Abstract

The two decades after the collapse of communism have witnessed large differences in terms of economic growth across transition countries. Figure 34.1 displays the dynamics of real GDP for central-eastern Europe (CEE) and for the Commonwealth of Independent States (CIS), during the period following the launch of market reforms, which started in 1989 in the CEE and 1991 in the CIS. Two main features stand out. First, the CEE countries have performed much better than the CIS. The initial output drop has been smaller and the recovery faster. As a result, in 2011 the level of real GDP in CEE countries was more than 80 per cent higher than before transition, whereas for the CIS the level of real GDP in 2011 was only 40 per cent above its pre-transition level. Second, both groups of countries have not performed particularly well in terms of the dynamics of real GDP vis-à-vis the rest of the world. Even though the CEE countries experienced a small loss in terms of output growth relative to the world economy, a large gap did open up for the CIS countries.