Every
end of an autocratic or totalitarian regime and start of a democratic
transition arouses big hopes and expectations. But the initial enthusiasm can
be easily disrupted by dissatisfaction and unfulfilled hopes.
In
Central and Eastern Europe, and it applies to many other non-democratic
regimes, the end was to a large extent caused by the collapse of economy. Therefore
the economic transformation was, along with political transformation, the
biggest and most important goal of the democratic leaders. For many people the
success of the new regime depends on their own well-being. If the people feel
they are better off economically, their support for changes is bigger and more
stable. Very often you can hear from people that failed to succeed that the old
regime was better because it offered stability and predictability.
For
the leaders of the economic transformation it is important to keep in mind
several points:
1) They
have to be honest with the citizens – The transformation is a costly process
which requires sacrifices from the people themselves. Czechoslovakia during the communist regime was a centrally planned economy with heavily
distorted market and prices not reflecting the real value of goods and services.
Liberalization of the market was accompanied by inevitable rise of prices. The
government explained in advance the changes about to happen, provided necessary
social subsidies and asked general public for understanding. The liberalization
was also accompanied by new variety of goods which were on short supply or were
not available at all during the previous regime.
2) State
has to set an example – If the citizens are asked for understanding and
sacrifice during the economic change, the government has to demonstrate the
readiness to economize as well. Among the first tasks for the new Czechoslovak
government was to cut government expenditures, close unnecessary governmental
institutions and reorganize the remaining.
3) The
citizens need to feel ownership of the changes – The basic human right of
ownership was crippled during the communist totality in Czechoslovakia. Private
companies or farms were non-existent because they were all nationalized during
the first decade of the totalitarian regime. For the economic transformation it
was important to restore the private ownership by means of privatization. The
possibility to own, build and manage was a huge asset which drew the public
into the transformation of the country. The Czech government introduced several
methods of privatization – small-scale privatization, large-scale privatization
and voucher privatization. The latter is a unique method where every citizen
over the age of 18 was given an opportunity to participate in the privatization
by investing a relatively small amount of money to buy shares of state owned
companies.
4) Old
injustices should be corrected – The new government bears no responsibility for
the wrongdoings of the old regime. But for the sake of restoration of human
rights and building trust into the legal system the new regime should make the
effort to correct the injustices done in the past. In Czechoslovakia and the
Czech Republic later there was a part of state owned property which was taken
out of the privatization process mentioned above and it was reserved for the
process of restitutions. The owners or heirs of the owners of property which
was nationalized during the communist regime could claim for restitution. Where
it was possible their right of ownership was restored. In other cases they were
offered financial compensations.
5) Economic
transformation should be fast – The restoration of private property, rebuilding
economy and the whole process of transformation cannot take long as it might
lose the support of the citizens. The reformers should use the momentum created
by the change of the regime to introduce the measures for the transformation of
the country. Also the process of transformation itself naturally creates an
army of losers and winners of the transformation. Lengthy process mobilizes
powers that take advantage of the frustration of the losers against the constitutional
system and legality of the new regime.
6) The
state should encourage individual activity – By creating an environment where
it is possible to start business by any individual the state supports the
establishment of the whole new system with strong middle class. It has been
generally acknowledged that the stronger the middle class is the more stabile
the democratic institutions are.
7) The
state should ensure equality before the law – The complexity of the
transformation from a non-democratic to democratic regime unfortunately very
often means that mistakes are made along the way and windows of opportunity
open for those who want to abuse the weakness of the newly born regime for
their own benefit by means of fraud or corruption. The reformers should
therefore take good care that the justice system treats every citizen equally
and the rule of law is ensured.
The
experience of transformation is never 100% transferable from one country to
another. Even in Central and Eastern Europe, relatively well defined and
culturally and socially similar area, the starting points of transformation
were different. For example in some countries (such as Poland) the market and
private ownership was not as strictly limited as it was in other countries
(such as Czechoslovakia). Also the level of economic development will be
different in communist China compared to that of North Korea.
But
it can be easily concluded that if during the transformation the human rights
such as the private ownership, right to liberty, equality before law, freedom
of expression and opinion are not granted, the transformation loses support of
the citizens and is doomed to fail. Many of these rights are exercised through
economic activity and therefore should be carefully protected during the
economic transformation.