Debate - Leonid Sintserov

Globalization and the Post-Communist Countries

Radical changes in the former socialist countries have made a considerable contribution to the present increase in the internationalization of the world economy and automobile industry in particular. The world economy has become much more homogeneous from the institutional point of view, now it is entirely market economy. Nowadays one can sell cars or invest into their production on vast stretches of Eurasia - from Prague to Tashkent and Saigon. The number of new manufacturing or buying countries has increased. And this tendency is on the rise.

There are two major trajectories of internationalization of the Post-Soviet motor vehicle industry. With the dissolution of the USSR seven independent industries closely tied by co-operation substituted for the single motor-car industry. Mutual shipments of vehicles and components have become international trade. This is in fact regional globalization taking source in the past. Another trajectory is launched by liberal economic reforms and leads to the future. Transition to the market economy has opened up Russia for foreign cars and foreign capital investments. Current restructuring of the Russian motor vehicle industry is in fact its transition to the international standards and proportions, to the norms accepted throughout the world.

Boom in motorization in the contemporary Russia is facilitated by internationalization in some form or another. Two new sources of supply of passenger cars have emerged in Russia in the nineties. The first one, as said above, is auto imports. Russia has also withdrawn from traditional foreign markets - the former satellite European countries and the former Soviet republics. The "surplus" of cars is now sold on the domestic market.

Transition to the market economy in the post-communist states is going on in an advantageous situation - in the context of globalization. Owing to the overseas expansion of Japanese and South Korean auto companies and increasing German investments abroad the situation in the automobile industry is particularly favourable. In the 90s the automobile industry has been created in Hungary, in Uzbekistan. In Poland, Czechia, Romania and Slovakia all the car manufacturers have already received foreign investments and have joined the international production complexes. The same future is in store for the Post-Soviet producers. Russia is a special case. On the one hand Russian companies look for strategic investors in the West. On the other hand they invest themselves in the motor vehicle production in the neighbouring countries - In Finland, in the Ukraine, in Kazakhstan.

It is evident that internationalization will play much more important role in the transitional economies in the near future, when the crisis is overcome, foreign trade liberalized and business infrastructure is improved. Many possible paths for the internationalization of the automobile industry lead to the Post-Soviet countries.

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