This article is written at my own risk. My business friends always say: “Ed, we value your public-policy insights, but don’t tell us where to invest or how to make money. That’s our business, and we’re pretty good at it.”
That may be so, but nevertheless, I want to remind the business world of an investment opportunity that’s been discussed a lot without prompting much activity.
I’m talking about
While things there are still tough-and may get even tougher-my travels in Central and Eastern Europe during the past several years have convinced me that the combination of institutional reforms, popular support for real democratic government, and the number of skilled and highly educated people in these countries eventually can bear tremendous fruit. However, one critical element needed to bolster the whole new nations rising from the rubble of communism is lacking: a pioneering spirit on the part of foreign investors. Especially American investors.
Perhaps this overcaution results from
According to recent public opinion surveys, most people say
The task now, Berisha says, is to attract investment. Prospective investors commonly balk at problems such as
Some corporations are getting the right idea. A Coca-Cola bottling plant, which will serve the entire Balkan area, was just about to be opened when I was there recently. A new international hotel is under construction in downtown
These companies, at least, will be in the right place at the right time when
Other opportunities abound.
And the country’s scenic mountain terrain and 217 miles of pristine coastline could transform
In short, tiny
General Electric, for example, was a pioneer in the uncharted waters of
Why the move? To improve GE’s competitiveness against European lighting giants Osram and Philips. A key factor: Wage costs in
Of course, it hasn’t been easy for GE in
The Polish debt-restructuring deal will make the leader of the velvet revolution, once again, “a respectable candidate for new money,” The Economist says. That money will pour into a dynamic market: In 1993,
Indeed, The Economist believes the
In fact, several Eastern European economies are showing signs of having weathered the depressions triggered by the communist collapse and the shift to free markets.
One emerging success story in the
Ditto one of Skoda’s suppliers, just 80 kilometers to the northeast in
Of course, the situation is much grimmer in the Commonwealth of Independent States. Here, everything was negative in 1993, with real GDP growth down in several countries:
Nevertheless, executives must not ignore the investment potential of these countries. The long-term advantages may well make a “wait-and-see” attitude seem overly cautious a few years down the road.
Healthy Eastern European economies would prevent the area’s descent into Yugoslavia-style chaos and, by their proximity, would provide an economic boon to
Indeed, the world is turned upsidedown. It is now the very capitalists-much maligned in the Cold War literature of the countries in question-that have become the key to economic and political success for the former communist nations.
Edwin J. Feulner, Ph.D., is president of The Heritage Foundation, a Washington, DC-based public policy research institution. He also serves on the boards of several other foundations and research institutes. Dr. Feulner is the author of “Conservatives Stalk the House.”