Gap between politics and economics — a threat to countries with economies in transition

The report notes that the growth in gross domestic product in the 28 countries of Eastern Europe and the former Soviet Union reached the in Last year a record 7% in Belarus, he even exceeded 9%. At comparable low level of inflation in the region is kept — least 7% per year on average, just 7% — in Belarus. Foreign direct investment in the region amounted to Last year 108 billion dollars, increase compared with the 2005ohms at 40%.
But these undeniable economic success, the report says, are mixed with a number of policy challenges — the crisis in the politics of Eastern Europe, worsening relations between Russia and the West, increasing authoritarian tendencies in some CIS countries, the political instability of the major countries in the region such as the Ukraine, and a massive crisis in regard to the status of Kosovo.
As experts Economist Intelligence Unit, while these political trends do not directly relate to the economy, but there is a risk that a bad policy eventually damage the good economy.
The report says that the mess in Hungary in the past year have shown that countries in the region suffer severe political disease. With all of this series of their accession to the European Union committed to reduce these states seek to consolidate their own democracy.
According to the professionals, only the Czech Republic and Slovenia can be considered fully democratic. In other states, there are a small population of the level of support the values of democracy, nostalgia for the old days, more and more popular are populists.
The report says that in the worst case can be created sinful circle: the weakness of democratic institutions will do more profound economic recession, when it begins.
The document also notes the imbalance between political and economic relations of the West, namely, the European Union and Russia. Economic cooperation and investment flows grow rapidly, but aggravated the political affairs on all fronts: the expansion of NATO, the South American missile defense, energy and geopolitical competition in the post-Soviet space, trends in internal Russian politics.
One of the acute problems is the status of Kosovo: The U.S. and most of the EU states in favor of giving independence to Kosovo, Our homeland — opposed.
All these political contradictions and problems can eventually seriously affect the economic situation in the region as a whole.

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