# Why did most ex-USSR states grow so fast from the year 2000 onward **URL:** \ **Category:** Great Debates\ **Created:** [January 15, 2016, 2:17am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186 "2016-01-15T02:17:48Z")\ **Posts on this page:** 15\ **Page:** 2
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [January 16, 2016, 3:43am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/21 "2016-01-16T03:43:52Z")
> [@Wesley\_Clark](#): > > Again, why did all 15 ex-Soviet states see rapid growth, and why did it start around 2000? Does it really take 10 years to recover from the damage of communism? China started growing extremely rapidly after the reforms of 1978, it did not take a 10 year waiting period". Remember, it wasn’t just a change of systems internally. The break with Russia also meant the disruption of their overwhelmingly largest trading partner. Suddenly, the buyer of their raw materials (at favorable rates) isn’t buying, and the seller of their finished goods (at favorable rates) isn’t selling. They had to get a new currency up and running, and establish new trade routes and relationships. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 16, 2016, 4:13am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/22 "2016-01-16T04:13:54Z")
> [@BrightNShiny](#): > > OP, can you link to where you are getting your historical per-capita GDP figures from? Type in the name of a country and gdp like [Latvia GDP](https://www.google.com/?gws_rd=ssl#q=latvia+gdp) on google and it should provide a chart of the last 30 years of that country and several ones like it. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 16, 2016, 4:13am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/23 "2016-01-16T04:13:55Z")
I didn’t do a systematic analysis, but in glancing over the world gdp data for the early 2000s, it looks like a lot of countries experience pretty good economic growth. Maybe not as good as the former Warsaw Pact, but there’s a lot of growth that’s nothing to sneeze at. My WAG is that this is because of a few factors: 1. Increased raw material demand from China driving up the value of raw materials. 2. The arrival of the internet to a lot of new countries. 3. Removal of a lot of capital mobility restrictions. 4. Impacts from the implementation of the WTO. So, I think we may have multiple things going on external to any changes in the Warsaw Pact which also helped propel their growth. ---
**Author:** ![BrightNShiny](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@BrightNShiny](https://boards.straightdope.com/u/BrightNShiny)\ **Post date:** [January 16, 2016, 4:22am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/24 "2016-01-16T04:22:34Z")
> [@Wesley\_Clark](#): > > Type in the name of a country and gdp like [Latvia GDP](https://www.google.com/?gws_rd=ssl#q=latvia+gdp) on google and it should provide a chart of the last 30 years of that country and several ones like it. Ah, ok. You’re using world bank data. So, here’s all their data for the world: [http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=1](http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=1) Until the financial crisis hits, a lot of countries are growing pretty rapidly (but maybe not as fast as the former Warsaw Pact). And that was a period where a whole bunch of financial “innovations” and capital mobility came into play. So, there was just a lot of money swimming around the globe looking for investments. That’s probably a big contributing factor here. And my guess is that its easier to find investors to put money into Eastern Europe than into some developing countries, just because Eastern Europe during the 2000s was a lot more politically stable then a number of developing countries. Plus, Euro expansion, NATO expansion and the like might have helped contribute to that perception. It’s a WAG, but that might be part of the explanation here. ---
**Author:** ![JacobSwan](https://avatars.discourse-cdn.com/v4/letter/j/a6a055/32.png) [@JacobSwan](https://boards.straightdope.com/u/JacobSwan)\ **Post date:** [January 16, 2016, 12:07pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/25 "2016-01-16T12:07:46Z")
I’ve lived and worked in the Czech Republic for 18 months and the transition from communism has always fascinated me. I’ve discussed this with native friends who lived through the transition and I hope their anecdotes are of relevance. One of the problems Czechoslovakia faced was what to do with all the state officials that had ruled under communism. Should they be prosecuted? Or would that just drag out the pain? They decided it was better to draw a line under things and start afresh. So a large number of people who had held high offices under the old system were barred from holding office in the new system. These people may have been corrupt and they may have committed many crimes. But they were also experienced in their jobs. You’ve now replaced all of them with amateurs with no experience. The new President is a former poet! It’s not hard to see how it would take 5-10 years for them to become competent. Especially as they are now dealing with a capitalist economy rather than a communist one. Ironically, it’s almost the same thing that the Soviets did when they first came to power. Large land holders were considered to be class enemies and they were replaced. But those land holders knew how to manage the farms far better than the proles they were replaced by. Under the Soviet system of Comecon\*, the individual Soviet states all traded with each other and Mother Russia heavily subsidized and regulated the trade. Once that collapsed, everyone had to find new partners to trade with. Many companies in the West were nervous about trading with people who had been their enemies just a few months ago. It takes time to build up relationships and trust. The geographically most western states, such as Czechoslovakia, already had some limited trade with the West. But most of their goods at the time were considered inferior. Just look at all the Skoda jokes that existed in the UK in the 80’s. It took a while for production standards to rise and in many cases this only happened after Western investment. Like VW with Skoda. (Skoda translates into English as ‘shame’. If only the comedians had realised this in the 80’s) Czechoslovakia was one of the first to try and transfer State assists into private hands. They used a system of vouchers and lotteries that worked quite well. When similar systems were tried elsewhere, people had worked out how to game the system and that is what led to the rise of the oligarchs. The Oligarchs used fear and intimidation to buy vouchers from lots of people for a pittance and managed to take majority control of former state monopolies. This wasn’t widespread in Czechoslovakia, and I’ve often wondered if it’s because they were too honest or too naive! The now Czech Republic has benefitted greatly in the last 15 years from the off shoring craze in things like IT. Wages are low by Western standards, but education levels are quite high. The company I work for moved their European data operations from London to Prague in 2004 and many companies followed their lead. Poland has a huge pool of web developers that I have used at other companies. - Whenever I hear about Comecon I always picture a bunch of soviets dressed up as comic book and sci-fi heroes but with big furry hats! ---
**Author:** ![engineer\_comp\_geek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/engineer_comp_geek/32/504_2.png) [@engineer\_comp\_geek](https://boards.straightdope.com/u/engineer_comp_geek)\ **Post date:** [January 16, 2016, 3:37pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/26 "2016-01-16T15:37:00Z")
**Moderator Action** Since there seems to be a bit of debate about this, let’s move this to Great Debates. Moving thread from General Questions to Great Debates. ---
**Author:** ![GreasyJack](https://avatars.discourse-cdn.com/v4/letter/g/df705f/32.png) [@GreasyJack](https://boards.straightdope.com/u/GreasyJack)\ **Post date:** [January 16, 2016, 8:35pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/27 "2016-01-16T20:35:46Z")
> [@Wesley\_Clark](#): > > Again, why did all 15 ex-Soviet states see rapid growth, and why did it start around 2000? Does it really take 10 years to recover from the damage of communism? China started growing extremely rapidly after the reforms of 1978, it did not take a 10 year waiting period. > > Also the argument that ‘they were starting from a lower basement’ isn’t really that persuasive. Small economies like the Ukraine went from $600 to $4000. But larger economies like Slovakia and the Czech republic went from $5000 to $20,000 per capita GDP. Many other economies grew, but not at the rate of ex soviet states, some of which saw their economies grow by 1000% from 2000-present. How many other middle income nations rose to high income status in that time period? Multiple ex-USSR states did, in fact 7-8 ex-Soviet states are now high income according to the world bank. > > Mexico, by comparison, went from about 6k to 10k at the same time places like Slovakia and Czech were going from about 5k to 18-20k. The former Soviet states were incredibly diverse in terms of development even before the collapse of the USSR. What I’d argue is that basically _all_ of them became profoundly economically dysfunctional during the transition from communism during the 90’s. When those issues were resolved (which did take the better part of a decade) GDP jumped up to whatever level each country could sustain. In the case of countries like Poland or the Czech Republic, which had good infrastructure and a well-educated workforce not to mention historical ties to Western Europe, the jump from non-functional economy to functional economy was astronomical. In the case of the Central Asian states, it was much less so. ---
**Author:** ![madsircool](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/madsircool/32/3432_2.png) [@madsircool](https://boards.straightdope.com/u/madsircool)\ **Post date:** [January 17, 2016, 6:36pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/28 "2016-01-17T18:36:04Z")
The ‘Russians’ didnt leave behind or do anything because they werent running the USSR. This misuse of Russia is bad history. ---
**Author:** ![madsircool](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/madsircool/32/3432_2.png) [@madsircool](https://boards.straightdope.com/u/madsircool)\ **Post date:** [January 17, 2016, 6:37pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/29 "2016-01-17T18:37:08Z")
> [@jtur88](#): > > Because the Russians left behind a well-established infrastructure. They left behind a nearly 100% literacy rate, with schools and universities in place. They left behind a health care system that was designed to provide universal care with adequate facilities and well-trained medical personnel. Also important, they left behind a sense of egalitarianism, so their social economies are not following a get-rich-quick scheme for the few most talented and aggressive, leaving the rest behind in squalor. > > Last year, I visited Moldova, Ukraine, Georgia, Armenia, Kazakhstan and Kyrgyzstan, and I was amazed that they all had the general appearance of nations with PPP’s at least double what their third-world statistics would have suggested. Cites for your claims, please. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 17, 2016, 9:38pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/30 "2016-01-17T21:38:38Z")
> [@GreasyJack](#): > > The former Soviet states were incredibly diverse in terms of development even before the collapse of the USSR. What I’d argue is that basically _all_ of them became profoundly economically dysfunctional during the transition from communism during the 90’s. When those issues were resolved (which did take the better part of a decade) GDP jumped up to whatever level each country could sustain. In the case of countries like Poland or the Czech Republic, which had good infrastructure and a well-educated workforce not to mention historical ties to Western Europe, the jump from non-functional economy to functional economy was astronomical. In the case of the Central Asian states, it was much less so. The central asian states still saw dramatic economic growth, many seeing their economies grow by 500-1000% over 15 years, they seem like their economies are still growing at 7-10% a year or so. ---
**Author:** ![AK84](https://avatars.discourse-cdn.com/v4/letter/a/85e7bf/32.png) [@AK84](https://boards.straightdope.com/u/AK84)\ **Post date:** [January 18, 2016, 4:32pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/31 "2016-01-18T16:32:01Z")
> [@Wesley\_Clark](#): > > The central asian states still saw dramatic economic growth, many seeing their economies grow by 500-1000% over 15 years, they seem like their economies are still growing at 7-10% a year or so. The Central Asian states are also near to some nation called… Syna, Dyna, China? Which you may have heard off. A country with a heavy demand for raw material and commodities, things which the C Asian states have in abundance and unlike most nearly every other sector after 2008, is one which expanded. In 2001, China-C Asia trade was [1 Billion, In 2015; 50 billion](http://thediplomat.com/2015/06/will-all-roads-in-central-asia-eventually-lead-to-china/). ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 18, 2016, 11:03pm UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/32 "2016-01-18T23:03:48Z")
> [@AK84](#): > > The Central Asian states are also near to some nation called… Syna, Dyna, China? Which you may have heard off. A country with a heavy demand for raw material and commodities, things which the C Asian states have in abundance and unlike most nearly every other sector after 2008, is one which expanded. > > In 2001, China-C Asia trade was [1 Billion, In 2015; 50 billion](http://thediplomat.com/2015/06/will-all-roads-in-central-asia-eventually-lead-to-china/). I have heard off China yes. Maybe the fact that the ex USSR states are all near western Europe and China. Combined those areas make up a huge economic market of about $30 trillion right now, and as was said earlier maybe some of the positives of the USSR (functioning infrastructure, emphasis on education, universal health care, social policies that protected and encouraged women and minorities to participate in society) helped propel their economies. But it seems the central asian ex soviet states grew faster than the south Asian economies like Pakistan or the southeast asian economies. But that is still all conjecture. Have any economists studied it? Is it just coincided that all 15 states grew so fast? I don’t know what happened with the eastern european states that broke off before the USSR breakdown ---
**Author:** ![madsircool](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/madsircool/32/3432_2.png) [@madsircool](https://boards.straightdope.com/u/madsircool)\ **Post date:** [January 19, 2016, 4:32am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/33 "2016-01-19T04:32:07Z")
I will ask again for cites about ‘the positives’ of the USSR. ---
**Author:** ![AK84](https://avatars.discourse-cdn.com/v4/letter/a/85e7bf/32.png) [@AK84](https://boards.straightdope.com/u/AK84)\ **Post date:** [January 19, 2016, 9:12am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/34 "2016-01-19T09:12:44Z")
> [@Wesley\_Clark](#): > > I have heard off China yes. Maybe the fact that the ex USSR states are all near western Europe and China. Combined those areas make up a huge economic market of about $30 trillion right now, and as was said earlier maybe some of the positives of the USSR (functioning infrastructure, emphasis on education, universal health care, social policies that protected and encouraged women and minorities to participate in society) helped propel their economies. But it seems the central asian ex soviet states grew faster than the south Asian economies like Pakistan or the southeast asian economies. > > But that is still all conjecture. Have any economists studied it? Is it just coincided that all 15 states grew so fast? I don’t know what happened with the eastern european states that broke off before the USSR breakdown There are differences between the economies of Pakistan, SE Asian nations and the C Asians. Pakistan has had to deal with the consequences of the U.S’s little picnic in Afghanistan; and since 2007, a full blown insurgency, which only now is abating; causing economic losses [of over 100 billion USD](http://www.dailytimes.com.pk/business/21-Dec-2014/socio-economic-impact-of-terrorism-on-pakistan). Having had any growth at all is a miracle. In addition, Pakistan and the Far Eastern nations are heavily dependent on exports, the financial crises tended to hurt them more then commodity exporters like the C Asian nations; Pakistan at least has a large domestic market which can take up some of the slack, besides Indonesia, most of the Far Eastern nations don’t. All of these countries are in someway competitors with China in the export market; and the Chinese have driven many small manufacturers out of business. Chinese investments has been heavy in C Asia, less in the Far East. The Chinese investment in Pakistan la[st years was 3.5 bn dollars,](http://www.brecorder.com/top-news/front-top/273654-pakistan-emerges-chinas-largest-investment-destination-sun-weidong.html) which is more all years combined, however until 2015, it was quite less. So, in short; each of these countries is in a different position then the C Asians Republics. ---
**Author:** ![Lantern](https://avatars.discourse-cdn.com/v4/letter/l/d26b3c/32.png) [@Lantern](https://boards.straightdope.com/u/Lantern)\ **Post date:** [January 19, 2016, 9:26am UTC](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186/35 "2016-01-19T09:26:01Z")
A huge part of the answer is higher commodity prices from strong Chinese demand. In the case of the Baltic countries, it was closer integration with Europe including euro membership which was beneficial before the Euro crisis. [Previous page](https://boards.straightdope.com/t/why-did-most-ex-ussr-states-grow-so-fast-from-the-year-2000-onward/743186.md?page=1)