Progress in transition and the development of democracy
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Over the past year the transition countries have continued to make progress in structural and institutional reform. In particular, the countries of central eastern Europe and the Baltics (CEB) have moved further forward from their already advanced position, as they prepare for accession to the European Union. After the EU’s Copenhagen summit in December 2002 and a series of referenda, all CEB countries except Croatia are now set to join the EU in May 2004. Bosnia and Herzegovina, Bulgaria and Serbia and Montenegro made most progress in south-eastern Europe (SEE) while Russia leads reforms in the Commonwealth of Independent States (CIS). However, in parts of the CIS progress in transition has virtually stalled. In two countries– Moldova and Uzbekistan– the reform process has actually moved into reverse in some areas.
The patterns of reform in 2002 and 2003 reflect the general trends in transition over the past five years. The advanced transition countries in CEB continue to make progress, while in SEE the fastest reformers are increasingly catching up. Within the CIS the division between intermediate reformers, such as Russia, Kazakhstan and the Kyrgyz Republic, and slow reformers, such as Belarus, Turkmenistan and Uzbekistan, is beginning to widen.
If these trends continue, there is a danger that the divisions which have already become apparent in the region may become permanent. While one group of countries is increasingly integrated into the world economy and the single European market– in the case of CEB and the most advanced SEE countries– a second group is in danger of being caught in a trap of slow reform, low productivity and high vulnerability similar to low- and medium-income developing countries outside the EBRD’s region of operations.
These divergent patterns of economic reform are mirrored by political developments. The advanced transition countries have made steady progress in the development of liberal, constitutional democracy while the countries that lag behind in transition are increasingly characterised by weak constitutional orders and, in some countries, political repression.
The chapter assesses reform progress over the past 12 months and updates the EBRD transition indicators (see p. 16). It begins with a review of reform progress so far and the key challenges that lie ahead. The chapter then asks what role the development of constitutional liberalism– meaning not just electoral democracy but also the rule of law and the institutionalisation of civil and political rights– has in promoting and sustaining the transition from command to market economies.
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