Boris Yeltsin may have defeated the communist candidate in 1996's presidential election in Russia, but the party is experiencing a renaissance elsewhere in the former Soviet bloc.
The sudden collapse of communism in Eastern and Central Europe gave rise to a euphoric belief that, with the aid of Western governments and international financial institutions, the struggling new democracies' path to prosperity seemed clear. First, a unified Germany would revive the area occupied by the old German Democratic Republic (GDR) through a massive transfer of wealth and the inclusion of the former East Germany under the legal system of the prosperous and well-governed German Federal Republic. Czechoslovakia, the most advanced republic in Eastern Europe even before World War II, would come next, followed by Poland and Hungary, which had begun the reform process in the 1970s. Romania, Bulgaria, and Albania, according to that scenario, would follow in time.
Meanwhile, Latvia, Lithuania, and Estonia (the most progressive of the 15 republics that had composed the old Soviet Union) would receive large amounts of foreign aid., particularly from the Scandinavian countries. Several other Soviet republics--including Russia, Ukraine, and Belarus--possessed massive natural resources that would hasten their transition to capitalism. The republics of the Caucasus--Georgia, Armenia, and Azerbaijan--presented bigger problems, but they, too, seemed to have sufficient human talent and natural resources to achieve success in time. The Central Asian nations would take longer, but win secular, democratic Turkey as a model, they also could be expected to join the community of free-market democracies eventually.
That was the hope. The reality has been considerably more complex and, on balance, disappointing. The transition to democratic capitalist societies has proven more difficult and erratic than most Western experts anticipated in the immediate post-Cold War period. Assorted communist, reformed communist. and neocommunist parties have exploited the problems of the economic and political transition throughout Central and Eastern Europe to gain power or at least mount serious challenges to noncommunist reform factions.
Estonia. Despite its ties to Finland and the economic support of the other Nordic countries, Estonia remains haunted by the past. The market-liberal-oriented government elected in September, 1992, pushed hard at economic reform and succeeded in creating a stable currency, attracting foreign investment, and setting the stage for modest rates of economic growth (five percent in 1995 and a probable four percent in 1996) through extensive privatization of state-owned industries and adoption of free-trade policies.
In March, 1995, though, Estonians went to the polls and shifted from a market-liberal to a more social democratic government largely because of heavy support for leftist candidates among pensioners and peasants, who mostly have not shared in the prosperity generated by capitalism. The new Prime Minister, Tiit Vahi, leader of the Coalition Party and a former Soviet-style factory manager, formed a coalition with the Rural People's Union and slowed down the pace of reform, especially in the agricultural sector. Still, Vahi consistently rejected the "former communist" label and, upon assuming office, insisted, "Estonia needs rightwing economic policies."
Vahi's first government lasted seven months. It was undermined by a wiretapping scandal involving one of his coalition partners, the Center Party. Vahi then formed a coalition with the market-oriented Reform Party and a bloc of parties that represent rural and pensioner interests that have, in the past, acted as a drag on reform. Not surprisingly, that somewhat unlikely coalition disagreed on the pace of reform. In early 1996, however, it succeeded in forging an agreement on privatization, providing for the sale of four state giants--energy, gas, telecommunications, and ports. …