NCPA - National Center for Policy Analysis


March 3, 2006

Corruption remains the leading economic failure among various regions of Eastern Europe. Poland has successfully integrated with the world economy, while the Commonwealth of Independent States (formerly the Soviet Union) lacks foreign trade advantage. Still, the southern region of Eastern Europe contains both prosperity and poverty, says the Economist.

World Bank researchers studied the causes and cures for Eastern Europe's economically assorted regions. They found:

  • While rich-country protectionism particularly hurts Eastern Europe's food and metal exports, self-imposed, low-level trade barriers damage the economies far worse.
  • Getting a truck-load of goods from Armenia to Russia means paying $2,000 for "security."
  • Georgia consumes 46 percent of the price of shipping a container from Rotterdam to the Georgian capital; of this, unofficial payments make up nine-tenths.
  • Clearing customs in Tajikistan requires 18 bits of paper from different government agencies.
  • If trade standards among these countries were half those of the European Union, trade in Eastern Europe would increase by $178 billion.

Clean, competitive countries strongly correlate with high shares of imports and exports in gross domestic product (GDP), says the Economist.

Source: "Exporting Success," Economist, February 4, 2006.


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