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Always look on the bright side of life
Fri, Oct 3 2008, 12:09 GMT
by Danske Research Team
The past year has been terrible for the global financial markets and we have been quite negative on the outlook for a number of Emerging Markets and in particular for Central and Eastern Europe (CEE) since early 2007. However, from time to time, it is important to look on the bright side of life.
We still expect a fairly sharp slowdown for the CEE economies. In fact, the slowdown is already under way. This is especially the case in the Baltic states, which, over the past year, have gone from double-digit growth to recession. However, that does not change the fact that the end of communism in CEE nearly 20 years ago has brought tremendous economic, financial and political progress and not least a significant improvement in living standards for ordinary people.
So even though CEE growth is likely to be very lacklustre going into 2009, there is nonetheless good reason to celebrate the enormous progress in Central and Eastern Europe since the first free elections in the former communist countries in June 1989. Poland provides a very good example of this progress. The country that joined the EU in 2004 - along with seven other former communist countries (and Malta and Cyprus) - has undergone a remarkable economic transformation over the past two decades of democracy and free market policies. In 1993 GDP per capita was only 9.5% of GDP per capita in Germany. Today the figure is 27.3%.
Take another example - the environment. Communist mismanagement created an environment graveyard in Central and Eastern. However, since the end of communism, the environmental situation has improved significantly in the region. For example, the emission of CO2 (per GDP unit) has been more than halved in Poland since the early 1990s.
Concluding, the Central and Eastern European economies and markets face serious challenges and we are likely to see a significant slowdown in growth in the region, but it does not change the fact that the past two decades have brought tremendous progress in region.
Published on Fri, Oct 3 2008, 12:14 GMT
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