Who won and lost from the disintegration of the USSR?

On August 19^th it was 20 years since the failed Soviet coup d'état attempt (19–21 August 1991), also known as the August Putsch or August Coup. The State Committee of the State of Emergency’s spontaneous and uncoordinated actions finished off the USSR.

The disintegration of the USSR disappointed many of those who later found themselves living in one of the 15 independent states of the former USSR.

Let’s look at the consequences in terms of figures, which is the only objective language for traders and investors:

For 20 decades numerous political scientists have been confusing people and each other. They have failed to provide distinct criteria and to determine which of the 15 states of the former USSR managed to benefit from the collapse or were knocked down.

According to the expert team of , everything will fall into place if to apply objective criteria when considering each of the 15 states. So, let’s apply them:

Criterion 1: GDP-per-capita growth over the last 20 years.

The following chart is based on the data provided by the IMF:

According to the Russian Association of Traders and Investors under , we can single out 4 frontrunners and 4 outsiders:

·         Azerbaijan, Turkmenistan, Kazakhstan and Estonia, which have managed to increase their GDP-per-capita by 2.7-4.9 times since 1991.

·         Tajikistan, Moldova, Ukraine and Kyrgyzstan. They have managed to increase their GDP-per-capita by only 7-36%.

That is why (Azerbaijan, Turkmenistan, Kazakhstan and Estonia) there are very few people among the frontrunners who feel nostalgic for the USSR, as opposed to the group of outsiders, where people are sure that the USSR was a better place to live in.

Criterion 2: Demographic situation.

 The experts of say there are 2 tendencies:

·         Fairly high birth rate in Muslim countries

·         Low birth rate, high death rate and labor migration in many other countries of the former USSR (Lithuania, Moldova, Ukraine, Estonia):

For the last 2 decades millions of people left Russia, Ukraine, Georgia and the Baltic countries, not to mention high death rate and low birth rate. For comparison sake, during the USSR time those countries used to have stable population growth every year.

Moreover, some of the former USSR states participated in armed conflicts (Russia, Georgia, Armenia, Azerbaijan, Tajikistan, and Moldova).

Criterion 3: Democracy

In other worlds, how democratic a country’s society is: freedoms and rights, political opposition, democratic elections, separation of powers. Now it is difficult to find such countries. It seems that only the Baltic states, Ukraine and Moldova can be called more democratic than the others.

Criterion 4: Earnings and income

It should be noted that during the latest global crisis people’s earnings shrunk. Before the 2008 crisis the average earnings for some of the CIS states looked as follows:

·         Russia - $718;

·         Kazakhstan - $485;

·         Belarus - $396;

·         Ukraine - $356;

·         Azerbaijan - $317;

·         Armenia - $293;

·         Kyrgyzstan - $137;

·         Tajikistan - $63.

Criterion 5: various countries of the former USSR belong to different international unions:

As you know, the Baltic states are already EU members, while Ukraine, Moldova and Georgia strive to enter the EU. Georgia left the CIS in 2008.

What did the former USSR states have in common?

13 former USSR countries formed the Commonwealth of Independent States (CIS) in order to preserve the economic and other ties between those countries.

According to , 20 year later we can make some conclusions and look at the achievements:

1.       Transition to market economy. All the ex-USSR states abandoned the socialist economic model and switched to the capitalist one. Some states (like Belarus) preserved some of the traits of the socialist model.

2.       Economic difficulties in the 1990s. All the post-socialist states experienced serious economic problems during the first years of their independence. Their GDPs were declining at a disastrous pace, with the Baltic states being the frontrunners of the economic decline.  In 1992 the GDP decline was the following: Estonia - 25,5%, Latvia – 34%, Lithuania – 39,3%, Russia  –13,8%, Belarus – 9,6%, Turkmenistan – 5,3%. The overall decline continued till 1996. Armenia and the Baltic states were the only countries to recover in 1994.

3.       Manufacturing collapse in the 1990s. The rapture of old economic ties led to an export decline as product markets shrunk. The former economic potential was nearly destroyed. In 2000 the level of the overall manufacturing potential of the CIS was nearly twice as low as the one seen in 1991 right before the collapse. Belarus and Uzbekistan were the only countries to exceed the level of manufacturing production seen in 1991, which became possible mainly due to governmental control.

4.       Agricultural crisis in the 1990s. In 2000 the level of the overall agricultural production of the CIS was equal to 68% of the one seen in 1991 right before the collapse. Armenia and Kyrgyzstan were the only winners.

5.       Social gap. Numerous reforms increased the gap between the rich and the poor. In 2000 over 41% of Russia’s population lived below the poverty line. In Belarus the amount of the poor reached 44%, in Kazakhstan - 36,4%. In the former USSR countries of Middle Asia the figures were even more terrifying. In 2000 the consumption of meat and dairy products declined as well (In Belarus – by 19%, Russia - 35%, Kazakhstan - 39%, Kyrgyzstan - 17%, Ukraine - 50%).

6.       Economic recovery and growth in the 2000s. In 2008 the CIS economies started growing. The growth continued until the global crisis (2008). 2000 was the first year when all the countries of the former USSR recovered and started growing. The economic uptrend continues, but its pace has been changing since the very beginning.

Consequently, we can conclude that all the former USSR countries were seriously affected by the disintegration of the Soviet Union, with some of them recovering faster than others.

Market Leader and would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:

In your opinion, who benefited from the disintegration of the USSR?