A brighter future for Southeast Europe

My column in the Sky Hi News July 27 2011
On a recent cruise on the Danube River from Budapest to the Black Sea, I was struck by both the folly and resilience of humankind.

Our boat stopped to explore Hungary, Croatia, Serbia, Bulgaria and Romania. These countries were in various stages of recovery from domination by the USSR that ended 20 years ago.

Post-World War II, the USSR imposed centrally planned economic systems on its satellites. It spawned a rush to industrialization in the mostly rural and agricultural countries of southeastern Europe to provide jobs and to manufacture goods, mostly for the benefit of the Soviet Union.

The official Communist economy was only half of the story.  Gray and black markets emerged to meet consumer demands neglected by central planning. Corruption, bribery, and barter fostered by the shadow economies continued even after the fall of Communist governments. Those former satellites are learning a sad lesson: The business most able to deliver bribe money and possessing the right connections may not offer the best quality, price, and efficient delivery. They are unable to compete in a capitalist world economy. The rusting carcasses of abandoned factories littered the banks of the Danube and were particularly visible in Bulgaria.

Mostly the transition from Communism to capitalism had been peaceful with two major exceptions. In Romania, a totalitarian Communist dictator, Nicolae Ceausescu, had risen to power and was killed in a bloody popular uprising in 1989. His role model had been North Korea and he built grandiose government buildings and apartment complexes for Communist party members which, as one Romanian wag said, “were built by the people but not for the people.”

Former Yugoslavia broke apart as Serbia and Croatia fought bloody wars in the 1990s to settle old scores that predated the World Wars. Now separate and independent, both countries are five years behind the rest of southeast Europe, having to recover from both the fall of Communism and war.

The European Union has helped economic development by granting membership to all but Croatia and Serbia. The EU has provided economic assistance, free trade zones, and setting standards. Croatia and Serbia are hoping for membership in the EU, but the process is years away because the EU learned a bitter lesson in quickly admitting Bulgaria and Romania …the importance of eliminating a culture of corruption before integrating economies into the Western system.

The Danube itself is now nearly empty of commercial barges. Enormous amounts of money had been spent in the Communist era on the lower Danube on a series of impressive dams and locks to make it more navigable .The expense may have been justified when the factories were producing, but often our passenger boat was the only vessel in sight.

The good news is that the individual human spirit to succeed is winning. Historical monuments and buildings have been restored to their former glory. New business models and tourism have replaced some of the old ways of doing business.

Varying in degree from country to country, private residences, farms and castles have been returned to pre-Communist owners. Many owners have plastered over their homes' peeling stucco façades in spite of the expense. Increased car ownership has caused traffic and parking problems that are monuments in themselves to newly emerging economies.

Those who learned their trades and methods of governing under the Communist system are still in power and with varying degrees of success they are trying to shake off old habits of doing business. Young people are impatient and often jobless, living with parents as they wait for the economy to improve. One mid-20-something said, “We are just waiting until the old generation dies off so we can get on with our lives.”

Therein lies the hope of southeast Europe. An internet-savvy generation is biding time until the old order fades away, retires, or is voted out of office. Young people are optimistic their future will be brighter, and I share their optimism.