How These Eastern European Cities Are Faring, Two Decades After Communism

Two decades after the fall of the Iron Curtain, Eastern Europe continues to lag behind the West. Communism defeated fascism during the Second World War and was able to keep a social, political, and economic hold on the eastern half of Europe. With the influence of the Soviet Union, communist leaders were able to industrialize their economies to distribute wealth, but time would only reveal the negative effects of socialism. Forty years later and Eastern Europeans became discontented with their planned-out lives and communist parties worldwide lost power to influence them. One by one, some peacefully and some violently, Eastern European countries entered the sphere of democracy. But how has communism affected these countries long-term? Let’s compare two cities to get a sense of the transition that has taken place in different parts of the Eastern Bloc.

First, let’s look at Ljubljana, the capital of present-day Slovenia, former member of the Socialist Federal Republic of Yugoslavia. Even though Yugoslav states attained democracy through a bloody war during the 1990s, Slovenia established independence somewhat peacefully. Since Yugoslavia was reluctant to accept Soviet influence there was a higher level of economic and personal freedom that was not present in the rest of the Eastern Bloc. These freedoms were escalated even further after independence in 1990. International assistance and an already established workforce due to years of communist planning system allowed Slovenia, and specifically Ljubljana, to enter the global economy with a running start.

Tourism continues to be a main staple of economic revenue for Slovenia with Ljubljana as its center, as it attracts 21 million tourists each year. The culture of Ljubljana is also a factor in attracting visitors as it sits in the crossroads of Germanic and Slavic cultures. By joining the European Union and NATO in 2004, Slovenia has been able to establish itself as one of the most successful former socialist countries to transition to a market economy. In 2008 Slovenia had the highest GDP per capita among former Eastern Bloc states at U.S. $27,015, but the global recession hit Slovenia, particularly Ljubljana, the hardest amongst EU members. Slovenia’s GDP per capita shrunk 7.9% in 2009, but eventually started to recover until sustaining another recession in 2011. Since then Slovenia has taken measures to recover from the recession and sits in a comfortable 30th position amongst the world’s best GDP per capita.

But this isn’t to say that Ljubljana still doesn’t face issues leftover from communist rule. From 2011 to 2013 there have been numerous protests in the streets of Ljubljana against the political elites and their inability to return Slovenian prosperity back to what it was at its climax in 2008. And most importantly Ljubljana, the industrial center, still suffers from business corruption, a glaring trait of communist planning systems. In a survey Slovenia was ranked as the most corrupt country in regards to business transaction with 96% of the participants considering bribery as a normal practice. Even though Slovenia’s capital entered democracy with a head start compared to its Eastern European counterparts, it has encountered a number of setbacks in its transition and these issues will have to be sorted out in the near future.

When comparing Slovenian Ljubljana and Russian Moscow, one could say they are polar opposites in their democratic transition. Unlike Slovenia, Russia entered democracy and the market economy in a very unstable and mostly ineffective manner. Boris Yeltsin’s “shock therapy” method to open the Russian economy resulted in three years of suffering for the Russian people, especially its Muscovites. As the country's capital, Moscow portrays all the aspects of Russia’s vast territory. The city exemplifies the religious, cultural, political, and economic properties of Russia.

The historic city of Moscow has been around since its founding in 1147. It was the country's industrial center during the rule of the Communist Party and continues to be so today. It is also the financial center of Russia and accounts for approximately 22% of Russian GDP. And even though Muscovites suffered during Yeltsin’s transition plan, many of the residents have gained wealth during the “loans for share” program initiated in the mid-1990s. Now there are 27 billionaires in Moscow, which is a sizable number, but less than the 74 that lived there in 2008.

Like Ljubljana, Moscow and Russia as a whole were dramatically affected by the global recession. Even though Moscow has become a world economic center due to oil and gas revenues, it continues to be hindered by the resource curse. Politicians have been using resource wealth to re-establish authoritarian rule under Vladimir Putin. Just as Muscovite entrepreneurs have established monopolies in vital industrial sectors, Putin has established his own hold over the political sphere in Russia’s capital. Even though billionaires are popping up in every corner of Russia, the average citizens are still left with living standards that do not correspond with a country considered to be in its economic golden age. A glaring example of this can be noticed when viewing Slovenia’s GDP per capita in 2011 ($24,932) and Russia’s ($12,995), even though Russia’s economy is the eight largest in the world and still growing. The protests in the streets of Moscow during 2011, 2012, and 2013 demonstrate the discontent that the Muscovites have in regards to the political and industrial elites.

Although Russia took a longer time to establish its transitional plan and the city of Moscow has quickly become an industrial, financial, and cultural center since its time as the communist capital of the USSR, it seems that the communist monopolies have merely been replaced by political and industrial opportunists that continue to hinder the city's full potential.