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Economy and Ecology in Eastern Europe
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Medea Abashidze
Institute of Polymers, Georgian National Academy of Sciencies,
Tbilisi, Georgia
Secretary General of the Georgian Association of the Club of Rome
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Co-author: Eleonora Abashidze
Institute of Plant Protection, Tbilisi, Georgia
When we ask how much the environmental protection costs, it is also necessary
to ask how much our civilization will cost when we are no longer
alive.
We are living in an era when all problems are interrelated, be it the economy,
environment pollution, climate change, migration, ethnic conflicts or
natural disasters. We have talked about global problems and sustainable development
for too long. The time has come to determine the greatest danger
to the environment and to look for new ideas and trends with a view to transform
them into actionable insights. If we do not act quickly, ‘these seemingly
isolated events will occur more and more frequently, accumulating and combining
to determine our future’ [1].
The mankind changes the environment while simultaneously being
changed by it. The current challenge is to achieve a friendly economy with
the hope to live on our planet without environmental hazards. Sustainable
development is impossible without a healthy environment. The condition of
the environment is the factor that mostly determines the viability of society.
Environment and human health, security, economy and prosperity depend
on how we utilise natural resources.
The aim of this paper is to highlight problems faced by Eastern Europe,
particularly Georgia. After the collapse of the former Soviet Union Eastern
European countries are confronted with a number of economic, social
and environmental problems. The economic and socio-political situation in
the transformed Eastern European countries varies, depending on their level
of development and degree of independence. Some of these countries regained
independence and obtained the EU membership whereas others continue
to assert their rights and retain the characteristics of the former system
(economy, technology, distribution of means of production, use of natural
resources etc.). Coming face to face with the challenges of sustainable development, those countries did not seem ready to adapt to the new situation, undertake
independent market reforms, boost economic efficiency and improve
their living standards. In the Soviet times, the republics constituted political,
socio-economic and environmental unity. After the USSR collapses, the economic
space disintegrated, political and socio-economic unity was lost and
new states began to create their own economies and environmental policies.
The early years of transformation in Eastern European countries were accompanied
by failures of the monetary system, instability of currency, investment
deficiency, low level of technological development. As the society in the
new countries is stratified by income, the scale of poverty grew enormously.
There was also a mass migration from less to more developed countries. The
persistent conflict situation in Georgia weakened the country’s economic infrastructure.
The old governance system combined with absence of dedicated
development programs aggravated the already complicated situation. Eastern
European countries fell far behindWestern Europe in creating wealth and
economic prosperity, and an enormous effort is required to surmount these
obstacles.
Georgia’s economic and environmental situation during the post-Soviet
period resembled that of most Eastern European countries. A number of internal
conflicts broke out after the country gained independence. Since that
time, Georgia’s relations with Russia have been complicated and the Russian
market has been lost.
Agriculture is the leading sector of Georgian economy with a share of
approx. 30%. Before independence, the country had a relatively strong economy
with a prosperous agricultural sector, and specialized in exports of agricultural
products as well as energy-intensive industrial products.
As a result of the existing conflicts, agricultural production suffered
greatly. In fertile areas crops get damaged on the fields as farmers either
cannot take their produce to the market or must bear costs that drive prices
of local produce above those for imported goods. Viticulture, cultivation of
fruits, tea, citrus fruits and other cultures was supported during the Soviet
period and received international acclaim. It has also absorbed some new
technologies. Domestic grain production is on the increase but will require
sustained improvements in infrastructure and policies to ensure appropriate
distribution and return to farmers.
The country has a strong export potential due to its natural resources and
strategic location.
Ferroalloys are number one in Georgia’s exports. In 2007 its exports
reached USD 73.6 million, or 11% of the total volume of exports, with scrap ferrous metals holding the second position. Copper ore and concentrates occupy
the third place in the export structure. Georgia holds 7% of the global
hazelnut market. 80% of Georgian hazelnuts are exported, among others to
the Ukraine, Switzerland, Poland and Czech Republic. Georgia is rich in
fresh, mineral, thermal water and medical mud. Almost all types of mineral
springs known in modern classifications can be found across the country.
Considering that water is a renewable resource, Georgia has a great potential
in this respect. The collapse of the economic system left the country with
enormous social problems in ‘ghost’ cities with dysfunctional industrial complexes.
Supported by European assistance, Georgia has taken steps to control
the quality of its natural spring water and to market it appropriately yet privatization
of water resources creates problems for the country’s population.
Currently, efforts are being made to develop relevant concepts of management,
use and protection of mineral resources. Relatively small-scale mining
sites are still operational and this is where environmental impacts are experienced
and these impacts are expected to intensify further as transitional
processes proceed.
One must also mention the very difficult socio-economic situation of
Georgia. Poverty is widespread, particularly among families with children
(54% of the population fall below the poverty line and this tendency is on the
increase). The gap between the rich and the poor is widening. Unemployment
remains high, as agriculture and industry, traditionally major sources
of exports and employment, have hardly recovered after their collapse after
the country became independent. The quality of education has been declining.
However, there is some progress in structural reforms. All prices
and most industries have been liberalized. The majority of small enterprises
have been privatized, whereas many medium-size and large companies have
been transformed into joint stock companies. With a legal framework (a law
and a decree) establishing the legal basis and procedures for privatization of
state property, the number of companies controlled by the state is expected
to decrease. Privatization is the only way to generate the capital needed to
rehabilitate the economy. The process of privatization is very dynamic. The
government has decided to sell all state-owned assets at once and to generate
proceeds from them. Privatisation proceeded along very much the same path
in most countries of Eastern Europe. The governments focused on its shortterm
populist goals rather than on developing a long-term strategic outlook.
Georgia is a transit corridor between Europe and the countries of Central
Asia, as well as between Russia and the Middle East. Georgia’s location at
the strategic crossroads has turned it into a transport corridor for Caspian oil and gas, estimated to be among the world’s largest reserves of hydrocarbons
[2]. This should lead to creation of an economic partnership and can improve
the economic situation in the Eurasian space and promote global economic
integration.
The civil war of 1993 caused massive migration, with hundreds of thousands
of people being displaced from conflict zones and concentrated in major
cities. As a result, about 58% of Georgia’s population live in urban areas.
This is the main reason why many of the country’s pollution problems
are concentrated in several municipal areas which are also industrial centres:
Tbilisi, Kutaisi, Rustavi and Zestaponi. The process has also created serious
difficulties for agricultural development and threats to urban areas where
air and water pollution, as well as waste problems aggravated. Nevertheless,
the environmental pollution indicators in Eastern European countries, particularly
in Georgia, are lower than their equivalents in developed economies in
times when the latter were at a similar stage of economic development. Privatization
of land, forests and other natural resources, as well as construction of
a pipeline might have a significant impact on the environment. Developing
countries as well as developed ones have their own environmental problems
yet ecology knows no national borders so local ecological problems spread to
other areas [3]. Numerous forms of human activity cause threats and damage
to ecosystems. For instance, the Chernobyl disaster was caused by absence of
environmental policies and reckless human behaviour. Many countries were
affected by the contamination that ensued: Czech Republic (Bohemia), parts
of Poland, Hungary, former East Germany, Turkey. Georgia also had its own
environmental disaster areas within the coastal zone of the Black Sea.
Ethnic conflicts have had an impact on biodiversity in all Eastern European
countries, notably Georgia. As a result of conflicts, traditional livestock
trails were destroyed, and concentration of cattle, sheep etc. in mountainous
areas accelerated land erosion, undermining the biodiversity of plants and
animals. Destruction of habitats is the leading cause of species extinction.
Forests in Georgia occupy about 40 % of the country’s territory, with 98% of
them being located on mountain slopes. As a result of deterioration of ecological
conditions, functionality of forests was undermined. The productivity
of forests and biodiversity degraded and declined.
The Critical Ecosystem Partnership Fund (CEPF) has included Georgia
(Caucasus) in the list of 25 most important and vulnerable ecosystems in
the world. Georgia is a ‘hot spot’ of natural and agricultural diversity. Investments
in diversity which secure long-term survival are not rewarded by
the market. There is a need to formulate such socio-economic policies that would allow to integrate environment protection and rational, long-term use
of natural resources. Despite the deteriorating ecological situation, the government’s
policies were confined to economically and environmentally ineffective
measures.
From 1996 onwards, Georgia began to move towards more rigorous laws
against poaching and illegal trade in endangered or threatened species, and
towards establishment of protected areas, and policies benefiting forestry and
agriculture.
Nowadays there are 20 nature reserves in Georgia, with a total area of
168,000 hectares, which represents 24% of the country’s territory. The reserves
were based on state-owned forest resources and, as a result, they include
vegetation formation forests. In order to preserve its nature, Georgia
is running a programme of national parks and other protected territories,
with financial support from international organizations and funds. The reserves
are established to protect several relict and endemic species of flora
and fauna. Unfortunately, nowadays most reserves are on the verge of extinction.
Georgia has taken efforts to establish close ties with the European Union.
It was the first Caucasian country to join the Council of Europe. A more intensive
integration with European structures creates new opportunities for
Eastern Europe. The EU has been involved in the implementation of regional
projects since 1992. Georgia is member of UN, OSCE,NATO’s partnership for
peace, WTO. It also participates in economic institutions such as the IMF and
World Bank, CMEA, ECO, INOGATE etc. The EU project of TRACECA and
the revival of the Great Silk Road, where Georgia participates alongside other
states, is an attempt to build a common market in the Eurasian space, based
on the ‘new economic diplomacy.’ There is a new international program, international
ecological fund, system of emergency aid, a service for the detection
of and quick response to ecological risks [4]. In order to encourage and
support the reform process, the US is joining other donors in shifting the focus
of assistance from humanitarian aid to technical and institution-building
programs. The project attracts foreign investment and improves security in
the region, which means it can be used as a significant component of the EU’s
‘wider Europe’ strategy [5]. The EU is interested in Georgia’s development
in the context of a politically stable and economically prosperous and environmentally
safe area. Analysis of the current situation has shown that there
is a need to focus on the following:
- ecological and economic factors are interrelated and are at the very core
of the causes of the Global Problematique,
- economies need to be based on value, ‘for life, not prices’;
- Eastern and Western Europe have common problems, solutions and answers
should bring them politically closer;
- It is urgent to study the less developed countries of Eastern Europe in the
context of stronger and wider Europe.
The world is facing a problem: the need to develop a new model for
civilization development, ‘new thinking’ able to withstand the approaching
global, social, political, economic and ecological crisis. The problems that
have been identified until today are enormous, and a great intelligence, vision
and courage is needed if they are to be solved [6]. In future, a profound
understanding of those problems is required if the newly developed European
strategy is to take account of problems which are common across Eastern
Europe. One common concern that can unite countries globally is the
protection of environment, elimination of poverty, improvements in health
care and education system.
If Western Europe takes on a new and more active role to support the
implementation and monitoring of the Eastern Europe strategy, we will reach
sustainable development in near future.
References
[1] Brown L., Plan B 2.0: Rescuing a Planet under Stress and a Civilization in Trouble.
NY, W.W. Norton &Company, 2006.
[2] Wertsch J.V., Georgia after the Rose Revolution. Journal. The Caucasus and Globalization.
Sweden, vol. 1, 2006.
[3] May R.M., Nature and Human society. Natural Acad.Sci. press Washington DC,
2000.
[4]Shevardnadze E., Great Silk Road. Georgian Transport System publishing.
house. Athens, 1999.
[5] Barren Z., A New Euro-Atlantic Strategy for the Black Sea Region, 2004.
[6] Nelson J., The State of Environment, UK, London, 2005.
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