Advertisement

Old East Bloc Must Act to Lure Investment, West Says

TIMES STAFF WRITER

Representatives from the Group of Seven leading industrial nations, meeting together with Western businessmen and government ministers from the former Soviet empire, urged the new democracies of Eastern and Central Europe on Friday to immediately implement new measures to lure private-sector investment from the West.

“Without the massive participation of Western economies, without the transfer of know-how and capital through private investors, a revival of Eastern Europe is not possible,” German Economics Minister Juergen Moellemann told delegates attending the opening session of the two-day conference.

Moellemann’s initiative to host the conference in this affluent, historic city on the north German plains reflects in part Germany’s growing concern about the dearth of financial support from the West to rebuild the shattered, chaotic economies of the former Soviet Union and its onetime satellite states in Eastern Europe.

Hard-pressed by the costs of rebuilding eastern Germany, Chancellor Helmut Kohl has told his Western allies that Bonn has reached its financial limits in contributing to the far larger task of rebuilding the rest of Eastern Europe and the successor states of the Soviet Union.

Advertisement

Germany claims to have provided $45 billion, or about 60% of all Western aid to the former Soviet republics.

The Muenster conference, grandly named the “West-East Economic Summit,” is seen as an attempt to promote private-sector investment for the East from the United States and other Western countries.

Representatives from all members of the Group of Seven nations were present, as were ministers from the five largest Soviet successor states and from Hungary, Poland and Czechoslovakia.

A draft of a “chairman’s summary” that will serve as a final communique called on policy-makers in the former Soviet Bloc nations to break up massive Communist-era monopoly enterprises, even if they had to remain temporarily in public hands.

Advertisement

The document also called for a series of measures aimed at fostering small and medium-sized businesses in the East and for the swift creation of commercial banking and legal systems.

At the initiative of U.S. Secretary of Commerce Barbara Hackman Franklin, a set of additional measures aimed at improving this investment climate were inserted into the draft, including the need for fair and equal treatment of international investors, unfettered transfers that are linked to investments and the protection of intellectual property rights.


Advertisement