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East: New Report Warns Of Post-Communist Crisis

Washington, 1 December 1998 (RFE/RL) -- A new report by a prominent U.S.-based human rights monitor contends that some of the nations of the former Soviet Union and Eastern Europe face the prospect of economic stagnation or steep decline unless they curb official corruption and accelerate political reforms.

The report also says that the nations of the region that have made the most progress on political reforms are also enjoying the greatest economic growth.

These and other conclusions are found in the study entitled "Nations in Transit 1998." The study is the work of Freedom House, a non-profit and non-partisan organization based in New York City. Freedom House was established in 1941 and its major goal is to promote liberty and democracy throughout the world.

The study will be published in book form in mid-December. Freedom House released a summary of the 700-page report's findings on Monday.

Freedom House president Adrian Karatnycky, a co-editor of the study, said:

"Our study conclusively demonstrates that both political and market reforms are preconditions for growth and prosperity. We find in the study as well that half-reforms haven't worked and aren't likely to work in the future. Moreover, the example of Russia suggests that countries that have failed to embrace both political and economic change may face a period of serious, long-term decline."

The study assesses political and economic change in 28 countries which were formerly under communist rule. The research for the study was done by a team of regional specialists working from a grant provided by the U.S. government's Agency for International Development.

Freedom House said that, while the nations that have done the best job at making political reforms are also performing the best economically, the nations most resistant to political and economic change registered a decline in their economic output.

According to the study, economic reform has been seriously stalled in those countries where large communist or leftist parties remain a major force in political life.

The study also concluded that countries which pursued inconsistent reform policies experienced economic stagnation or very low rates of growth in 1997. These nations, said the report, suffered severe setbacks in the economic turmoil of the past year.

The experts weighed economic progress and political reforms and set up a scale for rating each nation's level of economic growth. Freedom House says the ratings reflect the judgment of the academic specialists and senior Freedom House staff.

According to Karatnycky, the study's most important finding was the strong link between economic growth and economic and political reform. He said the study found that the seven countries which had already reached a high degree of political and economic reform sustained an average growth rate of 4.7 percent during 1997.

By contrast, he said the countries still in transition between authoritarian and democratic systems achieved a growth rate of 1.39 percent. This group of nations, said Karatnycky, includes Russia and Ukraine.

He said a third group of nations considered to be highly autocratic showed a negative growth rate of 2.85 percent. That group included Belarus, Tajikistan, Turkmenistan and Uzbekistan.

Karatnycky said of these findings:

"The study demonstrates a clear link between a high degree of political reform and a high degree of free market reform. It establishes rather conclusively the relationship between reform and prosperity. Those countries which have made the most far-reaching progress towards democracy and free markets have reaped the most substantial economic gain. Those countries which have implemented incomplete or half-hearted changes have done less well, and continue to do less well and may in some cases be moving in the wrong direction. Meanwhile those countries which have steadfastly resisted reform completely and maintained or retained authoritarian systems are suffering either negative growth or a declining standard-of-living."

The report found that seven countries in Central and Eastern Europe and the Baltic had succeeded in forging political systems which were securely democratic and economies with a high degree of market reform.

The study identified the seven as: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovenia. The survey noted that most other countries in the region showed "potential for further economic and political progress.

In the former Soviet Union, the report said Russia and Ukraine are hindered by a communist opposition that "seeks the restoration of the Soviet Union and consequently an end to the state sovereignty of Russia and Ukraine."