07/20/2002
EDITORIAL NUMBER=0-10016

O’NEILL IN CENTRAL ASIA

U.S. Secretary of the Treasury Paul O’Neill traveled this month to Eastern Europe and Central Asia. His mission? To determine how best to distribute an additional five-billion dollars in U.S. assistance.

Countries seeking economic growth must encourage economic freedom. That means removing barriers to trade. It also means improving the climate for business. In Ukraine, thanks to deregulation, the number of small businesses grew by more than thirty percent between 1999 and 2001. Because Ukraine has also reduced state ownership of land, agricultural production has greatly increased.

Kyrgyzstan, Uzbekistan, and Georgia are all in desperate need of economic development. In Kyrgyzstan, nearly half the population lives on less than two dollars per day. Only sixty-six percent of the rural population has access to clean water. In Georgia, secondary school enrollment has fallen by thirty percent between 1980 and 1998.

As Treasury Secretary O’Neill said, each of these countries needs a healthy private sector with new small businesses and foreign investment. Former state enterprises cannot drive an economy. Places where the rule of law is weak, where corruption reigns, and where contracts mean little will not attract either domestic or foreign capital.

But Ukraine, Kyrgyzstan, Uzbekistan, and Georgia must also do something about their poor human rights records if they expect to develop economically. Authoritarianism, brutality, and a lack of political freedom are serious obstacles to development. In short, respect for human rights goes hand-in-hand with economic growth.

In the ten years since the break-up of the Soviet Union, many of the countries in Eastern Europe and Central Asia have made little progress toward democracy and private enterprise. The U.S. is prepared to help the governments of Eastern Europe and Central Asia if they can demonstrate that they are committed to ruling justly, encouraging economic freedom, and investing in the needs of the people.