News Analysis - The ruin of Eastern Europe
WORKERS, SEPT 2006 ISSUE
Why are workers from Eastern Europe choosing to leave home and travel to Britain to find work, where they know little of the language? A recent World Bank report, "Enhancing Job Opportunities in Eastern Europe and the Former Soviet Union", shows that unemployment there is high and rising. It was 9.4% in 1995, 9.4% in 2004 and 9.7% in 2005 – leading to a huge exodus of their young people.
After the counter-revolutions in Eastern Europe and the former Soviet Union, it was claimed that the resulting high unemployment would be temporary and would decline once the new private sector created jobs. But reliance on 'neo-liberal' strategies based on privatisation gave extra leverage to the corrupt and criminal groups who had got rich by looting the economies' public assets. These "newly independent" countries are simply protectorates, recolonised by the EU and the USA.
Kosovo
Since mid-1999 and the end of NATO's attack on Yugoslavia, Kosovo has been under UN administrative rule. The report says, "progress has been made in implementing liberal market policies. Kosovo is one of the most liberal trading regimes in the world with no or low tariff rate and no quantitative barriers. Use of foreign exchange has been legalised for all domestic transactions, establishing the euro as the de facto local currency."
And the results of this beneficent regime? 37% of the population live in poverty (below $1.75 per adult equivalent per day) and 15% live in extreme poverty ($1.14 per day). The industrial sector remains weak and power supply is unreliable. Unemployment is estimated at 40%, particularly affecting young people.
Half the adult population has completed only primary education; 6% are illiterate. With insufficient space and classrooms, children do not have a full day's education; schools operate on 3-4 shifts per day. Infant mortality rates are the highest in the region. TB, disabilities and mental health are major problems. Crime is rampant: as the Greek president, Karolos Papoulias, pointed out, "Organised crime and the black economy were the real winners of the war."
Bosnia
Aid has been abused by 12 privatisation agencies, leading to ethnically exclusive privatisations. Asset-stripping deindustrialised and destroyed the socially owned economy. An American police officer working in the International Police Task Force described the corruption among his fellow American police: "They're making $85,000 in a place where everyone else is making $5,000 and they're chasing whores."
By mid-2002, industrial output was just a third of its pre-war level and unemployment was 40%. A UN official admitted, "Bosnia has taught much to all of us about how not to implement a peace agreement."