The end of the cold war and liberalisation of East and Central Europe are perhaps the most dynamic and exciting events of recent years. The introduction of perestroika in 1985 and the fall of the Berlin Wall in 1989 have created enormous opportunities for the world economy and for western firms. The importance of East and Central Europe, with a population of 429 million people, cannot be questioned. Its population is 30 per cent more than the European Community (EC) and almost double that of the United States. The new situation has enhanced the importance of Europe as a whole with a population of 720 million people. Moreover, Eastern and Western Europe have complementary resources. Eastern Europe has huge raw material production and reserves including metal ores, coal, oil, gas and agricultural products, while Western Europe has the technology (Buckley and Ghauri, 1994).The countries that are referred to as Eastern Europe are listed in Table 20.1.
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