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The Sixth St Petersburg Economic Forum has been held to tackle CIS states' urgent development problems. Ukraine's plan to privatise five major energy companies is expected to be the big topic. Russian investors could turn their attention to energy companies in other CIS countries, such as Kazakhstan and Belarus.

Eastern European economies are seeking to tackle the problem of money laundering following domestic financial crisis and in order to join the European Union. The Czech finance ministry is examining cases of suspected money laundering. Estonia also plans legislation against money laundering, and the other Baltic states and Romania are taking action. Western regulators have provided advice on designing laws to combat this problem in eastern Europe.

Critics argue that western policies toward nuclear reactors in eastern Europe have been flawed. A report which the European Bank for reconstruction and Development has commissioned argues that funding for Ukrainian nuclear reactors in exchange for the closure of Chernobyl is not economic. Siemens is one company working on nuclear reactors in the region, and the company argues that it would be better to make reactors safer than to shut them down.

There is plenty of work available for management consultants in Central and Eastern Europe. Companies are being restructured, with many being privatised, so management consultants can help to find buyers for the shares. Consultants are more keen to take on work which has development bank funding, which ensures hard currency payment. There is still some concern that the countries of Eastern Europe and politically and economically instable, but the introduction of Western-style accounting should be tackled with caution.

Privatisation of state-owned industry is proving to be an extremely troublesome political problem for eastern Europe's post-Communist governments, with accusations of economic mismanagement even threatening to bring down the Bulgarian government. Privatisation offers opportunities for enrichment and Hungarian economist Janos Gacs says that corruption is endemic to the process, although difficult to prove. A finance minister in Albania and a former prime minister in Romania have both been accused of corruption, but such allegations also form part of a battle for political power.

The sudden introduction of free-market economics in Poland and Czechoslovakia has resulted in falling output, rising unemployment and high inflation. Hungary's cautious transition should be Russia's model. Privatisation began in 1982 followed by banking reorganisation between 1985 and 1988. Hungary has also reduced spending and gradually removed subsidies. Russia is reforming the tax system but otherwise is following the 'big bang' example of Poland and Czechoslovakia.

Poland, Hungary and Czechoslovakia are the three fastest reforming countries in eastern Europe and they will have high hopes and expectations for 1992. December 1991 saw the signing of asociation agreements between the European Community (EC) and all three of these countries and, although a far cry from full EC membership, this facilitates the import of agricultural products, textiles, steel and chemicals. Their internal markets will be limited to keep control of their inflation and budgets. Czechoslovakia seems the best placed at present. Hungary's inflation is running at around 40% and needs new tough policies and the Polish budget is unpredictable.

East Europe Investment Appeal Outpaces Soviets' WASHINGTON--While the Soviet Union's oil and gas potential is significantly greater, Eastern Europe, particularly Hungary, Poland and Czechoslovakia, represents the region's more sensible investment. [...]

EASTERN EUROPE SEES THIRD WORLD AS MARKET FOR ARMS--CIA Despite a general reduction in military production, the non-Soviet Warsaw Pact countries will continue to look to the Third World as […]