to decline to single-digit levels.
A hard-currency regime and supporting monetary policy adopted in Estonia·made possible by a sizable stabilization fund of foreign currency and gold reserves·brought inflation down to a rate of about 30 per cent (Developments, 1994, p. 120). Economic problems present in contemporary Estonia include the dominance of a rather primitive market system on the one hand and a lack of market infrastructure on the other hand (Drechsler, 1995, p. 113). Low taxes and individualism do not make a market economy. Social stability, a savings banks system, contract culture, and so forth are the key elements of a free market culture, and they are lacking in Estonia. The World Bank and the International Monetary Fund, however, appear to be satisfied with the Estonian performance.
Domestic textile manufacturing continues to languish in Europe (European, 1994, p. 15). Retailers have accelerated use of private labels and direct imports, and direct outsourcing continues to gain favor by apparel buyers. Eastern Europe continues to gain strength as a low-cost manufacturing and assembly source. The region's potential as a market also continues to grow. Turkey remains a giant, offering fibers, fabrics, and assembly resources.
India signed bilateral agreements with the United States and European Union opening its closed market to textile imports (India, 1995, p. 3). Textile items allowed to be imported include polyester staple yarn, industrial fabrics, cotton, woolen yarn and fabric, and apparel. In these agreements, the government agreed to gradually reduce customs duty over a 10-year period. This market opening does not extend to the Eastern European countries.
In the early-1990s, competition from producers in the developing countries is more intense than it was two decades ago (Islam, 1994, pp. 48, 50). The American textiles industry, without significant success, has sought legislative relief beyond ...