Mapa (klikalna)

Centre and Periphery in Europe1

Krzysztof Zielke2

Krzysztof Albert Zielke, PhD, received his degrees in Political Science from University of Warsaw (MA), University of California at Berkeley (MA) and, finally, from the Institute for Political Studies of Polish Academy of Sciences in Warsaw (PhD), where he was researching Post-Soviet area and now studies European Union. Dr Zielke lectures International Relations, Political Geography and Dynamics of the World-System at the Bogdan Janski College in Warsaw, where he heads International Affairs sector. Zielke served as an expert and adviser in several Polish government agencies dealing with international security (i.e. National Security Bureau, Ministry of Foreign Affairs and Ministry of Defense).

It is becoming more and more clear that the enlargement of the European Union by eight Eastern and Central European countries (i.e. Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Lithuania, Latvia and Estonia) conducted on May 1st, 2004 was a fundamental geopolitical change whose influence extends beyond the region. It seems that the successful enlargement of the EU had some influence on the "Orange Revolution" in Ukraine, and indirectly on the situation in Russia and Belarus. On the other hand, the enlargement of the EU contributed also to increased frustration among the French public, which found expression in the rejection of the Constitutional Treaty in the referendum of May 29th, 2005. As far as the global situation is concerned, some consequences of the economic and political unification of most of Europe were evident as early as 2003, when Western Europe for the first time "imported more goods and services from the Eastern Part of the continent than from the United States and other Northern American countries."3

Geopolitical Changes in Europe. Huntington vs. the "Centre-Periphery" Model

Developments in recent years have failed to prove the correctness of the application of the so-called "civilization" model by Samuel Huntington to explain the transformation of Central and Eastern Europe. Huntington in his studies suggested that, among other things, the overthrow of the Yalta order and the transition of Central Europe from Russian sphere of influence to NATO and the European Union might be explained as a return of that region to "Western" civilization, which was supposed to consist of Western Europe and North America inseparably united under U.S. leadership. However, both the increasing conflicts between Western Europe and the U.S. (among other things as regards policy towards Iraq and in the field of trade), and signs of a break-up of the so-called circle of "Orthodox civilization" (Ukraine's pro-Western orientation), show that the reality is different from that anticipated by the model.

Competing with Huntington's model is the so-called "Modern World-System" paradigm (developed by Immanuel Wallerstein), which successfully explains the process of the transformation of Central and Eastern Europe from the western borders of the Soviet Empire to the Eastern part of the expanding European Union.4 The world-system paradigm, being based, among other things, on an analysis of the historical relations between Western and Eastern Europe, as a link between the centre and the periphery, seems to be the best solution to demonstrate the modern, supranational network of economic and political relationships within the confines of and around the European Union. The world-system paradigm is applied to research on globalization and represent latest achievements in such fields as international political economics and political & economic geography" (see, among others, the works of Paul Krugman5).

As early as the turn of the 1970s and 80s, it was noticed that there are three economic clusters being formed in the world economy, which together constitute the centre (or the core) for the rest of the world. Although the cluster around United States was the dominant, the significance of its rivals, i.e. Western Europe and Asia, whose hub was the Japanese economy, was growing. Already in the beginning of the 1980s, it was estimated that the Soviet bloc, dominated by Russia, was a peripheral branch of the Western European hub.6 The process of consolidation of the three competing areas in the world system intensified after the break-up of the USSR and the economic collapse of Russia, which has been demoted to the status of a natural resource base for the European Union. This can be confirmed by a simple comparison of the GDP of the major powers, which make it possible to state that the strength of the American and European clusters have evened out, whereas in Asia, the rapidly-developing China may with time dethrone Japan as the local integration hub. "In 1999, the United States accounted for 21.4% of the world economy, measured by purchasing power (purchasing power parity); the European Union, 20.1 %; China, 10.9 %, Japan, 7.6 %, India, 5.4 %, and Russia, 2.6%".7

The European economic area is in political geography described similarly, with the help of the centre-periphery model. As early as the turn of the 1970s and 80s, the core of the European economy was said to resemble a donat bitten from the East, whose middle was West Germany, and which encompassed the area inside the circle (clockwise) from Vienna through northern Italy and Catalonia through the South of England, Norway, and Sweden, and all the way to Helsinki in Finland. Peripheral areas were situated partially inside, but mostly outside, that core, and the other quarter encompassing Eastern Europe starting from Eastern Germany acted according to its own rules. In the 1980s, the European Economic Community expanded mainly to peripheral Greece (1981) and Spain and Portugal (1986), whereas thanks to the overthrow of the Yalta division of Europe, the European Union absorbed the last outstanding fragments of the European economic centre in Austria, Sweden and Finland (1995).8

The centre-periphery model in Europe is confirmed especially by the economic and political transformation of Eastern Europe. This is the case because it turned out that the economic and political reorientation of our region took place in accordance with the above-presented model of geographic relationships in Europe. Under the Yalta arrangement, all the post-communist countries were economically and politically dependent on the USSR, whereas a key phenomenon of the transformation was a reversion of the direction of dependency from East to West. In the economy, it meant that Russia's place as the main trade partner and a model to copy was taken over by the West European countries. As for Central Europe, its dominant partner is nowadays the united Germany. As far as the Baltic States are concerned, it is Finland and Sweden, and as for the Balkans, it is Italy. Politically, the transformation of Central and Eastern Europe meant the rejection of Soviet standards, the dissolution of the Warsaw Pact and COMECON, and the adoption of political standards from the European centre, which, for Eastern Europe for example, meant the adoption of German standards, and finally membership of the European Union, which amounted to the adoption of the whole of the Western European community legal legacy, i.e. the so-called acquis communautaire.

Further proof of the rapid expansion of the European centre-periphery structure to the East was the course of the transformation. Data published by the Economist Intelligence Unit confirm that the faster a country reoriented its foreign trade, economy and political links from East to West, the faster it overcame the crisis of transformation crisis and the greater its chances of regaining and exceeding its level of economic development of 1989 (real GDP 1989 = 100%). In particular, a pioneer in turning to the West was Poland, which in 2004 achieved almost 142% of its GDP of 1989, followed by Hungary (120%), the Czech Republic (114%) and Slovakia (118%), whereas Romania (100%) and Bulgaria (92%) were late in this regard. Although the exports of these countries to the 15 countries of "old" Europe (EU15) varies nowadays from 56% in the case of Bulgaria to 74% in the case of Hungary, the success of the transformation was related to the level of trade dependency on Russia in the initial stage and to the pace of the reorientation to the West. In countries where economic links with the West were the strongest and dependency on the USSR and COMECON markets the weakest, the reorientation towards the West was the fastest and the economic results were the best. This in particular, apart from the low initial level, may explain the economic success of the Polish transformation.10

The situation on the territory of the former USSR is similar. Russia, which before the transformation, was the local hub of economic integration for the whole of Central and Eastern Europe, is now primarily a supplier of oil and gas for Western Europe. In 2003, Russia's trade with Western Europe (EU15) accounted for 37% of its exports, while that with the expanded European Union was as high as 50%. As is the case with Central Europe, the main partner for Russia is Germany. Despite rapid economic growth in recent years on the wave of high oil and gas prices, Russia has not managed to overcome completely the aftermath of the crises that struck it after the break-up of its empire and as a result of the transformations during the period 1991-98. As a result, Russia's national product is still 20% below the level it had fifteen years ago. Despite its economic collapse, the country remains a regional trade hub for other CIS countries. Nevertheless, as far as Ukraine is concerned, its exports to the enlarged Union (EU25) have reached the level of 40% of its total, and these are even more important for the country than its exports to Russia, which in 2003 accounted for 19% of the whole. In general, in the countries situated closest to Western Europe and in which the economic situation is stable, progress in reforms has been fastest and brought better results in the areas of stability, liberalization and privatization. However, in the CIS countries, progress in the reforms has generally been slower and there are more cases of abandoning the reforms.11 In this other group of countries, the achieved 2004 GDP level was still below the level from 1989 (90% on average). Exceptional setbacks were suffered by Georgia (41% of real GDP in 1989), Moldova (43%), and Ukraine (55%). The comparatively best results were achieved by Uzbekistan (105%), Belarus (107%), and Turkmenistan (126%).12

Other regions around EU are also organized in the similar centre-periphery pattern. According to Michael Emerson from the Brussels Centre for European Policy Studies, "one region-the Balkans-is set to 'join Europe' as an integrating periphery, whereas the other-the Caucasus-is part of what Russia calls its near abroad, but can be seen also as a divided periphery". "The states and entities of the [Balkan] region are falling into place in one of three categories: EU accession candidates, associated states or protectorates. The strategic concept is that all the states and entities of the region are set to move progressively through these categories, ultimately to become full EU members. The protectorates may be directed at present by the international community at large, with decisive military and political power deployed by the US and NATO, but the destination is Europe. The EU's main policies progressively extend over the region. In the trade policy domain the regime can progress from tariff preferences to free trade, to customs union and finally to inclusion in the single market. Euroization has begun in the states or entities least able to manage a currency of their own. This may be through either a currency board regime such as in Bulgaria and Bosnia, or outright use of the euro […] in Kosowo and Montenegro. Regional infrastructures are being integrated into trans-European networks (TENs). The EU's new military and civilian (police) rapid reaction forces […] take over from NATO in due course. Institutionally these policies would amount to 'partial membership' of the EU years before full membership is actually achieved".13

Economic Successes and Political Defeats in Central Europe

The authors of the EIU study entitled "Economies in Transition" have noted that even those Central European countries that were relatively the most successful economically, are dominated by pessimistic attitudes and a lack of confidence in politics, which is expressed, among other things, in the dismissal into non-existence of erstwhile ruling elites and their parties. Such a rotation of the power elites in most countries virtually at every election, despite the declared support for the democratic mechanisms, shows that democracy is a hollow shell, and societies in our region are deeply distrustful of their own states. In particular, this concerns Poland, which leads the regional statistics for its incredibly low level of trust in its Government (7%) and Parliament (Sejm-8%). The EIU authors suggest the following explanations for this situation:

a) The economic and social costs of transformation. "After years of economic pain, large sections of society still feel that they have gained relatively little economically from the transition."

b) The "end of ideology" and gradual disappearance of real substance in current politics.

c) The "discrediting of the post-communist state" as a result of the vicious circle of loss of confidence in the state, and the perception of the decrease of its receipts and revenues following privatization perceived as corrupt, which led to further loss of confidence, and so on. "The failure of communism led not only to an initial sharp rolling-back of the state, but in some cases to de facto collapse of the state".14

d) "The role of external actors in undermining domestic policy", and especially the necessity to adjust to the requirements of the European Union and international financial institutions meant EU membership was perceived as a panacea for all problems, with deepening disregard for domestic policy and politicians. Domestic policy is in ruins, whereas the EU is more respected than national political institutions.15

Viewing these phenomena from a local perspective, one may say that people supported change and turned to the West not because they were fed up with the communist state, control and social welfare, but because the old system started to fail and ceased to satisfy their needs, and, especially because people started believing that it could be replaced with the European model of a welfare state, which seemed to be a guarantee of benefits at a much higher level. However, after reaching the goal, it turned out that the European model of welfare state was also disintegrating, and joining the Union was not the end, but virtually a beginning of new efforts aimed at getting closer to the western way of life. So voters chose to punish their rulers for this situation.

That is why the political scene in countries of the region was extremely uneasy, the proof of which is the fact that in all the new EU member states, except for Estonia and Slovakia, governments or their leaders changed. Also, the first elections to the European Parliament in June 2004 that involved the public of the new member states, became an occasion for expressing distrust in national rulers and a heralding of their imminent removal from power, as will probably happen in Poland (in 2005), Hungary and the Czech Republic (in 2006), and next in the Baltic States. A political changing of the guard in the region seems to be unavoidable, despite outstanding economic results in the first year of EU membership.16

According to the IMF, in 2004, the Slovak economy grew by 5.5%, the Polish economy, by 5.3%, and the Czech and Hungarian economies both by 4%; and if one adds Slovenia to this group, then the "average growth" in 2004 amounted to 4.6%, i.e. higher than the 3.5% recorded in 2003. The three Baltic States, Lithuania, Latvia and Estonia, developed even faster (as fast as 6.7%, though it was less than in 2003). In the first year of its EU membership, Poland received from the Union over two times more than it paid into its budget (PLN 12 billion and 6 billion respectively).17 "According to a report by the British Economist Corporate Network, as yet it looks like the countries that are best at winning EU funds are Estonia, Lithuania and Hungary. Poland is coping well, while the experiences of the Czech Republic and Slovakia are described as 'mixed'. All in all, the new countries put to shame Greece, which has been an EU member for over twenty years, and yet is coping worse with the funds".18 The group who took best advantage were Poland's farmers, who besides PLN 6.8 billion of income aid to agricultural production from the EU treasury, profited also from the rapid growth of prices for agricultural products and for exports to the EU markets, from Union financial aid (e.g. granted for the purchase of tractors) and from pensions for agricultural workers. Support for the Union within this group increased substantially. Apart from the farmers, the biggest beneficiaries from Polish accession to the EU were the country's exporters. Poland's exports counted in euros increased last years by as much as 26%. It turned out, however, that the costs of the benefits for the entrepreneurs and farmers were borne by ordinary workers, who increased their productivity (wages and employment have not changed), and whose costs of living increased (inflation increased by almost 5%), mainly as a result of increases in food prices. If to these economic problems one adds the wave of media reports on corruption scandals and the appointment of Sejm committees to investigate them (Lew Rywin case, the Orlen and PZU corporate cases) and the links of the ruling elite, the courts and the police with organized crime (the so-called Starachowice scandal), then it is no surprise that support for the ruling SLD party fell steadily, from around 40% in the 2001 elections, down to 20% in local elections, to 7% in the European elections, and finally to the 5% election threshold in this year's pre-election polls.19

Although, as is claimed by the EIU analysts, the expansion of the European Union had a major impact on economic growth only in Poland, the sole fact of the successful enlargement by eight Central European countries itself had to have an impact, e.g. through a demonstration effect, on the countries situated farther East, and especially on the choice made by Ukraine at the end of 2004.

"Colour Revolutions"

From a long-term perspective, the "colour revolutions" in the CIS countries appear as the final link of the pro-Western revolutionary chain initiated 25 years ago in Poland by "Solidarity". They confirm the existence of a trend for the Eastern-European periphery to gravitate towards the European centre. From a global perspective, Western Europe, because of its political and social appeal and, above all, its economic size, appears as a gigantic magnet that inevitably attracts more and more geographically remote post-communist and post-Soviet countries. As mentioned before, the economic "mass" of the European Union, even measured in terms of purchasing power parity (favorable for poorer countries), is ten times bigger than the economic "mass" of Russia. So in the long run, it seems inevitable that this overwhelming "mass" is going not only to detach from Russia all of its so-far economic "satellites", but also eventually make Russia economically, and as a consequence, politically, dependent on it. Although, from the long-term perspective, the prospect of further "colour revolutions" bringing more post-Soviet countries nearer, and finally Russia itself, to Western European standards seems inevitable, in a shorter perspective, the situation in the Commonwealth of Independent States looks quite different.

In the medium-term perspective, the "colour revolutions" in Georgia and especially in Ukraine, seem to be further confirmations of the theory, put forward by American political scientist James C. Davies, that revolutions break out not in periods of economic collapse and political repressions, but on the contrary, as a result of longer periods of economic development and increasing scope of political freedom. This theory, better known as the Davies' Curve, suggests that increases of the economic and political strength of the "masses" are a necessary condition for revolutions to break out, while short-term regressions or at least only a threat of their occurrence are a sufficient condition. In the period of their development, societies generate expectations that are higher than the actual progress, and a temporary decline or even a threat of such a decline give rise to dashed hopes and, as a result, the eruption of discontent, which may lead to revolutionary changes when not nipped in the bud.20 Paradoxically, the fast development of Ukraine, thanks to the co-operation in re-building the Russian economy since the beginning of the century on the wave of high oil prices, contributed to the outbreak of the "Orange Revolution" almost to the same extent as did the fraud of the candidate supported by Moscow and pressures from the latter. Therefore, it is indispensable to conduct a brief analysis of the Russian economy over recent years to explain the dynamics of the "colour revolutions", and to predict the chances of their occurrence in the future.

Post-communist Russia reached the bottom of its crisis in 1998, when, according to some data, its economy was close to the level of 50% that of 1990, and the political system was in a state of total decay, as a result, among other things, of the support given by the Russian oligarchs to the ailing Boris Yeltsin in return for shares in key corporations. However, from that time, the Russian economy began developing very well thanks to the rapid increase of oil prices, the devaluation of the rouble and the political stability brought by the administration of Vladimir Putin. According to the EIU, Russian economic growth in the period 1992-2003 can be entirely explained by the impact of four variables-the price of crude oil, the real effective exchange rate, the political stability index and the inflation level. EIU assessments show that the increase of political uncertainty in 2004 caused a reduction in the pace of growth of the Russian economy by 1.3 percentage points.21

According to these analyses, although initially consolidation of the state under Putin's leadership was favourable for the Russian economy, a worsening of the political climate after the showdown with the oligarchs, symbolic of which was the nine-year prison term for Chodorkovsky, the continuing unrest in the Caucasus (the raid on Ingushetia, the attacks on Kadyrov, Russian planes and the school in Beslan), which will not be solved by the killing of Aslan Maschadov, and especially, during Putin's rule, the public protests in Russian cities against the limiting of social benefits shortly after the spectacular defeat of the country's neo-imperialist ambitions in Ukraine, reduce the scope of manoeuvre for the group currently ruling in Russia, who come from the former KGB, and are called "siloviks" (representatives of power departments). Crucial for the future of Russia is, however, the prospect of an eventual fall in oil prices, on which the Russian economy is today even more dependant than it was before 1998. If a possible slump in oil prices were to coincide with a possible political crisis connected with the presidential elections in 2008, in which Putin may not stand, it may cause a simultaneous occurrence of an economic and political crisis as indicated by Davies' formula. In the meantime, Putin's policy seems to oscillate in a narrowing scope, both internally (re the latest offers to the oligarchs), as well as externally (offers of co-operation with China and the European Union on the one hand and the U.S. on the other). According to the EIU authors; "Each year, and with each US-Russian summit, the focus moves nearer and nearer to Russia itself. Several years ago, the main topic was still global-nuclear strategy and disarmament-or related to regions further away from Russia, such as the Balkans or Afghanistan. Then it shifted on to NATO enlargement, and then to the southern Caucasus and a military presence in Central Asia. Most recently, the agenda has moved to neighbouring Ukraine and now also to Russia's internal politics."22

Returning to the problem of explaining the reasons for the "colour revolutions", one has to remember that the fast development of most of the CIS countries in the last five years was driven by exports to Russia, which, according to IMF data, were developing in the years 1999-2004 at an average pace of 7% of GDP annually. As for Ukraine, this translated into annual growth of over 8%, while the biggest, 12%-13%, dynamic of national product growth was achieved by Ukraine in 2004, the year that ended in revolution. As far as Ukraine is concerned, we have seen a certain period of rapid growth, which has led to an even faster increase in expectations. Things stand similarly with political freedom. The "colour revolutions" did not break out in these post-Soviet countries where rule was heavy-handed, but rather in the most pro-Western and democratized republics, of Eastern European, South Caucasians and Central Asian regional standards, respectively. The overthrown leaders of Ukraine, Georgia and Kyrgyzstan tried to manoeuvre between Russia and the West, providing at the same time a bigger scope of liberty than in the neighbouring, more pro-Russian former Soviet republics. A direct reason for the revolutions in Georgia, Ukraine and Kyrgyzstan, the "rose", "orange" and "yellow" (also referred to as "tulip" or "almond") revolutions respectively, was the response to the application of techniques (modelled after Russia) for staying in power through manipulation of the election process (so-called "operation successor"). The reason was also, at least in Ukraine and in Kyrgyzstan, a pre-election turn to Russia by the previous authorities.

From Davies' theory and its confirmation through the events in the CIS countries in the past two years, it follows that if further "colour revolutions" are to take place, they will be later rather than sooner. As far as Belarus is concerned, the country is an exception among the Eastern European countries. In 2004, it achieved comparatively good economic results, with GDP almost 107% what it had been in 1989, thanks to subsidies of cheap Russian energy and close economic co-operation with Russia (over 50% of exports and almost 30% of GDP were dependent on Russia). Belarus' economic growth rate in the past few years has been at over 5%. Some acceleration has been seen in the last two years, i.e. 6.8% and 11%, in 2003 and 2004 respectively. The lack of opportunity for revolution in Belarus in the near future is not, however, determined by the absence of longer periods of fast development or even by the very good prospects for it as long as the good economic situation with Russian oil persists, but above all by the domestic policy of the regime of President Alexander Lukashenka. Dispersion of the opposition, which has no share of power (not a single MP), and the stifling of all media and organizations independent from the government (including the Union of Poles) make the emergence of any point of crystallization of possible social protest impossible. The disruption of the society and opposition mean that Lukashenka was able to win in a referendum, without any major fraud, opening the way for him to run for lifelong presidency. A symbolic end to the present wave of "colour revolutions" in clashes with central-Asian-like authoritarianism were the events in Uzbekistan (May 2005), where having turned recently towards Russia, President Islam Karimov ordered the army to shoot at protesting crowds in a town in the Fergan Valley, killing, according to various sources, from a few hundred to a thousand people.

So the conclusion drawn at the recent conference of the Centre for International Affairs in Warsaw devoted to Belarus, that revolution in that country is possible, but only after changes are made in Russia, appears accurate.23 As was suggested above, this is, however, possible only if the economic development of Russia slows down as a result of an abrupt decline in world oil prices (or rapid devaluation of the US dollar). This depends on the pace of growth of the world economy, especially the Chinese economy, as well as on crude oil supplies connected with the geopolitical situation, especially in the Middle East.

European Centre and its Eastern Periphery

The year 2004 was one of the best years for the world economy in over 20 years. The driving force behind the global demand for natural resources was China, which thanks to its fast development (especially of its car industry) absorbed bigger and bigger quantities of crude oil and other natural resources. The so-called "old Europe" developed comparatively slowly, especially against this background, but also in comparison with the U.S.. The new member states turned out to be the main source of dynamic for the whole European Union, as they developed on average twice as fast as the so-called "Old Union". The enlargement has not translated yet into a boom for the whole continent, as the economies of the new member states account for only a fraction of the economy of the whole Union (the GDP of new member states accounts for not even 5% of the GDP of the whole EU).

In general, it is expected that joining the European Union in the long-run will bring closer the living standards of the populations of the new member states to the Western European ones. In this regard, Greece is an example to be avoided, while the one to be followed is Ireland, whose average income per capita at the time of joining the Union in 1973 was 62% of the Union average, whereas in 2002 it was as high as 121%. Among the new member states, the best results in this regard were achieved by Poland, which reduced its economic distance from Germany by a factor of two.24

As was argued above, neither the former nor the current economic successes translate into support for those in power in the new member states, and they are almost always dismissed at or even before the end of their terms. This is quite dangerous, since the economic development, affluence and position of the new member states in the Union and in the world depend to a large extent on the strength and efficiency of their state apparatuses. The negative effects of permanent social discontent are partially amortized with the help of democratic mechanisms, which reduce the economic and social costs of replacing worn ruling elites to the minimum. Where these mechanisms are underdeveloped or limited, the costs of turning away from a wrong course can sometimes be much higher.

In particular, this concerns countries in which the only way out of being stuck half way between Russia and the West and between authoritarianism and democracy, has been the "colour revolutions". As noted by Yuschenko himself, Ukraine paid for the "orange revolution" with a decline of its growth rate from 13% in 2004 to about 4% in the first quarter of 2005. However, generally, the "colour revolutions" were a response not only to domestic shortages of democracy and too slow overcoming of the post-Soviet crises (none of the countries had regained its GDP level of 1989), but also to the geopolitical opportunity offered by the West's interest in the stabilization of the southern regions of the post-Soviet area. The symbol of this geopolitical situation was the opening of the Baku-Tbilisi-Ceyhan (BTC) pipeline on May 25th, 2005, which will transport crude oil from the Caspian Sea, as well as oil from Kazakhstan. Opening of the pipeline, under construction since 1994, provides an opportunity to create and extend a new, and independent from Russia, channel for the transfer of energy from Central Asia. The extremely rich resources of Kazakh oil have so far been burdened with the political risk of transferring them through areas controlled by Russia or the unstable regions of the Northern and Southern Caucasus. Completion of the oil pipeline, and soon also a gas pipeline, as far as Turkey on the Mediterranean Sea, along with the pro-Western "colour revolutions" in Georgia and Ukraine, create both material and geopolitical conditions for a relative stabilization of oil and gas supplies from Central Asia, and in consequence, offer independence from Russian pressure and unrest (like, for instance, that threatening the oil pipeline through Grozny in Chechnya).

A geopolitical expression of stability in the southern post-Soviet area is co-operation within the confines of the so-called GUAM group (Georgia, Ukraine, Azerbaijan, Moldova), reactivated after the "colour revolutions" in Georgia and Ukraine and the reorientation to the West by the Moldovan post-communists (and the withdrawal of Uzbekistan). There is some revolutionary potential in Azerbaijan, where geopolitical U.S. influence on the eve of parliamentary elections encouraged protests against the pseudo-democratic transfer of the presidential office from father to son two years ago. The opening of the BTC pipeline also provides the grounds for competition in the future direction of the export of Caspian oil through the Black Sea (from the branch of the pipeline to Supsy in Georgia). Oil from the Caspian Sea may be transported by tankers to the Odessa-Brody pipeline to Płock and Gdańsk, provided that the branch is built, or through the so-called "Orthodox" pipeline, pushed by Russia and crossing Bulgaria and Greece. But it has to be stressed that Kazakh resources are not sufficient for the effective utilization of three pipelines at the same time (i.e. to Turkey, Greece and Poland).

Generally speaking, the configuration of pipelines and political and economic influences shows that despite interference generated by the U.S. and Russia, a closing structure of periphery circles around the Western European economic-gravity centre and geopolitical world-system centre is taking shape in all regions of Central and Eastern Europe. According to the formula proposed by Emerson for the Balkans, all states of the post-communist Europe are drawing closer to the European Union. The highest level of this approach was achieved on May 1st, 2004 by five Central European countries-Poland, the Czech Republic, Slovakia, Hungary and Slovenia-along with the three Baltic States-Lithuania, Latvia and Estonia. The next circle of approach to the European Union includes the Balkan countries, two of which-Bulgaria and Romania-are preparing to join the Union in 2007, while others may adopt EU standards and/or currency unilaterally. The "colour revolutions" in the years 2003-2005 show that such countries as Georgia and Ukraine are also ready to deepen their reorientation to the West. It seems that for these countries, too, as was the case with all the previous ones (except perhaps Croatia), the road to the Union is paved through geopolitical co-operation with the U.S., and membership of NATO. Yet, the economic and geopolitical purpose of transformation is integration with the EU. Even Russia, which still remains a separate pole of integration, is becoming more and more economically dependent on the European Union, an example of which is the launch of the process of changing the currency link of the rouble from the U.S. dollar to the euro.

Basic data, 2004

 

Population (m)

GDP per heada

GDP per headb

Real GDPc

Growth (av; %)d

Inflation (av; %)d

Exportse

Importse

Current accounte

East-Central Europe

65.9

13,701

8,000

129.0

3.3

5.6

246.2

257.8

–20.2

 

Czech Republic

10.2

16,803

10,450

113.7

3.1

2.6

66.7

67.5

–5.6

 

Hungary

10.0

15,178

10,310

120.0

3.9

7.1

54.2

56.4

–9.4

 

Poland

38.2

11,977

6,340

141.9

3.1

4.3

80.9

87.1

–3.6

 

Slovakia

5.4

14,500

7,770

118.2

4.0

7.7

28.6

29.9

–1.4

 

Slovenia

2.0

21,216

16,260

129.2

3.3

6.8

15.8

16.8

–0.2

Balkans

54.3

7,280

3,190

87.0

4.8

15.2

51.9

85.8

–15.9

 

Albania

3.2

5,191

2,600

133.8

6.3

2.8

0.6

2.1

–0.5

 

Bosnia & Hercegovina

4.2

7,010

1,950

70.9

4.8

3.0

2.0

6.3

–2.4

 

Bulgaria

7.7

8,225

3,110

91.8

4.8

6.4

9.9

13.2

–1.8

 

Croatia

4.4

11,279

7,660

94.0

4.0

3.3

8.0

17.1

–1.8

 

Macedonia

2.0

7,003

2,530

82.1

0.9

2.8

1.7

2.8

–0.4

 

Romania

22.3

7,754

3,200

100.2

5.2

25.4

25.6

32.7

–5.9

 

Serbia and Montenegro

10.5

5,714f

2,790f

55.3f

4.8f

36.8f

4.3f

11.5f

–3.0f

Baltics

7.1

12,338

6,410

96.2

6.8

2.2

19.7

26.7

–5.1

 

Estonia

1.3

13,755

8,250

111.2

6.5

3.5

6.1

8.1

–1.6

 

Latvia

2.3

11,111

5,440

95.2

7.4

3.2

4.1

6.9

–1.7

 

Lithuania

3.4

12,610

6,340

91.5

6.7

0.5

9.5

11.8

–1.9

CIS

279.2

7,440

2,700

78.7

7.4

14.3

266.7

172.2

62.8

 

Russia

144.2

9,909

4,040

80.3

6.9

16.4

182.0

94.8

58.2

 

Ukraine

47.1

6,450

1,430

55.1

8.4

10.7

33.6

30.2

7.0

 

Belarus

9.8

6,805

2,330

106.6

6.6

56.4

13.9

16.1

–1.2

 

Moldova

4.3

2,136g

720g

43.4g

6.0g

13.7g

1.0g

1,8g

–0.2g

 

Armenia

3.1

3,993

1,210

93.0

10.4

3.0

0.7

1.3

–0.1

 

Azerbaijan

8.3

4,003

1,020

61.8

10.6

3.0

3.8

3.4

–2.3

 

Georgia

4.3

3,388

1,320

41.2

6.3

4.9

1.0

1.8

–0.4

 

Kazakhstan

15.1

7,329

2,700

98.8

10.3

8.2

20.6

13.5

1.2

 

Kyrgyz Republic

5.1

1,923

440

80.9

4.7

7.8

0.7

0.9

–0.1

 

Tajikistan

6.3

1,237

330

52.1

9.7

20.8

1.1

1.2

–0.1

 

Turkmenistan

6.0

6,229

870

125.7

14.7

9.2

3.9

3.3

–0.2

 

Uzbekistan

25.7

1,823

360

104.6

3.8

18.0

4.4

3.9

1.0

Eastern Europe

120.2

10,798

5,830

112.4

3.8

8.6

225.6

264.5

–36.1

Transition economies total

406.6

8,520

3,690

89.2

5.9

11.1

437.3

419.1

21.6

a US$ at purchasing power parity; b US$ at market exchange rates; c 1989 = 100; d 2000-2004; e US$ bn.; f data exclude Kosovo; g Data exclude Transdniestr region.

Export dependence, 2003a

 

 

Total exports (% of GDP)

Exports to EU15 (% of total exports)

% of GDP

Main export destination country

% of total exports

% of GDP

East-Central Europe

49.8

67.1

33.1

 

 

 

 

Czech Republic

53.9

69.1

37.2

Germany

40.3

21.7

 

Hungary

52.2

73.6

38.4

Germany

34.5

18.0

 

Poland

29.1

69.5

20.2

Germany

33.7

9.8

 

Slovakia

67.5

59.5

40.2

Germany

30.0

20.2

 

Slovenia

46.5

63.7

29.6

Germany

24.1

11.2

Balkans

23.2

58.2

13.0

 

 

 

 

Albania

7.1

89.4

6.4

Italy

76.2

5.4

 

Bosnia & Hercegovina

20.5

52.7

10.8

Italy

25.4

5.2

 

Bulgaria

37.9

56.2

21.3

Italy

15.5

5.9

 

Croatia

21.9

51.5

11.3

Italy

22.3

4.9

 

Macedonia

29.1

47

13.7

Serbia and Montenegro

33.9

9.9

 

Romania

30.9

68.2

21.1

Italy

25.2

7.8

 

Serbia and Montenegro

15.3

42.7

6.5

Italy

14.5

2.2

Baltics

40.3

57.6

23.2

 

 

 

 

Estonia

50.7

62.4

31.6

Finland

19.3

9.8

 

Latvia

28.7

62.8

18

Germany

13.1

3.8

 

Lithuania

41.6

47.7

19.8

Latvia

13.0

5.4

CIS

42.3

25.8

9.7

 

 

 

 

Russia

31.6

36.9

11.7

Germany

8.1

2.6

 

Ukraine

47.4

23.6

11.2

Russia

18.7

8.9

 

Belarus

57.5

10.0

5.8

Russia

50.6

29.1

 

Moldova

40.7

32.0

13.0

Russia

41.4

16.8

 

Armenia

24.8

31.7

7.9

Russia

15.2

3.8

 

Azerbaijan

36.8

59.4

21.8

Italy

30.5

11.2

 

Georgia

20.1

39.9

8.0

Turkey

23.7

4.8

 

Kazakhstan

42.9

32.7

14.0

Russia

17.0

7.3

 

Kyrgyz Republic

30.9

3.9

1.2

Russia

16.5

5.1

 

Tajikistan

58.3

10.2

5.9

Uzbekistan

17.1

10.0

 

Turkmenistan

80.6

11.9

9.6

Ukraine

16.3

13.1

 

Uzbekistan

36.7

17.7

6.5

Russia

17.9

6.6

Transition economies (av)

36.9

45.4

16.4

 

 

 

a Refers to merchandise exports. Regional and subregional averages are unweighted means.

© Copyright by The Economist Intelligence Unit Limited 2005.

 


1 This article was first printed as "Introduction" to "Chapter II-Political situation in Central and Eastern Europe in the years 2004-2005" of the New Europe-Report on Transformation written for the XV Economic Forum in Krynica, Poland 7-10 September, 2005 (Instytut Wschodni), pp. 27-34. Many comments to this "Introduction" (or part 2.1) of the 2005 Krynica Report made us reprint this fragment with amendments by the author.
2 I am grateful to Monika Rokicka from the Warsaw American Ambassy Library for providing Economic Intelligence Unit Reports and to Jacek Cichocki, Director of the Eastern Studies Centre (Ośrodek Studiów Wschodnich) for granting access to it's Weekly Reports. This article was written as a part of a project headed by professor Józef Fiszer, but a sole responsibility for its contents is mine.
3 Rzeczpospolita, October 27, 2004, p. B1.
4 Krzysztof Zielke, "Polish Responses to Global Challenges: The Geopolitics of Central and East European Transformation", in: Richard Sakwa (ed.), Experience of Democratization in Eastern Europe, Macmillan-St. Martin Press, London-NY 1999: 222-258.
5 Referred to also in: Report Krynica 2004: 123, footnote 2.
6 Patric O'Sullivan, Geopolitics, Croom Helm, London 1986.
7 Thomas E. Graham, Jr., Russia's Decline and Uncertain Recovery, Carnegie Endowment for International Peace, Washington DC, 2002: 69.
8 Paul Knox & John Agnew, The Geography of the World-Economy, Edward Arnold, NY 1989.
9 Thomas A. Baylis, The West and Eastern Europe-Economic Statecraft and Political Change, Praeger, London 1994.
10 Krzysztof Zielke, "Polish Responses to Global Challenges: The Geopolitics of Central and East European Transformation", in: Richard Sakwa (ed.), Experience of Democratization in Eastern Europe, Macmillan-St. Martin Press, London-NY 1999: 222-258.
11 Economies in transition-Eastern Europe and the former Soviet Union, Regional overview, The Economist Intelligence Unit (EIU), March 2005: 4.
12 Economies in transition-Eastern Europe and the former Soviet Union, Regional overview, Country Forecast, The Economist Intelligence Unit (EIU), March 2005: 4, 30; see: tab. 1 and tab. 2.
13 Michael Emerson with Nathalie Tocci, Marius Vahl and Nicholas Whyte, The Elephant and the Bear-the European Union, Russia and their Near Abroads, Centre for European Policy Studies, Brussels 2001: 35-36.
14 EIU, 03.2005: 12.
15 EIU, March 2005: 8-16.
16 Article does not include results of Polish elections in Fall 2005, where post-communists had to hand the government to PiS and Hungarian elections in the Spring 2006, where social-democratic government was re-elected.
17 Gazeta Wyborcza, 27.04.2005: 1.
18 Gazeta Wyborcza, 30.04.-01.05.2005: 7.
19 See footnote 16.
20 James C. Davies, "Contribution to the Theory of Revolution", in: Elementy teorii socjologicznej (Elements of sociological theory-materials for the history of contemporary Western sociology), (eds.) W. Derczynski, A. Jasinska-Kania, J. Szacki, PWN, Warszawa 1975, pp. 389-411.
21 Economies in Transition-Eastern Europe and the former Soviet Union, Regional Overview, The Economist Intelligence Unit (EIU), March 2005: 27.
22 EIU, Economies in transition, March 2005: 25.
23 19 Rzeczpospolita, 31.05.2005: 8.
24 Rzeczpospolita, 10-11.11.2004, p. B2.

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