For the first time since the fall of the Berlin Wall, the economies of the 15 former Soviet republics appear to be growing
e first time since the fall of the Berlin Wall, the economies of the 15 former Soviet republics appear to be growing.
The CIS interstate statistics committee reported Oct. 3 that significant January‑August 2000 GDP growth was registered throughout the former republics.
Ukraine’s 5.3 percent GDP growth placed the country behind Azerbaijan and Tajikistan (each with 9.6 percent growth) and Kyrgyzstan (with 6.3 percent). Meanwhile, Ukraine ranked second in industrial growth (12 percent). Kazakhstan registered 15.6 percent growth and Russia gained 10 percent in the same category.
While some analysts say the figures may be slightly exaggerated due to outdated Soviet accounting standards, they do believe the countries are experiencing economic growth.
The growth, analysts say, is partly due to reforms in these economically troubled states and partly due to simple supply and demand.
A global economic boom driven by Western economies is spreading worldwide, causing an increased demand for everything from steel to sun oil, they say.
“The economies of the CIS are growing, but so are the economies in all of Eastern Europe,” said Tetiana Sitnik, a senior economist at the International Center for Policy Studies.
She said the economies of countries such as Hungary (6.6 percent), Poland (6 percent) and the Czech Republic (3.6 percent) are again showing increased growth after a few years of sputtering growth in the mid‑1990s.
“U.S. consumerism is the main fuel driving this growth,” Sitnik said.
Americans are snatching up the raw and finished materials of the world. And countries like Ukraine tend to export raw materials for hard cash.
Sitnik says that even when the United States imposes strict quotas on raw products such as Ukrainian steel, it still ends up buying products made from that steel, such as cars from Europe or Japan.
Russia’s population of 150 million is also consuming large proportions of products made in other CIS countries. The Russian market has played a big role in the development of Ukraine’s flourishing food industry, Sitnik says.
But the next challenge for CIS countries will be to attract larger amounts of foreign direct investment. Sitnik says only then will CIS countries be able to jump‑start the production and sale of finished materials.
She pointed to Eastern European countries, such as Hungary and Poland, which tend to export more finished products today because of large foreign direct investments they received in the early 1990s.
“Russia will attract much of this investment at first, but the other CIS countries will soon follow,” she said.
