This Country Economic Memorandumsubscribes to the overall direction of the reform programmapped out by this body of work and it goes deeper in threeimportant areas: (1) public sector management, (2) labormarkets and education and (3) science and technology policy.Chapters 2-4 of this report, each one largelyself-contained, cover these topics in order. First, however,Chapter 1 gives the context for the transition now underwaywith an overview of past and present development focusing onthe transformation of the economy from factor-intensive toskill- and knowledge-intensive development. Then aforward-looking section offers a medium-term forecast forthe economy's emergence from the recent slowdown anddiscusses prospects for longer-term (potential) growth.