IDENTITIES IN TRANSITION: THE FORMER

SOVIET UNION AFTER THE COLLAPSE OF REAL

SOCIALISM

by Cristina Carpinelli

CESPI - FEBRUARY 2004

Pag. 1

Identities in Transition: the Fsu Countries After the Collapse of Real

Socialism

Cristina Carpinelli1

The social global scenario of the last decade distinguishes itself because

of growing inequality. Instead of seeing poverty diminish, we are

witnessing a growing social gap. Even when overall living standards rise,

poverty can also increase if societies become more unequal.

Global macroeconomic forces, and in particular the rise in interests

rates, debt crises, and the pressure for deregulation, privatization and

liberalization generally since 1980, have all contributed to a pervasive rise

in economic inequalities within Countries of the world.

Over the past decades extensive macroeconomic conditions have been

attached to the provision of development aid and loans as well as for the

cancellation of debt with disastrous consequences for social development.

Policies imposed by IMF and World Bank on developing Countries (or

on Countries in financial difficulties) of liberalization and privatization

(with the adoption of structural adjustment programmes) have increased

inequalities, not diminished them, impacting most severely on

communities and families with least access to decent work and the means

to a sustainable livelihood.

For the majority of the people living in poverty, of which a

disproportionate number are women and children, agriculture and fishery

provide the only viable livelihood for themselves and their families.

Economic reforms imposed on developing Countries (or on Countries in

financial difficulties) have promoted export-oriented production,

particularly of primary products for which world prices have dramatically

declined, and an increased control over agriculture and fishery by

corporate interests. The result has been increased impoverishment for

large sections of developing Country societies for whom there are no

alternative options.

For many low income Countries aid is the most important source of

finance for development. For these Countries it is also the only real source

of investment for the basic social infrastructure that is vital for assuring

the welfare and well being of its people and for effectively addressing

poverty. Aid will only be effective when it is sustainable and predictable, 1 She is a member of Scientific Commitee of International Problems Study Center - Sesto San

Giovanni (Milan - Italy). Cristina Carpinelli has taken care of translations of soviet texts,

particularly on the soviet society and sociology. She wrote many articles and essays on the

transition of the Fsu from a planned economic system to a free market one. She wrote also some

books: “Soviet society in the years of the perestrojka” (1991), “Women and family in Soviet

Russia” (1998), “Women and poverty in Russia under El’cin administration” (2004), “Russia in

pieces” (2008).

Pag. 2

contributing to the development strategies defined by a Nation itself. It

needs to be free from ties imposed by donors, which not only distort its

value but also prejudice a Nation’s commitment to development policies

imposed from outside. For many developing Countries their debt

servicing obligations undermines development. For this reason, it would

be necessary the complete cancellation of debts where not to do so would

undermine the Country’s economic recovery.

The withdrawal of the state and the privatization of service provision -

of health care, water, education - increasingly deny access to those unable

to pay for what constitutes a basic human rights. Major humanitarian

agencies (Ong) argues that IMF policies seek to keep inflation at very low

levels and do it blocking public spending on sanitation, education, ecc.,

paying only attention to strategies of macroeconomic stability and not to

strategies of human development.

Globalization and liberalization of trade, the corporatization of

agriculture, fishery and other forms of production should not be the

guiding frameworks for agriculture and fishery. Instead, sustainable local

livelihoods, food sovereignty, environment regeneration and social

concerns should be the guiding principles.

A reform of our international system of governance is long overdue. It

needs to be re-built so as to adhere to principles of justice and democracy.

The World Bank, IMF and WTO must be brought fully within the UN

system, with their roles being redefined. Their governing structures must

also be reformed to reflect changes in the global economy.

Women constitute the majority of the world’s poor and often carry the

social and economic burden of looking after the most vulnerable members

of the community, such as children, the elderly and the sick.

Economic reforms that dismantle social obligations of the state and

privatize public goods, impact disproportionately on women and deepen

gender inequality as women are pressed into filling the gap. At the same

time women constitute crucial active agents in any strategy to eradicate

poverty. Denying full and free access of women to the economic sectors

and labour market is not only a denial of their basic human rigths but is

also detrimental to a country’s economic development. Poverty cannot be

tackled successfully without ensuring equality of access to the means of

livelihood between women and men, and equity of opportunity. While

gender equality and equity are fundamental objectives in themselves, they

are also an essential pre-condition for eradicating poverty.

It’s imperative that the relationship between gender equity, poverty

eradication and the promotion of social justice are comprehensively

incorporated in future strategies.

Pag. 3

The structural adjustment programmes (Sap) imposed by IMF to

transition Countries provided for:

- the passage from a planned economy to a free market one;

- liberalization of prices;

- reduction of public expenditure, including cuts on sanitation,

education and social services considered unproductive from

economic point of view;

- cuts on military expenditures;

- cancellation of benefits directed to the poorest people;

- privatization of public and state enterprises;

- restriction of access to credit;

- liberalization of trade;

- promotion of export-oriented production;

- removal of the barriers to private investments;

- deregulation of labour market.

The Saps have had a terrible effect on domestic politics of transition

Countries, above all in which of them they didn’t adopt politics of social

security.

The process of transition from a planned economy to a market one in the

Countries of the center-eastern Europe and in those of the former Soviet

Union represents an interesting experience of analysis and comparison for

people that are interested in the labour market and the systems of welfare.

More than twenty Countries have almost simultaneously introduced

radical transformations in the economy and reformed the mechanisms of

social protection. Such transformations have proved to be more painful

and variegated than initially anticipated. Negative phenomenons have

accompanied and still accompany the transition: extremely elevated and

persistent rates of unemployment, emerging acute inequalities in the

income distribution, sensitive increase of the poverty.

From the experience of the economies in transition, some important

lessons can also be drawn for the Countries of the western Europe,

included Italy. The transition, in fact, can be seen like an “extreme” form

of the processes of reform of the systems of social protection and the

labour market into action in the european Countries.

The politics of transformation adopted in the transition Countries have

been different. In the Countries of the center-eastern Europe has been paid

attention to the politics of protection to the unemployed (the “victims” of

the transition), as incentive for a rapid restructuring of the economy based

on the move of labour force from the old state sectors to the new private

sector. The adjustment of the economy has taken place, therefore, through

the unemployment. In the Fsu Countries, the adjustment has taken place

through a decrease in salaries and an high hidden unemployment.

Pag. 4

The conclusion of some liberal economists is that in the Countries of the

center-eastern Europe, the governments have made the mistake to design

too generous politics of support to the unemployed and of social transfers,

above all, without temporal limits. The negative consequences have been

that there is still today an elevated and persistent unemployment, that a

too remarkable proportion of people have gone out from the labour force,

above all through the anticipated retirements, and that all this has actually

represented an obstacle to the economic recovery. Nevertheless, it could

be objected that in the Countries where the level of protection and support

to the unemployed has been negligible (Fsu Countries), the economic

performance and the process of restructuring have been disastrous.

In the Fsu Countries, the governments have not introduced a system of

protection for those people that had to leave the enterprises and the

sectors in decline. The absence of a “safety net” has represented a real

break on the economic growth, as the workers have preferred to maintain

the job also with very low salaries, rather than to enter the “pool” of the

unemployed.

Shortly, in the Countries of the center-eastern Europe as a whole wages

declined by less and unemployment increased by more than in the Fsu

Countries, with Bulgaria at the crossroads, because of the unfortunate

combination of the largest fall in wages and the biggest increase in

unemployment.

Another theme of big interest for those that are interested in the center-

eastern european Countries is the hypothesis of integration of these

Countries with Europe, that is their future entry in the European Union.

With regard to this, it will be important to well calculate which politics it

seems expedient to adopt in the “field” of the labour market and the

welfare state. In fact, to import politics into the Countries of the center-

eastern Europe that have produced break-downs in the EU Countries, it

would result even more harmful, because of the presence of very low

levels of income and a phase of extremely different development from that

of the EU Countries. The organisms of the EU should study, together with

the governments of the center-eastern european Countries, strategies in

the “field” of the labour market and the systems of social protection taking

account of the realities and the demands of those Countries, avoiding a

mechanic export of rules and politics that have also proved of doubtful

effectiveness in the EU Countries.

Terms of Reference

The transformation that the Fsu Countries have put in action, has been

indeed dramatic. The hinges on which were based the systems before the

transition have been completely dismantled. They can be summarized in a

few points:

Pag. 5

. 90% of the labour force was employed by state;

. labour income plus social transfers together accounted for over three-

quarters of total income;

. personal income tax was very low. Taxation had almost no distributive

impact;

. child benefits accounted for 3% of gross income, three times the level of

market economies;

. cash social transfers were distributed almost equally per head, rather

than being focused on the poor as in market economies;

. the social benefits were all regarded as entitlements which were

provided free or at minimum cost;

. the tax yield was based on “profits” of state enterprises, typical of a

socialist societies. On the contrary, in the market economies, it’s based on

personal income and expenditures (private consumptions);

. wages were somewhat more equally distributed than in market

economies, with differentials between manual and non-manual employees

being markedly lower. Overall, because taxation and social transfers were

broadly neutral, inequality was dominated by wage inequality;

. although average incomes and living standards pre-transition were low,

the scale of social transfers, consumer subsidies and the egalitarian wage

distribution meant that the incidence of poverty was also relatively low by

international standards, at between 5% and 10%, and it is likely that very

few people were in extreme poverty.

Nowadays, in the Fsu Countries, the attempts to create a “law-based

market economy” by reforms are failed, because the process has not

allowed the development of a gradual evolution through the legitimation

of political, legal and market institutions which provides the essential

framework for sustained growth and political stability.

As a result of a strategy of deregulation which failed to take account of

the absence of the key institutions of a “law-based market economy”, the

process has fostered and reinforced the demonetization, illegality and

criminalization of the economy in the transition Countries. The

disintegration of the Soviet Union and the pace of reform led to the

collapse of the old institutional framework before new institutions could

emerge. In the absence of appropriate institutions, deregulation and

privatization meant that those who controlled the key financial and

commercial intermediaries of the old system simply and quite literally

took the law into their own hands. The result has been the control of

economic activity by organizations which operate outside the law.

Restrictive fiscal and monetary policies led to the widespread

demonetization of the economy and the concentration of financial

resources in the hands of a limited number of powerful financial and

commercial organizations with strong political connections.

Pag. 6

These phenomenons - that have eroded the legitimacy of state and

political and market institutions - have been fostered and reinforced not

only by the macroeconomic policies which have been pursued by national

governments, but also with the support of international financial

institutions (Imf, Wb). They have undermined the process toward a

democratic development and are now the major source of poverty and

social unrest, and the major barrier to economic recovery. The

development of a law-based monetized market economy is perhaps the

most fundamental and urgent task that the Fsu Countries have to face, and

one which requires much more serious attention. It has a direct influence

on poverty because the impact of the demonetization of the economy is

felt most directly by those who do not receive their wages and social

benefits and who face the breakdown of healthcare, education and the

whole social fabric.

In these Countries, between a quarter and a third of the population live

in persistent poverty, below a realistic subsistence level for a sustained

period of time. The total number of poor has risen from about 14 million in

East Europe and the Soviet Union before the transition, to about 168

million after the reform, an increase from 4% to about 45% of the

population. The poverty derives from low and unofficial wages and high

levels of open and hidden unemployment (together with shadow-

economy, irregular employment and second job) resulting from economic

transition. All this is reflected in a dramatic increase in inequality.

Households with dependent children or disabled members are the most

vulnerable, because of the low level of incomes and the erosion of their

real value, and of the lack of child and disability benefits. In Russia and

Belarus, the average wage is no longer sufficient to support two

individuals at the minimum subsistence level; in combination with the

erosion of child benefits, this means that actually a two average-wages

family with two dependent children will be living in poverty. In

Moldavia, only about 20% of wage earners (breadwinners) are earning

enough to support one dependent. With smaller intensity, this situation is

also verifiable in Ukraine. Dependency puts great strains on the traditional

households, leading parents to abandon their children (an estimated one

million children have been abandoned during the transition, of which

200,000 of them in Russian Federation). Child poverty is an emotive issue

but it is not a distinct issue - it arises because parents cannot earn enough

to support their children and child benefits are not sufficient to cover their

marginal cost (of children).

Similarly, the average pension has fallen below the subsistence

minimum. Poverty is a serious problem and it’s still rising in all the Fsu

Countries.

The primary source of social and industrial conflict and of political

opposition to reform is the low level of wages (also the endemic wage

Pag. 7

non-payment or wage arrears) but also the transformation of universalistic

social security sistems into private sistems of social insurance. Access to

health services, education and social services has been severely curtailed.

Suicide, alcohol abuse-related deaths and wide diffusion of the drug have

all risen sharply. The spread of “social diseases” (tuberculosis, syphilis,

diphtheria, and so on) is being compounded by the fact that there is often

a lack of awareness, education, infrastructure, and programmes

addressing the problems. A common demographic indicator of transition

Countries of the Fsu is the high male adult mortality (The high mortality

rate for working-age males has produced in Russia a new problem:

material support to children surviving their fathers. However, the

applicable type of pensions - survivor’s pension - represents 51% of the

minimum subsistence of a child, which no way can fully compensate for

the reduced family income) and the sharp fall in life expectancy for men

and women. Mortality, nuptiality and fertility trends are more or less

equal to those normally observed during wartime.

Mass destitution in these Countries (mainly in the rural areas) is only

being averted by receipt of social benefits, return to subsistence

agriculture (the use of the own plot of land to survive) and reliance on

family support networks which are under increasing strain.

During the transition many of the eastern and central european

Countries and those of the Fsu, have found themselves having to absorb

ethnic migrants. This obviously raises many concerns where poverty is at

issue. Many of migrants, escaping from armed conflict, have settled

illegally in the larger cities where they are confined to informal work,

where they tend to be paid low wages. There is also the problem of ethnic

minorities that are tipically multiply disadvantaged. They have larger

families and lower levels of education. They tend to live in the more

remote rural depressed regions and suffer from the removal of the former

mechanisms of regional distribution of resources. The phenomenons of the

migrant and national minorities are cause of open social conflicts with the

local population that, bearing a condition of deprivation, lives as a

“threat” the presence of extraneous on the “own” territory. One of the

assignments to face in the immediate is to evaluate the phenomenon as a

whole, trying to remove the causes of the underdevelopment of some

areas of the Fsu Countries and guaranteeing contemporarily the

integration through solidarity and cooperation, not surrendering to

xenophobic temptation to criminalize the emigrants and the minorities,

making them entirely appear as source of delinquency.

Changes in the labour market over the reform years should be

considered with the account of a rilevant transformation of social and

legal terms of employment which has found reflection in mass violations

of labour guarantees to employees. Violation of labour legislation is

mostly centered around the following areas of legal regulation: labour

Pag. 8

payment (voluntary setting of the wages and salaries rates, fines as an

administrative penalty amounting to 50% of the monthly wages), working

schedule (unlimited working hours without due compensation for

working overtime and on week-ends), dismissal procedures (without

dismissal wage, lack of protection against voluntary dismissal), social

guarantees (denial of a regular holiday and of payment of compensation

of temporary disability). These violations are more typical of private

enterprises than state ones and are more frequent in the “field” of casual

or temporary employment. On the top of all these violations, there is a

new labour code recently introduced in Russia (1 February 2002) that

“legalizes” child labour, forces pregnant women to work night shifts,

increases “on application of the worker” the lenght of the working day

from 8 to 12 hours (employers can to impose a 56-hour week without

overtime pay) and removes from the trade unions a lot of power to act

(while in the past workers could not be legally fired if the trade union

opposed it, the new code allowes bosses to fire at own will, to create black

list of active trade unionists, the use of replacement workers as the

employers like, the imposition of contracts short circuiting the collective

bargaining process, to conclude labour contracts by enterprises with the

syndical organizations that they prefer, and so on).

The new provisions of labour code have been considered by russian

government (abroad by Imf and World bank), as compared with the

former (adopted in 1972 when Russia was part of the Ussr and seen again

in some points under El’cin administration in 1995) notoriously employee-

protective labour code, like a “complex of measures that strike a better

balance between the interests of all types of employers and employees”.

The lives of many workers and poor people have been devastated by the

greed of big business, by imposed policies of privatization without any

social protection, the creation of alternative jobs before destroying public

sectors of employment and by the introduction of new measures

undermining basic rights held by workers and population as a whole for

decades.

All transition Countries of the Fsu have developed a dualistic labour

market in which good jobs in the new private sector go to the more highly

educated, skilled, younger and more flexible workers from the former

state sector, which increasingly functions, in conjunction with the long-

term unemployed, as a reserve of less-employable labour. There is a

strong possibility that market-led growth will increase poverty as

backward industry and agriculture are displaced and lay-off large

numbers of unemployable workers.

The unemployable workers aren’t a small section of the population.

Even in the most prosperous of the Center-eastern european economies,

they constitute a third of the labour force or more, many of whom have

little hope of finding a place in the new competitive economy. The

Pag. 9

experience of Poland, the only economy to have seen sustained growth, is

not so encouraging, with the poverty rate actually rising as inequality

increased. In this Country, the rate of unemployment is very high, faced

with the adoption of a relatively generous politics of welfare and with

relatively strong trade unions struggling to protect the social state. The

hungarian scenario is not very different. Here the restructuring of the

economy has been pursued with politics of social stabilization, that is of

opening to the new labour market and at the same time of support to the

social state. Nevertheless, poverty exists to a great extent, because of the

increase of the inequalities in the income distribution at a regional and

occupational level.

Many workers affected by the reform have little hope to find a job in the

new competitive market. In short, transition has create a “lost generation”

which has little prospect of benefiting from economic growth.

The limited net job creation in the new private sector which marked the

early stages of reform has gone into reserve since 1994, while employment

in the former state sector has continued to fall. Since 1989, in the former

centrally planned economies an estimated 26 million jobs have been lost

and registered unemployed has soared, from almost zero to more than 10

milion. High registered unemployment was particularly found in Poland

and Bulgaria. In other Countries (Ukraine), registered unemployment is

lower, because of tight eligibility conditions for benefit - those ineligible

for benefits are less likely to register as unemployed - and the very low

level of benefit. The size and eligibility conditions for unemployment

benefit make it impossible for the unemployed to survive for long without

alternative sources of income. But low wages and delays in the payment of

wages, mean that many of the employed are in a very similar position. In

many respects the unemployed have the time to seek alternative sources

of income.

In most of Countries of the center-eastern Europe and in those of the

Fsu, the share of the long-term unemployed (those who have been out of

work longer than one year) has continued to raise. Both individuals and

social systems have been ill equipped to deal with this situation. In the Fsu

Countries, such a situation is so compromised that many commentators,

even within the ranks of liberal economists, have seen an argument for

continuing to support jobs in unprofitable industry and agriculture, that

it’s better to keep people at work than to throw them on to the streets with

no prospect of supporting themselves. Enterprises function as the social

safety net at approximately the same cost as a real safety net but with less

social dislocation. However, the support of jobs should not be

indiscriminate and is better addressed through protectionist interventions,

for example in fiscal and trade policies, which are clearly limited in extent

and duration than through job and wage subsidies which are less

transparent and more subject to political manipulation.

Pag. 10

The fall in both profits and wages in the Fsu Countries has undermined

the fiscal basis of the state budget and of the social and welfare state.

Governments have suffered a large decline in revenues, with little increase

in their ability to raise taxes. The erosion of pensions, child and disability

benefits, low-income family and single-mothers allowances, health,

education, housing and the inadequacy of unemployment insurance mean

that social and welfare state no longer functions as a universalistic system

which guarantees, first of all, that the principal high risk groups of

population will be protected from poverty.

To understand the importance of the role of social benefits, it’s

necessary to keep in mind that in the soviet-type societies, state policy

sought to erode the family as an economic unit, to replace family

obligations by obligations to the state. In terms of social policy this meant

that men and women were equally obliged to participate in social labour,

leading to female participation rates close to those of men, and that social

benefits provided income entitlements for all non-earning members of the

household: children, the sick, mothers of young children and the elderly.

This meant, in its turn, that the individual wage was precisely that, a wage

sufficient to meet the needs of the individual, and not a family wage

which supposed to meet the needs of the whole family.

This system of social policy had fundamental implications within family

that have remained intact also after the post-sovietism: many male wage-

earners still do not give their wives a penny of their pay packets, in a

moment in which family is assisting to the collapse of the government

system of social support and welfare.

The decade 1991-2001 has ruined the social fabric of the Fsu Countries,

destroying the old without building at the same time the new. The

treatment of wild liberalism without rules and counterweights that has

been made them didn't fit for realities with an unusual history and limits.

Countries that are at the meantime immense coffers of raw materials, of

wealths waiting to be exploited, but economic subjects not yet in degree to

operate in that open context that the westerners pretended, all and at once.

With the result that the most aggressive and more unscrupulous people,

the foreign multinational companies and the criminal transnational rackets

have prevailed.

Confronting dilemmas and looking for effective solutions

There are no simple solutions to the mentioned above problems, only

dilemmas which have to be evaluated in the real world in which they

arise. The central dilemma in the transition Countries is that the

preservation of those institutions and activities through which the low-

paid strata of population is currently able to survive is often in direct

Pag. 11

conflict with the development of a modern high-wage and high-

productivity economy. Correspondingly, measures which foster the

growth of the new economy erode the sustainability of the livelihoods of

the poor. For example, the free access to agricultural land is an extremely

flexible way of providing poverty relief and a way in which all families

can ensure a stable and secure supply of food. A share of food surplus is

usually transferred without charge to friends and relatives within

networks of reciprocity, or may be more directly bartered for services.

This is a legacy from the remote peasant past which was powerfully

reinforced in the soviet period when the private sale of goods and services

was illegal, so private produce and personal services were routinely

bartered.

Many workers have been forced for surviving to enter the cycle of the

natural economy. They spend their leisure time to work in the private

plots. At the same time, because the inputs are costless and producers

have minimal money incomes, commercial agriculture is unable to

compete in the market with private produce so that the persistence of this

form of production undermines the commercialization of agriculture. This

is the reason for which now the free availability of land is priority

accorded to land privatization by multilateral agencies interested to

commercialize on a large scale agriculture. The privatization of land to

foster the commercialization of agriculture can destroy the subsistence

agriculture through which the majority survive, while the persistence of

subsistence agriculture depresses prices and so is a serious barrier to the

development of a commercial agriculture.

Investment in modern production facilities will sweep away the old

low-wage labour-intensive producers which provide employment for

millions, while the persistence of low-wage producers depresses prices

and inhibits new investment. The professionalization of trade and services

with the development of small and medium businesses sweeps away the

street and shuttle traders whose casual employment provides vital income

for their families. But the persistence of low-paid, unregistered and

untaxed casual employment is a barrier to the professionalization of trade

and services.

In short, low wages keep people in work but inhibit new investment by

undercutting more efficient but higher wage producers and by limiting

the domestic market for their products. High wages encourage

productivity-increasing investment and expand the market but at the cost,

at least in the short run, of higher unemployment.

These conflicts cannot be resolved in favour of one or the other side of

the dilemma, but only within a dynamic context of gradual change. This

means that the problem can only be adressed by a broad and coherent

range of macro and micro economic and social policies and interventions

which will evolve over time as circumstances change.

Pag. 12

In particular, in the short run, this means supporting livelihoods -

subsistence agriculture, petty trading, inefficient factories - which in the

long run are unsustainable. A right approach to the dilemma tries in fact

to balance the demands of marked-led growth with the needs of the

population as a whole. This balance involves political choices and for this

reason has to be achieved politically, within the democratic process and

through the help of participatory structures operating in the transition

Countries. An effective reform from above has to be supplemented by

pressure from below: the issues of democratization and empowerment are

not a luxury but are fundamental to economic reform in the interests of

people.

The implementation of strategies on a long period must obviously take

account of the scenario of world economy. There is little point in trying to

encourage the commercialization of agriculture while flooding the

transition Countries with subsidized food imports from the EU. There is

little point in modernizing the textile industries when domestic markets

are open to EU suppliers while the EU keeps out textile imports through

quotas. There is little point in trying to develop a law-based economy

while colluding in international financial and commercial transactions

with organizations which operate outside the law. New macro and

microeconomic approaches have to take into account the fact that the

economy of the Fsu Countries is largely demonetized and operating

outside the law, but they must not undermine the attempt to develop a

law-based competitive market economy and an efficient and

jurisdictionally acceptable legal system, allowing an open and at the same

time fair social and economic life.

The evaluation of alternative strategies and policies at all levels has to take

account of the institutional framework in which they are to be applied.

- Much has been made by many commentators of the barriers to labour

mobility presented by the traditional enterprise provision of welfare and

housing in the transition Countries, and this has been used as one of the

key arguments in favour of the privatization of welfare facilities or their

transfer to municipal authorities and in favour of personal insurance-

based benefits. However, the main result has been the collapse of the

whole structure of housing maintenance and administration and the

system of social and welfare support across the majority of the Fsu

Countries. In fact, labour throughout these transition Countries has

proved to be far more flexible and far more mobile. The opportunities for

and obstacles to mobility lying more in the existence of social networks

and family ties than in access to housing or welfare benefits. Moreover,

encouraging labour mobility only serves to increase the dualistic character

of the economy by reinforcing its regional dimension as the young, more

Pag. 13

educated, active and energetic people leave the countryside for the towns.

In other words, they leave the depressed regions for the booming capital,

denying the deprived regions of precisely the human resources on which

their regeneration depends.

- The rural population in the transition Countries has suffered the most

from the deterioration in the social infrastructure, in health care and from

the sharply increased cost and reduced provision of public transport.

Rural poverty is directly related to the reform strategy and reinforced by

the trade and agricultural policies of the EU. The withdrawal of subsidies

and the opening of agriculture to international competition has led to a

flood of heavily subsidized agricultural imports from the EU which has

markedly reduced prices of agricultural produce and, correspondingly,

agricultural wages. While this has made a very significant contribution to

reducing the cost of living for the urban population, it has been at the

expense of the livelihood of the rural population. Moreover, the collapse

of agricultural incomes has encouraged the flow of young and more

educated people to the towns in search of better salaries but has left low-

educated, manual, unskilled and low paid labour force in the countryside.

- The collapse of the old system and the disintegration of the Soviet Union

have removed the old system of income equalization between town and

country and among regions, allowing substantial inequalities to open up

on the basis of different resource endowments. The regional inequalities

have been considerably intensified by structural changes in the economy,

with the decline of agriculture and old heavy industries and the

reorientation of industry toward export markets.

The attainment of the balanced and sustainable, economic and social

progress, must foresee the struggle against territorial disparities, through

the individualization of measures directed to reduce the discrepancy

among the levels of development of the various regions.

- Another example of not well-directed politics derives from what is

euphemistically termed “cost recovery”, in relation to the expenditures

that the citizens bear of housing and municipal services or for domestic

energy supply (i.e. rents, expenditures on heating, housing maintenance,

ecc.). Local government spending on housing, municipal services and

energy has fallen and accordingly the investments, despite the transfer of

this competence from federal obligations to municipal authorities and the

transfer of a large proportion of the housing stock from enterprises to local

government. It is essential to establish the commercial viability of

municipal housing administration and the energy sector, above all in

heavily demonetized economies, like the Fsu Countries ones, where two-

thirds or more of the population do not have the money to pay such

Pag. 14

charges on a regular basis and can only do so at the expense of their own

essential subsistence needs (before the reforme, expenditures on housing,

fuel, energy, communal services, and so on, were totally subsidized by

state). The attempt of governments to introduce the “cost of recovery” has

turned out to be a “poll tax”.

As a result of the privatization of the housing stock, many poor

households have become owners of residential property which they

rented or sold, because they were not able to face maintenance and service

costs. There has been a substantial increase in homelessness, above all

among the older generation.

- Some NGOs pointed out that economic pressures in Russia did not give

women a choice: a monostructural industry and the three-shift pattern

with quotas for women left unemployment and night work as the only

alternatives. 70% of shift workers were women, a position which they

vigorously defend for family reasons. At the same time, the labour code,

seen again in 1995, categorically forbade the female night work (for

women with children under six years) that, in conditions of expansion of

labour market and of economic recovery, should be considered a right

principle. But not when more than 45% of the russian people live below

the poverty line. What politics the government adopted to solve a

situation that automatically excluded big part of the women from the

labour market? Instead of finding an accord with the enterprises to protect

the female work, the government has chosen the less complicated way:

with the approval of the new labour code “Putin”, it has again introduced

the female night work, also permitted to the pregnant women.

- Some reformers have proposed, on suggestion of the World Bank, that

the financing of the social security system ought to be based on a

insurance system. Insurance-based systems are administratively more

expensive and are much less equitable, but from the reformers point of

view the political advantage of linking contributions to benefits is that the

majority of the electorate at any one time will be net contributors, and so

more inclined to vote for reductions in contributions than increases in

benefits. Moreover, if the insurance system is private it makes the public’s

forced savings potentially available for investment, although there is no

guarantee that any such investment will be in the domestic economies.

However, such a reform is fraught with difficulties because in the

transition period people have to pay twice: once to support those

presently disadvantaged, who have no contribution record, and once

again to set aside their own contributions. The shift to a funded insurance-

based system is therefore necessarily associated in the short-run with

increases in personal contributions and with substantial cuts in the present

level of benefits. The compromise solution, that has not been taken in

Pag. 15

consideration by the reformers, is to propose a pay-as-you-go system

which provides minimal benefits supplemented with compulsory and/or

voluntary insurance-based top-ups.

- Someone has advised to reduce the bureaucratic and fiscal obstacles to

the establishment and viability of small and medium enterprise, but such

an obviuosly sensible reforme will erode the competitive advantage of

petty trading and self-employment, threatening to destroy a key

component of the livelihoods of millions of households.

It’s necessary to sustain the insertion of the less competitive workers and

the unemployed, through special courses of professional training financed

by state, in the small and medium enterprises, so that the last ones can

replace in the middle period the current livelihoods of the weakest

persons on the labour market.

The first priority of a pro-low-paid, insecurely employed, unemployed

and poor people approach is not “to make things worse”. It’s essential that

all strategic interventions toward a balance between the demands of

marked-led growth and the needs of the population as a whole are

assessed for their possible impact on the short-term sustainability of the

current livelihoods of these categories of population (who form the vast

majority in the Fsu Countries) not only in theory, but also in practice.

Employment and labour market

One of the problems prioritily to face is the development of social labour

market policies and practices designed to relieve the actual economic

status of the unemployed and the low-paid working people (particularly

of agricultural workers, manual workers in declining industries, lower-

grade clerical workers and unskilled manual workers) in the Fsu

Countries. Despite private-sector growth (reaching an estimated 50-70% of

measured economic activity), persistent structural problems cloud

economic recovery. Under these conditions, the informal economy is

taking root, and prospects for secure earnings remain dim in these

Countries. Significant unemployment is a relatively new phenomenon

after decades of central planning and policies of full employment. There

has also been a sharp drop in real wages and a substantial increase in

wage disparity. Even when GDP is recovering, employment levels and

real wages tend to lag behind. This creates pressure for households to

maintain two income, at a time when there are fewer jobs and less job

security.

The market-led growth will not automatically alleviate transition

depression in these Countries. Also in Poland, Hungary, Slovenia and

Slovakia, where there has been an economic recovery, there are no signs of

a reduction in poverty.

Pag. 16

A large proportion of the working population in the Fsu Countries are

still in open, hidden (those working in state and former state enterprises

which have little long-term prospect of survival) or discouraged (the fairly

large number of people who have withdrawn from the labour force

because they have abandoned any hope of getting a job) unemployment,

in casual employment or still employed in low-paid jobs in decaying state

enterprises (about two-thirds of the poor, which have suffered

considerable reductions in income as the prices of retaining their jobs). The

phenomena of unpaid lay-offs (“administrative leave”), short-time and

part-time working have become pervasive. These expedients are often

adopted by employers as an alternative to redundancy, and as a way of

inducing people to leave voluntarily. Many more people are kept at work

because their wages are so low that employers have no incentive to

rationalize production or to invest to economize on labour. Many more are

working in jobs which would not be profitable on normal accounting

principles and which will be displaced once effective bankruptcy

procedures are in place. Depending on definitions, a greater or lesser

proportion of this huge labour reserve can be considered to be the “hidden

unemployed”, a category which merges with that of the low-paid. For this

reason alone it does not make sense to make a radical distinction between

low wages and unemployment as causes of poverty.

Only the younger, better educated and more flexible can expect to be

absorbed into better-paid employment as economic growth continues. In

modernizing markets, especially those with emerging knowledge-based

and service sectors, there are expanding economic opportunities, but they

are scarce and reserved for workers possessing the appropriate education

and skills. The scarce skills required by the market economy, when there is

an over-abundance of skilled and no-skilled manual labour, are

predominantly intellectual skills.

Of course, the growing inequality isn’t a stimulus to the rapid structural

change, which could liquidate transition crisis under certain conditions.

The falling incomes and growing inequality restrict the market and so

discourage investment in the development of new goods and services,

while poverty undermines the development process by depriving a

substantial proportion of the population of the resources which they need

to take place in the new economy. The fact that recovery has been most

rapid in the Countries in which wages have fallen the least and which the

growth of inequality has been the most limited is not a decisive argument

for the familiar argument that high wages encourage growth, since these

Countries enjoyed other advantages. But it’s difficult to resist the

argument that excessive wage flexibility in the Fsu Countries has not

simply led to widespread poverty and the degradation and

demoralization of a large section of the labour force, but has also inhibited

new investment and the razionalization of production, has exacerbated

Pag. 17

macroeconomic contraction and deprived the producers of new goods and

services of a potential market.

The Countries which have seen the greatest growth of inequality have

experienced the deepest crisis and have shown the fewest signs of

recovery. Moreover, widening disparities call into question how equitably

the fruits of economic growth will be shared. If the income distribution

were to remain unchanged or to improve, then economic recovery would

be expected to lead to a quite rapid reduction in the poverty headcount as

large numbers of people are lifted over the poverty threshold. On the

other hand, if recovery favours those who are already relatively

comfortable, then inequality may increase and poverty be unaffected by

recovery - the Fsu Countries scenario. In this scenario, low wages and

unemployment are in part a feature of the structural dislocation of the

transition economies, but the problem of poverty is at root an old-

fashioned macroeconomic problem of a generalized and persistent

deficiency of demand, with output and employment falling in virtually all

sectors of the economy. An urgent priority is the exploration of alternative

macroeconomic policies which can stimulate growth without an upsurge

of inflation.

It’s necessary to adopt active measures to secure the preservation and

creation of jobs in the short-run. If the market-led growth will be able to

solve the crisis, it can do it only in the very long term. And as an economic

thinker famously remarked, “in the long term we are all dead”. Moreover,

different policies - as compared with the current ones - need immediately

to adopt. First, to expand the service sector which had been “suppressed”

or forced during the period of the planned economy. It’s possible to

realize this expansion if a relatively high proportion of the population can

afford to buy such services, and this is, in its turn, possible if incomes are

sustained and the growth of inequality arrested by unfashionable

redistributive industrial and welfare policies. It seems also necessary to

leave many old structures and institutions in place and so to smooth the

transition. Hungary, for example, was marked by relatively high income

levels, a relative stability of state structures through the transition, a

reasonably well-adapted economic structure. Moreover, the guarantee of a

reliable economic and political stability has fostered the economic

relationships of this Country with the EU Countries. It adopted a less

radical strategy, but more successful. On the contrary, as a result of the

implementation of full radical programmes, other transition Countries

have experienced the longest and deepest depression in recorded history.

Different labour market policies are appropriate for different categories

of people. In general, in the transition Countries of the Fsu most

expenditure is on passive labour market policies: the payment of

unemployment benefit which is often very poorly targeted because of

administrative weaknesses and shortages and uneven distribution of

Pag. 18

resources. Spending on active labour market policies tends to be

concentrated on public works, wage subsidies (usually paid to employers)

for the protection or creation of jobs, with a relatively small amount being

spent on training.

Public works programmes and wage subsidies are widely derided as

expensive, poorly targeted and unproductive “make work” schemes, but

public works have a good record of providing jobs and work experience

for the low-skilled while contributing to the reconstruction of the decaying

state enterprises, even if they do not provide an effective transition into

employment. Where the targeting of unemployment benefit is poor and

resources are very limited, such workfare schemes provide an important

safety net. Wage subsidies are usually applied indiscriminately and

subject to political pressure, but there is a strong case for wage subsidies

for trainees and apprentices, where training programmes have collapsed.

Support for self-employment and labour-intensive small business start-

ups (petty traders, suppliers of domestic services, and so on) can play the

same role of developing skills and preserving jobs even they are not very

effective in job creation. The vast majority of those in self-employment or

setting up small business are motivated by the need to secure the survival

of their households, not to develop into larger businesses which can

provide work for others. For instance, private-sector agriculture has once

again become an important part of the economy. However, such work

often offers few prospects; many of these self-employed persons are

struggling to earn even a subsistence living, frequently by helping out on

small farms or family plots. The support for small business will improve

the incentives and capacities of the low-income strata of population to

engage in such kinds of petty economic activity, rather than or in addition

to those which have the most promising prospects. This might be through

the provision of the most basic material support, assistance with the

development of little cooperatives in several sectors.

The main problem with all such schemes is to ensure that they do not

simply provide or protect the jobs of the beneficiaries at the expense of

others, a problem which is best avoided by involving trade unions and

labour organizations in their design, implementation and monitoring. Of

course, such schemes will always be inferior to “real jobs”, but are

superior to prolonged unemployment. With proper organization, they

tend to be a much more economical and socially and psychologically

beneficial way of helping the unemployed poor than simply paying them

unemployment benefit. This is particularly the case when low wages for

the employed dictate that unemployment benefit should be

proportionately lower, trapping the unemployed in poverty. But, where

the unemployment benefits approach the level of minimum wages, that is

the case of the Fsu Countries, such schemes are appropriately targeted

also on those with lower wages. Under certain conditions, it’s better to

Pag. 19

have an integrated system of social assistance for the able-bodied

population, whether in or out of work, which in the immediate future can

only realistically be some kind of workfare system, rather than to increase

the unemployment benefits, with the risk that the already high quota of

the unemployment could again grow and forcing the unemployed into

dependence on state benefits and condemning him to the poverty trap.

Generally, macro-economic expansion and the strengthening of the legal

framework will create more and better-paid jobs. This will provide a

framework for assistance with training and retraining programmes

appropriate to the new jobs. But these programmes will be provided in

any case by employers if they face labour shortage and they will be

provided for those who do not need them because they are already well-

positioned in the labour-market. To help a low-income people such

programmes should be targeted on the hard to place, such as the long-

term unemployed or older workers or those, such a women and national

minorities, who face discrimination. They should be targeted to improve

competitive position in the labour market of these categories of

population.

Of course, all these are labour market policies functioning in the short

run. They are insufficient in the long-run, but now in the transition

economies, which have not yet fully developed the institutional

infrastructure of a market economy, they represent good alternative

strategies and policies.

The access to public services

Full citizenship demands not only an income but also access to health

care, social services, child and elderly care, education, transport, and so

on.

Widespread and relatively equitable access to basic education, health

care and social services is an inheritance from the soviet past, that has

been eroded during the difficult period of transition. The fall of the Fsu

Countries has repercussions on the deterioration in social indicators.

Because of its shrinking role and its declining revenues, the state has

relinquished much of its tight control over social issues, and a new

infrastructure - a partnership of personal, civil and public resources - has

yet to develop sufficiently.

The general pressure on education sistems and education resources has

undermined the quality of education and shifted more financial burdens

on to parents, even if by law, these Countries continue to guarantee free

school education. The family’s child education costs that formerly were

covered from the public consumption funds do also contribute to the

poverty since it is exactly in low-income and single-parent families that

such costs are now an unbearable burden. Besides, the difficult access to

Pag. 20

the education makes no competitive the children of these families, when

they will enter the labour market. For these families, elimination of public

consumption funds has also resulted in the growing medical costs. Their

relatively low remuneration precludes from getting access to quality

medical aid. In the Fsu Countries, many people suffer and die

unnecessarily because they cannot afford health care or essential

medicines. 16% of chronically poor families in Moldavia point to health

problems of their members as the main reason for the reduction of their

income.

For households with young children, adequate, accessible and

affordable child care is crucial to the effort to balance employment and

family responsibilities. The child care has changed during the transition.

The population of infants and young children is greately reduced; public

child care facilities are less available; child care fees have increased, and

mothers are forced to remain at home take caring of the children.

Maternity entitlements have remained relatively untouched. The good

intentions behind maternity and parental leave measures often go

unfulfilled in the new labour market. It is tipically women who must

adapt and take on more responsibilities in order to accomodate the new

circumstances. Thus, there is evidence that employers may be unwilling

and parents unable to take full advantage of the leaves. In Ukraine, 23% of

legally available maternity leaves went unused during the transition,

compared to 5% before the reform. In Russia, more than two-tirds of

women with higher education returned to work early from parental leave.

Enrolment rates in nurseries and kindergartens, the backbone of the

former child care system, have fallen. In Belarus and Moldavia, nurseries

have pratically ceased to exist.

The primacy of the family is being reasserted during the transition, a

good time to reset the balance among the roles of women, men and the

community in the raising of children. A wider range of accessible

childcare options is needed; family-friendly workplaces, particularly in the

private sector, must be developed, and men must be encouraged and

supported in taking a larger role in parenting. Ultimately, women and

men should be able to make the best choices for themselves as individuals

and families regarding the balance of work and children in their lives.

Also the material status of ritired is aggravated by the destruction of

free health care system which causes dramatic social deprivations. Despite

the rights to purchase medicine at a discount granted to the retired, this

social programme has not been backed up by the appropriate funding,

therefore, for most pensioners eligible for benefits this right proved to be

purely formal. Currently, the average pension allowance is a 2/3rds of a

retiree’s cost of living. Senior citizens whose pensions do not allow for

medical costs or social welfare find these services unaffordable and their

poverty level growing because of the deprivation. Many pensioners

Pag. 21

continue to work (even for extremely low wages) in order to supplement

the meagre pensions. So that their pensions are in effect a selective wage

subsidy, which risks dragging down the level of wages as a whole. The

solution adopted in Bulgaria is to deprive working pensioners of 30% of

their wage, although it’s not known what the impact of this policy has

been.

Public and social assistance

During the transition the Fsu Countries have been spending relatively

less on family allowances. Social assistance is not well-targeted, and above

all in Russia and Ukraine social assistance is actually regressive. Support

programmes have often shifted from universal coverage to targeted

coverage and, in some cases, have been eliminated altogether. It’s

necessary to ensure by increasing the level of benefits that the prime at-

risk categories of population (children, the elderly, the cronically sick and

disabled, single-parent families and single retirees) are guaranteed at least

a minimal subsistence income, and supplement this with unemployment

benefits and social assistance to protect the unemployed and the low-paid.

Meanwhile, it’s necessary to work for a more extensive rationalization of

the systems of social assistance and support for the unemployed (better

targeted) which will pay benefits only to those in proven need. In the Fsu

Countries, the revolt against the “new economic deal” is not only against

the perceived inadequacy of the sistems of social assistance unable

effectively to relieve poverty, but also against the injustice and corruption

in allocation of their provisions.

The system of government and private transfers must be improved

through targeted support to poor families (low-paid families,

monoparental families, ecc.) and enforcement of the already existing laws.

For istance, the very first component designed to cushion the material loss

suffered by the mother left with kids after separation is to review the

family legislation ensuring that the father pays child’s alimony in time and

in the amount needed to meet the child’s interests. This would, in its turn,

depend on the outcome for such issues as uncontrolled shadow-economy

incomes, unofficial employment, wage arrears and the level of

unemployment. Any increase in the alimony would also be dependent on

the overall pay levels and on the unemployment benefits.

In case of single-mother families, poverty factors include both low

individual income of the mother (often under the threshold of poverty)

and the insufficient amount of private and public transfers designed to

partly offset the absence of the second income source in the family

(children’s alimony following the divorce, pensions for the benefit of

children after the death of their father, single-mother allowances). As for

children’s benefits, their assessment basing on the minimum statutory

wages invariably devalues the already meager amounts since the statutory

Pag. 22

wage minimum has not be indexed for some time already. Moreover, the

income-based assessment of children’s alimony following the divorce does

not radically help since the amount remains the same while the eligible

income threshold stays rather high (two times the subsistence minimum).

It would be more appropriate to introduce a separate, supplementary

alimony that some Countries offer to support single-parent families.

An operative system of social welfare must ensure the wider

dissemination of information on welfare rights and an easier access to

those individuals whose indigence is rooted largely in the demographic

patterns (for instance, age). Currently, pensioners’ access to individual

social welfare is restricted by the applicable indigence criteria whereby in

most regions of the Fsu Countries the welfare assistance is available only

to those whose incomes are less than half the subsistence minimum. The

reference to the poverty line that equals half the subsistence level is being

accounted for by the high level of unofficial incomes which, if ignored,

could substantially enlarge the number of the poor. At the same time, for

poor, single pensioners of the older retirement ages, their pension benefits

are the only source of income. Should regional social security authorities

insist on an upward revaluation of pension incomes, it should be

differentiated depending on the family type.

Another component of the social policies aimed at reducing poverty

among more disadvantaged people should include a set of measures

designed to ensure these people with an adequate medical and social

services. These people seem currently to be particularly often

discriminated in their eligibility for free medical care. Two social policies

scenarios are possible here. One would set the priority for fee-based

medical care and social services. Under this scenario, the subsistence

minimum of people should allow for the actual requirements in medical

care and social services, so that the income be two or three times the

present one and people could, even with very tight budgets, afford paying

for the services in line with their typical actual consumption standards.

The other scenario would offer a system of institutional and financial

measures to provide for free (or mandatory insurance-based) medical care

for people in need of help. This second scenario seems less expensive and

more efficient, and it could be implemented in the draft law on minimum

statutory social guarantees.

The struggle against the poverty

Social assistance is certainly needed in every Country as the last resort,

whether that be provided in cash or in kind, but this cannot be the basis of

an anti-poverty strategy. An effective anti-poverty strategy has in the first

instance to distinguish those categories of the population who have the

potential to help themselves and those who do not. Two major directions

Pag. 23

may be distinguished within the system of social policy measures aimed at

preventing poverty:

a) measures of mission-oriented and well-directed social support of poor

categories of the population. Such a policy may achieve a desiderable

effect only if it’s pursued along with the measures aiming at rising the

nominal statutory wages worn away by inflation. With the growth of

official wages and salaries, insurance payments to government social

funds (the pension fund, employment fund, social benefits fund, ecc.) will

also go up, which will make it possible to increase pensions, benefits, and

so on. An increase in pensions will create objective prerequisites for

bringing down poverty among single pensioners. And since the women

are the majority of single pensioners, such an increase will reduce above

all the feminization of poverty, that is also a specific manifestation of

deprivation in the transition Countries;

b) macroeconomic changes targeted at bringing down the overall poverty

level of the employed. The growth of the official wages and salaries of

low-paid categories of workers may be achieved through revival of the

national production and redistribution of wages through lowering the

differentiation in labour payments. The rapid increase in the

differentiation of wage incomes is the principal source of increasing

inequality, primarily because the concentration of social transfers hasn’t

changed significantly, and the increased differentiation is very strongly

concentrated at the top and bottom of the income scale, with the middle-

income majority more or less keeping their share.

The differentiation of labour payments is growing at the highest space

within certain industries and enterprises. There has been a considerable

change in pay differentials within the state and former state sector. On the

one hand, differentials have widened substantially in favour of

managerial and professional employees in relation to manual workers. On

the other hand, pay in the formerly privileged military and engineering

sectors has fallen substantially while pay in the formerly benighted light

industry has risen relatively. The income dispersion in the new private

sector is much higher than that in the former state sector, so that

professional and managerial salaries are considerably higher, and the low-

paid are lower paid. Moreover, the new private sector is dominated by

business in the service sector and construction which employ large

numbers of unskilled casual workers. It’s only when privatization and

new business formation are associated with high levels of new productive

investment that we can expect it to begin to provide high-quality jobs

which can pay better wages. So far this has been confined primarily to

foreign investment and joint ventures. The problem is that these new

modern enterprises pay good wages but to relatively few workers and not

surprisingly select a narrow range of employees: young, well educated

with a strong commitment to work.

Pag. 24

Taking advantage of extremely liberal institutional regulation of labour

relations the top managers strata is carrying out its strategy toward

uneven redistribution of income to its benefit. This process should be

stopped and it seems expedient to start it with the implementation of

programmes increasing the institutional supervision over the payment

and distribution of incomes through the adoption of 1) measures aimed at

eliminating the gap between the minimal wages and the subsistence

minimun amount (in the russian labour code recently adopted, is declared

that the minimum monthly wage must equal the official minimum

subsistence level). An increase in the minimum wage will also

considerably ease the task of developing an efficient social safety net

which is impeded at the moment by the fact that the lowest wages are far

below the subsistence minimum; 2) measures targeted to control the

income of top-managers; 3) measures of extrusion of non-money forms of

labour payment (even if the new russian labour code states that 20% of

the salary can be paid in kind, encouraging rather than limiting the

widespread practice of paying salary in kind instead of in monetary form).

Other measures - aimed at settling the shadow employment and

informal income which are a real break on the economic growth - are

those that bring down the tax burden related to wages and salaries and

the public consumption funds (programmes aimed at decreasing the

income tax rate for low-paid workers and legalizing the informal income

of the middle class strata of the population).

Actually, many employees are low-paid and are anyway subject to pay

the tax on income. The real wages are squeezed to the minimum, and

apart from that, subject to unbearably high deductions for the public

consumption funds. The population responds to the situation by tax

evasion through possibility to receive informal salaries that has become a

major priority in searching employment (all the employees working in the

“diffuse economy” - sector of small and medium enterprises - receive

unaccounted wages and salaries). The “effect” of tax evasion it also

concerns the new middle class strata. The greatest tax-evaders are top-

managers and big bureaucrats, which prefer the shadow incomes.

The general reform of the fiscal system provides benefits, but makes

them liable to personal income tax. Although many doubts have been

expressed about efficiency of relatively new systems of personal income

taxation, this approach has the advantage that “prima facie” everybody

receives the benefit as a right. Moreover, the extent of the leakage will give

the tax authorities a stronger incentive to make efforts to improve the

coverage and assessment of personal income taxation, which will

progressively improve the targeting of benefits as the tax system becomes

more efficient. The targeting of social benefits is much better improved by

making them liable to taxation through the developing system of personal

income taxation than by means-testing. Means-tested benefits are so

Pag. 25

poorly targeted and are bound to establish a poverty trap, the aim should

be to ensure that as few people as possible should fall into extreme

poverty. Although both are deficient, in the latter case it’s the poor who

are the victims of the deficiencies of the system.

However, it’s necessary to adopt contemporarily politics protecting the

low-income strata of the population. The tax pressure on the low-income

strata of the population could be raised through the following measures:

a) fiscal deductions for the low-income big families and cancellation of the

tax income which does not exceed the annual subsistence minimum; b)

expansion of tax benefits for children through the use of not only the

personified tax payment system, but also the family-based principle for

tax calculation.

It seems also reasonable to transfer the allocation of children’s

allowances to the wage mechanism, which will allow to economize on

administration of the allowances payment and will prevent delays and

non-payments of this social transfer.

Without a regressive scale for mandatory payments to public

consumption funds it does not seem possible to legalize the informal

income of the middle class strata of the population. With the current

system of deductions and payments, social benefits which are received

from the respective fund are actually not differentiated. Under the

situation the poor pay little (or nothing) due to the low income. The rich

do not pay at all for their income is concentrated in the informal sector.

The middle class strata can be split up into two groups: those who legalize

the greater part of the income and thus bear the maximum burden of tax

payment, and those who are searching for adaptation strategies oriented

to conceal the incomes. The use of a regressive scale will allow to decrease

the tax burden of the major taxpayers which, in its turn, will contribute to

the expansion of their (major taxpayers) social base.

The gender-based analysis of poverty levels of the population and

households has produced evidence of feminization of poverty in the Fsu

Countries. Female poverty shows extreme patterns in the form of stagnant

and exceptional poverty: the poorest among the poor.

The opposition of the feminization of poverty through a set of targeted

measures needs to have the following actions done:

a) measures conducive to better competitiveness of women on the labour

market through 1) industrial policies should be spearheaded not only

toward the mineral resources sector that is largely relying on male labour,

but also on the manufacturing industries that tend to concentrate female

jobs (light and food industries, ecc.); 2) the nomenclature of public works

should be revised to re-focus it from mostly male (road construction and

building) to more female labour: nursing and elderly care, child care, ecc.

The continued economic recovery is believed to result in the growth of

mostly male vacancies (in natural resources and engineering industries).

Pag. 26

At the same time, in education, which is a traditionally female

employment segment, vacancies decrease as a result of the demographic

slump. The public works programmes (road construction and heavy

municipal chores) are least of all designed to support women and even the

programmes of training are scarce and are almost fully intended for

managers, professionals, specialists, that are above all men.

b) realization of women’s professional potential. A set of social measures

here needs to provide for: 1) ensured access to childcare institutions, when

special services are offered at home or outside home; 2) a more

sophisticated household services industry that helps to create jobs for

women on the one hand, and allows working mothers to continue in the

job and take care of the household on the other; 3) introduction of specific

measures targeting socially disadvantages categories of mothers (single-

mothers, mothers of big families or incapacitated children) and designed

to have employment agencies offering retraining or encouraging

employers.

The industrialization of household services alone cannot help equalize

the time budgets for men and women, this being a single basic condition

for the full equality of opportunities on the labour market. However,

improved social infrastructure, together with other important issues of

female employment, could help bridge the gap between men and women

in terms of their realized social potential;

c) the growth of official wages and salaries of low paid categories of

employees, of which the women are the majority, and reduction in gender

inequality in labour payment. A gender pay gap is evident everywhere in

the world, and women are also earning less on average than men in the

Fsu Countries. Nevertheless, the gender difference in wages, because of

her size, is higher in the Fsu Countries than in the western Countries. This

is the effect of the significant growth in overall wage inequality and the

massive changes in the labour market during the transition.

Wage discrimination of men and women is manifested at several levels.

1) wages and salaries of women in all sectors, even with prevailing female

labour, are lower; 2) the differentiation of women’s wages and salaries

within a certain sector and at an inter-sectoral level is considerably lower

than that of men; 3) in male dominated sectors, women receive lower

wages and salaries, while in female dominated sectors men are better

paid; 4) if a woman works in a traditionally male dominated sector, her

chances to earn more are higher than those of a woman of the same

profession employed in the female dominated sector.

Women’s equal pay and equal employment opportunity are also

important for the well-being of children. Research in various Countries

has demonstrated that a rise in the share of women’s earned income is

beneficial for child welfare. In this regard, it is worth noting that the “net”

pay gap (part that cannot be attributed to differences in job or human-

Pag. 27

capital characteristics) appears to be significantly greater than the value of

public child/family allowances in the Fsu Countries.

The syndical role in the Fsu Countries

The affirming trade unions in the Fsu Countries must give up doing

improper functions like that of organizing the productive processes,

concentrating instead on the defensive function. The solution is surely

found in the use of a classical instrument that in West, especially in Italy,

has assumed a fundamental meaning for the realization of a defensive

function, but that in the Fsu Countries ever had a dominant role. It

concerns the collective bargaining that still today, although existing, it’s

weak, patchy and not widespread at all levels. It’s necessary to give new

contents to collective contracts, subtracting them from the ream of

meaningless papers and making them an effective and organic instrument

of the renewing syndical action. The trade union must become a social

subject having a big moral integrity; it must be a free and independent

organism from statal bodies, political parties, ecc. The central syndical

organisms must renounce to the impositions toward works committees,

leaving the faculty to last ones in defining at a local level their priorities. In

this way, the syndical works organisms become free in defining executive

policies to conduct inside the industries and enterprises. At the same time,

they assume the faculty to determine the structure and numerical

consistence of the staff of the superior organisms (district and regional)

and contribute into the appropriate seats to the choice of the decisions of

general character. A strong, independent and authoritative trade union,

able to take and defend the own position, becomes today a reality

expected by all the workers. Especially now when many legislative

principles adopted in the Fsu Countries are found in sharp contrast with

the interests of working class (in Kazakhstan the new labour code enacts

the prohibition of strike, and in Belarus the labour contracts of the new

entrants are only on a temporary basis).

An important footstep toward the law-based state is represented from a

great diffusion of juridical training to the syndical cadres. To this respect

would be opportune to organize courses of juridical training on several

matters like employment, pensions, house, ecc. The contractual initiative

of the trade union becomes more and more articulated and complex: next

to the traditional problems of the defence of workplace, more high and

more correlated labour payments to the inflationary processes, more

careful (to people needs) solution of the social problems, more active

participation to the business politics which are currently the more

discussed issues at the negotial tables, there are other ones also important

and now often submitted to the syndical debate. They are: house (endless

source of social tensions), public diet, health and safety of workers,

Pag. 28

ecological defence and environmental recovery, more effective and

articulated professional training. It can be found a common point of

arguments between East and West Europe on some emergent problems

like environmental pollution, link between economy and criminal world

and exclusion of wide social areas from the circuits of guarantee.

The syndical reform in the Fsu Countries must not only concern greatest

autonomy and the internal restructuring of the trade union. It also must

operate for “remodelling” the mentality of the worker accustomed in the

past to a purely formal adhesion (although total) to the trade union. A

characteristic feature of social partnership in these Countries today is a

considerable differentiation of forms and methods of interaction: from

active position of the trade unions on protection of employees’ rights and

quite developed forms of social dialogue at enterprises to full absence of

any consideration to the employees’ interests and rejection of trade

unionism in any form. Of no less importance is the fact that social

dialogue up to now has failed to become the main principle of regulation

of social and labour relations. The role of the trade union is to also

promote an understanding of democracy and of a system of “social

partnership” aimed at achieving an optimum balance of interests among

the different subjects within the social partnership system (employers,

employees, state, trade unions, government and the society as a whole).

This understanding has to hold in due consideration the different ways

performed by partner Countries: specific character of the emerging social

partnership in the Fsu Countries stems from the fact that it’s developing

on the background of traditions and values totally different from those

that were forming the basis for the development of social dialogue

between capital and labour in the Countries of advanced market

economies. The transition from the state-run economy to a market one

changed the very nature and character of all relations within the post-

soviet societies (including social and labour relations).

The syndical reform must take place together with the process of

general democracy carried out in these Countries. At the same time, the

trade union must collaborate with all recently born democratic

movements, with all the informal associations that have a progressive

position, to lend every required support to them and to realize joint

demonstrations. The trade unions establish more and more intense

relations with the enterprises, institutions and local administrations,

starting complex political exchanges with the parties, corporate bodies of

development and socio-economic promotion. With the introduction of the

free market in the transition Countries, the problem of its regulation has

arised. The free market can only develop in a democratic way in the

presence of complex and elaborate juridical norms regulating it.

Nowadays we need not only enterprise-managers but also trade union-

managers, that is to say experts knowing how to plan out and lead a

Pag. 29

collective bargaining, looking for lines of compatibility between the

interests of the workers and the economic restrictions imposed by the

market. In the Fsu Countries, trade unions retain considerable rights to

represent their members and monitoring the activity of employers, but

barely exercise these rights. For example, the problem of low wages has to

be confronted through a combination of legislative means and

strengthening the role of trade unions as representatives of their members.

The trade unions can regain authority and respect only through facts

and concrete initiatives, directed to the satisfaction of the true needs of the

workers. What happened in the regions of Astrakhan’ and Yasnogorsk, in

Komi (the Federal Atomic Center) and in the Uralis, it is to show the

importance of the role of the renewing trade union and of the high

consideration of which it can enjoys among workers when it really fights

to protect their rights. During the last years, in these regions, strikes,

occupations of factories, legal actions against the top management,

highway blockades and mass meetings have been organized. Disputies

have been won for the payment of wage arrears, the increase in salaries,

the reinstatement of workers illegally dismissed, for a stop to the failure of

the factories, etc. These facts show that a foreground role is up to the

regional and district syndical structures.

The dedication of the trade unions toward a most scientific analysis of

the public opinion and a deepest study of the organization, retributive,

sanitary, housing, environmental issues and toward a more human

politics, all this will facilitate in a decisive way the so expected turning

point in activity and above all in the outcomes of trade unions themselves.

The gender dimension in the Fsu Countries

The transition period in the Fsu Countries, starting in the late 1980s and

continuing up through the present day, has been accompanied by

significant changes in women’s political, economic, and social status.

Whereas much research and media attention during the transition period

has focused on privatization and the development of a pluralistic political

system, both of these realms tend to be populated by a predominantly

male cast of characters, and as a result, the effects of the transition period

on women remain largely hidden from view. To accelerate genuine

development, gender issues need to be better integrated into the political

and public agenda. The key areas for the implementation of “affirmative

actions” in favour of women are:

a) economic status. For several years, the former socialist Countries have

been undergoing a transition from a centrally planned economy to a more

market-oriented economic system. From a woman’s perspective, the

process of transition to the free market has been accompanied by several

Pag. 30

disruptive and negative trends. The first of these trends is an increase in

unemployment. Under the socialist regimes, the specter of unemployment

was essentially unknown; the constitutions declared a “right to work” and

enforced this right with severe penalties for those who found themselves

jobless. Now unemployment has become a household word, particularly

for women, who make up the vast majority of registered unemployed. The

current growth of unemployment is shocking for women in the Fsu

Countries, who under former rules had maintained an extremely high

labour force participation rate: around 90 percent. The new trend toward

pushing women out of the labour force is particularly hard for single

mothers with dependent children; their salary is the sole source of family

income. Women over thirty-five with young children are increasingly

hard-pressed to find work. Not only they have on the job and hiring

discrimination increased, but also the social welfare infrastructure

undergirding mothers’ employment has been severely cut. In a society

where fathers rarely take a large role in child care, women especially are

left stunned by the rapid decline in availability of child care and other

benefits, such as children’s camps, all of which melted away with the

collapse of the soviet social welfare system. By 1994, as more and more

single parent families slipped below the poverty line, government officials

began to refer to the feminization of poverty.

There are two fundamental reasons for the disproportionately high

numbers of women among the unemployed. First, one can point to a well-

entrenched system of vertical and horizontal occupational segregation by

sex. Women predominate in certain industrial branches, including some of

those hardest hit by the changes in the economic system and the collapse

of the former socialist Countries, such as light industry, especially textiles.

The salaries are decreased in the military-industrial complex (with almost

all male), while they are increased in the light industry (where female

labour force generally is prevailing). Nevertheless, in the last case, when

jobs are available, the priority of assumption is granted to men that have

the tendency in the time to replace women.

A second reason for women’s unemployment has deeper roots but has

been exacerbated by the privatization process. Now responsible for the

profitability of their enterprises, employers prefer not to hire women

knowing that women hold full responsibility for taking care of the family,

including frequently sick children and aging parents. Also, women are the

beneficiaries of maternity leave and other associated benefits. These facts

and policies encourage the commonly held assumption among employers

that women constitute a less desirable and productive workforce since

their family responsibilities encroach on their work time. Thus women

face the double-edged sword of the “double burden”; they are fully

expected to take care of the family yet discriminated against at work for

this very reason.

Pag. 31

Economic discrimination against women is hardly new, but it seems to

be on the rise in the transition Countries. For decades, women have

tended to work in branches of industry with low pay and low prestige.

Despite an overall higher level of education than men, working women

are clustered in lower skill categories. Women rarely attain the level of

managers or industrial directors and their average pay is lower than men’s

one.

A second important trend affecting women adversely is a tremendous

drop in the provision of public child care. This is one result concomitant to

the process of structural readjustment, which entails a separation of the

social welfare sphere from the industrial enterprise. Factories are shutting

down childcare centers at unprecedented rates: many child care centers

were closed, while others were privatized, placing them out of financial

reach for many families. The effect of this combination has been to push

women back to the home.

What’s more, to make matters worse, most poverty indicators including

those not based solely on income but on the satisfaction of basic needs,

are based on household surveys that consider the family as a unit and

assume that all members of a household share equality the income and

resources available, independent of their age and gender. This results in

underestimating the number of women living in poverty, since many of

them are not able to satisfy their basic needs even when living in

households above the poverty line.

It should be said that women, along with men, now have opportunities

to open small businesses and to enter the private sector. However, without

enjoying the advantages of industrial directors, who were able to privatize

their enterprises when the new economic rules came into play, women

have had a harder time than men getting bank loans and credit and have

few role models in the business sphere. Furthermore, the private sector

offers a limited range of jobs for women. These are frequently secretarial

jobs for young women with foreign language or computer skills.

b) political status. Real decision-making power of women was especially

located within the several structures of the communist party. But most of

the female deputies were “mass representatives”, including several

prototypical “milkmaid heroines of socialist labour”; in other words, token

women who overfulfilled the economic plan and were present for

essentially decorative and propaganda purposes. At present, with the

passage from a quota-based political system to a free election-based one,

the women’s participation is drastically decreased. There is a widespread

feeling among people that women’s place is in the home, not in politics.

This is substantiated by both national public opinion polls and anecdotal

evidence.

Pag. 32

c) socio-cultural status. Social attitudes toward women and women’s roles

in the transition Countries are frequently essentialist in nature and often

openly sexist. Discrimination against women on the basis of sex forms the

background to women’s sociocultural status. The widespread opinion that

women should be at home raising the children, rather than working

outside the home for a salary is a typical role stereotype persisting despite

the fact that under current economic conditions most families require two

salaries in order to meet the minimum living standards. It should be noted

that according to the current constitutions of the mentioned above

Countries, there is no discrimination against women. Men and women

have equal rights and freedoms and equal opportunities to realize them.

The lack of legal culture makes this principle, though a very progressive

formulation, essentially meaningless. Given the weakness of the legal

systems and the lack of a mechanism to enforce antidiscrimination

legislation, the declaration of equal rights and opportunities for both sexes

remains in effect only on paper. Job advertisements, for instance, openly

exhibit discrimination on the basis of both sex and age, inviting

applications exclusively from men in some cases. It isn’t unheard of to

encounter an advertisement that states, “Seeking attractive woman, with

european features, under 35, and without hang-ups.The latter phrase is

even abbreviated as w/c (without complexes) and signifies either sex work

or that the woman in question should be willing to put up with advances

by bosses, clients, etc.; an institutionalized form of sexual harassment.

The proliferation of beauty contests and pornography in Countries

where for decades laws forbade the propagandizement of the cult of

violence and pornography are seen by some women as downright

oppressive and by others as simply a phase, during which the forbidden

fruit of pornography has become a commonplace presence in both the

public and private realm. Pornographic materials are sold in underground

street crossings and naked-woman wallet calendars are a staple in many

taxicabs. The transformation of women’s bodies into “objects of

consumption” extends to television and printed advertisements, where

women appear in traditionally feminine poses and seem to exist in order

to serve men and please the male eye. The diffusion of these images does

have an effect on women and on women’s self-image, not to mention on

the ideas and stereotypes that men and women develop about women’s

capacities and proper social roles. Numerous stereotypes about women,

including very sexist expressions, continue to have currency today.

Women are trying to fight discrimination and realize themselves as full-

fledged members of society, through organizing. Beginning in the early

1990s, a large number of women’s groups sprang up, forming a nascent

women’s movement. Women started to speak honestly in public about

their lives and, along with a variety of organizations, a several number of

women’s groups emerged. They met other foreign women’s movements

Pag. 33

and became transfixed by the goal of acquiring funding for travel to the

Fourth World Conference on Women, held in Beijing in September.

As it has been said, women’s economic, political, and sociocultural

status in the mentioned above Countries has suffered in many ways

during the transition period. At present, the trend is toward pushing

women out of the workplace and depriving them of their right to choose

whether or not to work outside the home. Women are increasingly

excluded from certain professions and are becoming more economically

dependent. They are showered with sexist images and confronted by

unsympathetic male politicians. For the masses of women (and people in

general), the economic conditions of life are immiserating and the political

conditions frustrating-even scary. However, the impoverished but

enthusiastic women’s movement has emerged in its variety of forms with

a great deal of potential for improving women’s status overall. Both the

more feminist groups (by challenging stereotypes and promoting

feminism) and the more pragmatic groups (by bringing women together,

expressly to better women’s situation) present the possibility of new

definitions of what it means to be a woman, as well as a radical challenge

to male power.

An important priority to realize, it concerns the building of a “network”

with several groups and female associations of the transition Countries,

and create a system of communication and constant exchange of

experiences about gender dimension, above all with the western european

Countries.

The social networks and civil empowerment

People need not only incentives, money and material resources, but also

social support. Social networks are vital resources.

Traditional networks based on reciprocity survived from pre-

revolutionary peasant society through the socialist period, but are now

coming under increasing pressure with the growth of inequality which

undermines reciprocity. Not nearly enough is known about the role of

such social networks or the conditions under which they thrive, but one

feature inherited from the previous period is that they tend to be narrow,

confined to relatives and close friends, and so do not provide a strong

basis for the development of community and civic organizations. Close

inter-family ties to some extent compensate for the lack of government

social support to families with kids. They support families with “private

transfers” rendered in cash, in kind or in service.

But this phenomenon today tends to grow and transform in line with

the social changes in the society. The social isolation of the family is

complemented by her civil and political isolation, which prevents her

from defending and pressing for own interests. Democracy and good

Pag. 34

government start at the bottom, so that initiatives to reform institutions

from above need to be complemented by measures to encourage

participation from below by supporting the development of effective

participatory communities, movements, informal organizations and civic

structures at the base so that they can press for the social and civil rights.

All these organisms can play an important part in supporting family by

providing advice, aid and representation for those persons whose rights

have been violated.

The technology as a strategy for democratizazion

The role of technology in the revolutions that led to the collapse of

Countries of the former soviet coalition has been widely acknowledged.

Indeed, it has been asserted that the socialist collapse could be called the

“first foreign policy victory of the information age”. Many believe that we

are in the midst of another revolution, a so called “information

revolution”, in which technology has a role to play in the ongoing process

of democratization. The information revolution is changing the balance of

power between the state and the other social actors. New technologies

have allowed activists in grass-roots organizations of all types to mobilize

virtual communities and shine a spotlight upon issues of social and public

interest, circumventing state control and connecting directly with

international media channels. Access to new information and

communication technologies is an important component in the

transformation of post-soviet societies to democracy by allowing citizens

unprecedented opportunities for free speech and political and social

advocacy. Specifically, technology is thought to enhance democratization

in the following way: it can help identify and publicize abuses or issues of

public social concern, aid in the mobilization of interested and affected

citizens upon specific issues across great distances, improve and simplify

coordination of actions by citizens and organizations. For better or for

worse, the information age has arrived in the Countries in transition, and

there is a perceived need to rush to exploit the opportunities it promises.

A lot of people have internet access today. An internet surfer can now

click on to a plethora of web sites and take contacts directly with several

organizations and activists. Access to new technology can be a strategy for

developing and strengthening the networks. These networks can

contribute to third-sector development by allowing groups to freely

communicate with one another, with government, syndical organizations

and the media, and with international community.

Technology has helped build connectivity between organizations and

transformed communication and information exchange, thereby helping

to sustain a relatively small and geographically dispersed movements or

groups. Of course, technology on its own is not a panacea, and access to it

Pag. 35

doesn’t mean to alter completely a way in which organizations, groups

and other social actors interact or engage with their community.

Generally, technology works best for movements, groups and

organizations with a clear mission, target audience and defined goals:

movements, groups, organizations that do not meet this criteria are

unlikely to reap the benefits that technology has to offer. Anyway, the

ones utilizing technology at a limited level may benefit in terms of

increased communication between existing organizations as well as access

to more information. It is clear that technology as a strategy for

democratization must be an effective tool specifically tailored to the

diffusion and knowledge of needs of the individuals and the organizations

that by technology can lace useful links of international solidarity and

struggles on common goals. To this respect interesting is the joint

experience - using internet and e-mail - of russian workers and mexican

ones. They decided to link their struggles as an important groundbreaking

move. It comes in the spirit of the global anti-capitalist protests that were

held in Seattle, Washington, Prague and elsewhere: “We need a

globalization of our own struggle - the struggle of workers and poor

people, uniting beyond national boundaries, fighting to ensure that there

will be a best world future». Another experiences are those of the

international movement of support to the protest actions organized in

Russia against the labour code “Putin” and the struggle of Ontario

(Canada) workers, facing a new labour legislation similar in many respects

to the new russian one.

Environmental safeguard and nuclear safety

A theme to face with a certain urgency concerns the promotion of

economic alternatives which would contribute to the development of

environmentally safe (eco-compatible) livelihoods. This is possible

developing at the same time a culture of environmental justice that differs

from traditional ecological philosophies in that it seeks to combine a

concern for the natural world with a consciousness of the presence of a

large ethnic and class discrimination. In numerous towns, hundreds of

workers and their families who live in the industrial settlements have over

the years fallen victim to rampant industrial pollution, to cancer, lung

diseases and sulphur poisoning. Throughout the world, poor and minority

communities (particularly low-income communities) bear a

disproportionately large burden of toxic contamination, and suffer the

health problems and stigmatization that result from it. Pollution and other

environmental problems have soared, while adequate medical care is now

a luxury reserved for the rich.

Particular importance must be granted to the institutional

strengthening, to the legislation and environmental education in the Fsu

Pag. 36

Countries, as well as to the start of the cooperation as regards the struggle

against the pollution and the disastrous ecological conditions of the

industry and the nuclear centers in a transfrontier picture.

As concerns the nuclear safety, an important footstep by the Fsu

Countries will be their ratification of the international Convention on

nuclear safety and their adhesion to the amendments of the Convention

adopted in London in 1993, forbidding the unloading of radioactive

refusals, as well as their adhesion to the Convention adopted in Vienna on

civil responsibility as regards the nuclear damages. Particularly, it’s

necessary to adopt a regulation that foresees the amelioration of the safety

of industrial fittings, including the amelioration in a very short time of the

mostly risky fittings, in the perspective, at the same time, of their as soon

as possible closing. Therefore, all the measures about the preparation of

the operations of fittings dismantlement must be activated without

neglecting the inherent aspects to the fuel cycle and the management of

the refusals. The attainment of an elevated nuclear safety level and a good

management of the pipe-lines are all essential elements to the prevention

of the nuclear catastrophes. The damages following the Chernobyl nuclear

explosion in April 1986 in Belarus are incalculable. The impact of

Chernobyl still affects all aspects of life in the afflict regions, as well in the

Country as a whole. The United Nations has recognized the Chernobyl

explosion as a disaster both global and regional in natural trascending

boundaries and unprecedented in its radio-ecological consequences.

The widening of the European Union to East

The future of the EU depends on its ulterior widening. The idea to open

the doors of the Union to Countries of the central and oriental Europe,

besides Cyprus and Malta, has constituted, after the year 1989 and the fall

of the wall in Berlin, the answer to necessity reorganizing on democratic

bases, aimed at cooperation and economic development, the relations

among all Countries of the european Continent.

In the picture of the definition of the new strategic assignments of the

Nato and its widening to East, the Union owes to also define the picture of

its relationships with some Fsu Countries, particularly with Russia and

Ukraine.

The European Union has taken the first binding decisions on the

widening during the vertex of Copenaghen in 1993, fixing the

fundamental criteria to realize the adhesion of the new members. These

criteria substantially foresee the attainment of suitable standards in the

field of the democratic institutions and the affirmation of the law-based

state, the modernization of the economic structures and the market ones,

the ability to assume the complex of norms that already regulate the

relations of current members States of the Union. This is the reason for

Pag. 37

which the widening can be defined like an evolutionary, global and

inclusive process articulating in different tappes in relation to ripening

tempi of each candidates Countries.

The process of integration must be stimulated sustaining the effort that

each partner Country must do to conform at the necessary levels to start a

real negotiation. But it’s important to take account that every Country has

traditions and different levels of development, avoiding in this way that

run-up toward the objectives of the adhesion has negative effects,

especially on the social sphere. The integration will be possible only if the

reasons for the social cohesion and solidarity among the whole members

States will be safeguard.

The widening to East of Europe is an important opportunity,

particularly as concerns the development of the programmes of

transfrontier cooperation. The EU must start with Russia and Ukraine an

open and profitable dialogue, such as to constitute a first footstep toward

the future unity of the whole Continent. It must to establish a solid and

lasting relationship with these Countries to promote the process of

democratic and economic reforms, strengthen the respect of the human

rights, consolidate peace, stability and security, so that to avoid new

divisions in Europe and fully integrate these Countries in the community

of the free and democratic Nations.

Globalization and cooperation

It’s important to make sure that laws and social-political and ecological

activities of partner Countries have a human face, and facilitate the

liquidation of all forms of oppression, exploitation, discrimination and

violence from their models of development toward the establishment of

new civilized relations. The possibilities for their realization demands

intense attention. Here particular attention is due in order to define the

problems of employment, labour, social security, development of social

dialogue, realization of the idea of social justice, equality and equal

opportunity for all citizens, in particular for those that are found in a deep

crisis after the implementation of neo-liberalism and privatization in their

former socialist Countries. A no less importance have these issues in the

western european Countries, especially now with the progressive change

of social, political and market relations due to process of globalization. It

drives toward the integration of national economies and the uniform and

comprehensive development of new life models, involving both eastern

european Countries and western european Ones. From here the necessity

to elaborate common strategies, monitoring the modern processes that

occur in the economy, politics, ecology and public social life, in order to

assure that there will be a stable and sustained growth, and an even

distribution of the resources. In this context, it’s important the

Pag. 38

strengthening of the role of the NGOs, like instruments for a real

participation of the civil society in the cooperation to the development.

The generating actions of income, like the microcredit, the development of

the small enterprise and in general the recognition of the popular

economy as a motor of the local development, are also fundamental. The

role of the NGOs must be strengthened in the initiatives of education to

the development and of promotion of the equitable commerce based on

solidariety. It’s necessary to simplify and to make more transparent the

access of the decentralized and not government subjects to the

instruments of international cooperation.

The globalization, the evolution of the financial markets and the rapid

technological progress have involved important transformations in the

national and regional productive structures and in the labour

organization. All this has not only had positive results, since the

unemployment and the social exclusion have now become structural

problems for the whole planet, the inequalities have grown more marked

and the discrepancy between the North and the South of the world has not

stopped becoming larger. About 1/4 of the inhabitants of the world still

live today in extreme poverty, either material that human, conducting the

own existence in absolutely precarious conditions from the point of view

of the sanitary assistance, of the personal safety, of the schooling, of the

social inclusion.

Moreover, wars, armed conflicts, violations of the human rights,

corruption and misgovernment require an approach of preventive type

that calls for an active and full involvement of international community. In

a more and more interdependent world, only the commitment and the

effort of international community can allow to face in an effective way the

problem of a sustainable, participatory and balanced socio-economic

progress centered on the human needs.

International security

The explosion of new ethnic, religious or nationalistic conflicts,

remaining or accentuating of economic unbalances at world level, the

danger of environmental catastrophes and of serious humanitarian crises,

all this imposes the necessity of common international politics aimed at

maintaining peace and stability in the world.

At first, it’s necessary to sustain and consolidate the right to security,

keeping track of the new international reality and inspiring to the

democratic principles with respect to a balanced geopolitical world

representation based on mutual solidarity. The principles of peaceful

coexistence have won broad international recognition and have been

incorporated into scores of several international instruments, but each step

along the road to more durable peace has taken and does take a lot of

Pag. 39

efforts. It calls for intense and joint struggle against the international

terrorism that has become especially active now, but it also calls for the

construction of relationships and links of international cooperation on

common strategic goals that overcomes the logic of the opposed blocks

even more monstrous today, because it would be founded not only on the

ideological hate but also on the ethnic, religious and nationalistic one.

The need for peace and security is of particular importance today when

the international tension is markedly increasing after the events of 11

september and with the worsening of the situation in the Middle East.

After the 11 September, the russian President has changed his political line

toward the appeasement with America - his Country is entering the

“western living- room” of the international geopolitics - despite russian

Parliament, the Duma, has not supported his choice (only 15% of deputies

supported presidential line) and continues to put obstacles in it. Within

the euromediterranean politics, a fundamental strategic importance must

have the active, political and economic support to the process of peace in

Middle East taking account of the accords undersigned by Israelis and

Palestinians.

The war and violence are still an usual method of social, political and

ideological confrontation and Countries have weapons that can destroy

human civilization and all life on our planet. The efforts of Countries, the

activities of governments and organized political forces should now all be

directed toward preventing acts of international terrorism and a nuclear

catastrophe with negotiations on all matters concerning the limitation and

reduction of armaments, and for the application of various accords or

stipulated conventions, like that of Ottawa about the complete elimination

of the terrestrial anti-man mines.

With the agreement signed by Russia and Nato in Rome, the United

States and Russia have not - contrary to conventional wisdom - ended the

cold war, which in a formal way concluded more than a decade ago with

the demise of the Soviet Union. Actually, the summit marks the beginning

of serious joint efforts to deal with legacies of the cold war - thousands

more nuclear weapons that needed for reliable deterrence, and Nato as an

exclusive military alliance with Russia as an outsider - that threatened to

become obstacles to practical cooperation. The american and russian

leaderships must now begin work on the meaningful agenda: defeating

global terrorism, preventing proliferation of weapons of mass destruction,

involving Russia into international economy, to give up its citizens a stake

in building a democratic and prosperous future, with the appointment by

the same Country to carry out to the obligations as concerns the

liberalization of the commercial politics. Finally settling crises outside

Russia’s and Nato’s zone responsability. Above all, that concerned the

India-Pakistan crisis and the situation in Central Asia. Of course,

anchoring Russia, or other Countries of former soviet coalition, in

Pag. 40

international organizations makes sense only if the rules, norms and laws

governing those organizations are then applied to Russia. This to date has

not been the case, and the international community has therefore missed

an opportunity to make the demand for the protection of rights inside

Russia a priority. There is a cost to this inaction for international security,

especially with regard to the ongoing war in Chechnya. The way in which

the russian forces have conducted their anti-terror campaign in Chechnya

is profoundly counterproductive; this is not a clean campaign but one

freighted with serious abuses that have alienated the local population and

made them more susceptible to the appeal of extremism. Big agricultural

lands are now mined. This is the reason for which the economy in

Chechnya is reduced at the level of pure survival and the society has lost

its stability.

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Copyright: CESPI (International Problems Study Center of Sesto San

Giovanni - Milan, Italy) - February 2004.