Pictures of a Region in Transition

By one measure the size of the economies of Central and Eastern Europe and Central Asia, figured per person, is $2,200 per year, or only 8.5 percent of the per capita figure in the richest nations. But that is a traditional measure, calculated at official exchange rates, which the World Bank says does not accurately reflect the situation of real people. The Bank works out a figure it calls Purchasing Power Parity (PPP), which, using real local wages and prices in local currency, converts these to dollars to more accurately reflect true purchasing power. The Bank’s PPP figures show that the per capita economy among the nations in transition is really twice the official figure—an annual $4,310—or nearly 20 percent that of the high-income countries. That puts the region just below the center of middle-income countries around the globe. Of course, the figures vary widely within the region—Uzbekistan stands at half the regional average, even using the PPP figures, while for the Czech Republic the figure is 60 percent higher than the average. But the World Bank says this is yet another example of how different facts and statistics can paint more complete pictures of nations around the globe. The facts and figures are assembled in the Bank’s annual World Development Indicators report.

In the broad sweep the figures show that the number of people in the region living on one dollar a day or less—the Bank’s definition of abject poverty—was 14.5 million in 1993, or 3.5 percent of the population. To reduce that poverty by half by 2015, the Bank says the region must have annual growth rates in real consumption of at least 0.8 percent every year from 1997 to 2000. This should not pose a problem, according to the Bank. The region’s actual real consumption growth rate from 1997 to 2000 is projected to exceed 2.4 percent per year. Overall economic output growth is projected to hit 3 percent for the region this year, and 4 percent next year, and will exceed 5 percent by 2000.

But the region’s financial depth and efficiency are still low, with domestic credit provided by the banking sector at a weak 31.9 percent of GDP, the lowest figure for any region in the world. At the same time, integration with the global economy, as measured by such things as trade and gross foreign direct investment, puts the region solidly among the middle-income nations. Employment in the region is still heavy in agriculture and industry—23 percent of the male workforce and 22 percent of the female workforce were still employed on farms in 1994, while 43 percent of male workers and 30 percent of female workers were in industry that year, compared with levels 10 to 15 percent lower in the advanced economies. Still, the Bank says the employment trend in the region is shifting to service companies, which provide the vast bulk of employment, like the rest of the world.

In health care the region spent an average of 5.4 percent of GDP—or around $315 per person a year (PPP)—in the first half of this decade, slightly above the share of health expenditure in most other middle-income countries and a little more than half as much as in the richest nations. Life expectancy in the region was 64 for men and 73 for women in 1996, about average for middle-income nations as a whole but significantly below the figures for high-income countries—74 years for men and 81 for women.

The region has moved into the information age. In 1996 in the region there were 6 mobile phones for each 1,000 people, 1.2 fax machines, 17.4 personal computers, and 350 television sets. These figures are on a par with the average for middle-income countries, but well below figures for the high-income nations. In the rich countries, for example, there were 131 mobile phones per 1,000 people in 1996, 47.5 fax machines, 224 personal computers, and 611 television sets.

Robert Lyle, Radio Free Europe correspondent