Textiles and Clothing in Eastern Europe: Market at a Crossroads
A Textiles Intelligence research report on the Eastern European textile and clothing industries at the turn from a command economy to a market economy
The speed of change sweeping through Eastern Europe in the late 1980s and early 1990s took the world by surprise. After decades of looking inwards, markets started to open up in East European countries, and the region began to welcome foreign investment. This Textiles Intelligence report — its subtitle, Market at a Crossroads, captures the moment — looks at the textile and clothing industries in the region as a whole and in seven individual countries: Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania and the Soviet Union. It gives a brief overview of each country's political and economic features and provides analyses of the textile and clothing industries in terms of history, location and size; production trends; material supply, technology and manpower; foreign trade; joint ventures; and future prospects.
Part 1: Understanding the System Being Left Behind
The report begins with the region itself: the seven countries, the Soviet-type economic system — its main features, its consequences, how industry operated under it and its foreign economic relations — and economic development, covering production, efficiency, foreign trade, inflation and exchange rates. An overview chapter then profiles textiles and clothing in Eastern Europe: industry development, the sector's position in the economy, growth, raw materials, fibre consumption and participation in textile trade. For a Western reader of the time, this groundwork was the point: the industries could not be assessed as ordinary market industries until the system that had organised them was understood.
Part 2: Seven Country Profiles
Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania and the Soviet Union each receive a full profile built on the same template: summary and country background; development and structure of the textile and clothing companies; leading companies; production trends; material supply; investment, productivity and employment; production costs or materials consumption; the domestic market; foreign trade; joint ventures; and future prospects. Czechoslovakia's chapter separates the Slovakian textile and clothing industries; the Soviet Union's chapter adds steps towards reform, the EC quota agreement, and market and investment opportunities for foreign firms.
Part 3: Competitiveness, the Marketplace and Foreign Capital
The final part steps back from the country detail. International competitiveness is assessed through the region's position in world textile trade, prices, cost and competitiveness, customs barriers and quotas, and participation in international organisations. The East European marketplace chapter covers consumption patterns, liberalisation of imports, currency convertibility, the future of CMEA trade relations and consumption trends. A chapter on opportunities for foreign capital works through future courses of action, privatisation, changing conditions for foreign capital, creditworthiness, profitability and tax allowances, legal procedures, infrastructure and joint ventures.
The report closes by assessing the future through four alternative scenarios and a choice between the alternatives — an honest structure for a market genuinely at a crossroads, where the speed and direction of reform were still open questions. An appendix sets out the quotas restricting East European textile and clothing exports to the EC and US markets, including EC outward processing quotas for Eastern Europe, the arrangement under which much Western European clothing production was already being sewn in the region.
Common Questions
Why is the report subtitled Market at a Crossroads?
It covers the Eastern European industries at the turn of the late 1980s and early 1990s, as markets opened after decades of looking inwards: its final chapter assesses the future through four alternative scenarios rather than a single forecast.
Which seven countries are profiled in depth?
Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Romania and the Soviet Union, each analysed for company structure, leading companies, production, materials, investment, employment, domestic market, foreign trade, joint ventures and prospects.
What does the report say to foreign investors?
A dedicated chapter covers privatisation, changing conditions for foreign capital, creditworthiness, profitability and tax allowances, legal procedures, infrastructure and joint ventures, and the appendix details EC and US quota arrangements including outward processing quotas.