The annual assemblies of the World Bank and the IMF provide a good opportunity both to take stock of the transition process over recent years and to identify areas where further progress is necessary if the transition to a market economy is to be successful. Expectations about the speed of transition to a prosperous market economy were clearly exaggerated in 1989. However, few would have believed that in 1997 refocusing of the state's role would be at the centre of interest of not only Central and Eastern Europe, but the entire world. The role of a state and its public institutions is not only important for increasing competition and efficiency in the national economy, but also for social development.
Unemployment remains a problem in virtually all transition economies.
Labour market policies, for example, must be aimed at helping the shift of labour from declining sectors towards an expanding, dynamic private sector, capable of competing on domestic and international markets. The rapidly expanding share of the private sector and the veritable explosion of small and medium-sized enterprises could prove essential features of the transition process in the future. Such a private sector can only exist if a state is capable of reinvigorating public institutions by designing effective rules, monitoring state actions and fighting against corruption. Privatisation must be supported by transparent mechanisms in order to improve corporate governance, make credit allocation more efficient, to diversify firms' financial sources, develop labour market and social policies and enforce de-monopolisation and more open market access. These will be critical areas of enterprise and state restructuring in the next century.