Poland survey chapter 4: Economy

So much to do

May 11th 2006
From The Economist print edition

From the economy to the legal system, a lot needs to be put right

SO WHERE does the new administration go from here? Provided that external conditions remain favourable, things could still turn out well, with the government settling in and controversy dying down. But there are dangers. One is Law and Justice's insatiable appetite for a scrap, which might lead to a serious conflict with the European Union, or a jealous putsch against Mr Marcinkiewicz.

Another danger is that the government's remarkable lack of co-ordination might get in the way of reform. A few weeks ago Mr Olex-Szczytowski and his colleagues at the defence ministry were surprised to hear Mr Marcinkiewicz announce the abolition of the military property agency on television. That plan, drafted by a junior official, had reached the prime minister's desk without brushing reality. No sooner was the plan announced than it was forgotten.

But the greatest danger is of an external economic shock. If the government were to alarm foreign investors (for example by ruling out joining the euro, rather than just making sceptical noises), that could prompt a collapse in the stockmarket and the currency. The resulting economic slowdown, in turn, would restrict government spending, making it impossible to oil the political wheels.

For the government's critics, such an economic disaster would be the best medicine possible. A run on the zloty, soaring inflation and sagging growth (preferably all three) would be an appropriate penalty for what they see as the innumerate populism of the Kaczynskis and their allies.

But for the moment none of this seems to be happening. The central government budget deficit in 2005 was 27.5 billion zloty, a mere 2.8% of GDP. The 2006 budget (inherited from the previous government and only slightly tweaked since) provides for just a small rise in the deficit, to 30.6 billion zloty. Growth in 2005 was only 3.2%, but increased to an estimated 5.2% at an annual rate in the first quarter of this year and is expected to reach 4.4% for the year as a whole. Average inflation in 2005 was 2.2%; real wages rose by just 1.7%.

Most importantly, exports are booming. The Economist Intelligence Unit, a sister organisation of The Economist, thinks that they will keep growing by more than 8% annually for at least the next four years. True, imports are rising sharply too, but that includes lots of capital goods needed for modernising the economy. The current-account deficit is a very manageable $4.8 billion, or 1.6% of GDP. Net foreign direct investment last year reached $7.5 billion, roughly what you would expect for a post-communist country of Poland's size.

All too average

These numbers are encouraging, but they are not great. Many of Poland's neighbours are doing better. The Czech Republic notched up annual growth of 6.9% at the end of 2005. Lithuania, on which the Poles tend to look down, reached 8.8% and Estonia 11.1%. Admittedly small countries may find it easier to put their economies right, and Poland is getting richer quicker than other big post-communist countries such as Romania and Ukraine that have remained outside the EU. But then Poland is much closer to the rich part of Europe, and its workers are better educated. The fairest comparison is with the average for the eight post-communist countries that have joined the EU (see chart 3). Poland scores poorly here, as it does on a wider comparison with mostly much poorer countries across the region (see chart 4).

This is particularly true for employment. In its advice to the new government, the International Monetary Fund said that the labour market needed urgent attention. It called on the government to take advantage of “unusually favourable” conditions to deal with fiscal and structural weaknesses and raise private investment and job creation.

Easier said than done. Mr Marcinkiewicz's office is strikingly underpowered, both in people and in clout. The best advertisement for the government are the ministries that are quietly getting on with piecemeal reform, particularly things that do not require legislation. “We are the government, so we don't have much to do with politics,” says a senior prime ministerial adviser, in all seriousness.

But not every problem can be tackled that way. Privatisation, for example, is not being pursued with sufficient vigour. Electricity privatisation has been stymied by pressure from the trade unions, and the petrochemical industry is off limits. The same is probably true for the post office and the railway infrastructure. But that still leaves plenty of opportunities elsewhere, not just for selling the minority stakes that the state still holds in scores of firms, but for disposing of wholly state-owned companies too. Pawel Szalamacha, the dynamic deputy privatisation minister, says that Ruch, the sleepy state-owned chain of newspaper kiosks, will be restructured and sold this summer. “It's a post-socialist corporate bureaucracy in the worst sense of the word,” he says. At the military property agency, Mr Olex-Szczytowski plans to raise more than 2 billion zloty by 2009 from selling surplus property, and to cut procurement costs by a tenth through centralised purchasing and online auctions.

Tax reform is high on the list of the government's priorities. From 2009, all but the richest Poles will pay a flat-rate income tax of 18%. The government is also promising indexation of tax thresholds and speedy cuts in social charges to make labour cheaper. At a tax conference organised in Warsaw in March by the American Chambers of Commerce in central Europe, there was no shortage of complaints from the Polish-based companies. But Miroslaw Barszcz, the deputy finance minister in charge of taxation, was given an appreciative reception. A former tax partner at the Warsaw office of Baker & McKenzie, an international law firm, he batted back even the most technical questions, and then started handing out dollops of good news for companies: VAT returns, for example, would in future need to be filed only quarterly, not monthly. A tax-reform package at the end of March went even further, allowing most companies to file their corporate tax returns only once a year.

It's the law

Law and order is also receiving plenty of attention. The government is setting up a powerful new central anti-corruption office with hundreds of new staff, which has pitched the justice minister, Zbigniew Ziobro, into a furious confrontation with the country's legal establishment. Critics say that the anti-corruption office will just create an extra bureaucratic layer in the already top-heavy criminal-justice system. With half a dozen agencies already entitled to bug potential wrongdoers, why does Poland need another one?

“Current structures are ineffective, so we must create a new one,” says Mr Marcinkiewicz. “We need lawyers and economists working there, and above all people not connected with communist Poland.” The main concern for Mr Ziobro, an energetic 35-year-old lawyer, is to speed up and clean up the justice system. Getting a court judgment against a defaulting debtor, for example, on average takes 850 days. “It should take 30 days, not nearly three years,” says Mr Ziobro. He wants courts to work round the clock to deal with hooligans, and to raise productivity by computerising paperwork. By the end of the year every judge will have a clerk to deal with timetabling, witness summonses and research. Mr Ziobro thinks that “judges should spend their time on adjudication, not bureaucracy.”

Poland has 5,000 advocates and 20,000 solicitors, but 12m cases pending. The answer is more lawyers. The biggest reform has been to break the profession's cartel on admission. Mr Ziobro reckons that 90% of Polish legal professionals are the children or grandchildren of lawyers. But now anyone with a law degree and three years of related experience can take the exams. He is also increasing the numbers of examining magistrates by half and reforming the ineffective bailiff system.

It is hard to overstate the importance of all this. For example, the constipated legal system is a big brake on bank lending to small business, which is unusually low in Poland. If collecting bad debts is slow and costly, only the biggest and best customers are likely to get loans.

The danger is that by attacking on all fronts, even a minister as energetic as Mr Ziobro will lose focus. He burns with enthusiasm to clean up corruption in the police, increase salaries and put more officers on the beat; he wants to tackle organised crime properly; to crack down on bribe-taking; to make the bankruptcy procedures faster and simpler; to encourage dispute resolution outside the courtroom; and, overall, “not just to catch up on the European level, but exceed it”. All that would be a tall order even with the support of the legal profession. Given its active resistance, he will find it harder still.

Poland survey conclusion: prickly psychology

Prickly to a fault

May 11th 2006
From The Economist print edition

It takes time to become normal

POLAND is a country that foreigners criticise at their peril. Even the mildest mention of habitual unpunctuality, brusque telephone manners or bad roads can prompt a lengthy and emotional review of the outside world's insensitive and ignorant attitude to the country's tragic history.

Alamy

Don't you dare call me prickly

Never forget that the country was divided up between three foreign powers (in the late 18th century, admittedly, but the wound remains livid). Remember that Polish heroism in blocking the Bolshevik advance into Europe, in the 1920 battle known as the “miracle of the Vistula”, stopped communism marching westwards. Bear in mind Poland's betrayal by Britain and America at Yalta, and the failure to support the Warsaw uprising of 1944, when a Soviet army stood by as the Germans destroyed the capital city. And make allowances for the destruction of Poland's elite, leaving it without the middle class that helps stabilise and guide its luckier post-communist counterparts.

Acknowledge also that Poland's tragic history is not just neglected, it is sometimes actively distorted. Careless references in the Western media (including, once, this paper) to Auschwitz as a “Polish concentration camp” (when of course it was built and run by Poland's hated Nazi occupants) provoke furious protests.

Bear in mind, moreover, that Russia, especially when allied with Germany, still menaces Polish security. Poles seethe with indignation about their two big neighbours' plans for an undersea gas pipeline that will bypass Poland, leaving it vulnerable to the Kremlin's whims.

Admit, too, that every country has its problems, many of them just as bad as Poland's. Doesn't Italy suffer from excessive bureaucracy (as well as wonky governments) and Greece from corruption? Surely France breaks EU rules and gets away with it? Doesn't Poland also have the right to be wrong? These are fair points—though Poland might do better trying to overtake western Europe rather than catching up with its worst bits.

What is rather odder is that praising Poland can go down badly too. A mild remark about the variety and excellence of the country's media or the growing strength of its private sector can be taken as being insensitive to poverty, unemployment and the inadequacy of public services, let alone the country's historical tragedies. A pampered Westerner cocooned in a comfortable hotel may prattle about progress—but it shows how little he knows about the real Poland.

Such prickliness remains, but it is diminishing. Living in Poland 20 years ago, your correspondent often found himself accosted by total strangers intent on having angry conversations on past wrongs such as Yalta. That still happens, but only rarely. For younger Poles, particularly those who have spent time abroad, history is water under the bridge, and the dark and steamy world of Polish exceptionalism, particularly the quasi-mystical notion of national martyrdom, is a fading relic of an unhappier age.

Yet the deeper problem remains. Wally Olins, an expert on branding who has worked on Poland's image at home and abroad, says Polish prickliness stems from “a tremendous lack of self-confidence”. Historical misfortunes, he says, have left Poles mistrustful of their ability to run their own affairs. That complicates the great task of modernising the country, and particularly of creating decent jobs. Mr Olins thinks Poland should try to follow Spain, another Catholic country on the edge of Europe that emerged from totalitarian rule and worked hard to achieve modernity, stability and prosperity. That is a fine aim—and for the first time in Poland's modern history, there is no real reason why it should not succeed.

Poland survey chapter 5: Migration

A country to run from

May 11th 2006
From The Economist print edition

But only for a while

TURN off the main road anywhere in Poland, drive for a bit, and you will find yourself in a different country. The roads become worse, sometimes abominably so. The one-storey log cabins and horse-drawn carts of Poland's rural past make an appearance. More commonly, you will see roofless concrete shells, the ruins of communist-era collective farms or tractor stations. Nearly 15m people, over a third of Poland's population, live in the countryside. Some 5m of them work on 2.5m farms. Life is dull and bleak. Mains sewerage is a rarity, as are reliable public services of any kind. There are few non-farming jobs. It is easy to see why people might want to leave.

Taxi

See you later

Nienadowka is a village in Poland's dirt-poor south-east corner. Social life, says Roman Nowinski, a sardonic dairy farmer, revolves around going to church and talking to the neighbours. Of the 2,800 inhabitants, a tenth have already gone to work abroad since Poland's EU entry opened the doors to legal migration to Britain, Ireland and Sweden. “They laid on courses for us farmers to learn English,” recalls Mr Nowinski. “It was very handy.”

In some parts of Poland, EU membership has been a boon for ambitious farmers wanting new machinery to modernise and expand. But there is little sign of this in Nienadowka, where tiny plots are inconveniently scattered around the village. Mr Nowinski's annual subsidy for his 10.5 hectares (26 acres, large by local standards) is 4,500 zloty. He gets 0.63 zloty for each litre of milk, 15% less than before EU entry; if he produces more than his 16,000-litre annual quota, he is fined. “This isn't farming,” he says. “This is just existence.”

But even in the boondocks, things are stirring. A few kilometres away is Smak-Eko, a small meat-processing plant but a big local employer with 150 workers. The co-founder, Eugeniusz Bernat, who returned to Poland after a spell in America, says EU money helped his firm meet new hygiene rules. He wants it to be a niche manufacturer of organic products, but does not expect it to be easy. “Look!” he fumes, brandishing a report on deregulation by the Adam Smith Centre, a Warsaw-based free-market think-tank. “No fewer than 40 state institutes with the right to inspect and check a business!”

The mayor of Sokolow Malopolski, the town that includes both Smak-Eko's plant and Nienadowka, is Andrzej Ozog. He was 26 when he was elected, the youngest mayor in Poland. Like many Poles, he regards national politics as a tiresome sideshow. “I belong to no party,” he says briskly. “I just want to know when we are going to have a state that is transparent, honest and efficient.” He is doing his bit by making it easier for citizens to deal with the town hall online: internet connections, he says, are more common than mains sewerage. He hopes EU money will fix the drains, and pay for a sports centre too.

Unemployment in the region remains high, at well over 20%. And from the regional capital of Rzeszow, a bumpy hour away by road, it is just two-and-a-half hours by plane to London. Ryanair, an Irish low-cost carrier, started flights to Rzeszow and half a dozen other Polish regional centres in October last year. Most days, the plane is full—in both directions.

One regular passenger is Justyna Dudek, a 27-year-old single parent who is moving to England, at least for a year, maybe more. It is not just that she is dissatisfied with the net salary of 800 zloty a month she gets for teaching English to teenagers. She also finds Polish workplaces much less appealing than those she has tried in England, including a bar and a travel agency. “Employers treat you differently. Here you are no one; there you are someone.” Abroad, relations with colleagues are better, too: “Here, everyone is much more stressed: if people get a good offer, they cheat on their friends.”

Half her former pupils are working in England already, she says, “and the other half are planning to go.” One reason for the exodus is poor Polish universities. There are islands of excellence, such as Warsaw University's institute of computing science. But they sit in a sea of mediocrity: undemanding, riddled with cheating, overcrowded and complacent. Mr Marcinkiewicz says reforming them is a priority, but it is hard to see Polish universities becoming dynamic, open and globally competitive soon. Until they do, many students will head abroad.

That raises two big questions: what is the effect on Poland of so many of its most enterprising people leaving? And what can the country do to tempt them back?

Jacek Bachalski, a politician and educational entrepreneur, holds out his hand to illustrate a lasting memory of an early trip to Britain. “The immigration officer rubbed his fingers against mine to see if they were rough. He was trying to see if I was really a bricklayer, not an undergraduate.” In the 1980s, Mr Bachalski was one of the few lucky Poles allowed to go West. When communism collapsed, there was a new obstacle: Western countries toughened their visa policies. Plenty of Poles still went, but most of them had to work semi-legally. Pawel Kaczmarczyk of Warsaw University says that migrants in those days tended to be low-skilled workers from the provinces. For them, even a job in the black economy was better than staying home.

Since the late 1990s, migrants have become younger and better educated: half of all Poles under 24 have some sort of tertiary education. In countries that still restrict Polish access to their labour market, such as Germany, the typical migrant comes for a seasonal job in agriculture. In Britain, one of the countries that has fully opened its doors, most Poles find jobs in business administration.

“The way it works is like this,” says Ewa, a graphic designer. “You start off in a bar or restaurant. You get to know the customers and find out what they do. When you find one who has the kind of work that you like and can do, you make friends with them and try to get introduced to their boss. Then you persuade him to try you out for a week, even unpaid. And because you are Polish and have good skills and work hard, you will get a job. Maybe even your new friend's job,” she laughs.

The brain boomerang

The benefits to western employers of getting well-educated and enthusiastic (if occasionally unscrupulous) Poles to work for them are clear. But what does it do to Poland? The big worry is that the outflow may drain the country of its best brains, especially in industries where the salary gap between east and west is large and the skills are readily transferable. The Polish media regularly feature stories about the effects of this brain drain, particularly on hospitals losing their best doctors.

In reality, though, the communist health system provided too many doctors and hospitals, so there is some spare capacity. But it also seems that supply is keeping pace with demand: there are actually more doctors practising in Poland now than there were two years ago. On the whole, says Mr Kaczmarczyk, Poland has a “brain overflow” (an excess of well-qualified people), largely thanks to the demographic effect of martial law, imposed by the country's communist rulers in 1981-83. Perhaps out of boredom, perhaps as a sign of patriotic resistance, Poles started producing more babies (see chart 5). That generation is now entering the workplace.

Will the huge number of Poles who migrate in search of better jobs eventually return home? Many people initially plan to go abroad only for a short time to earn some extra money, but months may stretch into years, even a decade—though for this generation of Poles probably not much longer than that. They are not fleeing totalitarianism or foreign rule. Low-cost flights and an open labour market make it easy to go back and forth.

Work abroad is often less comfortable at first and, without the family, lonelier than at home, so having raised the money to buy a house or set up a business, people generally want to come back. The Sokolow police chief's cousin, Elzbieta, is working as a secretary in London to improve her English; she hopes to return home to run a property business.

Another advantage of working abroad is that it brings new skills, not only in foreign languages but in other know-how. Watching the way a Western workplace operates can be a life-changing education. “The first thing you notice is that everything is organised as it should be. There it is clear and here it is grey,” says Ms Dudek, the English teacher. That matters: Polish management is still often weak, especially in “soft” departments such as sales, marketing and personnel. “The Polish idea of being a boss is still sitting in a big office being rude to people,” says one long-time British observer of Polish business.

Migration also deepens the talent pool for employers in Poland. Guy Simmons, who runs a chain of hotels in eastern Europe for Domina, an Italian hotel company, says the number of Poles working in hotels in Britain and Ireland has made it far easier for him to hire staff who understand about service quality. “It's drained the market of some of its best talent, but when they return, which they almost always do, they bring all that experience back,” he says. Other hoteliers agree. Maryla Koralewska, director of human resources at central Warsaw's Marriott, says Poles who have worked abroad have better “contact skills”, knowing how to greet guests and recognise regular clients.

Mr Bachalski, who now runs a successful chain of private colleges, sees a deeper effect. Working in foreign companies, he says, helps Poles shed their instinctive distrust of authority. “We learn to respect good management, and we lose our complexes.” Ewa agrees. “Before I came to London, I thought I was a very special person from a very special country, and nobody would understand me. Now I think that I am like anybody else. It doesn't matter where you come from or who your friends are. What matters is how hard you work and how good you are.”

Poland survey, sources etc

Acknowledgments and sources

May 11th 2006
From The Economist print edition

The author would like to thank the staff of PMR Publications, Marcin Piatkowski, Marek Matraszek, the Pytel and Jablonska families, Dawid Lasek and Sergiusz Trzeciak.

Sources:

Business Portal for Poland, PMR Publications

"Raport Otwarcia", Adam Smith Centre Warsaw (Polish-language version only), Centrum im. Adama Smitha ul. Bednarska 16, 00-321 Warszawa +48 22 8284707

IMF Country Report

World Bank/EBRD Business Environment and Enterprise Performance Survey on Poland

World Bank/EBRD Business Environment and Enterprise Performance Survey on Europe and Central Asia

Doing Business: Poland, World Bank

“Economic Policy Reforms: Going for Growth” (section 1.2), OECD

Economic Outlook No. 78, OECD

Audio interview with me
http://www.economist.com/surveys/displaystory.cfm?story_id=6876812

CEE & the Euro

The euro

When to join, and when not to

May 11th 2006
From The Economist print edition

Small countries should adopt the euro—if they can

IN THEORY, the European Union has a bracing and rational membership regime. Getting in means meeting Brussels standards in everything, from aviation to zoos. Once in, members take the next step, joining the euro, when they have slain inflation and sorted out public finances.

Reality is different. The three small countries that hoped to join the euro soonest are all solvent, and have creditably low inflation. But only one, Slovenia, strictly meets the criteria for new members, and is therefore likely to get the nod. The finance minister, Andrej Bajuk, looks forward to the end of exchange-rate risk, and says it both signals the “maturity” of his country's economy, and proves that the euro is not an “elitist, impenetrable club”.

For Estonia and Lithuania the story is not so good. Both countries fail (in Lithuania's case by less than a decimal point) the criterion that new members must have inflation no more than 1.5% above the average of the three lowest rates in the EU. In March, these came from Finland, Poland and Sweden. Yet the resulting target, of 2.6%, is artificial, since Poland and Sweden are not in the euro. A fairer test, argues Charles Robertson of ING, a bank, would be the average of the three lowest inflation rates in the euro area, which would mean a target of 3%.

The European Central Bank and European Commission will publish their assessment of would-be entrants next week. Estonia has put its plans on hold. Its problem is double-digit growth, which would normally be reflected in a rising exchange rate. But the Estonian currency has been pegged since 1992, so rapid growth is expressed in rising prices instead. Lithuania is still trying to get in, despite warnings that it won't succeed. Rolandas Krisciunas, a deputy finance minister, says his country will be “somewhat puzzled” by a negative ruling. It will press its case when the EU's finance ministers decide in June. “It doesn't make sense for us to stay out. It doesn't make sense to keep us out,” he says.

Yet many politicians in old Europe think the single currency has quite enough members already, having stretched the rules for countries like Greece. They worry that giving Lithuania even the teeniest wiggle-room would set a deplorable precedent. Big countries like Poland and Hungary, with soggier public finances, may then want exceptions too.

In fact, these countries are sensibly warier than they once were about early euro entry. Smaller countries with vulnerable currencies need the euro more. They cannot realistically have an independent monetary policy, and they gain from making trade cheaper and easier. It also makes them safer, notes Edward Parker of Fitch, a ratings agency. Their growth is stoked by big current-account deficits. Outside the euro, a crunch could be damaging.

One oddity in this tale is that many existing euro members, notably France, Germany and Italy, now fail the criteria on public finances—yet nobody throws them out. An even bigger curiosity is that the inflation and public-debt criteria make little economic sense. The real test for joining the euro should be whether an economy is flexible enough to cope with the strain of a permanently fixed exchange rate. On that score the bigger central European countries—and, indeed, big existing euro members—have much work still to do.

And the only really good Communist is...

By Edward Lucas

When you hear that since the collapse of Communism, there have been only 18 months without the ex-Communists being in power in Poland (either in government or the presidency), it helps explain why the current, strongly anti-Communist government is rather prickly about the past.

But one of the nice things about being an Economist journalist is that we have a team of fact-checkers (a species otherwise unknown in British journalism), who delight in catching us out. Sophie, the stellar fact-checker responsible for my survey of Poland (published this week) scoured reference books for details of every government and president since 1989 - and couldn't justify the 18-month claim. The real answer, she insisted, was 33 months.
I was puzzled by this, until a wise friend put me right. This 18-month claim is arguably true - if "ex-Communists being in power" also means any government in which former Communist party members have held office. By that count, for example, Leszek Balcerowicz, seen by many as the hero of the capitalist counter-revolution, counts as an "ex-Communist". That's a clever smear, because Balcerowicz, now the governor of the national bank, is just the kind of arrogant free-market liberal that the current government dislikes. The feeling's mutual: many members of the Warsaw economic and cultural elite feel that their country is being run by hicks and bigots.
This is not just a squabble about the arithmetic of political history. It goes to the heart of a big philosophical and moral debate in all post-Communist countries. What level of collaboration with the Communist regimes of the past is acceptable?
There is no simple answer. It is hard to find anybody, in politics or outside, who grew up under Communism and is wholly pure, and competent, and alive. You can have any two, but not all three. In particular, governments composed solely of ex-dissidents, however heroic, have a pretty disappointing record: squabbling, unfocused and even corrupt. Yet admitting that sleazy ex-commies are the only people efficient enough to run things smacks of defeatism.
Even for non-believers, religion is helpful in making sense of this. First: don't confuse saints and priests. Ex-dissidents are saints; good politicians are priests. Many saints would be disastrous pastors; equally, some of the best clergy I have known have had chaotic, even scandalous, personal lives. Their unworthiness doesn't necessarily impair their ministry - and can even help it.
Second, be ready to make moral judgments. These are rather unfashionable in an era when people like to talk of "inappropriate behaviour" rather than wrongdoing. But there's no way out. Everyone who lived under communism made some sort of moral choice. To honour those who chose bravely, some disapproval of those who were cowardly and vicious is vital. Collaboration with the Communist system is like a criminal record: it may (or may not) have been minor and a long time ago, but it is there and it is wrong, and there is no way round it.
But third, accept the possibility of redemption. There are ex-Communists who readily accept that they were wrong-headed pawns (or worse) in a monstrous, murderous, conspiracy. Many rejoiced in the collapse of the evil empire; many now are determined to help repair the damage. Such uncaptive minds are quite different from nostalgic ninnies who mourn the semblance of full employment and social welfare they remember liking in the old days. And still more different (and far, far worse) are the unrepentant, with their cold eyes and steel-clad consciences, such as Russian President Vladimir Putin and his ex-KGB cronies.

Edward Lucas is central and eastern Europe correspondent for The Economist.

Ukraine

Orange flowers

May 4th 2006
From The Economist print edition

Ukraine's unlikely revolution has a grubby and confusing aftermath

An Orange Revolution: A Personal Journey Through Ukrainian History By Askold Krushelnycky Harvill Secker; 368 pages; £8.99 Buy it at Amazon.co.uk Revolution in Orange: The Origins of Ukraine's Democratic Breakthrough Edited by Anders Aslund and Michael McFaul Carnegie Endowment for International Peace; 216 pages; $33.95 and £19.99 Buy it at Amazon.com Amazon.co.uk

Get article background

THE fall of communism brought Ukraine 13 years of criminal misrule. Power turned into wealth and back into power again in a seemingly endless cycle. But in late 2004, the grotesque rigging of the presidential election galvanised a real opposition movement for the first time. Well-organised and mainly youthful protestors, clad in orange, filled the centre of the capital, Kiev, setting up a tent city. Facing down both the regime's propaganda and its menacing goons, they refused to accept the election's fraudulent result. Prompted by the outside world, the crooks and spooks decided against violence, and left office under a face-saving deal.

EPA

Mrs Tymoshenko's murky radiance

The story of Ukraine's Orange revolution is gripping and tangled. Take the strange scandals that initially stoked public fury with the regime: when the headless corpse of a muck-raking, philandering journalist, Georgi Gongadze, was discovered, the investigation mysteriously tailed off amid a mixture of lies, bungling and obstruction. The foul-mouthed president, Leonid Kuchma, was bugged, supposedly by one of his own bodyguards.

Then the leading opposition candidate, Viktor Yushchenko, was mysteriously poisoned, in best KGB style; his disfigured face is an icon of the revolution. Another icon is the gorgeous Yulia Tymoshenko, a demagogic multi-millionairess, whose murky business past is matched only by the radiance of her political image.

None of these mysteries has been cleared up. The bugging seems to have been a clever plot rather than individual heroism. No one has been charged with ordering Gongadze's murder. The poisoning is a mystery too. Yet it would be easy to weave all this into an orange-tinted fairy-tale: a belated reprise of the joyous revolutions of 1989 which united central Europe with the rest of the continent.

That is certainly a temptation for Askold Krushelnycky, a British journalist whose parents fled Ukraine after the war. His book is a fast-paced account of Ukrainian history from the year dot until the revolution's end, illustrated in part by his own family's story and his own part in events. He was a vital channel for rebellious officials wanting to dish the dirt about their bosses on issues such as ballot-rigging and the Gongadze murder.

But the book suffers from the same thing that gives it authenticity: the author's own background in the Ukrainian diaspora. Self-sacrificing and determined though they often are, East European émigrés can be excessively one-sided. Mr Krushelnycky's treatment of Ukraine's ethnic minorities is as rudimentary as his treatment of Russia is snide.

It is still a good story, but the real one is a lot more complicated. Why did the Ukrainian tycoons, with their media empires and huge slush funds, desert the regime? How can Russia's puzzlingly clumsy policy be explained? Perhaps most importantly: how clean are the good guys? Some of these answers are to be found in a book edited by two well-known, American-based scholars of the post-Soviet world: Anders Aslund, an economist, and Michael McFaul, a political scientist.

If you want an exciting subject made dull, there are few better ways than having academics write about it. But the drama of the story keeps breaking through the jargon and waffle. A revealing chapter by Pavol Demes and Joerg Forbrig, two senior figures at an American pro-democracy outfit in Slovakia, provides a good account of the history of Pora (Enough), the youth movement at the heart of the protests.

But Ukraine's democratic evolution is still a work in progress; neither book deals with the mystifying squabbles and peculiar business deals that followed the Orange revolution. Mr Yushchenko and Mrs Tymoshenko fell out spectacularly and fought the March election as rivals. Now, in order to keep the revived party of the old regime out of power, they are back together again—though for how long, few would care to bet.

An Orange Revolution: A Personal Journey Through Ukrainian History.
By Askold Krushelnycky.
Harvill Secker; 368 pages; £8.99

Revolution in Orange: The Origins of Ukraine's Democratic Breakthrough.
Edited by Anders Aslund and Michael McFaul.
Carnegie Endowment for International Peace; 216 pages; $33.95 and £19.99

punting poles, by a punning journalist

A tough job, but someone has to do it

Immigration

Punting Poles
May 4th 2006
From The Economist print edition


A wider Europe, afloat on the Backs

WIELDING a pole to pilot a punt is a skill that is rare outside the gorgeous waterways of Oxford and Cambridge, and unknown in the ex-communist world. But nearly half of the 60-odd employees at Scudamore's, Cambridge's biggest punting-rentals firm, are from eastern Europe, chiefly Poles. The newly-arrived start off cleaning the boats; veterans of a summer or two, who have learnt to punt and chat to tourists in English, graduate to being “punt chauffeurs” on £14 an hour.

The firm's owner, James Macnaghten, says that east Europeans are a huge improvement on the local workforce: harder working and more dependable. “It's the difference between the person who clocks off five minutes or so early, and the one who stays on ten minutes later to help you pack up,” he says.

Estimating the overall effect of this influx of enthusiastic low-cost labour is hard, although a recent study by Ernst & Young, an accountancy firm, suggested that without it Britain's GDP would be 0.2% lower. In fact, nobody knows how many workers from what were once called captive nations are actually in Britain. The government's official (but voluntary) worker-registration scheme records 345,000 since Britain opened its labour market to such workers in 2004.

But, notes Dhananjayan Sriskandarajah of the Institute for Public Policy Research, a think-tank, this disguises “huge churn”. Workers may register and then leave the country. Others may not register at all. It costs £70, and the advantages it offers, such as the right to claim the dole in future, may seem flimsy. It is the prospect of work, not state benefits, that attracts east Europeans to Britain.

Four other west European countries—Spain, Portugal, Finland and Greece—opened their labour markets on May 1st to workers from the new Europe, while France promises partial liberalisation and Holland is thinking about it. But that will do little to dent Britain's lead. A widely-spoken language and thriving networks incorporating previous immigrants still make Britain a prime destination, with Ireland close behind.

Does continuing the hit-or-miss registration scheme make sense? The government considered scrapping it altogether on May 1st, but decided not to. One reason is that some existing formalities could come in handy if, as seems likely, the EU expands on January 1st 2007 to include Romania and Bulgaria. It has not yet been decided whether workers from these two countries, which will be the poorest in the EU, should be given free access to Britain's job market. Mr Sriskandarajah's institute reckons that, if allowed, 41,000 workers are likely to come from Romania, and 15,000 from Bulgaria. The government could scrap the registration scheme for Poles and the like, while keeping it for the newcomers.

The registration scheme may produce misleading figures, and it is a curious use of official time and energy at a moment when bureaucrats are too busy to deport foreign rapists. But it is a sop to public opinion, which is twitchy about Britain's increasingly open borders.
ends

Rich Russia minus ideology equals trouble

It is one thing to feel uneasy about Russia. It is another to see clearly how things can go wrong in practice. During the 1990s, the nasty scenarios were based on Russia breaking up (meaning loose nukes) or the bad guys toppling Boris Yeltsin (and the KGB takes over).

Neither seemed likely enough to be scary. Pre-9/11, loose nukes in the hands of terrorists were hard to imagine. And if the bad guys did re-emerge (say by slotting a cold-eyed junior KGB officer with platform heels into the Kremlin) what could they do? Russia was still bankrupt, decrepit, unable to feed its soldiers properly or heat its people in winter.
Now nobody worries whose finger is on the nuclear button. That's not much comfort: like a frog in a heating saucepan, we barely notice how bad things are. Xenophobia at home and abroad is pretty much official policy; Russia tears up international rules that it doesn't like and befriends tyrants all over the world.
Two new things are really scary. One is Russia's petro-fuelled wealth. The other is that we are greedy.
Rich Russia takes some getting used to. A decade of bailouts and soft loans left many people thinking that Russia couldn't survive without western goodwill. Not any more. The question now (at least as posed by the Russians) is the other way round: whether Europe can stay warm and well-lit without Russian goodwill.
Having shackled most of its former satellites, Russia's cash-rich energy empire is now expanding west. Led by Germany, the big countries of continental Europe have rolled over without a fight. And why not? Surely it's hypocrisy to tell Russia to adopt capitalism and integrate in the world economy and then start objecting when it happens?
That's the greed talking. Faced with the choice between cheap-ish energy and a quiet life on the one hand, and an uncomfortable and costly spat on the other, western countries are overwhelmingly plumping for the former. Rows with Russia are bad for business.
During the Cold War, that greed was tempered by fear. Even if appeasement seemed profitable, the prospect of Communism, or Communist-inspired subversion, made tycoons, mostly, opt to defend capitalism. Not any more. Now we are not just greedy, but flabby and complacent too: that is the wrong state of mind when a stand on principle is urgently needed.
In short: by shedding the unattractive and impractical ideology of Communism, Russian imperialism has become a lot more sinister. Why mess about with the workers when you can buy the bosses?
Anyone who thinks that Russian investment in downstream energy businesses is a purely commercial transaction should look at what has already happened in post-Communist Europe. Dodgy intermediary companies mushroom; politicians of all stripes start getting kickbacks to look favourably on the new order.
The combination of gas pipelines, long-term contracts and Russian investment in the downstream business means that it becomes almost impossible for a country to diversify. It's the equivalent of having a couple of Red Army divisions parked outside your capital city - but a lot more lucrative for the Kremlin and a lot less objectionable for the public.
It's still possible that the Kremlin's crass, bullying manner rouses even the chancelleries of Europe from their cowardly lethargy. Eventually, Russia's troika of dreadful problems (collapsing public health, fraying infrastructure, declining education) may so weaken the state that it implodes.
But I'm sceptical. We are living in a common European house all right - and if Russia heats it today, it looks all set to run it tomorrow.
# Edward Lucas is central and eastern Europe correspondent for The Economist.

Hungary's election

Hungary's election

The re-election precedent
Apr 27th 2006 | BUDAPEST
From The Economist print edition


A sign that politics in central Europe may be maturing

THE first rule of post-communist politics in central and eastern Europe has long been that, whatever a government does, it will be voted out of office. All the reforming administrations of the early 1990s met this fate. So did the softly-softly governments that replaced them.

Such constant changes of government have made outsiders fearful over the fragility of these new democracies. Few prime ministers or parties have completed a full term. Nowhere in the region has a prime minister yet served two full consecutive terms at the head of the same coalition. Parties have been launched, merged and folded with bewildering speed. And, in some countries, populists of extreme right and left are troublingly successful.

This week's news from Hungary may herald a change, towards governments that can sometimes win again. After the second round of the election, on April 23rd, the ruling centre-left coalition led by Ferenc Gyurcsany took 210 of the 386 seats in the lower house of parliament, against only 164 for the conservative opposition led by Fidesz. Fidesz's outspoken leader, Viktor Orban, who was prime minister between 1998 and 2002, proved divisive and unconvincing. Even his announcement after the first round that he would not seek to be prime minister again failed to win voters back. At least, unlike some earlier elections, this one was free of anti-Semitism, coded or otherwise.

Mr Gyurcsany's victory was largely personal. A youthful, smooth-talking tycoon with links to the communist-era elite, he is now a keen Blairite, Atlanticist and market-friendly, quite unlike the older ex-communists who still dominate his Socialist Party. He handled Hungary's smaller parties cleverly, keeping his liberal allies, the Free Democrats, happy and also wooing a moderate right-wing party, Hungarian Democratic Forum. This party then doomed Fidesz by refusing to co-operate with it in run-off votes.

The Socialists' slick campaign contrasted with Fidesz's gaffe-strewn effort. Mr Orban gained a few votes on the far right (the main extremist party saw its vote fall by half, to 2%). But he did not appeal to the centre. Having dominated Hungary's right-wing politics for more than a decade, he is now talking of quitting. A big shake-up of the political right looms.

Mr Gyurcsany faces a more immediate test: how to fill the gaping holes in Hungary's public finances, many of which his own government created in a pre-election binge. This year's budget deficit is approaching 8% of GDP; including such off-balance-sheet items as road-building, it would be nearer 10%. The current-account deficit is over 8% of GDP, one of the biggest in Europe. Foreign investors are edgy.

The government promises “reform without austerity”. It intends to bring in insurance-based health-care and to cut the number of ministries and municipalities. “Our objective is to transform the work of the state so that it is not a burden, but instead serves us,” Mr Gyurcsany has said. Yet, as Juliet Sampson of HSBC, a British-based bank, puts it, “given the Socialists' record on reform, we'll believe real fiscal adjustment is on the way when we see it.”

Elsewhere in the region, re-election may start to become a habit, not a fluke. Many in Poland's minority ruling party, the right-wing Law and Justice, want an early election, hoping to win it. The Czech prime minister, Jiri Paroubek, stands a chance of staying in power after the election in June (though perhaps with his Social Democrats in a different coalition).

It would help if only honest, reformist governments were re-elected, and not spendthrift, soft-talking, sleazy ones. Yet Slovakia's Mikulas Dzurinda is the only prime minister who fits the happier description so far, when he won again in 2002. And he now faces defeat in this summer's election.

Mr Dzurinda's mentor, Mart Laar, who was prime minister of Estonia in 1992-94, believes it is futile to worry about re-election. “Just do the right thing,” he argues, and the voters will eventually appreciate it. That brought him back to power in 1999, though for only a partial term. Now a backbencher who spends much time abroad preaching the virtues of the flat tax and economic reform, Mr Laar laughs off any talk of a comeback. His fans hope that he may be dissembling.

Eastern lynxes in need of better schooling

By Edward Lucas

Asia has tigers, I mused, so eastern Europe has...lynxes! That was a handy way of illustrating an interesting bit of research by some Austrian economists (at the Vienna Institute for Comparative Economics and BA Creditanstalt) which shows how well the post-Communist economies of the EU are doing.
The key to understanding the region's economy is to look at the composition of exports and the Austrian study shows how the lynxes, (the eight former captive nations now in the EU) are doing rather well in shifting their exports from low-value to more hi-tech categories.
It turns out that on almost every count the lynxes are pulling ahead of the second-rank Asian tigers - places such as the Philippines and Malaysia.
It's always a pleasure to confound the doomsayers. I still remember the cantankerous Finnish diplomat who told me in 1992 that Estonian independence would be a "catastrophe" for his country and the many Germans who sneered about the polnische Wirtschaft next door. For the next few years, "new Europe" is going to give the old rich bit of the continent a healthy competitive boost.
But in the long run there are two big problems. One is demography. That's a pan-European problem, but it's most pressing in places where national savings have been stolen and squandered by Communist gangsters. The result is rich-country population structure with poor-country economies. The further east you go, the worse it gets: Georgia, for example, will almost certainly be old long before it is rich. And there's little chance of such poor countries plugging the gap with migration. So the lynxes, both the sleek tribe of central Europe and the Baltics, and their mangier cousins further afield, need to breed a lot faster.
The other problem is brainpower. There's startlingly little research and development in post-Communist countries - just 0.8% of gross domestic product, compared to more than 2% in rich Europe (which is still too little). There are three reasons. First, world-class research and development is mostly too expensive for either the public or private sectors in post-Communist Europe to afford. Even a big company like the Czech Republic's CEZ can't match a global giant like Siemens.
Second, rich-country subsidies distort the market. Estonia would be a natural place to do research on internet banking - but the big banks there are all foreign-owned and likely to heed their home governments when spending research money.
Third, the universities are not good enough. There are honourable exceptions - usually in capital cities, in disciplines unspoiled by Communism either because they are so rigorous (physics) or so new (computing). But most post-Communist universities are introverted, mediocre, bureaucratic and hierarchical. In some respects they are the last bastions of the planned economy, capturing state resources through favouritism and then fulfilling the bogus targets set by the state.
It is hard to solve the first two problems. Foreign ownership has brought so many benefits, it would be absurd to restrict it. But lynx-country governments could free their universities to compete internationally (they already have two advantages: cheap living costs and beautiful buildings). Most advanced courses should be taught in English, by star academics hired on highly competitive salaries. Great teachers and researchers attract not just world-class students, but lucrative ones, too (Americans! Study creative writing in Prague! Guest lecturers Milan Kundera, Ivan Klima and Vaclav Havel!). Most importantly, it would kick-start R&D (especially as old-Europe's universities are mostly too sleepy to compete). Globalising fast might dent national pride, but the lynxes don't need fading academic trophies any more than they need national airlines. They need more brainpower, and fast.
# Edward Lucas is central and eastern Europe correspondent for The Economist.

© Copyright 2006 The Economist Newspaper Limited. All rights reserved.

Belarus and naval strategy

Free media and naval strategy in Belarus

When I used to work in the BBC's religious broadcasting department some 20 years ago, we sometimes teased our slightly dim presenter by telling him that the next item concerned a conference of Catholic bishops' wives (or Muslim brewers, or a Mormon coffee-morning: in those happy days, you could still make jokes about religion).

He usually fell for it. So when I received an e-mail apparently from the Belarus Embassy in London, inviting me to a government-sponsored media conference in Minsk, my immediate reaction was that some friend of mine was playing a practical joke.
Admittedly, any official invitation from that quarter is about as likely my spending New Year's Eve at Vladimir and Lyudmila Putin's dacha. I can't at the moment get a visa for either Russia or Belarus. That's a pity: I have been covering both countries for nearly 20 years, and my affection for their language, culture and people is matched only by dislike (doubtless mutual) for the creeps in charge, and the bullies and sycophants around them.
But the subject of the conference was so unlikely that it couldn't be a joke: the "10th International Special Exhibition: Mass Media in Belarus". Even my most ingenious friends would not think that one up. A conference on mass media in Belarus is as implausible as that landlocked country debating naval strategy, or a meeting of Icelandic trainspotters.
For those unfamiliar with the benighted politics of Belarus, it may be worth pointing out that the mass media there do not fulfil the functions of their counterparts in other countries, of raising issues of public concern, holding officials and politicians to account, and so forth. In Belarus, the media's task is to operate in the Leninist sense, of a transmission belt bringing the political wisdom of the country's leadership to the masses. The deeds of the president are the main, sometimes the only, item in the news. Misdeeds (such as the ruination of the country's education system, relations with rogue states, state-sponsored criminality, the murder of political opponents, and the blatant rigging of elections) don't feature.
A bit of Googling reveals that the previous nine conferences really did take place. From the accounts posted on official Belarussian websites, these seem to have been ghastly Soviet-style affairs, awash with toasts and endless maudlin self-congratulation.
For anyone who doesn't remember the Soviet Union, these sort of conferences were the staple diet of public life in those days. Delegations would arrive armed with wordy communiqués of staggering blandness and banality. There would be lengthy speeches, punctuated with lethargic applause. The main business, of course, was shopping and socialising (rather like American business conventions, now I come to think about it, but with secret police, instead of corporate PR departments, checking that everyone stays on message).
But such conferences are valuable for a different reason. However boring the official sessions, the bits between are a rare chance to get alongside top goons, drink them senseless, and try to get them to spill a bean or two. So I phoned the embassy and pleaded for confirmation that I would actually get a visa. The theme of the conference, after all, is the "integration of Belarus into the world media landscape", and surely the participation of The Economist, one of the few big international publications to cover Belarus solidly, would speed that noble goal? "We'll get back to you," said the embassy official smoothly.
Perhaps it would have improved my chances if I had asked for advice on how to arrive by sea.
# Edward Lucas is central and eastern Europe correspondent for The Economist

A big bang from a small eastern country

By Edward Lucas

The economic history of Estonia might sound arcane. But when the speaker is Mart Laar, twice prime minister and the father of its unique blend of free-market capitalism and internet government, it proves quite a draw.

A few weeks ago, I was watching Mart Laar launching the Polish-language edition of his book in Warsaw. The audience, at the city's top economics school, reminded me of a harried group of believers getting a red-hot sermon from a much-admired foreign preacher. It was much the same at a dinner in London, organised recently by Politeia, a conservative think-tank.
Estonia has that effect on both free-market liberals and geeks: it has done what other countries just dream about. Laar's administration in 1992 abolished all subsidies and tariffs, balanced the budget, introduced a flat tax, auctioned most industries to foreign investors and reformed the pension and welfare system. This wasn't just shock therapy: this was the most radical high-voltage treatment experienced by any economy in Europe, ever. (I was living there then. It was thrilling, but uncomfortable.)
Laar is chubby, bearded, rather rumpled, more like a university professor than a political icon. His Estonian-accented English takes a bit of getting used to (he pronounces "invite" and "invade" as if they were the same word). And he is very modest about his account of those exciting years. He didn't know much economics, he admits freely: he'd just read Hayek and Friedman and they made sense. He hoped that the flat tax would bring in roughly the same amount of money, but he couldn't be sure (in fact, of course, it brought in a lot more). He is far too polite about the bad advice Estonia received from outsiders (including a ninny from the International Monetary Fund who recommended a common post-Soviet currency "from Tallinn to Tashkent"). Laar, thank goodness, ignored it all.
But he certainly fires up his audience. The Poles wondered, wistfully, if radical reform could only work in a country with Estonia's small (1.3 million) population? (Answer: no.) And was it now too late to try such radical measures in Poland, 15 years on? (Again: no.) The UK Conservatives, whose current leader, David Cameron, is a platitudinous semi-socialist who shows not the slightest interest in low taxes and lean government, listened enviously. Their questions were admiring, but peppered with excuses about why real reforms wouldn't be practical, timely or popular in the UK. (Laar replied that necessary reforms are never practical, timely or popular, and you have to reckon that you may lose the election after you implement them: but they're still worth doing, all the same).
Amid the swooning admiration, I was struck by a paradox. Most of the parliamentarians and party groupies round the London dinner table were Europhobes, who would like the UK to leave the European Union, or reduce it to a free-trade area with no central institutions. I asked Laar what he thought. He replied that people who criticise the EU are just looking for someone to blame for problems they can't solve themselves. Joining the EU had not affected Estonia's economic freedom and the Brits should stop whingeing and start working to make it work better.
This didn't go down very well. But as UK Conservatives hunt around the nutty fringe parties of Europe for partners who are suitably Europhobic, they might stop to notice that a politician who has actually won an election in living memory and has promoted capitalism, freedom and European security with striking success, thinks they are plain wrong.

Edward Lucas is central and eastern Europe correspondent for The Economist.

Central European competitiveness

Lynx economies

Apr 12th 2006
From The Economist print edition

The advanced ex-communist countries have done well—and will do even better

THE best-performing ex-communist economies are setting quite a pace: Estonia and Latvia posted 10% GDP growth in 2005, reminiscent of Asia's “tigers”. The question now is whether the new Europeans can keep it up and catch the richer half of their continent. Few worry about external shocks, though Hungary, with its big current-account and budget deficits, looks vulnerable. For most, basic competitiveness is more pertinent.

A study by the Vienna Institute for Comparative Economic Studies, a think-tank, and Bank Austria Creditanstalt paints an encouraging picture, at least for the eight ex-communist countries that joined the European Union two years ago. They are usually termed the EU-8, but “lynx economies”—in honour of the region's own fierce felines—would be catchier. Their prospects are much brighter than those of the next candidates for membership, such as Romania and Bulgaria. In particular, the lynxes look set to keep their edge against their Asian competitors in the EU market.

The study measures the EU-8's competitiveness in terms of export performance (both size and quality), economic structures (a big share for services is a strength, farming and manufacturing are not) and the friendliness of the business environment (from bureaucracy to infrastructure). On some scores, the lynxes have almost caught up. They gain 65% of their gross value-added from services, only just below rich EU countries, at 69%. The second-rank tigers (Indonesia, Malaysia, Philippines and Thailand) make only 47% through services. They have 13% of value added coming from agriculture; among the lynxes, it is 4.3%, in old Europe, 2.7%.

The growth in the lynxes' exports to rich countries (see chart) beats that of any Asian economy bar China. Those exports are fuelled by sharply rising foreign direct investment. As a share of EU-8 GDP, it was worth 29% in 2000 and 38.1% in 2004. In the second-rank Asian countries, this ratio fell, from 26% to 19%.

Even better, the quality of exports is shifting upwards. The study notes particularly fast growth in what it calls “medium high-tech” industries, which now make up the biggest category of exports. Here the lynxes are raising not only the prices they charge but also market share.

Two big weaknesses remain. One is in the quality of public institutions. The World Bank and others compile detailed scores of business-friendliness on which all European countries, rich and poor, are outshone by the likes of Singapore and Hong Kong. The EU-8 need to make sure that they emulate not stagnant old Europe but its dynamic rivals in Asia.

This is improving, slowly. A bigger problem is in research and development. Most post-communist countries devote puny amounts of money to this: the lynxes average only 0.8% of GDP, compared with 2% in western Europe. Politicians grumble that the foreigners who own most of their industries prefer to shop at home for brainpower that rich countries can afford to subsidise more generously.

That's partially true, but politicians are slow to recognise another problem: post-communist universities are still largely unreformed, complacent and introverted. There are plenty of ways that ambitious countries could pep them up—for example by paying internationally competitive salaries, teaching in English and encouraging closer links with business.

Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.

East European media

Londongrad

Apr 12th 2006
From The Economist print edition

A million east Europeans in London are creating a thriving media market

Home thoughts, abroad

WHEN spies from MI6 were caught red-handed in Moscow earlier this year, Natasha Chouvaeva knew just the espionage expert to interview: Oleg Gordievsky. He is a former KGB officer who spied for Britain, escaped from the Soviet Union and now lives in well-guarded anonymity. For the media inside Russia, he's taboo. But unlike her counterparts in Russia, says Ms Chouvaeva, editor of the fortnightly Londonskiy Kurier [London Courier], “I don't have to worry about the Kremlin.”

Her paper, with a circulation of 12,000, is just one of a dozen thriving publications aimed at the east European diaspora in Britain. The latest arrival is a glossy English-language colour weekly, Fusion, with a circulation of 60,000. It is designed strictly for people from the eight post-communist states of the European Union. There are two other Russian weeklies plus a clutch of glossies focused on shopping and lifestyle; then there are six Polish publications (including a daily) and a radio station; and two Lithuanian papers. Their combined sales are over 120,000, and that is only a fraction of the market. Fusion's editor, Klara Smolova, reckons there are up to 1m east Europeans in London—nearly four times the government's official figure.

The most interesting material is the advertisements. As well as the predictable pages dealing with shared housing offered and sought in the grottier parts of London, and the nannies and builders who have proved the salvation of the British middle classes, there are ingenious lifestyle tweaks: for example, a way of using your mobile phone contract to get free calls home. An escort agency wanting new recruits stresses that it is “run by women”.

Ms Chouvaeva's paper apart, most of the publications show little interest in politics. Editorial content is a mixture of news from home and tips about how to survive in London. One Russian paper recently had a two-page spread on “Fake marriages, for and against”. There is a smattering of snide commentary about British social mores, but the overwhelming sense is of appreciation and awe at the opportunities offered.

Some still find the offerings pretty amateurish. At a Polish newsagent in west London, Bogusia Jarzebska, a graphic designer currently working as a cleaner, sniffs about the Polish papers' clunky layout, bad prose and inaccurate information. “One of them is published by a company that used to be a cleaning agency. I think it's the same people working there.”

That is why Fusion is so striking. Owned by the company that also publishes the Guardian, Britain's biggest liberal daily, it boasts both professional layout and sharply focused articles on survival (how to deal with double taxation) and fun (cheap days out). Its stablemate is TNT, published since 1983 for Australians, New Zealanders and South Africans in London. After only two months, Fusion's circulation is only 7,000 behind.

Poland

Radio nasty

Apr 12th 2006 | WARSAW
From The Economist print edition

Anti-Semitic radio in trouble

THE Polish government is the most technologically advanced in the world—because it is radio-controlled. That jibe reflects the close relationship between Radio Maryja, run by an outspoken Roman Catholic monk, Father Tadeusz Rydzyk, and a government marked by its senior figures' piety.

Now Radio Maryja is embroiled in scandal. At the end of March one of its commentators, Stanislaw Michalkiewicz, said Jews were “trying to force our government to pay extortion money disguised as compensation payments”. This was tasteless even by this station's standards. It brought a protest from the Vatican, which urged the bishops to keep the station under control. It also led to a rare statement from one of Poland's best-known Jews, Marek Edelman. The last surviving commander of the Warsaw ghetto uprising of 1943 called for Radio Maryja to be closed down because of its “xenophobia, chauvinism and anti-Semitism”.

Many Polish bishops, who represent the brainy, open-minded faith embodied by the late pope, John Paul II, feel the same. They find Radio Maryja creepy and superstitious. The mainly secular Polish mainstream media have piled in as well, probing the station's questionable financial dealings. None of this may have much impact on the radio station's traditional, mainly elderly, rural and poorly educated listeners. But it may give the government pause for thought, as it prepares for a visit by the new pope next month.

Newly published: "Why I am still an Anglican"

http://www.amazon.co.uk/exec/obidos/ASIN/0826481434/qid=1144686709/sr=8-1/ref=sr_8_xs_ap_i1_xgl/026-2890637-1254841#product-details

...is how you can buy it from Amazon. But my chapter (the last) is here

Happy Easter (for those people on the list who celebrate the western calendar)

Home thoughts from abroad

St Saviour’s Anglican church is built of brick, and it stands on British soil. But it is hundreds of miles from Britain, in the Latvian capital, Riga: the earth below its foundations was brought there by patriotic English merchants in the nineteenth century. St Andrew’s has similar Victorian church architecture -- but it’s in Moscow. In my nearly twenty years as a foreign correspondent in eastern Europe, these and other Anglican churches of the European continent have provided the spiritual landscape for my life, and my education in Anglicanism.

I thought I knew the Church well: I was brought up in an Anglican family, studied religion, and worked as a journalist for the BBC’s religious affairs department. There were, I reckoned, at least seven kinds of Anglican. My crude caricatures went like this:

1) The Evangelical — well-scrubbed, austerely dressed; the self-conscious, even smug heir to the traditions of the Reformation and, before that, the Early Church. He worries that many Anglicans are Christians in name only, but likes the idea of evangelising them. He sees the Church, not as the bride of Christ on earth, but as the ‘best boat to fish from’.

2) The Anglo-Catholic -- scented rather than scrubbed, and elaborately coutured. Would be a Catholic in Italy, or Orthodox in Greece. Liberal-minded on the Bible; nit-pickingly precise on details of liturgy and vestments. Loves the Church; less keen on outsiders. Worries that other Anglicans do not have the right idea about sacraments and neglect saints’ days.

3) The Liberal -- relaxed in dress and manners; open-minded to a fault; sees central tenets of the faith as dearly held but hard-to-believe, valuable in a symbolic, rather than literal context. Finds evangelising distasteful, and worries that other Anglicans make the church look off-putting.

4) The Traditionalist -- British to his bones; sees, often unthinkingly, the Church of England as part of the national identity, the wellspring of the country’s literary and constitutional tradition. Loves the Book of Common Prayer and the King James Version. Dislikes modern Britain. Thinks other Anglicans are faddy and over-excitable.

5) The Radical Do-Gooder -- goes to church because he wants to bring down the mighty from their seats and exalt the humble and meek; to dump the debt and save the rainforest. Right-on politics usually combined with ultra-liberal theology. Regards other Anglicans as stuck-in-the mud and introverted.

6) The Community-Minded -- a staunch supporter of the playgroup, the choir and the youth club; admires the vicar more for his people-skills than his preaching. Hazy on doctrine; thinks other Anglicans are rather “churchy” and intense.

7) The Loyalist -- faith rests on shaky foundations, but unwilling to ditch the Church altogether (at least while his parents are still alive). Feels that an hour a week of reflection and hymn-singing makes him a better person. Finds other Anglicans too clubby.

These caricatures (admittedly crude) were all features of my life. It didn’t put me off churchgoing altogether, but it did strike me as an odd feature of Anglican Christianity that each strand of the Church attracts vehement criticism from other parts of the church. The evangelicals in particular seemed to regard all other motivations for churchgoing as peripheral: you’re either saved or you’re not. If you want a social club, a political party, or a family get-together, go to one.

Other bits of the Church were equally (un)charitable, regarding the evangelicals as simplistic and narrow-minded. Many outside Anglo-Catholicism regarded that as something of an affectation: a club for people who like prancing about in strange costumes amid clouds of incense, pretending to be holy. Those bits of the Church that believed in the Virgin Birth, the physical Resurrection and the Ascension were uncomfortable with those that didn’t. The radical do-gooders distrusted the traditionalists, and vice versa.

It was tempting to conclude from this that Anglicanism was a ragbag of warring and contradictory beliefs, a historical accident which is now facing a deserved and inglorious demise. In a world which likes clear boundaries -- gay or straight, pro-Bush or anti-, vegan or not -- the ambiguities of Anglicanism seemed quite out of place.

But even before I went abroad in the mid 1980s, I began to see that this argument could be turned on its head. If you agree that it is rash to be too certain about the future of Christianity then a dose of inclusivity and tolerance is wise. Take three examples: first, if women priests and bishops prove to be a temporary enthusiasm, destined to wither away, then the traditionalists will be vindicated and recover their central role. If, on the other hand, there is an overwhelming and permanent shift going on in human understanding of women’s roles, then much of Anglicanism has already grasped it.

Secondly, if there is a general revolt against literal readings of holy texts then Anglicanism offers a ready framework for a Christianity that does not treat the Bible as a history-book-cum-instruction-manual. If instead there is a renewed interest in devotional use of Scripture, Anglicanism has a powerful intellectual tradition to support that, too.

Thirdly, the sacramental tradition may perhaps prove to be a hangover from a pre-modern age, and will die out along with indulgences, relics, exorcisms and prostrations. Or maybe sacraments will prove to be the key to religion in a post-modern age, where people seek symbolic expressions of hidden meanings. Either way, Anglicanism can accommodate the shift in spiritual appetite.

I appreciate this breadth all the more because my own Anglican faith has veered so sharply between all points of the ecclesiological compass. I grew up in a family where churchgoing was an unquestioned part of life. My father, a philosophy don, advised the Church on doctrine; my mother has a theology degree. As a teenager, I was an evangelical; as a student, a right-on modernist, combing ultra-liberal theology and ultra-liberal politics. As a busy young journalist, I found my faith stretched, and resorted to habit and tradition, joining the Prayer Book Society and going to church mainly to sing hymns and make good resolutions.

It was only when I was travelling abroad that I began to feel at ease with the Church. As a student in Cracow in 1986 (with no Anglican church nearer than Berlin), I sought out the tiny Methodist congregation, and tingled to the sound of familiar hymns sung in Polish (Abide with Me was a local favourite). It was an experience that both prompted homesickness and cured it.

Working as a western journalist in eastern Europe before the collapse of Communism was a lonely, sometimes scary experience. The outside world was largely uninterested -- the Berlin Wall seemed a permanent fixture -- and friends and colleagues were thin on the ground. Every contact with a local brought an ethical dilemma. Was the nice girl I met at a lecture in East Berlin truly a secret dissident eager to pass information to a friend from the free world, or a Stasi plant trying to embarrass me (and, worse, the BBC)?

As I wrestled, callowly, with these problems, I found the Anglican congregations in West Berlin and, later, Prague, Riga, Vienna and Moscow, became a central part of my life. There were big contrasts: the Berlin services were in a splendidly fitted-out military chapel; the Prague ones, until the collapse of Communism, were celebrated in the basement recreation room at the British embassy by a visiting priest from Vienna. But for me the effect was always the same -- and ever stronger.

Of course there were plenty of services in local languages, and I attended them when there was no alternative. But I found nothing to match the pull of a familiar liturgy, of fellowship with like-minded believers, and those beloved hymns. The effect on the soul was similar to that of Marmite on the tastebuds. Admittedly, analogies like that make expat congregations easy to caricature. People who would never darken a church’s doors in England start coming, because they are bored and lonely. There is a sometimes ridiculously self-conscious Englishness (not always confined to the English members of the congregation): I remember, after one service in Berlin, hearing an elderly German woman hissing reproachfully to the (also German) intercessor, “You forgot to pray for our Queen”.

But behind the absurdities are huge pluses. An Anglican church abroad can play a role which is muffled at home. In eastern Europe, it represents the triumph of good over evil. St Saviour’s in Riga was closed by the Soviets in 1940 and turned into a youth club. St Andrew’s in Moscow was confiscated by the Bolsheviks after the Russian Revolution, and clumsily converted into a recording studio. Even then, the architecture was a mute witness to happier days, and local Anglophile believers would offer a silent cheer as they passed. But regaining and re-consecrating the buildings after the collapse of Communism was a symbolic triumph: atheistic, xenophobic intolerance was vanquished, and a precious historical and spiritual feature of both cities was restored to its rightful use.

In communist Czechoslovakia, where atheism was the state ideology and the church leadership had to a large extent been bullied and suborned into making shameful compromises with the system, the existence of a “real” Church, however tiny, was of symbolic importance. And, peripheral as the Anglican services were, they made me feel that I was doing something in my spiritual life to stand alongside the underground priests and dissident pastors whom I met in my journalistic life.

In Berlin, the Anglican Church also had symbolic value. One strand, as in Prague, was fighting the good fight of the cold war. Many members of the congregation were officials (actually spies) and soldiers from what was then the huge British official presence in Berlin. They were clever, brave and friendly --and I found the atmosphere in the congregation a refreshing contrast to the ignorant peacenikery of much of the Church back home. Another, contrasting but complementary, element of the congregation was reconciliation between old foes. The congregation also included elderly couples consisting of British servicemen who had been posted to Berlin (in the days when part of the job was to keep a vanquished enemy subdued), and local girls they had met and married.

In the new conditions of freedom, the Church remained a protagonist, but this time in another culture war: between the spiritual values of western civilisation, and the brash, avaricious ways of post-communist capitalism. The end of totalitarianism left a moral vacuum, where greed was elevated to a virtue, and brutality overlooked. Many expatriates found the temptations overwhelming: compared to life in respectable western countries, the money was far better, and the fleshpots far fleshier. One (bachelor) journalistic colleague of mine in Moscow confided that, in his first six months in town, he had never gone to bed alone or sober. For westerners living and working in a city where swindling, promiscuity, drugs and drinking were everyday pursuits, church was a place that refreshed and inspired.

For me, there was an increasingly important extra dimension. My marriage was breaking up. There was a danger that my children would end up living far away, and my contact with them would be sharply limited. As my home life deteriorated (and my children were no longer able to come to church), St Andrew’s in Moscow kept me from disaster. The shabby, desecrated church fabric, like the wounded body of Christ, matched my own feelings of hurt and despair. Weeks would go by when it was only at services -- sometimes the Sunday Eucharist, sometimes the daily said evening prayer -- that I felt (rightly as it turned out) that hope of a happy future was not altogether lost.

The miserable physical state of St Andrew’s highlighted another powerful way in which a church abroad inspires commitment: through its vulnerability. For most congregations in Britain, the parish seems a permanent fixture. Even if it closes, or is merged in a team ministry, life will go on. For an expatriate congregation, existence is much more precarious. St Saviour’s and St Andrew’s are both in advanced states of disrepair—St Andrew’s in particular needs millions of pounds to keep the rain out and the roof on. Everything portable was stolen or destroyed under Communism, and the interiors disfigured by hideous, Soviet-era conversions. Obtaining even the simplest church furniture requires head-scratching and fund-raising.

Solving those problems is made more difficult because of the nature of the congregation. Expats come and go frequently, and it seems a rule of life that the best people are always moving on elsewhere, while the most tiresome seem to stick around indefinitely. But that mixed-bag congregation makes it all the more compelling. There is a sameness to Anglican congregations in Britain. Moscow’s included worshippers from all corners of the Anglosphere (Indians, Americans, Australians and the like). That was to be expected. Less so were the many others: Dutch and Germans, Poles and Finns -- not to mention a bunch of Russians. All these people had made a conscious, thought-out decision to go to a church of a different tradition, in a different language.

That is humbling and thought-provoking for someone brought up to feel that Anglicanism is as unremarkable as bus services or running water. It demonstrated to me Anglicanism’s unique inclusivity. Those from in the Orthodox tradition were able to feel at home, just as much as those from a Protestant background (one regular attender was a full-time worker for the Salvation Army), or from no religious affiliation at all.

It was when I returned to England that I realised how much more at home I felt in the Church than I had when I left, some fourteen years previously. But Living abroad had deepened not only my ties with Anglicanism, but also my knowledge of other Christian denominations. In Russia, I was deeply impressed by the Roman Catholic Church, whose priests’ brainy integrity was in sharp contrast to the obscurantism and often dubious practices of much of the Russian Orthodox church. But I also found much to admire elsewhere in the eastern tradition. By happy coincidence (or maybe more), I came across a former fellow-student, an American of Ukrainian extraction, who runs a Byzantine-rite Catholic seminary in Ukraine. Although our contact was infrequent, it was inspirational. His seminary -- really a university -- was a moral lighthouse to a whole region, teaching students everything from classical languages to moral philosophy. Its rigorous standards and loving pastoral care are in sharp contrast to the often corrupt, exploitative and debased system of state-financed university education.

That helped shape my choice of church when I returned to London. Whereas in the past I had been lucky to have one Anglican church to go to, now I had hundreds. I decided to explore a part of the Anglican tradition that I had scarcely encountered in past years. I wanted transcendence, beauty in sound and sight, mystery, reverence and historical continuity; but also a feeling of being part of the widest possible Christian family. So I began going to St Mary’s, Bourne Street -- probably the most High Church of all Anglican churches, anywhere.

At first it was rather a shock. I had barely said a Hail Mary in my life, let alone sung the Salve Regina. I had never attended Benediction, nor sung plainsong, nor touched a rosary. Some of my friends were surprised. Given that my beloved new wife is Roman Catholic, and that the Anglo-Catholic wing of the Anglican church is weak, splintered and demoralised, and the whole Church so riven with dispute, they wondered why I didn’t take one step further, and join (as one friend kindly put it), “a proper Catholic Church, rather than a pretend one”?

My answer was that the Church of England is not perfect, but neither are other denominations. It has problems, but so do others. The current rows about sex may get worse, or better, but one does not escape them by moving elsewhere. Equally, whichever course the Church decides to follow, there will be some damage to its ecumenical relations, but the nature of Christian disunity means that there is no single Church that can claim untroubled relations with all other Christians. Leaving the Church you are brought up in is like severing relations with your own family -- it may sometimes be necessary, but it should be only the last resort. So long as Anglicanism maintains its inclusivity, tradition and ecumenism, with its ambiguity a witness to humility in the face of the unknowable, I can think of no better spiritual home.

So, for the first time in my adult life, I now feel that my faith and my life are firmly in tune. The Church’s job is to provide a framework for modern life, and to fill the gaps. If the secular world is busy, ugly, shallow and selfish, the Church offers peace, rhythm, contemplation, humility, aesthetic riches, history, friendship -- all combined in a narrative that makes sense of our actions, hopes and fears. The strands of belief that have passed through my fingers in the past decades have finally knit together; I have never felt more strongly tied to the Church.

EDWARD LUCAS
Edward Lucas was born in 1962 and educated at Winchester, the LSE and the Jagiellonian University, Cracow. He has been a foreign correspondent in Eastern Europe since 1988 (chiefly in Moscow, Berlin and the Baltic States) and is currently Central and Eastern Europe correspondent for The Economist. He is married to Cristina Odone and has three children.