Privatization and foreign capital flows in transition economies

Central Eastern European Countries and Soviet Republics which havecalled transitional economies, need to integrate with the global economy. Inthis respect, it can be seen that these countries have achieved greatimprovement in the fields of politics and economics. In order to achieve thenational development, these countries should commit to continue the reformsmade in the fields of foreign capital and privatization.As a result of the failure of centrally planned economies, transitionaleconomies started their transition period to liberalise their economies. Duringthis period, these economies intended to reduce the governmentinvolvement. Due to the economic performances, Central and EasternEuropean countries were succeeded to become a member of EuropeanUnion. However, with the application of rapid transitional programmes, theintended success has not been achieved by Turk Republices. This study hasbeen included in privatization and foreign capital flows in transitionaleconomies and examples Poland and Hungary, besides Turkey.The basis of Polish and Hungarian privatization processes werestarted in 1990. During 14 years of the sweeping process of ownershiptransformation Poland and Hungary have utilised several methodsprivatization. Polish and Hungarian privatization revenues were generated byforeign investors. As a result of transformation process in the Polish andHungarian economies are expected to be completed by 2006 similar toEuropean Union member states. On the other hand, Turkey privatizationprocesses was started in 1980. The reforms made in the fields of foreigncapital and privatization in our country. However, these reforms is notenough. Turkey should reevaluate the policy of the foreign investment andprivatization and make the necessary amendments. If Turkey has an efficenteconomy, it must first create an investment climate and privatizationstrategies.