration zones with regional programme
funding from UNDP.

150.        UNDP is supporting the development of small and medium-sized
enterprises through an integrated approach covering policy, public
awareness and the establishment of business support centres which aim
at providing entrepreneurs with a large range of support.

151.               In 1994, UNDP initiated the establishment of gender in
development units in all countries of the region.  With the support of
these units, UNDP launched an intensive effort to prepare the
Governments and the non-governmental organizations in the region for
their active and full participation in the Fourth World Conference on
Women, held in Beijing in 1995, as well as in the parallel meeting of
non-governmental organizations.  The Regional Bureau is currently
preparing a peace negotiation workshop to address women's role and
potential capacity in preventive diplomacy and conflict management.

152.               Another regional initiative is the preparation and
publication of national human development reports in 22 countries of
the region.  The aim of this initiative was to assess the cost of the
transition to market-oriented economies, not only in terms of economic
efficiency but, more importantly, in terms of its impact on human
development in these countries.

153.               A major regional project covering 26 countries in eastern
Europe and CIS was launched in 1995 and executed by ECE to assist
national statistical offices in developing the human resources
necessary for building self-sustainable capabilities for the
collection, processing and analysis of reliable social and demographic
statistics, and enabling the appropriate governmental institutions and
agencies of these countries to monitor the social aspects of
development.  The projects will also serve to enhance the quality of
the national human development reports.

United Nations Educational, Scientific and Cultural Organization

154.         The activities of UNESCO in the countries in transition focus
on the following themes:  education, sciences, culture, communication,
information and informatics.  As there is a general commitment by most
of the central and eastern European countries to integrate their
educational reforms into a European and wider international context,
in recent years UNESCO has undertaken a series of activities aimed at
extending the exchange of experience and information, as well as joint
analyses and consultations in the field of educational policy and
reform elaboration, including consultations on multilateral assistance
programmes, in countries such as Albania, Belarus, Georgia and the
former Yugoslav Republic of Macedonia.  The UNESCO European Centre for
Higher Education in Bucharest is a direct participant in the process
of transition through its work on such items as quality assurance and
accreditation, the recognition of higher education qualifications; the
International Institute for Educational Planning, in Paris, among
other tasks, is working on reinforcing national capacities in policy
planning and management and evaluation of education.

155.               In the framework of the International Project on Technical
and Vocational Education, and in collaboration with other United
Nations specialized agencies such as ILO, UNESCO is assisting the
central and eastern European countries in reforming the system of
vocational education in order to adjust it to the needs of a market
economy.  The UNESCO office in Venice, Italy, assists the scientific
communities in the countries of transition of central and eastern
Europe in introducing democratic methods in the decision-making
process and management of science in the course of their transition to
market economies.  Its project on the transformation of scientific
communities in Europe has a series of major components:  science and
technology policy, intellectual migration, peer review in science and
technology, organizational structures of science, research and
innovation management.

156.               The main objectives of the UNESCO University - Industry -
Science Partnership Programme are of special interest to central and
eastern Europe, as they include a new approach to the adaptation of
university engineering education to industrial needs, the transfer of
research results to industry, and assistance to these member States in
creating or strengthening cooperation in the university, industry and
science.  In 1995, an international conference of university and
industry leaders was organized in Poland.  UNESCO is providing
assistance to a centre of excellence in Georgia (the International
Energy Centre), involved in solar architecture and development
activities in rural areas.

157.               Recognizing the urgency of addressing and resolving the
problems of the transition process, several international conferences
have been organized, on such themes as "Financing culture in the
period of transition to a market economy" (Mongolia, 1994) and
"Financing privatization in culture" (Bulgaria, 1995).

158.               Two flagship projects in the Russian Federation, the
Hermitage/UNESCO project and the Bolshoi/UNESCO project, are
particularly concerned with new patterns of management, marketing,
public relations and fund-raising.  The broadest long-term objective
of the UNESCO Programme on Management of Social Transformations is to
improve the interaction between social science research and the users: 
policy makers, the media, non-governmental organizations, civil
society, the private sector, and so on.  UNESCO was entrusted with the
execution of several UNDP projects in Albania, Azerbaijan, Bosnia and
Herzegovina, Kyrgyzstan and Uzbekistan, on such issues as
strengthening management and planning capacity in the education sector
and sustainable development.

United Nations Population Fund

159.               For several years, especially since 1992, UNFPA has
collaborated with the Governments of the countries in transition to
strengthen national expertise and institutional capabilities for the
formulation, planning, implementation and management of their own
national population and development policies and programmes.  This is
expected to enhance their capability for improving the quality of life
of their people and to help in bringing their economies into line with
international standards and the world economy.

160.               Assistance has been provided to these Governments to
undertake country- and regional-level studies on population and
related issues, such as ageing, migration, fertility and family
survival.  This has been complemented with training in the collection,
processing and analysis of population data.  UNFPA has undertaken
activities to raise awareness among Governments of the benefits of
providing quality reproductive health services, including family
planning and sexual health, to all eligible members of their
population.

161.         By organizing meetings, workshops and conferences, UNFPA has
promoted opportunities for the concerned Governments to interact and
share experience not only with representatives of other countries in
transition but also with representatives of countries that are
relatively more advanced in the population and development field. 
This has enhanced the cooperation among countries with economies in
transition and between these countries and developing countries. 
UNFPA has supported the Governments in their participation in a number
of conferences and workshops, such as the International Conference on
Population and Development (Cairo, 1994) and the joint ECO/UNFPA
conference on implementation of the Programme of Action of the
International Conference on Population and Development in the ECO
region (Almaty, 1996).

162.         UNFPA has also supported the creation by these Governments of
a periodical newsletter on reproductive health, published in five
languages, which has contributed to the improvement of the technical
expertise of health service providers.

United Nations Children's Fund

163.               The activities of UNICEF in countries with economies in
transition are in the following main areas:  (a) adoption of
international standards and practices of countries with market
economies; (b) analytical activities and policy advice; and (c)
enhancing economic cooperation among countries with economies in
transition.  UNICEF is promoting the introduction of WHO treatment
protocols and immunization schedules for major child diseases. 
Standards of certification of major vaccines are also promoted, since
many of the locally produced vaccines and "cold chain" storage
equipment have never met international quality standards.

164.         In cooperation with the World Bank, UNICEF has developed the
International Child Development Centre of the regional system and
database for the monitoring of social conditions in economies in
transition of central and eastern Europe and CIS.  UNICEF also
analyses the situation of the state of children and mothers in
individual economies in transition and the development of relevant
country programmes in individual areas of child development, survival
and protection.

165.               In accordance with the decisions of the World Summit for
Children, UNICEF has developed national programmes of action, covering
all major areas of child well-being and development, and introduced
innovative and low-cost social technologies in child health, water
supply, sanitation and other sectors.  It is also active in promoting
(in cooperation with the World Bank and WHO) health reform and the
introduction of medical insurance systems.

166.               In an effort to enhance economic and technical cooperation
among countries with economies in transition, UNICEF developed the
Vaccine Independence Initiative aiming at the gradual shift of some
economies in transition of Central Asia and Kazakstan to
self-provision and/or local production of major vaccines now being
imported by these countries.  UNICEF has also implemented projects of
subregional cooperation in the production and application of some
pharmaceuticals (iodized salt, oral rehydration salts, etc.) which are
critical for child health and survival.

United Nations Industrial Development Organization

167.         Of the seven thematic priorities of UNIDO, five are directly
relevant to the economies in transition:  industrial strategy and
policy advice; environment and energy; small and medium enterprises;
innovation productivity and quality for international competitiveness;
and industrial information, investment and technology promotion.

168.               In its work on industrial strategy and policy advice in the
economies in transition, UNIDO has recognized the importance of
advising on the need for national economies to achieve synergy among
all parties involved in industrial policy and decision-making.

169.               The economies in transition in eastern Europe and Central
Asia will be the focus of several industrial strategy and policy
projects as well as industrial economics seminars that are currently
in the pipeline or in an advanced stage of preparation.

170.               UNIDO offers technical and economic expertise in the fields
of ecological sustainable industrial development.  The majority of
UNIDO programmes and operational activities are targeted at enhancing
the role of competitive small and medium-sized enterprises.

171.               Every year training workshops are held in several countries
in the region with the participation of developing countries, and
study tours are organized, all with the objective of bringing these
countries from different parts of the world closer together through
shared experience.

172.         Global integration can also be fostered by activities in the
area of industrial information, investment and technology promotion. 
Examples of UNIDO projects are:  assistance to the Georgian Institute
for Scientific and Technical Information, and an investment forum for
Ukraine in 1996.

173.               The promotion of technology flows to and between developing
countries and accompanying efforts to bring about enterprise-level
technology partnerships are essential for fostering global
integration, and the experience of UNIDO gained in developing
countries is being transferred to the region (for example, Slovakia).

United Nations Institute for Training and Research

174.               UNITAR has been focusing its activities on the immediate
training needs of economies in transition, including Azerbaijan,
Kazakstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, as
well as Mongolia and Viet Nam.  UNITAR has implemented several
training programmes on the legal aspects of debt, and economic and
financial management, such as the workshop on small-scale
privatization in Turkmenistan (Ashgabat, February 1996) and the survey
of training needs in Baku, March 1996.

United Nations University

175.               UNU has undertaken a number of research projects at its
research and training centres:  the UNU Institute for New Technologies
in Maastricht, the Netherlands; and the UNU World Institute for
Development Economic Research in Helsinki.  The projects have dealt
with many issues including social development and technology.  The
projects on technology provide a coherent analytical framework for
dealing with key issues in technology policy, such as the role of
foreign industrial technology transfers in the economies in
transition, and include "The transfer of environmentally sound
technology in industrial transformation in eastern Europe:  A case
study - Poland" and "The synthesis project".

176.               Other projects, such as that on the evolving new market
economies in Europe and Asia, analysed in a comparative perspective
the sources and consequences of the successes and failures experienced
by the evolving new economies in Europe and Asia in the first stage of
the transformation process, focusing on the external, regional and
global implications of the internal changes in these countries.  This
project dealt with China, the Czech Republic, Finland, Hungary, India,
Kazakstan, Poland, the Russian Federation, Slovenia, Uzbekistan,
Viet Nam, the former German Democratic Republic and the Baltic States.

177.               In the area of social development, UNU has undertaken such
projects as "Global restructuring and women workers in industrializing
and transitional economies", "Social determinants and consequences of
transition to the new market economies in the 1990s:  employment,
poverty, equity, demographic development and gender issues", and
"Economic shocks, social stress and demographic impact".

Universal Postal Union

178.         UPU has undertaken several measures to assist countries with
economies in transition.  In January 1996, it created the post of
regional adviser for the region comprising all the countries in
transition.  On the strength of his knowledge of the postal situation
of each country in the zone, the regional adviser can provide the full
support of UPU in the field and facilitate the financing of postal
investments by third-party organizations or countries.

179.         Another way in which UPU is strengthening the postal services
of these countries is through postal reform, the quality of service
actions and the establishment of multi-year integrated projects to
assist economic development and stimulate international trade.

180.               UPU also organizes technical meetings and conferences to
facilitate the transfer of postal know-how between Western countries
and countries with economies in transition.

181.               In addition to its activities in the areas of postal
development and technical cooperation, UPU promotes greater
participation in the world economy by countries with economies in
transition and developing countries through its payment systems for
transit and delivery of mail.


                               Notes

          1/       For a comparison of targets and results of the early
stabilization programmes, see Economic Commission for Europe, Economic
Survey of Europe in 1991-1992 (United Nations publication, Sales No.
E.92.II.1), chap. 3, table 3.1.1.  See also D. M. Nuti and R. Portes,
"Central Europe:  the way forward", in R. Portes, ed., Economic
Transformation in Central Europe:  A Progress Report (London, Office
for Official Publications of the European Communities, 1994) pp. 1-20.

          2/       See Economic Commission for Europe, Economic Survey of
Europe in 1995-1996 (United Nations publication, Sales No. E.92.II.1).

          3/       These high growth rates of the value of trade reflect, to a
substantial degree, the depreciation of the dollar against the other
hard currencies and the increase in world commodity prices.

          4/       A reflection of the Hungarian austerity measures, including
a currency devaluation and an 8 per cent import tariff surcharge,
introduced in March 1995.

          5/       This last sentence is still being negotiated in the sense
that such a strategy should not detract from the problems faced by
developing countries.

          6/       The volume and complexity of the technical assistance
component have risen dramatically in recent years.  In fiscal year
1994/95 (May/April), IMF resources allocated to technical assistance
in the economies in transition represented around 200 person-years, or
around one third of the total technical assistance provided by the
Fund to all its members.

          7/       In 1995, a major project on international economic
comparative research was undertaken on the role of agriculture in
economic transition, in cooperation with the World Bank.

          8/       IAEA provided technical assistance to the following
countries in transition:  Armenia, Belarus, Estonia, Georgia, Kazakstan,
Latvia, Lithuania, the Russian Federation, Ukraine, Uzbekistan (member
States), as well as Azerbaijan, Kyrgyzstan, Moldova, Tajikistan and
Turkmenistan (non-member States).

          9/       The five projects represent a total cost of about
US$ 155 million, of which IFAD provides loans of about US$ 40 million
and grants of about US$ 1 million, co-financing institutions and
donors US$ 104 million and Governments and project beneficiaries
US$ 10 million.

          10/      By 1999, IFAD expects to have approved about 15 loans,
worth more than US$ 150 million, in support of rural and agricultural
development projects in the region.

          11/      The resources with which UNDP has undertaken its efforts in
the region are modest.  However, these resources have been, and
continue to be, supplemented by other sources of funding.  The
Executive Board of UNDP has earmarked US$ 5 million for programmes in
Bosnia and Herzegovina in 1996.

          12/      In the area of democracy building, UNDP is supporting
Armenia, Belarus, Latvia, Lithuania, Moldova, Kyrgyzstan, the Russian
Federation, Ukraine and Uzbekistan.  The programme also includes
support to the electoral processes in Azerbaijan and Kyrgyzstan.

          13/      These projects are:  "Environmental management of the
Danube River basin", "Environmental management and protection of the Black
Sea", and "Aral Sea capacity development programme".


                                   Table 1

                 Economic activity in the European countries
                         in transition, 1992-1996

            (Percentage change over same period of preceding year)

------------------------------------------------------------------------------
                                   GDP or NMP a/
                    ----------------------------------------------------------
                                                                      1996
                         1992       1993        1994        1995    Forecast
------------------------------------------------------------------------------
Albania                  -9.7       11.0        7.4         13.4       ..
Bosnia and Herzegovina     ..         ..         ..           ..       ..
Bulgaria                 -7.3       -1.5        1.8          2.5      3.0
Croatia                  -9.7       -3.7        0.8         -1.5      6-8
Czech Republic           -6.4       -0.9        2.6          4.8      5-6
Hungary                  -3.0       -0.8        2.9          2.0      2.0
Poland                    2.6        3.8        5.2          7.0      6.0
Romania                  -8.8        1.5        3.9          6.9      4.5
Slovakia                 -6.5       -3.7        4.9          7.4 c/   5.6
Slovenia                 -5.4        1.3        5.3          4.8      5.0
The former
 Yugoslav Republic
 of Macedonia d/        -13.3      -14.2       -7.2         -2.9      2.0
Yugoslavia d/           -26.6      -27.7        6.5          6.0     12.5
                              
  Eastern Europe         -6.0       -1.2        4.1          5.6      6.0
    CETE-4               -1.2        2.0        4.3          5.8       ..
    SETE-8               -7.0       -0.3        2.9          4.4       ..
                              
Armenia                 -52.3      -14.6        5.5          6.9       ..
Azerbaijan              -22.6      -23.1      -21.8        -17.3       ..
Belarus                  -9.6      -10.6      -12.6        -10.0       ..
Georgia                 -40.3      -39.4      -30.0          2.4       ..
Kazakstan               -13.0      -12.9      -25.5         -8.9       ..
Kyrgyzstan              -13.9      -15.5      -20.1         -6.2       ..
Republic of Moldova     -29.1       -1.2      -31.2         -3.0      7.7
Russian Federation      -14.5       -8.7      -12.6         -4.0     -3.0
Tajikistan              -31.0      -17.3      -12.7        -12.4       ..
Turkmenistan e/          35.7       10.0      -18.0        -16.0       ..
Ukraine                 -13.7      -14.2      -23.0        -11.8     -0.5
Uzbekistan              -11.0       -2.4       -3.5         -1.2       ..
                              
  CIS                   -15.2      -10.0      -14.8         -5.5       ..
Estonia                 -14.1       -8.5       -2.7          2.5       ..
Latvia                  -34.9      -14.9        0.6         -1.6      0.3
Lithuania               -39.3      -30.4        0.9          0.6      4.2
                              
  Baltic States         -33.7      -20.5       -0.1          0.2       ..

Total economies in
 transition             -13.6       -7.9       -8.7         -1.5       ..
Ex-GDR La"nder             7.8        7.2        8.5          6.3      5.0
------------------------------------------------------------------------------


------------------------------------------------------------------------------
                                         Gross industrial output
                              ------------------------------------------------
                                 1992        1993        1994       1995  
------------------------------------------------------------------------------
Albania                          -60.0       -10.0       -18.6      -7.2
Bosnia and Herzegovina           -28.4       -33.3       -25.0        ..
Bulgaria                         -15.9       -10.9         8.5       4.6 b/
Croatia                          -14.6        -5.9        -2.7       0.3
Czech Republic                    -7.9        -5.3         2.1       9.2
Hungary                           -9.7         4.0         9.2       4.8
Poland                             3.9         6.4        11.9       9.4
Romania                          -21.9         1.3         3.3       9.4
Slovakia                         -14.1       -10.6         6.4       8.3
Slovenia                         -13.2        -2.8         6.4       2.0
The former
 Yugoslav Republic
 of Macedonia d/                 -15.6       -13.8       -10.7     -10.7
Yugoslavia d/                    -21.4       -37.3         1.2       3.8
                              
  Eastern Europe                 -11.8        -2.7         6.6       7.3
    CETE-4                        -3.8         3.1         8.8       8.8
    SETE-8                       -15.8        -4.1         3.2       6.9
                              
Armenia                          -48.2       -10.3         6.9       2.4
Azerbaijan                       -23.7        -7.0       -22.7     -21.4
Belarus                           -9.4        -7.4       -17.1     -11.5
Georgia                          -45.8       -26.6       -39.7      -9.8
Kazakstan                        -13.8       -14.8       -28.1      -7.9
Kyrgyzstan                       -26.4       -25.3       -28.0     -12.5
Republic of Moldova              -27.1         0.3       -27.7      -6.0
Russian Federation               -18.0       -14.1       -20.9      -3.0
Tajikistan                       -24.2        -7.8       -30.8      -5.1
Turkmenistan e/                  -14.9         4.0       -25.0      -6.9
Ukraine                           -6.4        -8.0       -27.3     -11.5
Uzbekistan                        -6.7         3.6         1.6       0.2
                              
  CIS                            -16.8       -12.1       -21.4      -5.0
Estonia                          -38.9       -29.1        -5.3       1.4
Latvia                           -34.6       -32.3        -6.8      -6.5
Lithuania                        -30.0       -34.5       -28.0       6.2
                              
  Baltic States                  -33.6       -32.6       -15.7       0.2

Total economies in transition    -16.1       -10.1       -12.8      -0.3
Ex-GDR La"nder                     -6.1         6.0        13.9      7.1
------------------------------------------------------------------------------

          Source:  United Nations Economic Commission for Europe, Economic
Survey of Europe in 1995-1996 (United Nations publication, Sales No.
96.II.E.1), with updating by the ECE secretariat. Aggregates for
eastern Europe, the Baltic States and total countries in transition
are ECE secretariat computations based on 1992 weights and some
estimates for missing components.  Forecasts for 1996 are those of
national conjunctural institutes or, if these are not available,
government forecasts associated with the budget formulation.

          Note:  Aggregates are:  Eastern Europe (the 12 countries above
that line), with sub-aggregates CETE-4 ("central European transition
economies":  Czech Republic, Hungary, Poland, Slovakia) and SETE-8
("south European transition economies":  Albania, Bulgaria, Romania,
and the five Yugoslav successor States); CIS (12 member countries of
the Commonwealth of Independent States); Baltic States (Estonia,
Latvia, Lithuania); and total countries in transition.

          a/  Gross domestic product, unless otherwise noted.

          b/  Industrial output, January-December 1995 in Bulgaria
includes estimates for the private sector, whereas the other quarterly
figures cover state and cooperative enterprises only (full-year
growth, 1.9 per cent).

          c/  Gross material product (value added of the material
sphere, including depreciation).

          d/  January-September.

          e/  Net material product (produced).


                                Table 2

   Changes in foreign trade values and trade balances by partner region in
                   economies in transition, 1993-1995

     (Growth rates in percentage, trade balances in billions of dollars)

------------------------------------------------------------------------------
                                              Growth rates a/
                            --------------------------------------------------
                                           Exports              Imports
                            --------------------------------------------------
Country and trade partner
groups b/                      1993    1994    1995    1993    1994    1995
------------------------------------------------------------------------------
Bulgaria
--------
World ......................   -8.7     5.8    29.9    -3.4   -21.7    18.2
Economies in transition ....  -13.6    12.4     3.5    11.7   -41.7    15.4
Developed market economies .  -10.4    33.1    24.4    -5.9   -15.3    18.4
Developing countries .......    3.0   -42.6   124.4   -27.2    14.0    26.1

Croatia
-------
World ......................   -6.1     9.1     8.7    13.5    12.1    43.6
Economies in transition ....  -11.8     2.5    10.4   -16.6    -9.5    36.9
Developed market economies .   -7.0    13.4     4.9    18.2    19.2    48.3
Developing countries .......   20.5     1.9    51.0    22.8    27.4    28.1

Czech Republic                
--------------
World ......................   15.5     8.3    19.2     0.5    14.6    39.5
Economies in transition ....   -0.6    11.4    28.1   -14.2     8.3    48.2
     Slovakia ..............     ..   -17.9    18.0      ..    -7.0    28.7
Developed market economies .   19.5    19.6    19.7     5.2    21.7    40.6
Developing countries .......   24.2    -3.9    -2.0     6.5    24.1    29.8

Hungary                       
-------
World ......................  -16.5    20.4    20.2    13.7    15.6     6.3
Economies in transition ....   -5.6     5.6    26.7    34.7    -7.5     6.5
Developed market economies .  -20.9    29.7    15.9     5.9    25.5     6.0
Developing countries .......  -11.4   -12.1    52.4    15.3    25.0     8.5

Poland
------
World ......................    7.8    21.6    32.8    16.3    15.2    34.7
Economies in transition ....   -8.9    25.6    54.4    -4.5    22.3    44.6
Developed market economies .   12.6    22.0    32.2    22.4    13.5    33.3
Developing countries .......    2.1    13.0     0.7    10.3    17.2    27.7

Romania
-------
World ......................   12.1    25.7    22.2     4.2     9.0    32.4
Economies in transition ....   -9.1    -3.5    -8.5   -13.1    15.1    27.5
Developed market economies .   28.2    44.6    30.6    18.9    15.2    29.7
Developing countries .......   10.4    18.3    26.4    -7.2   -15.8    50.6

Slovakia                      
--------
World ......................  -18.7    23.5    27.8     5.7     4.2    28.5
Economies in transition ....   25.3    14.6    39.2    -2.5     0.2    27.1
     Czech Republic ........            8.1    20.5      ..   -14.0    19.3
Developed market economies .  -17.9    50.0    33.2     0.7    25.9    33.9
Developing countries .......   -8.9    19.7     6.6    93.2    17.7    47.0

Slovenia
--------
World ......................   -0.9    11.9    21.4    17.7    11.5    29.4
Economies in transition ....   28.6     5.7    18.2     1.6    -2.6    30.0
Developed market economies .   -5.0    16.1    22.5    15.4    17.6    29.2
Developing countries .......   13.7   -15.5    21.1    96.7   -11.5    30.3

Eastern Europe, to and from:
--------------
World ......................   -0.1    16.4    24.0    10.4     9.9    29.0
Economies in transition ....   -7.3     5.2    23.7     4.0    -1.6    28.2
Developed market economies .    1.2    24.5    23.9    12.9    16.6    29.3
Developing countries .......    5.6     2.6    25.1     8.6     0.1    29.6

Baltic States, c/ to and from:
-------------
World ......................   44.3    13.2    35.2    75.0    28.1    39.0
Economies in transition ....   43.6    -1.3    18.5    73.2     1.6    18.6
Developed market economies .   39.7    47.6    59.5    76.9    75.2    63.0
Developing countries .......  114.9   -19.1    19.9    81.2     0.1   -24.0

Russian Federation, to and from:
------------------
World ......................    4.5     8.4    29.5   -27.5     5.2    17.0
Economies in transition ....  -10.6   -14.9    36.8   -32.3   -15.8    16.7
Developed market economies .    7.6    21.7    17.9   -29.6    20.2    15.8
Developing countries .......   11.2     0.4    83.2   -10.3    -4.5    25.0

Other CIS countries, to and from:
-------------------
World ......................  -14.8    15.8    40.3    25.5    30.2    24.1
------------------------------------------------------------------------------


------------------------------------------------------------------------------
                                                   Trade balances
                                      ----------------------------------------
Country and trade partner groups b/        1993       1994        1995
------------------------------------------------------------------------------
Bulgaria                      
--------
World ......................               -1.4         -          0.1
Economies in transition ....               -0.7        0.4        -0.4
Developed market economies .               -0.9       -0.1          -
Developing countries .......                0.2        0.3         0.5

Croatia                       
-------
World ......................               -0.8       -1.0        -2.9
Economies in transition ....                 -        -0.2        -0.1
Developed market economies .               -0.5       -0.8        -2.4
Developing countries .......               -0.2       -0.3        -0.4

Czech Republic                
--------------
World ......................               -0.3       -0.7        -3.8
Economies in transition ....               -0.1         -         -0.5
     Slovakia ..............                0.6        0.2          -
Developed market economies .               -0.6       -1.1        -3.3
Developing countries .......                0.5        0.2          -

Hungary                       
-------
World ......................               -3.7       -3.9        -2.6
Economies in transition ....               -1.4       -1.0        -0.6
Developed market economies .               -2.2       -2.6        -2.0
Developing countries .......                 -        -0.3        -0.1

Poland
-------
World ......................               -4.6       -4.3        -6.1
Economies in transition ....               -0.8       -0.9        -1.0
Developed market economies .               -3.6       -3.2        -4.4
Developing countries .......               -0.1       -0.2        -0.7

Romania
-------
World ......................               -1.6       -1.0        -1.9
Economies in transition ....               -0.3       -0.6        -1.2
Developed market economies .               -1.4       -0.9        -1.0
Developing countries .......                0.1        0.5         0.4

Slovakia                      
--------
World ......................               -0.8        0.1         0.1
Economies in transition ....               -0.7       -0.5        -0.5
     Czech Republic ........                 -         0.6         0.7
Developed market economies .               -0.3         -           -
Developing countries .......                0.1        0.1          -

Slovenia                      
--------
World ......................               -0.7       -0.4        -1.2
Economies in transition ....                0.3        0.4         0.4
Developed market economies .               -0.5       -0.7        -1.3
Developing countries .......               -0.2       -0.2        -0.2

Eastern Europe, to and from:
--------------
World ......................              -12.9      -11.5       -18.4
Economies in transition ....               -3.0       -1.9        -3.3
Developed market economies .              -10.2       -9.4       -14.5
Developing countries .......                0.3       -0.3        -0.6

Baltic States, c/ to and from:
-------------
World ......................               -0.3       -0.9        -1.4
Economies in transition ....                 -          -           -
Developed market economies .               -0.2       -0.8        -1.4
Developing countries .......               -0.1       -0.1          -

Russian Federation, to and from:
------------------
World ......................               17.5       20.9        30.6
Economies in transition ....                5.7        5.4         8.5
Developed market economies .               10.2       12.8        15.5
Developing countries .......                1.6        2.6         6.5

Other CIS countries, to and from:
-------------------
World ......................                2.1        1.5         3.5
------------------------------------------------------------------------------

     Source:  United Nations Economic Commission for Europe, Economic Survey
of Europe in 1995-1996 (United Nations publication, Sales No. 96.II.E.1), with
updating by the ECE secretariat.

          a/   Growth rates are calculated on values expressed in dollars. 
Values for 1994 and growth rates for 1994 and 1995 include the "new" foreign
trade (trade among successor States of the former Czechoslovakia and
Yugoslavia), but growth rates for 1993 were calculated on values excluding
this trade, usually for lack of reliable data for the base period.  Data for
the Russian Federation exclude intra-CIS trade and are not adjusted for
non-registered trade flows.

          b/   "Eastern Europe" refers to Albania, Bulgaria, Croatia,
Czechoslovakia (through 1992) or the Czech Republic and Slovakia (from 1993),
Hungary, Poland, Romania and Slovenia.  For lack of adequate data, the
trade of Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia and
the Federal Republic of Yugoslavia (Serbia and Montenegro) are not covered. 
The partner country grouping follows the practice prevalent until recently in
the national statistical sources, which differs from the breakdown usually
employed in United Nations publications.  Thus, "economies in transition",
which covers the ex-socialist trade partners, includes Cuba and former
Yugoslavia, in addition to the eastern European countries, the
former Soviet Union and the Asian centrally planned economies.  "Developed
market economies" excludes Turkey and includes Australia, New Zealand and
South Africa.

     c/   Growth rates for 1993 are distorted by valuation problems regarding
the dollar value of the Baltic States trade in 1992, a significant part of
which in the first half of the year was still conducted in rouble terms and at
prices deviating from world market levels.


                                    Table 3

       Net capital flows into eastern Europe, the Russian Federation and
               the Baltic States, by type of capital, 1990-1995

                         (Billions of dollars)

------------------------------------------------------------------------------
                                         Eastern Europe a/
                        ------------------------------------------------------
                            1990    1991    1992    1993    1994    1995
------------------------------------------------------------------------------
Capital account             -2.3     3.5     2.7    12.9    10.8    28.9
Capital account c/          -2.1     4.1     2.1    13.5    10.6    31.2
    of which:                 
Foreign direct invesment     0.4     2.3     3.1     4.5     3.2     9.1
Portfolio                    0.9     1.2     1.0     4.6     3.6     4.7
Medium-, long-term funds    -0.1    -0.8    -0.1     2.1     4.3     6.1
IMF loans                    0.4     3.7     0.7      --      --    -2.8
Short-term funds            -4.1    -2.8    -1.9     1.2     0.2     2.7
Other short-term capital d/   --      --      --      --     2.4     9.4
Errors and omissions         0.1     0.6    -0.6     0.7    -0.4     2.3
                
                                        Russian Federation
                         ----------------------------------------------------
Capital account e/           8.6     5.2     4.0     0.5    -5.9      ..
Capital account c/, e/       9.2     5.6    -1.9    -5.8    -6.1      ..
------------------------------------------------------------------------------


------------------------------------------------------------------------------
                                           Baltic States
                         ----------------------------------------------------
                                  1992       1993       1994      1995 b/
------------------------------------------------------------------------------
Capital account                    0.1        0.6        0.9       1.0
Capital account c/                 0.1        0.5        0.4        --
    of which:                 
Foreign direct invesment            ..        0.2        0.5       0.4
Portfolio                           --         --         --        --
Medium-, long-term funds            ..        0.4        0.4       0.6
IMF loans                           --         --        0.1       0.1
Short-term funds                    --         --         --       0.1
Other short-term capital d/         --         --         --        --
Errors and omissions                --       -0.2       -0.5      -1.0
                              
Capital account e/                  ..         ..         ..        ..
Capital account c/, e/              ..         ..         ..        ..
------------------------------------------------------------------------------

          Source:  United Nations Economic Commission for Europe, Economic
Survey of Europe in 1995-1996 (United Nations publication, Sales No.
96.II.E.1), with updating by the ECE secretariat.

          a/       Albania, Bulgaria, Croatia, Czech Republic, Hungary,
Poland, Romania, Slovakia and Slovenia.

          b/       January-September.

          c/       Including errors and omissions.

          d/       As reported in Poland's balance of payments, comprising
chiefly net receipts from cross-border trade.

          e/       Excluding transactions with CIS.


                                     Table 4

          Lending to borrowers in Europe/Central Asian region by sector

                       (Millions of United States dollars)

------------------------------------------------------------------------------
                                            Fiscal year
                          ---------------------------------------------------
Sector                     1987-1991    1992    1993    1994    1995   1996
------------------------------------------------------------------------------
Agriculture                    210.6    155.0   525.4   582.9   202.0  185.8
Education                       89.3                     59.6    40.0    5.0
Electrical power and other
  energy                       285.4    516.0    93.0   164.8   191.7  325.4
Environment                      3.6                            123.0   30.1
Finance                        351.7             55.0   280.0   232.0  638.9
Industry                       214.9                    375.0
Mining and other extractive                                            540.8
Multisector                    323.4    691.1 1 245.0   566.3 2 000.0  489.0
Oil and gas                    108.0            610.0   691.3   226.3   10.0
Population, health and
  nutrition                     15.0    280.0    91.0           220.4  350.4
Public sector management        20.0    269.2   335.0   210.0    70.9  505.6
Social sector                   20.0             67.0    10.9   127.5   12.0
Telecommunications/informatics  68.0             30.0   153.0
Transport                      265.6            378.0   352.0   486.0  868.0
Urban development               24.0    200.0   285.0   171.0   418.0   44.3
Water supply and sanitation    123.0     32.0   129.5   109.6   161.0  221.5
                             -------  ------- ------- ------- --------------
      Total                  2 131.6  2 143.3 3 843.9 3 726.4 4 498.8 4 226.8

     of which: World Bank    2 131.6  2 102.2 3 739.5 3 533.3 3 953.8 3 750.4

            International
              Development
              Association               41.1    104.4   193.1   545.0  476.4
------------------------------------------------------------------------------
 

                                    ----- 

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Date last posted: 28 December 1999 17:35:10
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