CIS: COMPARE AND CONTRAST….

The twelve members of the Commonwealth of Independent States — all the former Soviet states except Estonia, Latvia, and Lithuania–have little in common but lack of wealth. In every CIS country, 1999 output, per capita income, and labor productivity are below 1990 levels. But most CIS countries have shown signs of recovery since 1997. The Russian collapse of August, 1998, has turned out to be a temporary setback.

These conclusions emerge from the always suspect data published by the CIS Statistical Office. Suspect, because economic activity in these countries is often in hiding from taxation, regulation, or prosecution and resists being counted. The shadow economy accounts for perhaps a third of all production in Armenia and Georgia; a fourth in Russia, Kazakhstan and Azerbaijan; and a sixth in Moldova and Kyrgyzstan. And the data from the base year of 1990 is misleading as well. Gross domestic product in the Soviet era included quantities of unwanted goods and services fabricated–in both senses of the term–to meet central-planning targets. With the base year overstated and the current year shortchanged, the apparent CIS collapse in the 1990s is exaggerated.

With that warning, the CIS statistics released in February indicate that gross domestic product in 1999 was 95 percent of its 1990 level in Uzbekistan, 81 percent in Belarus; 63 percent in Kazakhstan and Kyrgyzstan, 60 percent in Armenia,58 percent in Russia, 42 percent in Azerbaijan, 41 percent in Ukraine, 34 percent in Tajikistan; and 31 percent in Georgia. Moldova reported per capita GDP at 56 percent of 1991 levels. No data were available for Turkmenistan.

But economies have turned up in the last two or three years. In 1997, ten of twelve CIS countries had positive growth, with double-digit growth reported for Georgia, Kyrgyzstan and Belarus. The Russian collapse in 1998 led to contractions in that year only in Russia, Ukraine, Moldova and Kazakhstan. Last year, GDP rose in every CIS country except Ukraine and Moldova, and Ukraine showed growth in the second half. Only unfortunate Moldova, divided, occupied and bankrupt, continues its woeful decline.