Year XXXIV, 1992, Number 1 - Pagina 58



1. Two opposite tendencies are simultaneously appearing in the sphere of international relations: the action of unifying forces exists alongside movements towards the disintegration of links between countries and communities.
The events of recent months have shown the strengthening of international organizations, both international ones such as the United Nations and certain regional ones (in the Atlantic and European area, not only the EEC but also NATO and the CSCE). On the other hand, the most recent events testify to the acceleration of the break-up of certain political blocs in ex-Communist Eastern Europe.
Signs of unity come from a variety of sources. From the UN building, where the role of the general secretary has begun to acquire importance – certainly more than in the past – due to his initiatives to resolve tension between nations. From Washington, where a large number of countries within a framework of multilateral initiatives have undertaken to aid the economy of Russia and the other ex-Soviet republics. From Brussels, where NATO has acquired a new instrument, the Co-operation Council, which is open to the old enemies of Central and Eastern Europe. From Prague, where the member states of the CSCE have established the important principle of “unanimity less one” as a decision making rule. This has taken the first step towards overcoming the “right of non-interference” and limiting the “right of veto” of CSCE members. And finally from Maastricht, where the European Community has undertaken decisive progress towards political unity, with the double decision of creating a single currency and a common policy on foreign affairs.
However it is the other side of the coin that startling events are highlighting. The Soviet Union has ceased to exist as a legal international entity and in its place, behind the facade of a Commonwealth, which up until now has been devoid of a similar legal identity, new sovereign states have appeared. The other East European federation, Yugoslavia, has not survived the most recent events. There has been the institutional crisis between the republics, the secession of the Croats and the Slovenes, the civil war between Belgrade and the secessionist republics, and the proclamation of independence by Bosnia-Herzegovina and Macedonia. Even the unity of Czechoslovakia, the third Eastern European federation, is in the balance. Relations between Prague and Bratislava have been marked by a high level of institutional conflict, even if they have not yet come to separation, and may not do so ever in the future.
We should ask ourselves whether these events – seemingly manifestations of opposite political tendencies – do not in fact have certain common roots, which once identified could allow a more comprehensive and coherent interpretation of what is taking place in the world today.
2. The simultaneous confirmation of both integration and disintegration as basic tendencies in world affairs, points to the beginning of a new, more complex phase of world history. It could be argued that these new events mark the true beginning of a supra-national period of history. Until the present time, the need for a world government came from doubts or dangers that remained to a greater or lesser extent distant. However this need has now received decisive confirmation from historical events. The fall of the Soviet Union and the end of polarized world affairs has given rise to the definitive beginning of a new era in which all problems are global, but in which we lack the tools to resolve them. The nucleus of “world government” represented by the joint management by the Americans and Soviets of problems and crises (attempted by Gorbachev with Reagan and then Bush) has fallen apart. The struggle to strengthen the UN has become extremely relevant. On its success hangs the fate of events for the next few years, of the advance of civilization or the break-up of humanity.
With the end of the polarized world, the control of world events is only possible through a decisive reinforcement of the power of world supranational organizations, and in particular the United Nations. The risks that can ensue from the death of the USSR are at least as great as the possible advantages that can be gained from the decline of communism as a totalitarian power system, and the ending of the international class struggle as the foreign policy of the Communist states. In the following months we may witness the phenomenon of nuclear proliferation, and the exportation of highly dangerous arms and military technology to irresponsible regimes. We may see local wars and other signs of instability both in Europe and in Asia. The news is already full of these events. The break-up of the Soviet Union and the fall of communism have, without doubt, also added to the North-South conflict. Nobody however is in a position to say whether Socialist governments in the Third World will be replaced by pluralistic democracy, as is the hope, or whether they will give rise to political systems of a different type, characterized by strong ethnic and religious intolerance and aggressiveness. If the problem of the world’s economic imbalances should break out into violent demands, we could have a world civil war on our hands.
3. What caused the break-up of the USSR and what has overturned the geography of Eastern Europe? Moreover we should ask ourselves why the new generation of pro-democracy Eastern European politicians and intellectuals has not taken to heart the economic concepts that are now generally current in the West? (That is, that the increase or at the very least the maintenance of the size of geographic groupings is a pre-condition for economic growth.) Why, on the other hand, in the ex-Soviet Union and the entire Socialist bloc, have political forces and schools of thought arisen which hold that the improvement of the economy is linked to the break up of previously unified areas?
The answer is only partly linked to concepts of the contrast between international communism, and democratic nationalism, of the nineteenth century variety. In reality something more complex has happened. To understand what, we should compare the experience of Western European reconstruction during the fifties with the events of recent months.
In the first post-war decade, the national states of Western Europe, devastated by war, had to begin mutual integration in order to start economic reconstruction. The choice of integration was also due to economic restrictions, since the national states of Europe did not have direct access to the world market. For example let us think of a small European country such as Belgium or Holland; at that time, without the nearby markets of France or Germany, they would not have had a future. Their companies could not have been managed easily, either their financing, or the distribution of their products to the distant American markets, not to mention Japan, the “Asian tigers” or other world markets which are now emerging. The same restriction was true even for the larger European states such as France, Germany and Italy, and, as history has shown, this was the case even for Great Britain which had the Commonwealth to trade with. In the forties and fifties a real world market was lacking. International economies were not as integrated as they are today. Only those countries which associated with their neighbours, thereby creating an “internal market” on a continental scale, could assure themselves of a prosperous future.
To the eyes of Eastern Europeans who dreamed of leaving the Socialist system, the world showed contained features in the late eighties which had varying aspects.
The process of deregulation, launched by Mrs Thatcher and President Reagan, opened the financial and trade markets to the companies of the whole world. Even today these two personalities have their most faithful admirers in the East. The establishment of a common European market has simply confirmed the creation of a world market. Indeed during the eighties an integrated world capital market was created which among other things allowed the United States to finance its internal growth from abroad. The US in its turn was transformed into an important part of the “domestic market” of Japan and industrialized Asia, which allowed these countries to reach very high levels of growth.
What is indeed notable is the change in attitude of the great majority of countries with respect to the globalization of the economy. Once treated with disdain, multinational companies are nowadays courted by countries as a source of direct investment and, consequently, as an element of progress. The great international economic areas contend for international capital by offering benefits and fiscal exemptions. The integrated financial markets of America, Europe and Asia offered large companies the financial means to provide services to their world clientele, even in economic areas which were far from the original areas of expansion.
It was no longer the size of internal economic areas, but rather the access of single economies to the world market that defined the level of economic well-being in the eighties. Some of the most severe cases of economic crisis seen during this decade are exemplary: Mexico, Brazil, Argentina, Nigeria and the Soviet Union itself. All of these countries were large and had great resources but can be considered as having been closed economies. Their huge territories however did not help them from their slide towards economic decadence. On the other hand it was the small industrial economies, which were forced to open up and carve out niches in the world market, that offered the only examples of an exit from underdevelopment: Taiwan, Singapore, Hong Kong, South Korea, and Chile.
4. At the end of the eighties the world market had become the decisive factor in economic development. It had also sent the great closed continental economies into crisis.
The economists and politicians who were more receptive to the new world situation certainly watched this development with great interest. The dream of Poles, Czechoslovaks, Hungarians, citizens of the Baltic nations, Slovenes and Bulgarians, as well as of Russians who had rejected Communist economics, was to combine the two phenomena which they had witnessed in the eighties. That is, the return of Latin America to democracy – just as essential to the East for the creation of a market economy – and the growth of the “Asian tigers”, small flexible economies which had already established themselves solidly as trading partners with Japan, America and Europe.
It was therefore no coincidence that as soon as Gorbachev had offered the chance to reject socialism, an immediate opening up to the world market was chosen (directly and without the mediation of regional associations). After years of inadequate technology and declining industrial plant, the East threw itself into the deep end of the world market, in a desperate search for technology and investment. The anxiety to make up for lost time has forced these countries to make a tremendous effort. In a short period of time, prices have been floated to nearly world levels. International commerce, once concentrated in the CMEA area, has been redirected towards the Western countries, with great sacrifices as a result. Some countries have taken the quickest route to complete convertibility of their currencies, i.e. without relying on a payments Union. Joint ventures and foreign investment have been greeted with great enthusiasm. Many nations have become members of international financial organizations, in particular the International Monetary Fund and the World Bank. The East has chosen the most direct and painful path in order to enter immediately into the world market. It has turned its back on less difficult ways for both ideological reasons and considerations of objective need. The lost ground was far greater than that of the Western countries after the Second World War. Furthermore it should be noted that their principal economic partner and competitor, East Germany, is being integrated into the West at a great pace, thus forcing the other nearby countries to proceed with equal rapidity.
The process of integration into the world market had to be completed as soon as possible in order to reduce the most difficult part of transition to a minimum, and to offer international investors favourable conditions for industrial establishments and collaboration. Therefore another element was needed: a clean break with the past, involving an economic, political and if necessary territorial departure from all the old systems of control that might slow down the passage from economic isolation to integration with the world economy. For some of the more westernised republics (e.g. the Baltic states and Northern Yugoslavia), this meant secession. For others, however, it meant a struggle to leave CMEA and the Warsaw Pact. Therefore, the beginning of the integration of East Germany, Poland, Czechoslovakia, Hungary, the Baltic states and Northern Yugoslavia into the world market during the 90’s meant the break-up of CMEA, the Soviet Union and Yugoslavia.
5. A year after the firsts signs of the choice of radical reform in the East, three new elements have made the situation even more complex.
The first was that the strategy of an immediate and direct entry into the world economy was embraced by the new political protagonists. The most important of these was Russia. The most convinced and coherent was Bulgaria. After much hesitation and in dire economic straits, they were followed by Rumania and Albania. Recent events in Russia (e.g. the liberalizing of prices at the beginning of 1992), have also forced the Ukraine and other ex-Soviet republics to do the same, so starting the process of opening up to the world market. It is extremely noteworthy that it is post-Gorbachev Russia itself that wants to be free of the weakest republics, which would slow her entry into the world market. In fact, Moscow no longer wants to retain links with Central Asia and with the trans-Caucasian regions. Bearing this in mind we can see why Russia originally wanted a confederate agreement only with Belorussia and the Ukraine, why she wants to join NATO in the medium term, and why she wants to disengage militarily from the Armenian areas claimed by the Azers. It was only the refusal of the Ukraine to participate in any form of complex association with Russia that obliged Russia to put off its final break with Central Asia and the trans-Caucasian regions.
The second element above all involves, but not exclusively, the countries which have common borders with member states of the European Community. Here the desire to become part of the EEC has become strong. On the 3rd October 1990, the workhorse of the old CMEA, East Germany, in effect became part of the European Community. In November 1991, Czechoslovakia, Poland and Hungary signed special association agreements with the EEC. The desire to tighten links with Brussels has also arisen in the Baltic states, Slovenia, Croatia, Bulgaria, Rumania and even in some of the ex-Soviet republics.
The third element has been the final disintegration of the old forms of co-operation. CMEA, the Warsaw Pact, the Soviet Union and Yugoslavia have all disappeared.
6. Therefore we can see that the strategy of immediate entry into the world market was undertaken with great single-mindedness. However certain risk factors that could lead these states into a blind alley emerge (that is, into isolation and economic under-development).
The world market is not yet organized on a rational, ordered, basis. It still needs the legal guarantees, firm procedural regulations, and institutional checks which work within markets which have already been established. For example, the European Common Market allows companies to invest and establish relationships and alliances with a degree of security. An example of lack of controls is the current conflict between !be EEC and its two major partners on the world scene, the United States and Japan. This is based on two fundamental questions: free trade and interest rates. There is the risk that unresolved problems between the giants of the world market will be off-loaded onto the weakest links in the chain, i.e. the new arrivals. The danger that the industrialized West will use protectionism to harm the newly democratic countries of Central and Eastern Europe in important sectors such as agriculture is particularly worrying. The entry of the Ukraine into the world market in this sector, for example, will upset the present balance.
The world market is not yet capable of mobilizing sufficient resources for the development of all the economic areas that need capital. The developing world is not the only competitor of Eastern Europe. Eastern Europe also has to contend with such industrialized states as the USA, a united Germany, and indeed Italy itself, all of which have their own enormous internal financial imbalances. The scarcity of capital is becoming one of the most important features of international economics. The willingness of Western business to make direct investments should not be overrated. While Europe has begun to act, Japan and America have shown a great deal of caution regarding buy-outs and joint-ventures.
Despite romantic and sentimental attitudes which often dominate public opinion, a lot of companies, and as many governments, do not consider that the economic and political disintegration of the East, which was actively desired by those who wanted direct contact with the world market, is a contribution to growth and stability at all. Conflict and disorder, which are occurring at regular intervals, the confusion of roles, and the conflict between legal systems are features of this process. All of which, by adding to the risk, have encouraged the sense of disorientation and even fear which investors have felt and which have subsequently kept investments away.
There is therefore the risk that the countries of Central and Eastern Europe will have to face the problems of transition to a market economy alone. They will not be able to benefit from the indispensable help of international capital, while the old channels of trade relations inherited from CMEA are now obsolete. An unhappy outcome could paralyse for years to come the whole of the Eastern bloc, with the exception of the old DDR, Czechoslovakia, Poland and Hungary. These four countries in fact do not enjoy privileged access to the world market. But, on the other hand, they can count on integration into the EEC, particularly thanks to the public and private efforts of German financial investors, who have a geopolitical vested interest in stabilizing the eastern frontiers of their country.
Because of these conditions, the probability that the economic situation will fall into a spin increases. These countries have made the best and boldest choice in order to liberalize their economies. Despite this, Western capital is not forthcoming, East European businesses are not receiving Western orders and the whole economic crisis deepens, assuming an increasingly worrying aspect.
At the root of the decision to create immediate contact with the world market was the possibly naïve over-estimation of the West’s capacity to help that was made by the new pro-democracy politicians. The West’s propaganda had perhaps led them astray. It is enough to think of the bewilderment of the secessionist Republics of the Soviet Union and Yugoslavia when faced with the reticence and lack of support of the West (a fact that continued until their secession was complete, and hence could no longer be ignored). Their leaders thought that the West, especially America, had the will and the means both to intervene militarily to defend their territory and to invest in their reconstruction. Unfortunately, a totally naïve conception of the capacity of the West to react had prevailed over a realistic assessment of how the world market works.
7. The integration of these new economies into the world market is an important objective. As such it should be pursued by the world community, and particularly by the West and the European Community (which is preparing to become a union). Here we can pose the not very simple question of what exactly the world community can do in a world which is no longer bipolar.
The first priority is to distinguish short, medium and long term objectives. Paradoxically, it is easier to say what should be done in the long term with regard to the problems associated with the fall of the Soviet Union. It is relatively simple to lay down the guide-lines which at the beginning of the next century would allow us to resolve once and for all the instability of these recent months.
Taking these problems as a whole, Europe’s resources are not sufficient to stabilize the old Eastern bloc in the long term, let alone the even more troubled developing countries. Therefore this objective needs to be supported by all the countries in the world which produce resources. To this end the UN needs to increase its powers, and the means to manage economic issues need to be created. Safeguards also need to be created in the world market, by imposing international rules on investment and the functioning of the free market. Stable exchange rates should be created as well as a new stable monetary system. The resources of a wide range of countries should be gathered together to finance investment aimed at key sectors, such as energy and the environment. The strengthening of the UN would, furthermore, avoid the spreading of war, instability, and general disorder in the post-Communist and developing world.
In the middle term, that is this decade, the European Community must consider all the Central and Eastern European countries from the point of view of their progressive integration, first by making agreements of special association which should be followed by adhesion agreements. Assistance should also be provided, not only to Russia, but to all the other ex-Soviet Republics, using the Community tool of commercial association.
It would be completely unsatisfactory if the Community decided only to help the more advanced Central and Eastern European countries, and ignored the poorer areas, especially the Balkans. The recent Serbo-Croat war shows that peace throughout Europe may depend on the future of this region. In our interdependent world Europeans cannot apply the reasoning “hic sunt leones”, especially with reference to areas which are so close.
It would furthermore be dangerous to reduce the ex-USSR to an exclusively European country. Russia is an inextricable mix of Asia and Europe: it cannot be abandoned by Europe, nor must it abandon Asia. For this reason we should not accept the concept of a Europe “from the Atlantic to the Urals”. Rather we should look towards the formation of a great common Eurasian market, a “Greater Europe” which binds consciences and creates solidarity from the Atlantic to the Pacific.
In the short-term, i.e. from the mid nineties onwards, the world community will have to be flexible and imaginative. All the old and new political groupings, such as the International Monetary Fund, the World Bank, the BERD, the CSCE, the Council of Europe, and the NATO council of co-operation will have to take part in international and regional institutions. Each of these institutions will have to offer a permanent political forum. The interaction between differing points of view will be continuous and intense, and will have to be based on mutual trust. Communication between national capitals will have to increase and become more continuous.
For its part, the European Community will have to enlarge its borders to include Czechoslovakia, Poland and Hungary within the next few months. It must also initiate special association agreements with those countries that satisfy the indispensable political prerequisites. The Community will furthermore have to face problems regarding its own resources and its right to apply direct taxation. Without adequate financial backing the EEC will only be able to express good intentions. This is a problem which must not be underestimated. The reinforcing of the Community’s institutions and its transformation into a Union – even tighter than the one envisaged at Maastricht – are indispensable if Europe is to fulfil its role in the world.
8. In this essay I have tried to show that the disintegration phenomena of countries has become more acute because it was incubated for a number of years. This is due to the need – felt by all the countries which have rejected the Socialist system – to open up economic systems and to enter the world market. This need must be viewed positively and encouraged. However it should not be confused with those tendencies which destroy solidarity between different peoples.
It is Europe’s duty to ask the states and peoples of Central Europe to follow the road which leads to integration with more determination. The fall of the Communist regime in Moscow and the choice of pluralistic democracy, free markets and free world trade by many countries has changed world aims. The option of “every country for itself” no longer seems justified and is objectively incompatible with the desire to become part of the world economy.
The ruling elites of some countries are trying to make a change. Poland, Czechoslovakia and Hungary, which were the first to introduce economic reforms, have signed agreements to move progressively towards free trade and to co-operate between themselves at periodic consultations with other governments. It is only natural that these three countries, like others that will sign special association agreements with the EEC and which want to enter the EEC itself, should recognize the common interests that tie them together. This is also the case for negotiations with the European Commission. A “Council of Association” could be created, establishing a basis for political and economic coordination between countries, like themselves, that will have to face the grave problems involved in joining the EEC.
Not all the countries in Eastern Europe will enter the European Community. This, However, does not mean that they do not have interests, both economic and defensive, that will lead them towards some type of integration. Many new republics that are now arising from the ruins of the ex-USSR and Yugoslavia, together with many that were once satellites of the USSR, will still have to learn to recognize their mutual interdependence. This interdependence had previously found expression in certain ways, even before the Soviets expanded their influence over Europe and Asia.
The necessity for dialogue between peoples that were once united and which are currently divided, is based on the very same conditions of objective interdependence, and common problems which will probably re-emerge in the future. However, these conditions will prevail only if Western economies and international institutions provide incentives for unification. Initially, it will probably be necessary to think of a system which involves preferential intervention for those countries capable of drafting co-ordinated plans for reconstruction. The use of sanctions cannot be excluded in the case of those states which, in such delicate areas as nuclear, chemical or biological weapons proliferation, threaten world security by violating international agreements.
It is not easy to predict whether the political and commercial links which have dissolved over recent months will be rebuilt with the same criteria as in the past.
However, it is also rather unlikely that countries will continue for years on end to reject any form of stable co-operation and other more structured forms of integration. There is no doubt that the very same peoples that have followed the path towards world integration and regional disintegration will also have to decide what these new forms of pluralistic and democratic co-operation, based on a free market, will be. It is also clear that Western Europeans have a duty to send a clear message: that the indispensable condition for full entry into the world economy by Eastern European countries is their movement towards integration.
Francesco Mazzaferro


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