The general mood in society depends largely on the standard of living in the country. With the economic crisis of 2008 turning into the crisis of 2011, we are reminded of this fact yet again.
The countries of the former Soviet bloc have been the hardest hit by the global economic problems. In the past three years, they have suffered the greatest drop in production since the “transitional recession” that followed the collapse of the Soviet Union in 1991. In fact, the economic downturn in some Eastern European countries has been even more severe than during the breakup of the socialist system.
People living in countries with transitional economies are now experiencing high unemployment, a sharp drop in salaries, the inability to repay bank loans and the need to drastically reduce consumption. Having had little opportunity to fully enjoy the benefits of democracy and a market economy, they now face the most painful problems associated with the functioning of free markets. Will the economic problems of former socialist countries serve as a catalyst for market reforms, or will they only encourage those people to reject the market-based economic model?
Unfortunately, there are many arguments in favor of rejecting market reforms and democratic ideals. Most countries’ anti-crisis programs have led to greater government control of the economy and a stronger voice for groups advocating tighter regulation.
Before the 2008 crisis, former Communist countries tried to liberalize their financial systems to integrate into global trade and financial systems. But now, more Europeans are reconsidering this position.
A recent report by the European Bank for Reconstruction and Development, or EBRD, showed that their support for democracy and free markets is declining. In fact, the further a country is along the path toward reform, the more its citizens want to move away from the ideals of democracy and free markets.
The EBRD report shows that people perceive a direct link between the current economic problems and the functioning of democracy and a market economy. An average of 30 percent to 70 percent of respondents blamed the crisis on the West and market values. And the countries that made the most progress along the path of reform also suffered the most from the crisis.
The EBRD research makes clear that the harder an individual has been hit by the crisis, the worse their attitude toward democratic values.
Paradoxically, the EBRD study found that support for democracy has actually risen in Russia and the former Soviet republics as a result of the crisis. According to the report’s authors, people who live in freer societies that were hardest hit by the crisis became more averse to the existing democratic political system. Conversely, those living under more authoritarian rule became stronger supporters of democratic change as a result of the crisis. For example, support for democracy in Tajikistan, Uzbekistan and Armenia reached 80 percent — the same as in Western Europe — and hit 40 percent in Russia.
As it turns out, the principle “the worse it gets, the better it is” applies to Russia. A serious decline in living conditions creates greater demand for democracy and market reforms. Previously, many were convinced that Russians would embrace the values of a free society only after they had tasted the fruits of globalization and market reforms.
In the end, Russians are jolted to awareness only when their stomachs are empty. Now the question is: How bad do things have to get before Russians make serious demands for political change as well?