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Taken as the beginning of a new democracy after the fall of the Soviet Union, Eastern Europe is now widely criticized as a breeding ground for populism, especially in Poland and Hungary. But a return to politics simply makes economic progress more impressive.
It is rare for any country to rise from poverty to wealth. The IMF manages the 195 economy and counts 39 as “forward”. Only 18 countries have received higher education since the end of World War II, and they tend to appear in regional conferences. First came southern Europe, then Greece and Portugal, then East Asia, led by South Korea and Taiwan. Now, the hotspot is in eastern Europe.
Of the last ten countries to attend the event, four are in smaller states or territories such as Puerto Rico and San Marino. The rest are former Communist countries in Eastern Europe: the Czech and Slovak Republics, Lithuania, Latvia, Estonia, and Slovenia. The last major economy (the highest in the world at 25 GDP) to reach South Korea was 1997, and the next is coming from eastern Europe.
Although the IMF definition of “progress” also includes the type of institutions and so on, these countries share a personal income of more than $ 17,000. Of the few who are close to the area, the only country is Poland, with a net worth of over $ 15,000. Hungary is ahead, about $ 16,000, and Romania is a small place back $ 13,000.
The key to development is constant growth. In the last decade after the war, many developing countries have been left with very little money in developed countries. When they have a good ten years, they are usually not followed by a second. The problem is exacerbated during the period of globalization, trade and economic activity are declining.
In contrast, Eastern Europe is known. For the past three decades, Poland has grown by about 4 percent annually without just one year of error (pre-epidemic). Like other Soviet satellites, Poland left the area with the most educated and talented people, who still serve them well.
Today Eastern Europe is shared by East Asia with a well-known secret to the growing era: the creation of art. Because it is able to generate export revenue on a regular basis, which can be repurposed in new factories and roads, production can be a self-sustaining engine.
Of the 18 economies that reached the elite after 1945, they were the ones who exported oil or other foreign goods, which tended to beat prices and disrupt growth. Four is a smaller area or economic center such as Macau. The rest is industrial economy, with production representing about 15 to 25% of GDP and about 60% or more of exports.
The rising Eastern economy is in this category, growing at the strength of the export industries near the markets of West Europe. Most high-end German cars are manufactured in Hungary or Romania. Poland sends everything from car to video.
The digital economy is now growing at a rapid pace in the economy, and Poland is one of the leaders. In terms of digital currency as a share of GDP, it is already the 20th largest economy in the world. .
Modern-day opposition in Eastern Europe is looking back at the courts and the media, but missing out on significant progress. Like other former Soviet satellites, Poland has forced institutional change as a cost to join the EU and continues to benefit from stability and finance.
Between 1989 and 2020, in comparison with the European Central Bank protests, six former communist countries that recently managed to receive a steady income receive annual funding from the EU, on average, more than 1 percent of GDP. Whatever the cost of losing Soviet communism, EU funding has dropped similarly in Poland, Hungary and Romania. Recent estimates suggest that, over the next five years, EU aid to these countries will exceed the annual average of about 1% of GDP.
If the show is correct, the average income per person in Poland will increase to $ 17,000 by 2022, and it may be a short time before they can be approved in a top club. Regardless of when the time comes, the communist countries of Eastern Europe have already established themselves as the epitome of civilization since the wonders of East Asia.
The author, Morgan Stanley Investment Management’s global expert, is the author of ‘The Ten Commandments of Good Practices’