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With
the fall of the Berlin Wall on November 9, 1989, the Iron Curtain
began to recede. Within two years, Communism was a thing of the
past in Bulgaria, Czechoslovakia (later the Czech Republic and Slovakia),
Hungary, Poland and Romania. For former Eastern bloc countries,
the transition from central planning to a free
market economy was not easy and progress was uneven. They have,
however, taken the first steps toward joining the global economy.
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Hungary
began its reforms early and built up a vigorous market economy in
the early 1990s. Under its Solidarity-led government, Poland plunged
into the free market. Almost immediately GDP fell by 10%, real wages
fell by 40% and electricity prices rose by 300%. Though painful,
the strategy proved successful: by the early 1990s, Poland had completely
divested itself of central planning and was well on its way to prosperity.
The Czech Republic opted for a more gradual approach to economic
reform than Poland, possibly losing precious time by delaying the
inevitable. Romania spent the 1990s reforming its socialist economy.
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