| The improvements in living standards in the transition countries between 1998 and 2006 need to be placed in the context of economic growth and employment generation. The Baltic states (Estonia, Latvia, and Lithuania) and many Commonwealth of Independent States (CIS) countries have enjoyed growth in GDP per capita averaging 5 percent or more a year, reflecting their recovery from a deep transitional recession which had taken GDP per capita in the CIS countries in 1998 to an estimated 55% of its 1990 level. Growth in the Czech Republic, Poland, the Slovak Republic, and Slovenia and in Southeastern European countries such as Bulgaria, Croatia, and Romania, averaged less than 5 percent. Eastern Europe had experienced a shorter and shallower transitional recession, which had seen GDP per capita in 1992 fall to an estimated 85% of its 1990 level. |  Read More [pdf: 175kB]
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| | Accompanying the transition from command to market economies were substantial changes in the = st sectoral composition of value added—with a broad pattern of deindustrialization, declining agriculture, and expanding services, which had been repressed under central planning. Deindustrialization moved labor into services in the EU8 and middle income CIS countries but into agriculture and services in the low income CIS countries. | Read More [pdf: 265kB] |
| | The business environment is widely acknowledged as an important determinant of firm behavior. Detailed information on key aspects of the business environment comes from the EBRD-World Bank Business Environment and Enterprise Performance Surveys (BEEPS), which have been implemented for virtually all the transition countries of Eastern Europe and the former Soviet Union in 1999, 2002, and 2005. | Read More [pdf: 241kB] |
| | | Despite the substantial poverty reduction between 1998-99 and 2005-06, many transition countries have failed to create visible and lasting employment for a large swath of the population. Among advanced reformers, such as Slovak Republic and Poland, the limited use of labor is reflected in unemployment rates, which stood at 13–14 percent of the labor force in 2006. In Hungary it is reflected in declining labor force participation, as many workers have given up their job search and left the labor force, rather than in the unemployment rate, which in 2006 was a (relatively) low 7.5 percent. In the EU8 countries the long-term unemployment rate—the proportion of unemployed without a job for more than one year—ranged from 36 percent in Latvia to 56 percent in Poland, and to an exceptionally high 76 percent in the Slovak Republic in 2006. | Read More [pdf: 314kB] | | | Economic growth since the Russian financial crisis of 1998 has lifted many boats. It has moved 50 million people in the transition countries out of absolute poverty, defined as those with an income less than $2.15 a day in purchasing power parities (figure 5.1). While nearly one in five people—or 85 million—lived in poverty around 1998/99, only one in twelve—or 35 million—did so around 2005/06. As a result, the poverty headcount—the proportion of the absolute poor in the population living on less than $2.15 a day—ranged from 1.6 percent in the EU8, 2.9 percent in the middle income CIS, 5.8 percent in Southeastern Europe, and 38.6 percent in the low income CIS, using a poverty line of $2.15 a day in purchasing power parities. | Read More [pdf: 220kB] | | | A key reform at the beginning of the transition was price liberalization, opening domestic markets of tradable goods to international prices and setting in motion the integration of the countries of Eastern Europe and the former Soviet Union into the world economy. Merchandise exports and imports in those countries expanded from just over 15 percent of GDP in 1994 to nearly 35 percent in 2006. Services, a low priority under central planning, emerged as a dynamic force in such sectors as telecommunications, transportation, energy, and banking, boosting services trade to nearly 7 percent of GDP. | Read More [pdf: 252kB] | | | The transition countries and Turkey have seen large movements of people since the fall of the Berlin wall and the disintegration of the Soviet Union. If movements between industrial countries are excluded, the region accounts for over one-third of total world emigration and immigration. The flows at the beginning of the transition reflected the return of populations to ethnic or cultural homelands, the creation of new borders and political conflict, and the unwinding of Soviet restrictions on movement. The breakup of the Soviet Union led to Russia’s gaining 3.7 million persons through migration and becoming a net recipient of migration from all other countries of the CIS as well as the Baltic states. At the same time, 15 percent or more of the populations of Albania, Armenia, Georgia, Kazakhstan and Tajikistan migrated permanently. But later flows—driven mainly by income differences—have been large as well. | Read More [pdf: 144kB] | | | The transition countries face a major demographic challenge to their growth prospects. The limited rate of labor use, reflected in a fairly low employment rate, assumes greater significance against the background of an aging population and of a projected decline in the share of the working age population in the total population in many transition countries, mostly in the western part of the region. Fertility rates are below replacement in Central Europe, parts of Southeastern Europe, and such countries as Ukraine, Bulgaria, and Georgia, with their population expected to decline more than 15 percent by 2025. | Read More [pdf: 169kB] |
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| | - World Bank urges aging Eastern Europe to take in immigrant workers(Associated Press, July 2, 2008)
- Eastern European States Still Want To Join Euro -World Bank(Dow Jones International News, July 2, 2008)
- WB: Western Europe Countries Need Innovations(ARKA, July 2, 2008)
- Red Turns Grey and Gloomy(The Economist, July 3, 2008)
- Former East bloc countries need to ‘innovate, include, and integrate’ for growth: World Bank report(Asia-Plus, July 3, 2008)
- Falit ce 80.000 radnika(Jutarnji List, July 4, 2008)
- Baltics need to raise productivity - World Bank (Baltic Times, July 4, 2008)
- World Bank Chief Economist Talks of Solutions(New Europe, July 7, 2008)
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