Twenty-five years after the fall of the Berlin Wall, the biggest surprise is how badly most of the post-communist nations have done since. There was a general expectation back then that most of these countries would step out from tyranny and rejoin the European club of prosperous nations. Most of us did not appreciate the corrosive power of distrust, and how long it would take to heal the mental scars caused by it. Branko Milanovic, an economist at the City University of New York, measured the wreckage in a recent essay on his blog, Global Inequality. He looked at the growth rates of post-communist countries and broke them down into four groups. In the bottom group are basket-case nations that haven’t even recovered the level of real income they had in 1990, as measured by real G.D.P. per capita. These failures include Ukraine, Georgia, Bosnia, Serbia and others — about 20 percent of the post-communist world. “Basically,” Milanovic writes, these “are countries with at least three to four wasted generations. At current rates of growth, it might take them some 50 or 60 years — longer than they were under communism! — to go back to the income levels they had at the fall of communism.” [...] There are only five countries that have emerged as successful capitalist economies: Albania, Poland, Belarus, Armenia and Estonia. To put it another way, only 10 percent of the people living in post-communist nations are living in a place that successfully made the transition to capitalism. Ninety percent are living under failed transitions of one sort or another. This fact is already yielding screwed up politics in places like Hungary and Russia and will shape the 21st century.
Posted on: Thu, 13 Nov 2014 11:48:02 +0000
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