Challenges of Transition

Publication date
Wednesday, 12.09.2001

Ye. Gaidar

USAID Partners in Transition Conference II, Sofia, Bulgaria

A socialist economy may exist and undergo some sort of reform while it is still a powerful totalitarian regime. If it does not, then its framework, what supports it, falls to pieces. Then the issue of creating a market becomes a real necessity Rules of supply and demand cease to be the subject for academic discussion – should we reform it this way or this other way?. That is, if our old political and economic system has collapsed, we immediately need some kind of new system, any kind, and this could only have been the market system, which would function, at least in some form, to allow bread to appear in the stores, electricity in homes and so forth. Or we would have had interethnic chaos with terrible catastrophic consequences, such as we, unfortunately, saw in a number of postsocialist countries. This is the first given that we must understand when we discuss aspects of transition.



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