May 20, 2007 / 9:00 AM / 12 years ago

Most people in transition nations not living better

KAZAN, Russia (Reuters) - The majority of people living through the transition from planned, state-run economies to market economies say they are not living better now than in 1989, research by the EBRD and World Bank showed on Sunday.

The Life in Transition survey, unveiled at the European Bank for Reconstruction and Development’s annual meeting, asked 29,000 people across 29 countries questions about their lives.

The results were mixed.

Generational differences showed the young tended to be happier with life than the old, confirmation of long-held beliefs that the casting off of communism hit pensioners, used to high levels of state support, the hardest.

Corruption was universally thought to have stayed an intractable problem and people were now less trusting of others and their governments versus the pre-1989 period.

“Only 30 percent of people believe that their household lives better today than in 1989,” the report said.

Particularly bleak perceptions about current well-being versus pre-transition were found in south-eastern Europe due to the significant drop in living standards in former Yugoslav republics, the survey said.

“On the other hand there is a sense of optimism emerging from the results. When asked whether they agree or disagree that children born today will have a better life than their own generation, a majority (54 percent) agree whereas only 24 percent disagree,” the survey said.

And more people did declare themselves to be satisfied with life than dissatisfied, indicating a dose of cautious optimism.

Access to credit, something new for consumers in the transition countries, has helped drive economic growth. But accessing services and public utilities is difficult.

In an interview with Reuters on Saturday, EBRD’s chief economist Erik Berglof highlighted the generational differences.

He said the bank was concerned by political malaise slowing down reform in some central and eastern Europe countries which moved quickly to market economies and joined the European Union.

“On the one hand they say ‘our generation has lost out but our children will have a better life.’ It is these losing generations that are now exerting political influence. It is quite a difficult political landscape to maneuver. These value changes that come with economic changes, they take time.”

DEMOCRACY, MARKETS AND CORRUPTION

“The results show that many people remain unconvinced by the virtues of markets and democracy,” the report said.

The survey found 36 percent preferred living under democratic and market economic principles versus 10 percent, generally the elderly, poor and unemployed preferring authoritarian government and a planned economy.

A fifth of the respondents said it didn’t matter, but corruption was still perceived as an intractable problem.

“Only 15 percent of respondents believe that there is less corruption now than in 1989 while 67 percent of respondents indicate that corruption is the same or worse than it was before transition began.”

The perception of corruption was even higher, 75 percent, in south-eastern Europe.

People’s trust in one another has diminished greatly from the pre-transition time. Then, two-thirds of respondents felt they could generally trust people versus one-third now.

“One of the biggest challenges remaining in many countries is to convince these people that transition can work for them too.”

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