Eastern Europe is where economic progress and reform are taking place. It is
where economic experimentation is the norm; it is where taxes are being cut; where capitalism is most alive.
GENERAL COMMENTS
ON THE CAPITAL MARKETS
Horace Greeley, a
one time successful and important newspaperman in the
19th century, supposedly called upon the young men and
women of the then young United States to "Go West, and
grow up with the country." If Greeley were alive today and
writing, he would be telling the young men and women of
Europe to "Go East." By that he would mean to Eastern
Europe, for it is there that the future lies. Eastern Europe is
where economic progress and reform are taking place. It is
where economic experimentation is the norm; it is where
taxes are being cut; where capitalism is most alive.
According to the EBRD (The European Bank for
Reconstruction and Development) '04 will be the fourth year
in a row that the former Soviet Eastern European nations will
outpace the economic growth of the West... and the
difference in the growth rates is increasing! In '03, the former
Eastern Europe grew its GDP by 5.6%; in '04 it is expected
to grow by 6.1%. Eastern Europe is green and vibrant;
Western Europe, by comparison, is brown and sclerotic.
Interestingly, the fastest most vibrant growth is in the former
CIS itself. We can "excuse" or discount the growth in
Kazakhstan and Azerbaijian, which lead the region with
growth rates averaging a stunning 7.4%, as an accident of
high oil income. And we can perhaps "excuse" the growth in
Russia itself, of 6.9% this year, as also oil induced. But we
cannot excuse the growth of Bulgaria, Croatia, Romania, The
Czech Republic, Slovakia, Hungary, Poland, Estonia, Latvia,
Lithuania and Slovenia at or near 5.0% as oil related, for they
are oil importers, not oil exporters. Rather, we have to
believe that something very real is taking place in these
formerly Communist countries, who are now quite willing to
adopt freer market policies than those of the West.
Like reformed smokers who are most willing to shun their
habits of the past and who are most willing to see the error of
their past ways, the former Communist nations see the
silliness of collectivist thinking and are willing to embrace the
wisdom of capitalism. Two cheers then for the former East;
two louder cheers for the young people of Western Europe
who are moving to the East to embrace the future. Horace
Greely was almost right: Go East, Young Man... Go east.
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