A decade of life without the Wall

As she meets an acquaintance in the restrained turn-of-the-century elegance of Budapest's smartest coffee house, Em Jzsa's fashionably bobbed hair, her well-cut suit, and her practiced English proclaim her success: she has grabbed with both hands the opportunities that the new Hungary has offered her.

To the northeast 120 miles, in the depressed steel town of Miskolc, Elemer Kotai stands outside his rundown apartment block, waiting on the corner for the mailman to bring his welfare check.

A middle-age crane operator, Mr. Kotai lost his job when his state-run factory was privatized in 1994, and with it he lost all hope in the future.

In the 10 years since the fall of the Berlin Wall signaled the end of communism's grip on Central and Eastern Europe, a pattern of winners and losers has emerged. You can see it in the individual lives - like Kotai and Ms. Jzsa - as well as in the progress of individual nations.

Hungary and Poland, for example, have made a relatively rapid transition from totalitarian states with socialist economies to constitutional, participatory democracies with free markets. Neither country, however, would claim that it's been an easy - or a complete - transformation.

But others, such as Bulgaria and Romania, are still struggling to make the adjustments that will bring them into a semblance of accord with the rest of Western Europe.

"Our societies have yet to adapt to the changes," says Gabor Demszky, once a prominent Hugarian dissident and now mayor of Budapest.

Mr. Demszky adds, "In general it is fantastic how rapidly the transition has happened. But the price we would have to pay for it was not clear in 1989."

Em Jzsa look-alikes can be seen all over the region, cell phones to their ears, working and playing hard, wearing the same clothes, listening to the same music, and sharing the same aspirations as their West European cousins. Nor is Elemer Kotai alone: millions of people have been "shoveled out of the gate" as he puts it, in the economic upheavals that have shaken Central and Eastern Europe.

But if similar forces are at play everywhere, the countries of the region that were once blurred in many Western minds into one gray "Soviet bloc" have now sprung into individual relief.

History (suspended by Soviet diktat), and geography (distorted by the Iron Curtain), have reasserted themselves. And though the mantra from the Baltic to the Balkans is the same - capitalist democracy - naturally some countries are closer to this goal than others.

One overriding trend has swept them all, though. As the Russian bear's hug loosened, capitals that had been obliged to look East for 40 years swung their eyes westward. Nations that had been members of the Soviet-dominated Warsaw Pact lined up to join NATO (Hungary, the Czech Republic, and Poland joined last May), and as Comecon collapsed, its members applied to join the European Union instead.

"Our countries need capital, technology, markets, and security," points out Andrs Balogh, head of the Hungarian Institute for International Affairs, an independent think tank. "NATO and the West are the only reference points."

It is not surprising that Hungary experienced one of the easiest transitions from a totalitarian state running a Socialist economy to a constitutional democracy and free markets. Although the 1956 uprising against Communist rule was crushed by Soviet tanks, the Hungarian authorities developed a style of "goulash communism" that allowed many reforms.

Hungarians often traveled to the West, small private enterprise was allowed, and by 1989 "our managers were already thinking along profit lines, they knew how to make deals," says Pl Rti, an editor at the leading business weekly HGV.

Likewise, in Poland, the atmosphere was westernized by the tens of thousands of workers who had taken jobs in western Europe, and by Solidarity, the anticommunist trade union. Farmland had never been collectivized, and more than 50 percent of Polish trade was with Western countries.

This was very different from the situation in Bulgaria, for example, which is still struggling to implement market reforms. There, the economy was dominated by massive state-run heavy industrial plants that depended on cheap Soviet oil and gas, and exported 85 percent of their output to the Soviet Union. When the energy supplies and the market dried up overnight, Bulgaria was bound to be in difficulties.

Nor was Romania well-placed to implement changes: President Nicolae Ceaucescu had denied his citizens all contact with the West, and his successors were hardly cut from the same democratic cloth as the new rulers in the rest of the region.

Even Czechoslovakia, which split into the Czech Republic and Slovakia, was at a disadvantage, despite its proximity to the West. "All individualistic or entrepreneurial thinking was uprooted" by the Communist government, says Lszl Lengyel, a noted Hungarian political analyst.

Once the regimes changed, economic theorists who had been used to working with models suddenly found themselves with a crop of live economies on which to experiment, and different Central and Eastern European governments followed a wide variety of different counsels.

Some privatized their economies by simply selling off public companies wholesale for cash; others gave citizens vouchers they could use to buy shares; some organized management buyouts; others broke up firms and sold off bits. Most did a little of everything.

In retrospect, says Jacek Rostowski, an economic adviser to the Polish government, "the consensus is that selling off" public companies, as Hungary did, "is the much better option," since the companies that bought them - almost always from the West - brought in technology, management skills, and investment.

The vouchers that the Czech government issued dispersed ownership widely; in the absence of any tradition of corporate governance, many managers took advantage of the lack of firm oversight to ransack their firms' assets.

Though the upheavals happened differently, there have been casualties everywhere. Indeed, Poland is the only formerly Socialist country that has yet managed to achieve the same per capita gross domestic product as it enjoyed 10 years ago. "Even in Hungary, a success story, two-thirds of the population are losers in terms of how much they consume" says Andrs Vrtes, an economic consultant. "Just imagine what it's like in Romania."

The resulting social inequalities have shocked Central Europeans, accustomed to the egalitarian principles of the past. But recent World Bank figures suggest that these inequalities are approximately the same as in Western Europe and much less pronounced than in the United States.

Overall, the European Union found in a survey last month that Poland, Hungary, the Czech Republic, Slovenia, Latvia, and Estonia are "functioning market economies," while Slovakia and Lithuania are "close" and Bulgaria "has made substantial progress." That left Romania where "the economic situation is very worrying," the report said.

Likewise, the study found formal parliamentary democracy and the rule of law working satisfactorily throughout the region, with free elections and human rights respected almost everywhere.

But from Estonia in the North to Macedonia in the South "you can turn a one-party system into a multiparty democracy overnight - that is not the same as democratizing society" points out Ferenc Miszlivetz, author of a book on civil society in Central Europe.

Not even in the most radically transformed of the Eastern bloc countries have thinking patterns changed in institutions such as the police, universities, government ministries, and other public bodies, say reformers. And corruption fueled by poverty, greed, and the legal uncertainties of transition economies has flourished throughout the region.

Even allegedly democratic politicians suffer from old habits, observers say. "A primitive interpretation of democracy is very common everywhere," says Dr. Miszlivetz. "They think that once they have a majority, they can do whatever they want."

"It takes decades to establish a democratic mentality in peoples' minds," says Dr. Lengyel. "But it is not even rooted in the elites yet. The logic of one-party rule prevails; governments cannot imagine the opposition winning an election, and in some countries the opposition is simply the enemy."

For ordinary people, conditioned by decades of repression, the state is still the enemy. A problem in fighting rising crime, says Leslie Kaciban, an FBI agent who runs a US-funded training school for policemen in Budapest, is that cooperation with the police "is still embryonic. It may take a generation to build a partnership between the police and society."

Meanwhile, the sort of values that reinforce civil society - and that fueled the resistance to Communist rule - have retreated in the face of the hurly-burly of economic survival, says Miszlivetz. "Cooperation, tolerance, solidarity, nonviolence, negotiating a consensus, these have not totally disappeared but they have been pushed into the background."

But citizens' groups are springing up around the region, mobilizing around such issues as health care, minority rights, and the environment. Eventually, says Miszlivetz, Central European societies will develop new strength. "They have to," he says. "Otherwise there is no chance of a successful integration into Europe."

(c) Copyright 1999. The Christian Science Publishing Society