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Emerging Markets And Regions Term Paper

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European Union's Former Eastern Block: A New Emerging Market and Region This paper will focus on the European Union or "EU" former eastern block countries of Czech Republic, Slovakia, Hungary and Poland. This region of the EU was selected as a recent emerging market and economic community to study because of its recent introduction into the global marketplace. The EU carries a lot of clout in the world of politics. In recent years, the Czech Republic, Slovakia, Hungary and Poland have made concessions needed to become a part of the European Community. The countries were former eastern block countries, controlled by Soviet powers and up until the late 1980's and were closed to the rest of the world but they have been successful in their transition to a market oriented economy. Specifically the country of Hungary has been ranked one of the world's top tourist destinations for the last four years and its exports for 1999 "totaled $25 billion, nearly half of the GDP with 85% supplied to EU customers (Country Profile, 2000)" and the Czech Republic is not far behind in popularity. Hungary has also "attracted an aggregate $20 billion in foreign direct investment (Country Profile, 2000)" trailing only Poland. This paper will explore this region's emergence and discuss issues of integration, economic development and the major drivers of globalization for these countries. What are the ramifications of compliance not just monetarily but also for the people of these countries and their cultural identities? How will integration into another economic environment influence success?

Background on the Region

Politically the countries are harmonious and borders are open. Hungary has played an important positive role in Central European socio-political growth and issue resolution. It has become the peacekeeper and in order to end the arguments among its neighbors Slovakia and Romania, Hungary "decided to modify the law on status of Hungarian expatriates (Deloy, 2003)." This law grants social services and other rights to minorities living in bordering countries within the...

These social services include health care, free university education and the right to work in Hungary legally for three months. This law was amended for many reasons. First this lifts the burden of taking care of this population off of the neighboring countries while they stay in those countries. The countries populations remain stable during the final steps of integration into the market. Still the changes to this law have come under much criticism from Slovakia and Romania. These minorities make up a good chunk of these countries lower working class. By taking care of them, Hungarian social reform is put in a good light to the market but this does not change the fact, these people are not living in Hungary and should be bettering their adopted country. All of the major political movements are in favor of becoming a part of the market. The Hungarian government created a media blitz to get the word of the EU membership out there to the people. They have done this by circulating millions of letter flyers and creating an Internet web site (www.euint.hu/cgi-bin/ikk.cgi). Advertisements were broadcast on television promoting the 200 debates organized to inform the public. In the end, only the Right-wing movements in Slovakia protested the EU membership with a vote "no" campaign.
Regional Economic Status

All countries on this block are doing well economically since the introduction of a free market and trade with the outside world increased. However, "Hungary has one of the most open economies in Central Europe (Deloy, 2003)" with the other countries not far behind. One side effect of integrating into the EU market is the practice of cutting interest rates. This devalues their currencies but also keeps inflation at a minimum as they integrate to the Euro. Profits stay up for investors in bonds. Also devaluing currency seeks to protect the region's export driven economy even after the membership becomes a reality.

Economic Development and Possible Negatives

Whoever coined the phrase "Change is good" was not prepared to deal…

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References

Country Profile: Hungary. Retrieved December 8, 2004 from the World Wide Web: http://www.hungary.org/hungary

Deloy, C. (2003). Referendum of the European Union in Hungary. The World Bank

Publications. Retrieved December 8, 2004 from the World Wide Web: http://www.world bank.org/html/

Hungary Hopes to Join European Union. Columbia News Video Forum. Retrieved December 8, 2004 from the World Wide Web: http://www.columbia.edu/videoforum.html
Kaminski, B. (1999). Hungary's Integration into European Union Markets: Production and Trade Restructuring. The World Bank Publications. Retrieved December 8, 2004 from the World Wide Web: http://www.worldbank.org/html/
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