Thomas:
Interesting article - thanks for re-posting. It is amazing to me, how the
powers that be cannot see the results of their actions more clearly and
openly acknowledge their mistakes. It is sort of - leadership denial, that
if it was analyzed would be considered pathological - and maybe it is.
Could it be that we are led by idiots and madmen in armoured limosines?
Respectfully,
Thomas Lunde
--
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>From: [EMAIL PROTECTED] (M.Blackmore)
>To: [EMAIL PROTECTED]
>Subject: Times article on Russia: Maimed by embracing the market
>Date: Wed, Aug 25, 1999, 12:00 AM
>
> Forwarded:
>
> Don't know if anyone's interested but yesterday's Times contained
> this rather negative and depressing report on the situation in Russia
> and elsewhere.
>
> -- jP --
>
>
> My comment: hey, big surprise, what?
>
> =================================================================
> Michael Binyon examines a devastating UN indictment of how, in the
> Nineties, privatisation in east Europe's former communist states has led
> only to human misery
>
> Maimed by embracing the market
>
> Attempts to transform the state economies of Eastern Europe and the former
> Soviet Union into a market system may prove to be the biggest departing
> mistake of this millennium, a United Nations report asserts. The
> transition of these countries has, in reality, been a Great Depression,
> plunging more than 100 million people into poverty, with many millions
> more hovering precariously above subsistence.
>
> This indictment of the way former communist economies have been privatised
> is made in the latest report on the region by the UN Development
> Programme, and is sure to provoke huge controversy. It claims that the
> social and economic upheavals of the 1990s have been calamitous for a vast
> swath of eastern Europe and Central Asia, leading to widespread poverty,
> alarming falls in life expectancy, widening inequalities between the
> sexes, falling investment in education, the collapse of public health and
> the spread of disease, crime, nationalist violence and suicide.
>
> The report, one of the most negative assessments of the change from
> communism to capitalism ever issued by a world organisation, paints a
> picture of human misery stretching from Hungary to Kyrgyzstan, from the
> Black Sea to the Arctic Circle. Basic security, freedom from hunger,
> economic and social rights, proper housing and decent pensions have all
> been swept away by the ferocious sacrifice of everything to the market,
> the report says.
>
> Centrally planned economies that overlooked political choice and
> individual rights have been replaced by policies under which individual
> responsibilty took centre stage without much consideration for those left
> behind, says Anton Kruiderink, the UNDP regional director for Europe and
> the former Soviet Union and author of the report. Neither blind trust in
> centralised authority nor in the market have proved capable of producing
> the democratic instruments needed to correct the distortions that both
> ideologies produced.
>
> In a foreword to this bleak document that could almost have been written
> by a diehard defendant of the old communist system, he cites World Bank
> figures showing that in 1989 about 14 million people in the former
> communist bloc lived on less than $4 a day. By the mid-1990s that number
> had risen to about 147 million.
>
> The main criticism of the report is that across Eastern Europe and Russia,
> the state has become too weak and institutional reform has been neglected.
> Society's values have been turned upside down, dissolving the glue that
> held them together. The new nations enjoy neither proper democracy nor
> proper regulatory instruments to make a market economy reasonable and
> equitable.
>
> "When transition becomes only a partial process, benefitting primarily the
> young, the dynamic, the mobile, the connected, and leaving behind the
> vulnerable, then the surge in poverty, already so visible, will
> destabilise societies and reverse whatever this new economic growth is
> capable of," Mr Kruiderink says.
>
> He adds: "Growing human insecurity is at the source of human violence, and
> when democracy gets equated with misery, its hope will turn into
> disillusionment, with many more volatile societies coming our way."
>
> There are, the report concedes, some bright spots. Slovenia and Poland
> have recouped their lost output and appear to have laid the foundations
> for a prosperous future. Similarly, although the Czech Republic, Hungary
> and the Baltic states face numerous difficulties such as falling birth
> rates, high suicide rates, growing unemployment and widening income gaps,
> they have made "noticeable progress" towards creating dynamic and
> efficient economies. However, the gains of a few countries are "all the
> more poignant" in view of the suffering of others.
>
> The report's harshest condemnation is reserved for the former Soviet
> Union, where almost nothing seems to have gone right. "These societies
> have unravelled in a traumatic manner," it says. "The largest of these
> imploding societies is Russia, which continues to stutter from one crisis
> to the next."
>
> Such sweeping judgments are bound to draw sharp criticism from the
> governments of the 27 countries surveyed in this report, and will be
> refuted by Western politicians who have long argued that only the private
> market can deliver human rights, wealth and economic growth. But the UN
> has assembled an impressive array of statistics, many drawn from the
> countries surveyed, to back its harsh judgments.
>
> The most devastating is the cost in human lives. During the ten-year
> transition since the fall of the Berlin Wall, there has been a decline in
> life expectancy almost across the region, with falls of at least four
> years in countries such as Russia, where the latest figures show that men
> are living only until the age of 58 on average. Several million people
> have not survived the 1990s who would have done so if the life expectancy
> levels achieved by the start of the decade had been maintained.
>
> Accompanying this sad trend is a grim rise in suicide and disease.
> Tuberculosis and other diseases once all but vanquished are returning as
> big killers, especially in the former Soviet Union. Aids and sexually
> transmitted diseases are also spreading rapidly, coinciding with a huge
> rise in prostitution among impoverished women, drug abuse and the
> breakdown of societal values.
>
> A third cost of transition identified by the report is an extraordinary
> rise in poverty. In Armenia, according to a household survey conducted by
> the Ministry of Statistics in 1996, about 55 per cent of households were
> poor, judged by a modest official poverty line based on a minimum
> consumption basket. Of these, half were "very poor". In Kyrgyzstan,
> according to the National Statistics Committee, 71 per cent of the
> population had an income below the poverty line - which was based on the
> assumption that 60 per cent of total income was spent on the food needed
> for survival.
>
> Human poverty, defined as a lack of basic human capabilities, has also
> risen. Malnutrition affects millions. The number of pregnant Russian women
> suffering anaemia trebled between 1989 and 1994. In Moldova, a survey
> showed that between 20 and 50 per cent of children had rickets from a lack
> of Vitamin A.
>
> Throughout the former communist world, pensioners have been especially
> hard hit by the new market economies. The disabled have lost access to
> benefits. Migrants and refugees have been exposed to acute financial
> difficulties. And single families are particularly vulnerable.
>
> Poverty has often been caused by the state's inability to pay wages. In
> Ukraine and Russia these arrears amount to about 4 per cent of GDP; in
> Kazakhstan they are estimated to amount to some 40 per cent of GDP.
>
> The fourth cost of transition is the widening inequality in wealth and
> incomes. This is exacerbated by inflation, which tends especially to
> affect the price of food, a large item in the budgets of the poor. Between
> 1991 and 1996, food prices in Armenia rose by 24,000 per cent, whereas the
> prices of non-food items rose by 7,800 per cent.
>
> A fifth drawback identified by the report is the growing inequality
> between the sexes. The advent of more democratic regimes has led,
> paradoxically, to lower percentages of women in decision-making positions.
> Women have been pushed out of public life, while the cuts in social
> services have affected them more. Violence against women has also risen,
> with physical abuse from spouses becoming more noticeable and more women
> falling victims to crime. Women desperate to find employment have found
> themselves forced into prostitution within the region and in Western
> Europe by organised crime networks.
>
> A sixth cost has been the deterioration of education. The sharpest falls
> in spending on schools and universities have been in Azerbaijan, Bulgaria
> and Georgia, but almost everywhere enrolment and attendance rates,
> especially at pre-primary schools, have fallen. In the former Soviet
> Union, more than 30,000 pre-school facilities were closed betweed 1991 and
> 1995. Overcrowding, dilapidation, lack of heating, underpaid teachers and
> a lack of health checks have also taken their toll.
>
> The final price paid, says the report, is higher unemployment and
> underemployment. This has been a main source of social hardship in the
> 1990s, as much in the richer east European countries as in the poorer
> states in the south and east of the former Soviet Union.
>
> Related to this is the rise in "black" economies, which, in countries such
> as Hungary, account for 30 per cent of total national income. The result
> is that large parts of these new market economies are by-passing taxation.
> Taken together, the UNDP says, these seven costs underline a "dramatic
> deterioration" in human security for the former communist states.
> Privatisation, which occurred in fits and starts, was never uniform. The
> "big bang" theory was "seriously flawed".
>
> Alternative strategies to economic and social reform must be fair and
> uniform, the UNDP insists, and benefit not just the few but the mass of
> the population. There must be a shift from private consumption to
> investment and human capital formation. Otherwise, it predicts, the
> outlook is grim for all those who looked at sunny horizons as communism
> fell. Mr Kruiderink speaks of a "meltdown of expectation". Rarely has an
> economic report been as bleak.
>
