Transport and Telecommunications Infrastructure in Transition

Poor infrastructure is one of the major obstacles to economic modernisation, to the functioning of a market economy, to increasing international trade flows and to foreign investment in East-Central Europe. Six out of ten surveys of foreign investors named weak infrastructures among the major obstacles they faced in Eastern countries. Backwardness, however, means also that potential investors in transport and telecommunications can reckon with increasing demand and safe returns. Both activities are among the most promising targets of investment for governments, domestic and foreign firms and international financial institutions alike. This article outlines problems related to infrastructure encountered by Central and East European (CEE) countries, namely the Czech Republic, Hungary, Poland, Slovakia and Slovenia. The term infrastructure is used in a limited sense referring to transport (mainly road and rail) and telecommunications. The article first evaluates the pre-transformation development level of infrastructures, then the impact of transformation to a market economy on the demand and supply of infrastructure services. This is followed by some thoughts regarding the development of international networks and the financing of infrastructure development projects. In the final section the options for national transport and telecom policies are described and compared.