The Eurasian Growth Paradox
In the first decade of postcommunist transition, Central Europe took the lead, and analysts showed that vigorous economic growth followed from radical, comprehensive market reform. Since 2000, however, the transition countries of the Commonwealth of Independent States (CIS) have grown 4 percentage points faster each year than the Central European countries. Reducing government spending was most effective in stimulating this growth, though the oil export boom was also a significant factor. The striking turnaround in growth rates can be traced to the Russian financial crash of August 1998, after which many CIS countries likewise experienced crises, which forced them to drastically reduce their budget deficits.