Export Performance in Transition Economies

Trade performance Export reorientation in the transition We examine export performance in the transition economies of Europe and central Asia. We conclude that early success in exporting required the simultaneous pursuit of stabilization and liberalization. Neither liberalizing the foreign trade regime alone nor drastic devaluations of domestic currencies will improve trade performance unless domestic prices are decontrolled, inflationary expectations lowered, and administrative controls over the economy relaxed. Within the foreign trade regime, removing export controls appears a more immediate priority than relaxing import controls: export controls induce undervaluation and high levels of protection that insulate domestic producers and consumers from international markets. —Bartlomiej Kaminski, Zhen Kun Wang and L.