 In the Eastern Europe and Central Asia region, the Russian Revolution of 1917 interrupted the region’s long history as a major player in international trade. For almost 50 years, the region remained basically isolated from the global marketplace while the central planning system dictated the flow of goods and services by administrative fiat, mainly within the Soviet bloc. These flows were mediated through one currency and under common laws and regulations.
When the central planning system disintegrated in the 1980s, the situation changed radically. Almost overnight, trade flows encountered new national boundaries, new currencies and taxes, customs authorities and border procedures. At the same time, production and marketing decisions confronted consumer demands, and the region’s trade with the rest of the world now faced global market forces. Today, most of the countries in the region have significantly re-integrated with the global economy. Exports have tripled and imports increased two and a half times since the dismantling of the Soviet trade bloc. Eighteen of the 29 countries have become members of the World Trade Organization(WTO) and the majority of the others are in various stages of accession. Eight have achieved membership in the European Union (EU8) - the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia. Where implemented, the establishment of liberal trade regimes have yielded a faster pace of trade growth since the 1990s than any other region worldwide and helped to propel growth. However, the record across the region is far from uniform. Some countries in the region remain relatively isolated from the global economy and dependent on a few primary commodity exports left over from the Soviet era structure of production. Their exports remain concentrated within the region and they risk being increasingly frozen out of the international market place. |
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