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EBRD Urges Management Quality
The European Bank for Reconstruction and Development issued its “Transition Report 2007” yesterday on the countries with transitional economies. The report found “very limited progress” in reforms in Russia for the year and increase state intervention in the economy. It recommends infrastructural reforms and reforms in corporate management. Like the World Bank, the EBRD sees the quality of corporate management as a key factor in Russia's economic development.
The EBRD issues its report on the 29 countries where it is active (the Baltic countries, Eastern Europe, the CIS and Mongolia) annually. It noted that proximity to European markets spurred reform in Southeastern Europe last year and in the beginning of this year, but that reform is now losing momentum. The report notes that the third phase of reform, the reform of corporate management, is not proceeding as successfully as the first two phases (formation of a market and privatization of large enterprises and reform of the financial sector).
The report praised only reforms in the Russian railways that increased competition in shipping. It also approve the growth of consumer crediting in the country, while criticizing the dominance of two state banks and slow consolidation of state banks.
The EBRD assesses the economic outlook of the countries with transitional economies as positive on the whole, although it foresees complications for them stemming from the mortgage crisis in the United States. The authors of the report urged Russian authorities to refrain from price controls, which could cause price disproportions and negatively effect small banks. They also repeated their calls for strengthening of the banking system and encouragement of enterprise.
www.kommersant.com
All the Article in Russian as of Nov. 09, 2007
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