Recent official statistical reports from CIS governments indicate that nearly all the CIS countries experienced economic growth in the first quarter of 1997. (Interfax, April 24-26) However, the quality of these data leave a great deal to be desired and, somewhat inexplicably, they show that Ukraine and Moldova continue to be mired in a deep recession.
While the apparent continuation of the double-digit GDP growth that Georgia recorded in 1996 is no particular surprise, the 9 and 5 percent annual growth rates recorded in the first quarter (relative to first-quarter 1996 levels) by Belarus and war-torn Tajikistan, respectively, certainly are unexpected. Uzbekistan’s GDP was up 1.7 percent, while the growth in Kyrgyzstan, Kazakstan, Armenia, and Azerbaijan recorded during 1996 also seems to have carried forward into 1997. However, although Russia reported 0.5 percent growth in GDP during the first quarter, its largest trading partner — Ukraine — reported a 7.9 percent drop, a figure matched almost exactly by Moldova’s 8 percent decline. These anemic figures reported for the Western CIS are something of a puzzle, since: 1) these countries’ borders are closest to the wealthy OECD countries and the rapidly-growing Central European economies; 2) the vast majority of the foreign capital invested in the CIS last year went to Russia and Ukraine; 3) inflation rates in Russia, Ukraine, and Moldova are not especially high, compared to the rest of the region; and 4) Belarus, the economy with the Western CIS’s best growth figures, is widely viewed as a reform laggard.
Wide disparities in the statistical authorities’ use of price deflators and coverage of the second economy make cross-country comparisons difficult, and suggest that caution be used in interpreting these numbers. Still, these are the most optimistic growth figures to come out of the region since the dissolution of the USSR, and they suggest that, for most of the CIS, the worst of the economic transition is now over.
Mass Demonstration in Minsk Against Union with Russia.