europe.view

Europe.view

The lie of the land

Mar 8th 2007
From Economist.com

Europe is united only by its contradictions

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SHOULD we ban the term “Europe”? It will be much used—and misused—at the EU’s 50-year anniversary celebrations in Berlin. “Europe” is certainly not the European Union. Cities like Königsberg and Lemberg have been European for centuries (albeit not under those names). They won’t be in the EU any time soon.

Even snobs who think that the mud-and-vodka belt is inhabited by barbarians would have to admit that anything that excludes Switzerland and Norway isn’t complete. The label is meaninglessly elastic. The European Bank for Reconstruction and Development stretches to include such unlikely Europeans as Turkmenistan and Mongolia. The Organisation for Security and Cooperation in Europe has (thankfully) a strong American presence.

So “Europe” means nothing geopolitically. Nor does it make sense in internal politics. The Belarus autocracy is “un-European”? Hang on: Belarus is the historic core of the late lamented Grand Duchy of Lithuania, once the largest state in Europe, an early modern superpower that was multicultural and multi-confessional before its time. Calling Belarus “un-European” is like calling Virginia “un-American”.

If only the Belarusian regime were more “un-European”. The idea that “Europe” means deeply-rooted multiparty democracy and strong institutions is fanciful, even if you look only at the past 15 years. Try finding a common political theory that encompasses Britain, Serbia and Belgium over that period. Look back over a century, and Europe is better termed the cradle of totalitarian dictatorship and mass murder.

What about the European Convention on Human Rights: surely that embodies the European ideal? Not a bit of it. Countries outside Europe (mostly, but not only, former British colonies) uphold those ideals better than some European countries that have signed up to it.

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“Europe” means equally little when it comes to economic models. It is dirigiste and free-market, flexible and calcified, low-tax and high-tax, celebrating both private property and its confiscation.

“Well, what about creativity”, the Europhiles whinge, “surely the common European tradition is the wellspring of world culture?” True: there were at some points some common trends across the continent—the Renaissance and the Enlightenment, perhaps.

Thereafter, though, such trends were not European, but products of their time. They stretched across oceans to the Americas and India and beyond. European languages such as English and Spanish, when they reached other continents, produced great literature there too.

For those who use “European” as a term of approbation, surely faraway Canada and New Zealand are much more “European” than, say, Albania. But the map doesn’t lie. Albania is between Greece and Italy, the historic hearts of everything the Europhiles count their own.

Maybe distance doesn’t matter—maybe Vladivostok is a European town on the Pacific, and Tirana is a Levantine city in the heart of Europe? Fine, but then the European argument becomes even weaker. If Europe means anything at all, it is a place on the map, stretching from the Atlantic to the beginning, middle or far end of Russia depending on your outlook and upbringing.

In short, there are too many exceptions inside the definition, and too many outsiders who share the same qualities. If “Europe” means “tolerant”, “modern” or “civilised”, then say so—and be prepared to meet many “Europeans” who are anything but.

The more you think about it, the harder it is to find any meaningful use of the words “Europe” or “European” and anyone using them is probably trying to sell you something. Be particularly alert if they are used by someone from the rich west, talking to the ex-communist east. What they mean is “we got here before you”. To which the answer—especially if you are from the lands of the Grand Duchy of Lithuania—should be: “No you didn’t”.

Estonia

Estonia

Building on success

Mar 5th 2007
From Economist.com

Estonia needs a brighter government

AFP/EPA

SUCCESS stories are rare in eastern Europe, and badly needed. That, perhaps, is why Estonia usually gets a good press—and why the elections on Sunday March 3rd were both important and worrying.

In the 1990s it was easy to make the case that economic reform had been something of a disaster in the ex-communist world. Had not the “Washington consensus” of fiscal stabilisation, privatisation and price reform left millions destitute, while enriching the spivs? Well, Estonia showed that sound money, fast privatisation and free trade could work pretty well. The economy has been growing at a breakneck 11%; unemployment is negligible.

It was also easy to make the case that post-communist countries were hopeless laggards when it came to reforming the machinery of government. While the modern world was going digital, eastern Europe was where you found rubber stamps, typewriters, carbon paper, telexes, and long, long queues.

Estonia disproved that, too. It can claim almost to have invented “e-government”—the idea that citizens deal with the government online, at their convenience. Sunday’s elections were the second in Estonia to allow voters to cast their ballots online. The internet is integrated into everyday life in Estonia in a way that visitors from most other countries find tantalising and admirable.

Estonia also showed that a small ex-communist country could stand up to Russia and survive. That seemed a long shot in the early 1990s, when Russian troops were still refusing to leave, and when international pressure on Estonia to adopt Russian as an official language, and to give automatic citizenship to anyone who had moved to the country during the Soviet occupation, was intense. Around a third of Estonia’s population was made up of such migrants and their descendants, stranded by the collapse of the Soviet Union.

Estonia’s tough stance has worked. Most of the non-citizens have learnt at least some Estonian; a third of them well enough to gain citizenship. Dark predictions of ethnic strife have proved groundless.

So Estonia looks more secure and more prosperous than at any time in its history. Yet its friends, and many of its citizens, are dissatisfied. Politics is a dismal mess. Corruption—in a country where the public sector was once remarkable for its honesty—is growing, and the famed innovative edge is blunting by the week. Reform has stalled in most areas, and the labour market is becoming unbearably tight for many businesses. Amazingly, some construction companies are even importing Finnish workers: they are expensive, but they are skilled and conscientious. The state-run education system is ossified, the private sector flimsy and low-grade.

In the face of this, the past government proved not just uninspired, but sometimes silly. The prime minister, a cheerful but not terribly impressive ex-mayor called Andrus Ansip, has inflamed tensions with both local Russians and the Kremlin by picking a fight over a Soviet-era war memorial. The so-called “bronze soldier” is an obnoxious relic of the occupation to many Estonians. But it is revered by many local Russians, and Mr Ansip’s sudden and urgent desire to have it moved from central Tallinn looks cynical and irresponsible. Still, Mr Ansip is popular. His Reform Party did especially well in the election, and now claims 31 of the 101 seats in parliament (up from 19). The freemarket opposition party of the country's flat-tax guru, Mart Laar, polled disappointingly.

The one real bright spot is Estonia’s president, a Swedish-born, American-educated heavyweight called Toomas Hendrik Ilves. He recently vetoed the law on the bronze soldier, keeping it out of the election campaign. In a speech for Estonia’s independence day celebrations, he lambasted corruption, complacency and stalled reform, attacking the “indifference, callousness towards fellow human beings, arrogance” and worse of his fellow citizens. The real enemies of Estonia, he said, were bad habits at home, not bullying behaviour from abroad.

Mr Ansip will now have to decide whether to work with his current coalition partner Edgar Savisaar, a brooding figure demonised by Estonian conservatives for his friendly ties to Russia. But the lesson of the vote is that every ex-communist country from the Baltic to the Black sea lacks a government committed to reforms and, sadly, even Estonia is no longer an exception.

Boom and bust in Eastern European IT

Eastern Europe's technology boom

Brains boxed in
Mar 1st 2007
From The Economist print edition


How long can the good times last?

ON THE face of it, Romania's software industry could hardly be doing better. Foreign firms such as Microsoft, Alcatel and Hewlett-Packard are piling in, attracted by cheap, skilled and multilingual programmers, and proximity to rich Europe. It is part of a wider boom stretching from well known hotspots such as Estonia (home to Skype) to autocratic Belarus.

Cornelius Brody of iQuest, which writes software for companies including Virgin Atlantic and Lloyd's of London, now employs 160 people after ten years in Romania. He praises the “multilingualism, multiculturalism and Western-oriented mentality” in the northern part of Romania, which used to be part of the Austro-Hungarian empire. But business is getting harder. His programmers' salaries are now at 50% of Western levels and are rising by as much as 20% a year. When the discount to Western salary levels drops to around a quarter, it is scarcely worth going abroad, he notes.

That squeeze is common across the region. Over the past decade foreign firms have snapped up workers with excellent maths and thrifty programming habits honed by the educational system and hardware shortages of the communist era. “Everyone is facing the same problem,” says Steve Keil of Sciant, based in Bulgaria. “More foreign direct investment means fewer programmers available.” To cope, his firm has shifted some work to Vietnam.

As it struggles to respond, eastern Europe's software industry faces two big tests. The first is to move away from low-margin offshoring towards higher-value work. “When we started our typical customer was a foreigner wanting something done cheaply,” says Pawel Zak of IMPAQ, a thriving Polish software firm. “Now it is a Polish firm wanting something done quickly.”

The second test is getting enough graduates of sufficient quality out of ossified education systems. Natasha Starkell of Goal Europe, a consultancy, notes that Ukraine, with a population of 47m, produces 30,000 computing graduates a year. This gives it an edge over Romania, with a population of 22m, which produces only 8,000. Zsolt Nagy, the Romanian government minister responsible, admits there is a bottleneck, but insists that public-private partnerships in education will increase capacity.

Yet across eastern Europe, higher education—almost always state-run—has been remarkably resistant to reform. Ms Starkell says that universities are run as “fiefs” where innovations such as teaching by outside practitioners are strongly resisted. Higher demand for graduates tends to result in corruption in entrance requirements or a drop in standards, rather than better teaching.

A globe-trotters guide to Divorce

Divorce

For richer and poorer

Mar 1st 2007
From The Economist print edition

Rich people with wobbly marriages need to think hard about where they live

MARRIAGE may be about love, but divorce is a business. For global couples—born in different countries, married in a third, now working somewhere else and with children, pensions and other assets sprinkled over the world—a contested divorce is bliss for lawyers and a nightmare for others.

Divorce laws vary wildly, from countries (such as Malta) that still forbid it to Islamic states where—for the husband, at least—it may be obtained in minutes. Rules on the division of property and future financial obligations vary hugely too. France expects the poorer party, usually the wife, to start fending for herself almost immediately; England and some American states insist on lifelong support. Some systems look only at the “acquest” (assets built during the marriage); others count the lot. A few, like Austria, still link cash to blame (eg, for adultery). Japan offers a temptingly quick cheap break, but—for foreigners—little or no enforceable contact with the kids thereafter, notes Jeremy Morley, a New York-based “international divorce strategist”. Other places may be mum-friendly when it comes to money but dad-friendly on child custody.

The European Union (home to 875,000 divorces a year, of which a fifth are “international”) is trying to tidy up its divorce laws. A reform in 2001 called Brussels II tried to stop forum shopping, in which each party sought the most favourable jurisdiction, by ruling that the first court to be approached decides the divorce. That worked—but at the cost of encouraging trigger-happy spouses to kill troubled marriages quickly, rather than trying to patch them up. This, says David Hodson, a specialist in international divorce law, favours the “wealthier, more aggressive, more unscrupulous party”. It goes against the general trend towards counselling, mediation and out-of-court settlement.

An EU measure called Rome III, now under negotiation and pencilled in to come into force in 2008, tries to ensure that the marriage is ended by the law that has governed it most closely. It may be easy for a Dutch court to apply Belgian law when dealing with the uncontested divorce of a Belgian couple, but less so for a Spanish court to apply Polish rules, let alone Iranian or Indonesian, and especially not when the divorce is contested.

Such snags make Rome III “laughably idiotic—a recipe for increasing costs”, according to John Cornwell, a London lawyer. Britain and Ireland say they will opt out. That, says Mr Hodson, will give a further edge to London. Since a judgment in 2000 entrenched the principle of “equality” in division of marital assets, England, home to hundreds of thousands of expatriates, has become a “Mecca for wives”, says Louise Spitz of Manches, a London law firm. David Truex, who runs a specialist international divorce outfit, reckons that at least a fifth of divorce cases registered in London's higher courts now have an international element.

That trend is accelerating as more and more foreign professionals move to Britain: the latest bunch of customers, says Ms Spitz, are from the former Soviet Union: hugely wealthy and based in London for political reasons. That may protect their assets from being grabbed by the Kremlin; but it does not shield them from their wives. English courts are slowly edging towards the principle (already entrenched in some American states) that the wife's efforts during the marriage to boost her husband's earning power must be compensated, meaning that future income, as well as current assets, must be shared.

Compared with most other jurisdictions, English courts are not just wife-friendly but sharp-toothed and clear-sighted. A case to be heard next week by the Court of Appeal will determine the fate of the huge offshore fortune of John Charman, a financier. A lower court ruled that his wife was entitled to her share of the assets held in a Bermuda trust. Rich couples with troubled marriages and a London connection are watching with a mixture of glee and foreboding.

For the typical global couple, such high-profile, big-money cases matter less than the three basic (and deeply unromantic factors) in marriage planning. According to Mr Truex, a rich man should choose his bride from a country with a stingy divorce law, such as Sweden or France, and marry her there. Second, he should draw up a pre-nuptial agreement. These are binding in many countries and have begun to count even in England. Third, once divorce looms, a wife may want to move to England or America (but should avoid no-alimony states such as Florida); for husbands, staying in continental Europe is wise.

Outside Europe, the country—or American state—deemed the most “appropriate” in terms of the couple's family and business connections will normally get to hear the case. But here too unilateral action may be decisive. When Earl Spencer, brother of Princess Diana, divorced his first wife he surprised her by issuing proceedings in South Africa where they were then living. In England, where they had been domiciled, she might have got a better deal. She ended up suing her lawyers.

The lesson for couples? How you live may determine the length and happiness of your marriage. Where you live is likely to determine how it ends.

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Europe.view

Europe.view

We were there for America

Mar 1st 2007
From Economist.com

But how long will America be there for Europe?

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“WIN some, lose some”, says a top Lithuanian politician of the looming disasters in Iraq and Afghanistan. “We were there for America. America will be there for us”.

That sort of breezy Atlanticism is almost extinct in western Europe. And even among the east Europeans, it conceals a sinking feeling that they are going to suffer big collateral damage from America's misguided strategies in the ill-named “war on terror”.

For a start, the crude division of Europe into “old” (anti-American) and “new” (Atlanticist) has hardly helped the still-shaky cause of reuniting the continent.

The disproportionate presence of largely token ex-communist forces in the “coalition of the willing” has helped confirm the cynical chancelleries of old Europe in their view that the new democracies are gullible American patsies.

The implication of Romania, Poland and perhaps some other countries in the renditions scandal has blemished what should have been the new democracies’ strongest card: their commitment to human rights. How could those who had suffered in communist prisons collaborate now in the torture of other prisoners? The allegation may be outrageously unfair. But it has stuck in the minds of many.

The damage goes on. America’s role as guarantor of Europe’s security has been weakened. In western Europe, revulsion at the bloody and incompetent occupation of Iraq, coupled with a mixture of astonishing amnesia and lazy prejudice, has wiped away a shared history that stretches from the Normandy beaches to the end of the Berlin Wall.

In western Europe, revulsion at the bloody and incompetent occupation of Iraq has wiped away a shared history that stretches from the Normandy beaches to the end of the Berlin Wall

Even in the new democracies, America’s standing has fallen. The cost and hassle of getting an American visa grates maddeningly. Polish and Estonian boys who fight side-by-side with Americans in Iraq are liable to be treated as potential terrorists and illegal immigrants when they want to visit. The administration has moved shamefully slowly on this injustice, and on military assistance to its eager allies.

Yet, if the Atlantic bonds do weaken, the ex-captive nations will suffer the most. It was America that got them into NATO, and it is America that looks out for them now, much more so than nearer but less friendly countries such as Germany. Any suggestion that the east Europeans can rely on the European Union to stick up for them against Russian bullying is, on current form, laughable.

New radar gear and rocket interceptors planned for the Czech Republic and (probably) Poland will probably not do much to change this, You do not strengthen an alliance by pressing on your allies weapons that their public does not want. Helmut Schmidt, Germany's chancellor 20 years ago, thought that having Cruise and Pershing missiles in western Europe would make America’s nuclear guarantee more credible. Instead, it cast America as the warmonger in the minds of the muddle-headed, and stoked peacenikery throughout Europe.

Barring an unlikely success in Afghanistan or Iraq, the strains on the Atlantic alliance will grow in the years ahead. The rivets have long been popping. Now great girders, such as Italy, are twisting and buckling. It was public anti-Americanism that brought down Romano Prodi’s government last week. Old Kremlin hands who remember how hard they once tried to destroy NATO must have trouble believing that the job is being done so well for them now by the alliance’s own leaders.

Poland WSI

Polish spies

Of questionable intelligence

Feb 22nd 2007 | WARSAW
From The Economist print edition

Poland leaks spooky secrets but fails to prove a conspiracy

PUBLISHING the names of serving spies is a huge taboo in the intelligence world. It endangers not only them, but anyone they have met. You might do it to your enemies on occasion, but never to your own side.

Yet Poland's official report on the recently disbanded WSI (military intelligence service), has named dozens of current and former agents including some in highly sensitive places such as Afghanistan. That has provoked derision and alarm in equal measure, for at first sight the gains seem elusive and the costs high. Serving diplomats, their cover blown, have hurried home. They include the ambassadors to Austria, China, Kuwait and Turkey. At least ten of the names, including the military attaché in Moscow, are fiercely contested.

The aim was to highlight the WSI's role in the cosy business and political arrangements that took root in Poland following the collapse of communism. The report does raise disturbing questions about both Russian penetration of the WSI, and its involvement—perhaps with Kremlin help—in the energy industry among others. It strongly suggests a past failure of political oversight. But the seemingly muddled and inconclusive material published so far falls far short of the “atom bomb”, proving conspiracy and subversion, promised by its author, Antoni Macierewicz. It is puzzling too that some scandals of past years are treated so sketchily.

Mr Macierewicz is undaunted, as are his sponsors, Lech and Jaroslaw Kaczynski, the twins who are respectively Poland's president and prime minister. “This was one of our most important goals and it was worth it,” said the prime minister. Government defenders say the criticism comes from those with a vested interest in maintaining the old order. No real secrets have been leaked, as the Russians already knew the WSI inside out.

Mr Macierewicz, who—remarkably for a political appointee—runs the new military counter-intelligence service, insists the best is yet to come. Many leads remain to be chased; missing and destroyed documents have slowed things down. Maybe so—though it is hard to argue that Polish political life will benefit from yet more months of leaks, innuendo and suspicion.

(see the print edition for the magnificent picture of Macierewicz)

Sweden/Russia

Swedish security

Back on the block

Feb 22nd 2007 | COPENHAGEN
From The Economist print edition

Sweden's growing worries about Russia fuel a love-in with Norway

WHEN the cold war ended, Sweden felt able to turn a furtive friendship with its fellow neutral Finland into a close economic, political and security one. Now it wants also to cosy up to its western neighbour and NATO member, Norway. Again, the motivation is Russia—but fear, not rapprochement, is the spur.

The Swedes' immediate worry is a planned Russian-German gas pipeline on the Baltic seabed. That is littered with dumped chemical weapons and other munitions dating from the second world war, and home to sensitive submarine defences built during the cold war. A planned pumping station (see map) close to the Swedish shore has infuriated the country's defence establishment, which fears it will be used for Russian electronic espionage or other mischief-making. Such concerns give Sweden no legal basis for blocking the pipeline, but it is trying to delay it on environmental grounds.

A combative radio interview by the Russian ambassador to Sweden, Alexander Kadakin, has failed to allay fears. He repeatedly described critics of the pipeline as “idiots”, arguing: “why should we need [another] spy station when we already have the real-time capability to read the number plates of every car in Stockholm?”

Last week Mats Engman, head of Sweden's influential MUST military intelligence and security service, publicly gave warning of the “Russian bear's...greater self-confidence and increased freedom of action.” In the same week another top military thinker, Stefan Gustafsson, said: “the strategic map has changed. We must now analyse what resources are required at home if tension in the north were to grow.” He noted that Russia's economic prosperity was financing a sharp rise in defence spending.

Sweden and Norway are the military heavyweights of Scandinavia (Finland maintains a well-trained army with a stellar record, but has only a vestigial navy and air force). General Håken Syrén, commander of the Swedish armed forces, said recently that “Swedish and Norwegian security and defence interests are running closer than ever...and often shared.” Sweden already shares its radar surveillance data closely with Finland and is discussing other military monitoring projects. It now hopes to match these by similar co-operation with Norway.

However much diplomats may wince, there is no disguising that all this aimed at only one country: Russia. The hottest issue is energy. Norway hopes that a newly hawkish Sweden will be supportive in its long-running dispute with Russia over the two countries' northern sea border (see map). At stake are the “High North's” lucrative, and still largely unexploited, oil and gas reserves.

A big sign of intensified co-operation would be if Norway chose to upgrade its air force with the Gripen JAS-39 fighter, made by Sweden's Saab. A Swedish television investigation this week claimed to have unearthed evidence of bribes of 1 billion kronor ($142m) paid to support the sale of 24 Gripen jets to the Czech Republic. A second programme next week will make similar allegations about sales in Norway. That may hold things up a bit.

Unlearning the trusting habits of the past decade will be hard: Sweden's security establishment was run down in years when trade promotion and haggling in Brussels outweighed Russia-watching. Hawks are cheered by the foreign minister, Carl Bildt, a tough-minded and eloquent figure who as prime minister from 1991 to 1994 threw Sweden's weight behind the freedom of the Baltic states.

All this is uncomfortable for Finland, forced by geography into a more cautious stance towards Russia. Finns have never forgotten that they learned of Sweden's decision to apply for membership of the European Union only when they read it in the newspapers. Some wonder if they might get the same nasty surprise about Sweden and NATO.

this week's europe.view

Europe.view

Two speeds, too scary

Feb 22nd 2007
From Economist.com

Beware a split between the EU's old and new democracies

DEPENDING on where you are standing, the phrase “two-speed Europe” can be tempting or terrifying. For the people who run many of the continent’s old democracies, it must be very tempting—a device for marginalising all the prickly Poles, hapless Hungarians, sleazy Slovaks, chattering Czechs and baffling Balts who have made the European Union so much more diverse a place in the past couple of years.

If the EU were to fracture, the natural fault-line would be the edge of the euro zone, as Toomas Hendrik Ilves, Estonia’s thoughtful president, has observed (see map, below).

The common currency includes most of old Europe, but excludes most of the new democracies (including his). What would happen to the outsiders?

It would be nice to think, as a worst-case scenario, that the single market would hang together, and that the baker's dozen of countries outside the euro zone would at least remain part of this thriving free-trade area.

They would find themselves in much the same position as Norway and Switzerland do today―bound by the EU's rules and standards for trade and industry, in exchange for free-trade arrangements, but with few of the other main burdens and privileges of EU membership.

Probably, however, the unravelling would go further. The EU already finds it a huge effort to make the Poles, for example, abide by European competition law. Without a seat at the top table in Brussels, no Polish government would allow foreigners to claim full national treatment, especially when it came to buying the country’s big companies. With that, the single market would unravel too.

The already withered carrot of enlargement would look much less appealing. Today the EU can hope to make the politicians of the western Balkans raise their game by talking up the distant prospect of full membership. But who is going to lift a finger to join a two-speed Europe in the slow lane to nowhere?

Another big casualty of a two-speed Europe would be any hope of a tough and coherent policy towards Russia.

A resurgent old Europe would probably be dominated by France, Germany and Italy (assuming Britain, as usual, dithered). These countries tend to see rows with the Kremlin as costly distractions. They view the warnings and grumblings of the Poles and the Balts as mere revanchism.

Given the chance, they would happily strike bargains with Russia on energy and anything else, over the heads of the countries in between. A Russian-German gas pipeline being built on the Baltic seabed is a foretaste of what Poland and the Baltics can expect if a two-speed Europe takes shape.

The ex-communist states’ wobbly finances are propped up in part by the financial markets’ confidence that they will join the euro eventually. If that belief erodes, the halo effect of proximity to rich stable Europe evaporates

This should be a terrifying scenario for the new democracies. You might expect them to react furiously by hastening to adopt the euro, by restoring their reputation as reformers, and by pushing for adoption of the EU's constitutional treaty.

But they aren’t, mostly. And the euro is slipping away from them as the EU’s monetary bosses cook up ever more slippery criteria to limit membership. Slovakia, the new EU member with the best claim to join soon, is likely to be told that its low inflation is “unsustainable”, because it relies on a currency appreciation which will end when Slovakia joins the common currency.

The dangers here can scarcely be exaggerated. The ex-communist states’ wobbly finances are propped up in part by the financial markets’ confidence that they will join the euro eventually. If that belief erodes, the halo effect of proximity to rich stable Europe evaporates. Slow-lane Europe’s bad government, backwardness and weakness will stand starkly revealed. And who will pay then?

book review from this week's print edition

The first world war

Germany's African epic

Feb 15th 2007
From The Economist print edition

Tip & Run: The Untold Tragedy of the Great War in Africa By Edward Paice Weidenfeld & Nicolson; 488 pages; £25 Buy it at Amazon.com Amazon.co.uk

MEASURED by scale, dreadfulness or daring, the German campaign in east Africa from 1914 to 1918 can hardly be beaten. Over a vast territory, a small German colonial force, under the extraordinary leadership of General Paul Emil von Lettow-Vorbeck, outsmarted the combined forces of the British, Portuguese and Belgian empires, from the beginning of the war to beyond its end.

By attacking Northern Rhodesia they invaded British territory, the only German forces to do so in the whole war. They improvised everything from artillery (using salvaged naval guns) to quinine (known as Lettow-schnapps). Their opponents carried a disassembled steamer in crates across Africa in order to outgun them on Lake Tanganyika.

It came at a terrible cost. The few soldiers who fought in both Europe and Africa thought the latter far worse. All sides treated Africans abominably. Of 1m porters recruited by the British, 95,000 died. German looting and raiding caused at least 300,000 civilian deaths. Many native casualties simply went uncounted.

This extraordinary story has already been well told in fiction, such as “The African Queen” by C.S. Forester and William Boyd's “An Ice-Cream War”.

Those longing to know every detail of the military campaign will be well-served by Edward Paice's comprehensive history of the war. Others may find it frustrating that the human drama and detail are obscured by a relentless focus on military minutiae and an unfortunate propensity to repeat facts. By the middle of the book the reader feels lost in a seemingly endless wasteland of skirmishes and forced marches. The inadequate maps do not help make sense of the many unfamiliar place names.

But even the author's plodding prose cannot obscure the exciting bits. German efforts to resupply the beleaguered protectorate in east Africa were audacious. The final attempt counts as one of the great feats of early aviation. In 1917 a Zeppelin got as far as Khartoum before turning back—apparently having been tricked by a bogus radio message sent by the British. Yet this astonishing story is crammed into four pages and is missing from the index.

Most annoyingly, the author is inexplicably timid about giving details of personality and character. The retired General Kurt Wahle, who served throughout the campaign (he was visiting his son when war broke out), is described as the oldest combatant of the war—but his age is not given. No proper picture of General von Lettow-Vorbeck is provided, and all details of his private life (was he married?) are omitted. So too is the fact that his admiring British opponents not only invited him to a dinner in 1929, but after the second world war got together to pay him a pension.

second article about Poland, from print edition

Poland's government

Turning the loose screw

Feb 15th 2007 | WARSAW
From The Economist print edition

The Polish government flails, creaks and sheds ministers

POLAND'S fractious, pig-headed government has survived for nearly 18 months, against the expectations of most commentators. Lech and Jaroslaw Kaczynski, the identical twins who are respectively president and prime minister, may be disastrous in foreign affairs, but at home life rumbles on fine. Poland took in a record $14.7 billion in foreign investment last year, and the economy is growing at almost 6% a year.

Money is flowing in from Brussels, thanks to Grazyna Gesicka, the diligent regional-affairs minister. The justice system, under a zealot named Zbigniew Ziobro, at least sounds serious about catching the biggest crooks. Communist-era secret-police files—long a source of suspicion and scandal in Poland—are to be opened. The old military intelligence service, the WSI, has been closed down, and a dossier will be published soon showing the reach of its sinister tentacles in business, media and officialdom. The upper reaches of the Kaczynskis' Law and Justice party exude a puritanical rectitude. Its two small coalition partners, once known for their outlandish populism, have been tamed by power.

In the past two weeks, however, the government has shown signs of self-destruction. First to go was Radek Sikorski, the defence minister. He resigned because his military counter-intelligence service was snooping on him, at the behest of its chief, Antoni Macierewicz, a Kaczynski ally. Mr Macierewicz was in charge of liquidating the WSI, but has created a private spy service for the Kaczynskis in its place. The loss of Mr Sikorski, the only minister able to talk sense in English, will merely highlight his ex-colleagues' failings.

Next came the departure of Ludwik Dorn, a deputy prime minister and head of the interior ministry. Known as the “third twin” for his closeness to the Kaczynskis, the brainy and hard-working Mr Dorn wrote a furious open letter to the prime minister, demanding indefinite leave (which was granted). The ostensible reason was a clash with Mr Ziobro.

Two senior foreign-policy advisers have also left. The chaos suggests that the Kaczynskis' grip may be failing. Anybody wanting to survive in the government must be passive, mediocre and loyal, say Poles. One Polish weekly has even compared Jaroslaw Kaczynski to Vladimir Putin, an insult that is both shocking and a shade absurd. Yet Mr Kaczynski's statist, top-down approach and his disregard for the separation of powers do ring some faintly alarming bells.

Even as their enemies become more hysterical, however, the Kaczynskis' supporters are untroubled. Law and Justice is polling a steady 28%, more than it scored in the election of September 2005. It would be rash to write the government off; Jaroslaw Kaczynski has often proved a masterly tactician. Some loyalists even suspect that Mr Dorn's half-resignation is part of a master-plan. Others think the government's troubles are a last-ditch diversion put up by the WSI in its death-throes.

The bigger problem is that, aside from the justice ministry, reform has stalled in Poland. Its public administration remains unwieldy, incompetent and backward. Having booted the old government's cronies out of top jobs in public institutions and state-owned companies, the Kaczynskis have installed their own chums, rather than liberalising and depoliticising. Privatisation has almost stopped. Public purchasing is still deeply corrupt. The Kaczynskis' obsession with the wrongs of the past seems to blind them to what is happening under their noses.

In foreign policy, farce is mixed with tragedy. The Kaczynskis have missed no opportunity to insult Germany—which under Angela Merkel has been trying to be friends. Their conduct of diplomacy is comically incompetent. Any advisers who know anything about abroad attract mistrust, and often dismissal. Hardly any officials are left who understand the European Union, for example, a grave matter with tricky negotiations over the EU constitution about to start again.

Economics attracts similar disdain. The sole goal of economic policy was to remove Leszek Balcerowicz, author of Polish free-market reforms in the 1990s, from the central bank. Poland's most urgent task is to use the boom to cut the budget deficit. Taxes on labour are too high, squeezing wages and increasing the incentive to emigrate. A million-plus Poles have done just that since Poland joined the EU, creating widespread labour shortages.

Vengeful, paranoid, addicted to crises, divided and mostly incompetent, the government survives mainly because the economy is strong and the opposition is feeble. Neither will last for ever.

europe.view column on Poland

Right question, wrong answer
Feb 15th 2007From Economist.com
The job of Poland's government is reform, not revenge
GIGGLING at Poland's government for its incompetence, provincialism and narrow-mindedness is to miss the point. The crusty, prickly conservatives of Law and Justice—chiefly the Kaczynski twins, who hold the offices of president (Lech) and prime minister (Jaroslaw)—did not come to power thinking that they would make Poland a diplomatic powerhouse, or a beacon of liberal economic reform and modernity.

Their aim is different: to purify Poland of what they see as the shameful sleaze of the past 17 years. In their eyes, a sinister combination of crooked businessmen, corrupt officials and lawless spooks has consolidated economic and administrative power, usurping what should have been an anti-communist revolution. This putative coalition of post-communist interest groups and clans is commonly called, in Polish, the uklad (pronounced ook-wad), a word which can be translated both as "deal" and "establishment".
That raises three questions. First, does the uklad really exist? Second, is it harmful? Thirdly, are the Kaczynski brothers' tactics in dealing with it correct? Answering the first definitively is hard. It is not as if the uklad has an office, meetings or formal membership list. What is clear is that no attempt was made in 1989 to stop such a thing developing. The "thick line" that was drawn under the past allowed a seemingly peaceful formal transfer of power.

Ex-spooks and ex-apparatchiks went gleefully into business, and have thrived for reasons that go beyond their business acumen. A successful, even a disgraceful, career in the Polish People's Republic has proved no bar to success in the private or public sectors. The military intelligence service, the WSI, seems to have been a law unto itself once its communist masters retreated.
So the uklad is, at least, a useful metaphor. Does it matter? The trade-off is between peace and purity. Excluding the old regime's people might have been dangerous. Giving them a stake in the new system made it stable. Yet their unfair advantages, of money and connections, rankle with honest citizens who never collaborated.
It is entirely defensible, then, to argue that Poland should be a country in which old connections matter less, and honesty and hard work matter more. The big question—and the weakest point in the Kaczynskis' approach—is how to get there.
One way is to use the criminal justice system to attack those with dubious pasts. Pilfering of state assets, insider trading, bribery in public procurement: there is plenty of material. But this route is risky. Whom do you pick on, and where do you start? The great danger is of a vindictive, arbitrary witch-hunt, where communist-era tactics of denunciation and punishment are used against those whose main crime is being unlucky, not wicked.
That seems to be the way that the Kaczynskis are going, both with their enemies and even—surprisingly—with their friends. In recent weeks a distinguished presidential adviser was fired humiliatingly because of a single document signed under great stress during the communist era, an act which he had immediately admitted to his dissident friends, and repudiated. Another has been ejected from public life because he worked for the WSI as a consultant in the post-communist era. A senior diplomat has been deprived of his promised ambassadorship because his brother worked for Poland's previous president, an ex-communist.
Fighting the totalitarian legacy with totalitarian tools is unlikely to work. The way to shake up Poland's crony capitalism is not by selectively hunting down the cronies, but by making it such an open, liberal and competitive society that the old connections no longer count for much. That means more privatisation (and thus less room for manipulation), more deregulation, and welcoming all forms of outside competition. But it is hard to imagine the Kaczynskis humming that tune any time soon.

this week's column--sorry for delay in posting

Europe.view

Boyars of Belgravia

Feb 8th 2007
From Economist.com

The Kremlin and its critics do battle in London

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THE weapons in this war are not high explosives, nor even gas pipelines, but stories about them. The battlefronts are seminars, think-tanks and dinner parties in the posher parts of London. Not since Alexander Herzen’s day has Britain's capital been party to such arguing over Russia’s future.

The biggest and richest protagonist is the Kremlin, or, more properly the sprawling mass of business and political interests connected with it. Their aim is simple: to rehabilitate Russia’s reputation. Events (they say) have proved the doomsayers wrong. Far from crumbling, Russia is flourishing. Europe, and the world, need its oil and gas. Critics of Russian policy are crazed cold warriors, hypocrites with double standards, agents of Vladimir Putin’s enemies, or all three.

The critics of the Kremlin fall into two main camps. One is ruled by Boris Berezovsky (below, right), an exiled Russian oligarch. He can't outgun the Russian regime pound for pound, but his money is well targeted for maximum damage.

Mr Putin (he argues) is not only a dictator, but a murderous one. The Russia security services organised a bombing of apartment blocks in Moscow in 1999, with many deaths, to create a climate of fear in which their man, Mr Putin, could take power. They assassinate opponents, among them Alexander Litvinenko, a Berezovsky loyalist poisoned with polonium in a London hotel last year.

The other anti-Kremlin camp salutes Mikhail Khodorkovsky (below, left), a one-time oil tycoon, jailed in Siberia on fraud charges that his supporters say are trumped up. This camp has two main tactics: highlighting its backer’s legal plight, and sponsoring academic and think-tank work undermining the Kremlin’s claim to respectability.

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Divided by a common enemy

The two anti-Kremlin camps do not co-operate. Mr Khodorkovsky’s lot regards Mr Berezovsky as the epitome of what went wrong in Russia in the 1990s, and their own man as an emblem of modern business brought down by greedy Kremlin thugs. They shun the Chechen cause; Mr Berezovsky befriends it.

For the Kremlin’s propagandists, Mr Berezovsky is a terrorist sympathiser and Mr Khodorkovsky is a self-serving crook.

The Kremlin has been winning the argument in London’s morally myopic financial world. Russian companies are a spectacularly lucrative line of business for brokers, bankers, lawyers, accountants, and PR-chiks (a wealthy, mainly male species not to be confused with homophonous English “PR chicks”, though the latter benefit too). Pro-Kremlin Russian Londoners have struck up a close friendship with the city's mayor, and sponsor a popular and entertaining winter festival in Trafalgar Square.

Spent well (as with the winter jamboree), or badly (as it otherwise mostly is), the tide of money washing through London is proving the Kremlin’s best ally. “Nobody wants a reputation as a Russophobe these days: it’s bad for business,” says one Sovietologist-turned-banker.

But the opposition camps have their successes. The Litvinenko murder was a disaster for the Kremlin. The British media gleefully unleashed every cold-war cliché—a kneejerk reaction, perhaps, but one that was justified subsequently by Russian officialdom’s sullen and obstructive behaviour towards British investigators.

This week a book called “Blowing up Russia”, written five years ago by Litvinenko and a co-author, Yuri Felshtinsky, is being published in Britain for the first time. It argues that there was official collusion in the Moscow apartment-block bombings. A press conference to launch the book was cancelled at short notice because, it was said, of unspecified threats to Mr Felshtinsky’s life.

The hi-jacking of Shell’s Sakhalin gas fields, and the looming likelihood of a similar raid on the mighty BP, also hurt the Kremlin’s cause. But the mood in moneyed London is still largely positive towards Russia. In thinking London it is increasingly negative. The battle continues.

radek's departure

Poland

Poland’s troubled rulers

Feb 6th 2007
From Economist.com

An admired minister goes, further weakening the government

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POLAND’S defence forces, unlike those of most European countries, are tough, numerous and enthusiastic. So the resignation on Monday February 5th of Radek Sikorski, the country’s suave and forceful defence minister, is more than a quirky turn in the history of a notoriously eccentric government. Poland’s soldiers are in both Afghanistan and Iraq, as well as other hotspots—and unlike some token members of international coalitions, they do real jobs. Poland is also a planned site for an American “star wars” missile-defence base.

Nobody is talking publicly about the reasons for the resignation. On departure, Mr Sikorski praised Poland’s prime minister and president (the identical twins Jaroslaw and Lech Kaczynski). The government has spoken of “reservations” about his work. But the outlines are clear.

The main battle is about who controls military intelligence. Mr Sikorski has been wrestling for months with Antoni Macierewicz, a close ally of the Kaczynskis who was installed as deputy defence minister to oversee the liquidation of Poland’s WSI military-intelligence service. Depending on whom you believe, this was a nest of traitors and gangsters, a decent outfit full of professionals, or a mixture of the two.

Mr Macierewicz certainly takes the first view. He has replaced the WSI with two new services, one for spying, one for spy-catching. He claims to have rooted out scores of secret WSI collaborators in the media, business and officialdom, and is about to publish a list—maybe as soon as next week—which will expose their malign influence over the past 18 years of post-communist Poland. His supporters reckon that Mr Sikorski was too soft. That certainly chimes with the Kaczynskis’ view of Poland: a land bedevilled by sleaze and treachery.

The alternative view is that the influence of the WSI is wildly overstated and that Mr Macierewicz is cynically feeding the Kaczynskis’ paranoia. Mr Macierewicz has now taken personal charge of the new military counter-intelligence service and is using it—critics say—as a personal intelligence-gathering outfit for the Kaczynskis. That, coupled with a witchhunt against experienced officers, has endangered Polish national security, especially the troops serving abroad.

Separating imagined ghosts and real demons is tricky. Mr Sikorski had several times threatened to resign if Mr Macierewicz’s influence was not curbed. There are suggestions that Mr Macierewicz had counter-attacked by ordering the collection of dirt on Mr Sikorski himself. Mr Sikorski fled Poland after the imposition of martial law in 1981, and spent the next decade in Britain, where he gained British citizenship. The communist-era Polish security service thought he must be a British spy; it would be ironic if Mr Macierewicz, an anti-communist witchfinder-general, were to take a road so well-trodden by his foes.

What is clear is that Mr Sikorski’s resignation robs an already troubled government of one of its few ministers with unquestioned practical competence. Since taking power in October 2005, the government has had two prime ministers, five finance ministers, two treasury ministers and two foreign ministers. With Mr Sikorski gone, only two ministers—those in charge of justice and regional development—strike outsiders as worthy of their jobs. Mr Sikorski introduced changes in Poland’s defence establishment such as regular fitness tests and modern IT (ability to use a BlackBerry is a condition of promotion).

Critics may call these changes gimmicky and superficial. But Mr Sikorski was also a rare Polish government figure able to talk convincingly to the outside world. Even supporters of the ruling right-of-centre coalition admit that its foreign policy is startlingly clumsy. The Kaczynskis seem to distrust all foreigners except Americans, and have reduced relations with Germany to a level of icy puzzlement unknown in Poland’s recent history. In European Union meetings, it is almost a laughing-stock.

Mr Sikorski, who used to work at an American think-tank, will continue as a senator in Poland’s upper house of parliament. He will be heard of again: a Polish magazine has even suggested he may be a future president. The shaky coalition government’s future looks rather less assured.

the nicest thing I have ever written about a communist

Russian emigrés



A fine turncoat

Feb 1st 2007
From The Economist print edition

Red Princess: A Revolutionary Life By Sofka Zinovieff Granta; 346 pages; £16.99 Buy it at Amazon.com Amazon.co.uk

LIKE a Jew becoming a Nazi, was how her relatives saw it. How could a brainy, sensitive woman, exiled from her homeland by a monstrous totalitarian regime that hounded her class and murdered her friends and relatives, become an unflinching supporter of its creed?

That is the puzzling life of the beautiful Sofka Dolgorouky. Born into one of tsarist Russia's grandest families, she escaped from Soviet clutches only to spend the second world war in a Nazi internment camp. Sexually insatiable, she had two husbands and countless lovers, and neglected her children abominably. After all that, she ended up happily but squalidly in a cottage in a remote corner of rural England, defiantly communist to the last.

The story is told by her granddaughter, Sofka Zinovieff, who maintains an appropriate tone of slightly bemused sympathy with her captivating but repellent subject. She retraces her grandmother's footsteps, in Russia, France and Britain, presenting an evocative mix of past and present, partly with her own acute descriptions, and partly from her documentary sources. These include the copious diaries and notes of Mrs Skipwith (née Princess Dolgorouky), the recollections (mostly caustic) from the rest of the family and some revealing files from the British security service, who tracked their exotic Russian target (“outstandingly intelligent, courageous and active”) through the shabby grey world of post-war London.

Like the men in raincoats, Ms Zinovieff fails in the probably impossible task of explaining how someone who had suffered so much from totalitarianism could embrace an ideology that upheld it. The horrors of Soviet policy at home and abroad, exposed time after time from 1917 onwards, gradually destroyed the hopes and convictions of sympathisers with the Bolsheviks' experiment, even in the British Communist Party. But it left her grandmother's faith intact. You couldn't blame Christianity for Torquemada, and you shouldn't blame socialism for Stalin, was her usual answer.

The easy explanation is that her judgment was scarred by the poverty she witnessed in the 1930s, and by living on the fringes of the Holocaust—the Jews in her internment camp perished in Auschwitz. But others who experienced the same horrors became ardent democrats; the princess after the war became an enthusiastic tour-guide to the countries of the communist bloc, even editing a magazine that glorified the Stalinist outpost of Albania.

A second puzzle is that someone so good at making friends was so careless with her relatives. Ms Zinovieff reluctantly concedes that her grandmother was not just chronically unfaithful but wildly promiscuous (“bedding” was her own word for casual sex); worse, her hapless children were left in strange hands for long periods, and then moved with a cruel abruptness that even the kindest biographer can hardly excuse. Her self-absorbed carelessness in that, and towards money, hygiene and much more besides, make it easy to see why her Russian in-laws loathed the turncoat princess. Yet anyone reading about her sizzling charm, guts and literary gifts can't help thinking it would have been fun to know her.

europe view column

Europe.view

Wobbling Westward

Feb 1st 2007
From Economist.com

What is Mr Lukashenka's price to quit Belarus?

AT ANY time in the past 12 years it would have been not merely an implausible turn of events, but a sensational one. Alyaksandr Lukashenka of Belarus has denounced Russia, and praised the West.

“We are in the centre of Europe and we must be on normal terms with the East and the West”, he said last week. The previous policy, aiming for a union state with Russia, was all wrong, he continued: “we have been flying on just one wing.”

Never mind that the old one-winged foreign policy was his own creation. Never mind that his regime has murdered, bullied, beaten and blustered its way to international isolation for more than a decade. Now he is citing Finland, Sweden, Germany, France, even Poland as commendable economic models.

The prospect that Belarus may be emerging from its black hole is a tantalising one. There is a precedent, of sorts. President Vladimir Voronin of Moldova came to power as a Communist leader determined to make his divided, dirt-poor country into another Cuba, perhaps even joining Russia and Belarus in their union state. But he soon turned into a moderate social democrat, suspicious of the Kremlin, and determined to push Moldova to the West (a course for which the West has given him shamefully little support).

Will the same happen with Mr Lukashenka (shown below, left, with President Vladimir Putin of Russia)? As Vladimir Socor of the Jamestown Foundation points out: “Lukashenka’s overtures are marred by his difficulty finding an idiom understandable to a Western audience”.

EPA

It was quite nice knowing you

That’s putting it mildly. The Belarusian leader is a wild-eyed veteran of the collective farms, a museum-quality homo sovieticus whose pro-Kremlin sentimentality and do-it-yourself authoritarianism are matched only by a volatile temper and crudity of manner. Anyone who has grown used to Mr Lukashenka's cynical rule will find it hard to nurture any hopes of a change.

The comparison with Moldova is only partial, moreover. Whatever his views on foreign policy, Mr Voronin was no authoritarian. Moldova, for all its problems, is a model of Athenian democracy compared to Belarus. Mr Lukashenka’s Damascene conversion to the joys of the Western model have not brought any change in his repressive domestic policies. The recent local elections were a farce, with most opposition candidates and their supporters intimidated into withdrawing.

Previous tiffs with the east and flirtations with the West on the part of Belarus have always ended in business (with Russia) as usual. But this time the rhetoric is certainly stronger.

Bruised by his recent brawls with Russia over oil and gas supplies, Mr Lukashenka’s denunciations of Russian energy imperialism would not sound out of place coming from a Pole. The Belarusian boss says he wants Western companies to buy stakes in his country’s energy infrastructure.

A deep opening to the West may be wishful thinking, but nothing should be ruled out. The fundamentals are changing. Russia’s swaggering, clumsy, regional policy is alienating all its loyal ex-Soviet allies—Armenia, the Central Asian states, now even Belarus.

That creates a huge, unexpected and undeserved opening for the West. Handled wrongly, this could be disastrous. Trying to prop up Mr Lukashenka against Russian pressure would make the West look appallingly cynical.

But it should be possible for the West to talk to the Belarusian nomenklatura—the senior officials and businessmen who administer the country. Neither pariahdom nor incorporation into Russia offers an them an attractive future.

In an ideal world, the fractured, weak opposition would unite and sweep Mr Lukashenka and his cronies out of power and into prison. But in the real world, if providing him (and them) with luxurious villas in Montenegro or Cyprus was the price of freeing Belarus from both dictatorship and Russian hegemony, it would look a pretty good outcome.

czech govt

The Czechs' new government

Someone in charge, at last

Jan 25th 2007 | PRAGUE
From The Economist print edition

A seven-month political stalemate produces a fragile agreement

MOST of eastern Europe worries about its bad government. The Czech Republic's worry since the summer has been rather different: no functioning government at all. A general election in June produced a tied result, with a putative conservative-green coalition having exactly 100 MPs, and Social Democrat and Communist deputies the same number.

Last week, Mirek Topolanek, the leader of the main conservative party, the Civic Democrats (known by its Czech initials, ODS), squeaked through a confidence vote thanks to the absence of two renegade Social Democrat deputies. What inducements, personal or political, they may have received for this, is a subject of great speculation in the taverns of Prague.

So will Mr Topolanek's government be any good? And will it last? Its members are mostly a dispiritingly grey bunch, with a whiff of sleaze (like most previous Czech governments). But it boasts some stars, such as the foreign minister, Karel Schwarzenberg, a colourful and savvy Hapsburg aristocrat. It mixes those from the “truth and love” camp of the former president and dissident leader, Vaclav Havel, with the more hard-headed followers of his successor, Vaclav Klaus. Though divided on issues such as nuclear power and rights for Roma (gypsies), it seems clear on foreign policy. One early decision was to announce its willingness to provide a base for an American anti-missile radar (though the accompanying missiles will be based elsewhere, probably in Poland). In return, Czechs expect visa-free travel to America.

The pressing question is soggy public finances. Though GDP growth was around 6% last year, a government deficit of 3.7% of GDP in 2006 is likely to rise to 4.1% in 2007, taking the country way beyond the target needed to adopt the euro. Drastic reform of state administration and public services is needed, as well as of the pension system.

The government promises a flat tax, health-care charges and other liberalising moves. But other plans are sketchy, and in any case nothing will happen soon (drafting the laws will take six months). Worse, getting anything radical through parliament will be hard. Milos Melcak and Michal Pohanka, the two Social Democrat deserters, have not promised to back the coalition in future.

So why not call early elections? The ODS and its allies are ahead in the polls. But Mr Topolanek's own position in the party is shaky. An election could give his powerful rivals (who are backed by the abrasive Mr Klaus) a chance to strike.

Another possibility would be cross-party co-operation with the Social Democrats. Lubomir Zaoralek, one of their leading figures and a deputy speaker, says his party is always willing to compromise, but that the ODS is not: “If they behave arrogantly, it won't lead anywhere.”

The Czechs may have ended their humiliating political paralysis. But much deeper reform is needed than this fragile government seems likely to provide.

gloomy thoughts on migration

Europe.view Exodus
Jan 25th 2007 From Economist.comHow to vote no confidence, with your feet
FORGET, for a moment, the headline stories from central and eastern Europe―the pipeline politics, the corruption scandals, the treasonous tycoons. The big story in the ex-communist world is people. Too few are being born. Too many are dying. And tens of millions have changed country.
A recent World Bank report on outward migration from the former communist countries makes broadly comforting reading. For poor countries, it says, the benefits of remittances slightly outweigh the disadvantages of losing the brightest and best. As home labour markets tighten, fewer people will leave.
The report recommends that governments make “circular” migration as easy as possible. People who know they can come and go again freely are more likely to take the chance of returning home.
That may well be true. And the bank probably understates the benefits of migration to those who migrate, for example, in dispelling neuroses and learning new skills and languages. But the report—and much of the discussion around the issue—fails to deal adequately with the darker possibilities: chiefly, what happens if the exodus continues.
As the bank rightly argues, it is not the prospect of higher wages alone that makes people move abroad. Quality of life plays a big role. Most ex-communist states neglect their customary duty to provide dependable health-care, good education, and the right sort of law and order (honest bureaucrats, friendly policemen, speedy justice).
Bad public policy brings slow growth, less foreign investment, and worse public services. More people leave, making things even worse.
Work is no refuge. Even if the pay is good, a job in an ex-communist countries can still be a pain when it comes to relations with bosses and colleagues. Cronyism, trickery and bullying are rampant.
In all these respects, “old” Europe is far from perfect. But it is a lot better, especially for the young and ambitious.
The big danger is a toxic circle in which migration and bad demographics combine with slow reform and bad government, causing failures in the labour market. The wage needed to persuade a Moldovan to come back from Italy or a Pole to come back from Britain may be too high for his putative employer to pay and stay in business.
The wage needed to persuade a Moldovan to come back from Italy or a Pole to come back from Britain may be too high for his putative employer to pay and stay in business
Eventually, of course the migration will stop, when the pickings for those that remain become sufficiently lucrative for them to stay. (It is not the last person to leave who turns off the lights, but those that remain, melting down the cables for their copper.) As talent drains away, brutality and cunning are what really counts. Whether democracy, a pro-Western orientation and a functioning market economy still survive by then is another question.
Labour-market protectionism in western Europe won’t avert this gloomy outcome. Migrants will still come, and work illegally; or they will divert elsewhere. Better government at home is the right answer.
That means rethinking what is meant by competitiveness. In the early post-communist years, it chiefly meant making things nice for employers, through flexible labour markets and business-friendly taxes.
All that is still necessary. But so is something else: making things nice for workers, so that emigrants return and foreigners come in. That means not merely better public services, but a political elite that inspires trust and optimism. People will put up with a lot if they think the future looks bright.

lead note from this week's Economist

Migration

Europe's huddled masses

Jan 18th 2007
From The Economist print edition

EPA

Millions of Europeans are on the move. Does it matter?

ROBERT, the Polish-born head of a group of British removal men, can read and write English easily, unlike his British colleagues who after packing their cardboard boxes label them as “clovs” and “shuse”. Two years ago, when he moved to Britain, Robert lugged heavy loads like them. He still lives worse than they do, in a shabby rented house crammed with compatriots. But the remittances he sends home are paying for his family, a car, a house and—eventually—his own business there.

That dream, of hard work abroad leading to success at home, has inspired millions of people to move across Europe since the collapse of communism—a peacetime migration exceeded only by the upheavals that followed the end of the second world war. But remarkably little is known about the nature of this movement of people one way, and money the other, not least because so much is undocumented or illegal. Now a new report* from the World Bank attempts to fill some gaps and explode some misconceptions.

The first is that the main migration is from the ex-communist world to what used to be called the West, when in fact Russia is the main destination for immigrants, surpassed only by America. That is due partly to ethnic Russians returning to the motherland after the break-up of the Soviet Union, but also to Tajiks, Georgians, Moldovans and other non-Slav citizens of ex-Soviet republics moving to Russia in search of work. In the process, Georgia, for example, lost a fifth of its population in the 14 years from 1989.

The money-flows from migration—around $19 billion annually, the authors estimate—are surprising too. In some countries they matter more than foreign investment. For example, remittances make up more than a quarter of Moldova's GDP—a figure exceeded worldwide only in Haiti and Tonga. For nine ex-communist countries, remittances provide 5% or more of national income. In the region as a whole, three-quarters of the money comes from migrants working in the European Union; about a tenth from those in the former Soviet Union.

The big question is the impact on the home country's development. Optimists think that remittances prop up current accounts and help development. “Whereas aid to governments is often wasted or siphoned off into Swiss bank accounts, migrants' remittances end up directly in poor people's pockets,” says Philippe Legrain (formerly of The Economist) in a book† arguing the case for migration.

But pessimists reckon that having the best and brightest working abroad, often in menial jobs, is a dreadful loss. Remittances may also keep currencies artificially high, harming growth. The World Bank's authors think only a third of remittances go on education, savings and business investment. The overall result, they surmise, has been a mild stimulus to growth in the recipient countries, but without a measurable effect on poverty: it is better-off, urban families that tend to send someone abroad, and then reap the benefits.

The final misconception is about what motivates migration. “Everyone thinks it is all about income differentials, but actually it is all about expectations. Even in poor countries we can expect low levels of migration if people think that conditions there will improve,” argues Brice Quillin, one of the report's authors.

From one viewpoint, the huge migration of recent years to western Europe seems unlikely to continue. Populations are declining in all countries (except Albania) in the western half of the post-communist region. That tightens their labour markets and may stimulate migration from farther east. By contrast, populations in the southern states of the former Soviet Union—countries such as Tajikistan—will keep growing until the middle of this century. “If the typical migrant of the 1990s was a Pole moving to Britain, his successor in the next decade may be a Tajik moving to Poland,” says Mr Quillin. Even Turkey, previously a big exporter of workers, now imports migrants.

What really helps putative migrants stay at home is not just higher wages but the prospect of fast, effective reform, bringing better public services and a dependable legal system. Employers in post-communist countries, particularly those outside big cities with a local monopoly in the job market, still treat their employees with remarkable casualness. A sawmill in a small town, for example, may fail to pay wages, and then declare bankruptcy, only to restart under a new name with the same owners, managers and workforce.

The catch is that reform throughout the region is flagging. No country between the Baltic, Black and Adriatic seas can boast a strong reformist government, and with a few exceptions the farther east you go, the worse it gets.

*

Migration and Remittances: Eastern Europe and the Former Soviet Union (World Bank, 2007).

†“Immigrants: Your Country Needs Them”. Little, Brown. £12.99.