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Tuesday, September 9, 2014

The Advent of the Functioning Failed State....

Link: Has the West Failed Eastern Europe?

The Balkans region is the national nursery of Europe.  With the establishment of Bosnia-Herzegovina and Kosovo, and the renewed attempts at economic and political rejuvenation in Albania, the Balkans seem to be alive with growth.  South of Kosovo are Macedonia and Greece, and to the east you find Rumania and Bulgaria.  The people of Kosovo recently celebrated their Declaration of Independence, with the hope that economic growth and political stability would follow.  But Eastern Europe, regardless of the recent developments in Kosovo, is home to stagnating economies and political instability.  In fact, you would be hard-pressed to identify a country in the region (possibly Serbia) that does not fit the description of a "failed state". 

With the fall of the Iron Curtain and the subsequent collapse of totalitarian regimes in Rumania and Bulgaria, there was great excitement and hope for national rebirth.  Unfortunately, both Rumania and Bulgaria suffered from an endemic type of corruption deluxe.  Every branch of government seemed to function on a unique form of bribery and nepotism.  It would take much more than a change in government to reform the corrupt judicial and administrative systems that had atrophied under communist rule.  In order for Bulgaria and Rumania to succeed, it would be necessary to build from the ground up, and would require immediate sacrifice from every level of society.  And many people were not willing to make the sacrifice.  Since the fall of communism, both Bulgaria and Rumania have stuttered and staggered towards a pseudo-capitalist economic system, still fighting corruption in government, still dealing with the presence in power of some of the old communists that had been part of the original problem.  The average person doesn't see the big picture.  the average citizen realizes that their standard of living has no improved since the defeat of the communists.  In fact, crime has increased and the trains don't always run on schedule anymore.  They blame the political changes for all the problems they face today, long for the stability of the past, and vote communist.  Both Bulgaria and Rumania are failed states.  They function almost out of habit.

Greece is the country that wants to be European, but doesn't want to make the sacrifices and the reforms necessary for the long-term economic stability that exists in places like Austria and Denmark.  The Greek people do not seem to understand why they are different.  They refuse to examine their economic and political system, where lies the answers to their question.  It was probably wishful thinking on behalf of the European Union that allowed for Greece's acceptance into the EU.  The Greek economy was not structured to compete effectively with other European markets.  Socialist governments in Greece had created so many loopholes and exceptions to the tax code, not to mention pension growth that far outweighed economic growth, that the Greek economic system bore very little resemblance to its European Union partners.  The Greek economy is also dependent upon a vibrant tourist industry.  When political problems (and the threat of terrorism) discourage tourism, the Greek government must look elsewhere to make up the lost income.  The EU has been willing to bail out Greece, but repeated requests for permanent reform (including hated changes to the pension system and the tax code) have met with demonstrations, riots, and revolving-door governments.  Greece has become a failed state.  It also still functions, but at the end of the day the economic forecasts promise more conflict with the EU.

Macedonia was born on the rump of the former Yugoslavia.  At birth, the Macedonian economy was in no position to support an entire nation.  Efforts to build a diversified economy have resulted in less dependence on foreign imports for foodstuffs, but Macedonia is also in great need of improvements in infrastructure.  Macedonia is landlocked, and all trade must be transported on a less-than adequate road network that was heavily damaged during the Kosovo conflict.  Macedonia lives on loans, just like its neighbors.  At least the possibility of a Civil War with Albanian separatists has diminished, and the political system seems to be vibrant.  But Macedonia is a young, failed state.  On the other hand, Albania has been a political entity for roughly a century.  The Albanian people, God bless them, have suffered heroically through repeated corrupt administrations, both socialist and "democratic".  It seems impossible to find an Albanian politician who isn't "on the take".  The Black Market, smuggling cigarettes, booze, and women, functions much more effectively than the national economy.  But the people, with a trust in traditional methods of subsistence, persevere.  Albania functions, but it certainly fits the mold of a failed state.

The link I have provided questions the European commitment to Eastern Europe.  When Yugoslavia, Bulgaria and Rumania threw off the yoke of communist/socialist control, the diplomatic response was very supportive.  But the money and the assistance (to rebuild infrastructure, train and educate workers, etc.) was either non-existent or slow in arriving.  For all practical purposes these nations were left to their own devices.  Kosovo and Bosnia-Herzegovina both have the misfortune and the fortune of being temporary home to various European military elements.  But both Kosovo and B-H have healthy, ingrained Black Markets that won't hesitate to compete with legitimate businesses.  Kosovars benefit tremendously from an Ex-Pat community (particularly in the United States) that continues to pay for improvements in infrastructure (although power is a real concern).  The EU has made its presence known (the Office of European Cooperation in particular) recently, in a Johnny-come-lately fashion.  But it may be too little too late.  The people of Eastern Europe have lost faith in the EU, and European taxpayers are growing weary of expenditures into "nowhere".  The future is not bright for the functioning, failed states of Eastern Europe.

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