Post-communism is the period of political and economic transformation ortransition inpost-Soviet states and other formerlycommunist states located in Central-Eastern Europe and parts of Latin America, Africa, and Asia, in which new governments aimed to createfree market-orientedcapitalist economies. In 1989–1992,communist party governancecollapsed in most communist party-governed states. After severe hardships communist parties retained control inChina,Cuba,Laos,North Korea, andVietnam.SFR Yugoslavia began todisintegrate, which plunged the country into a long complexseries of wars between ethnic groups and nation-states. Soviet-oriented communist movementscollapsed in countries where they were not in control.[1][2]
The policies of mostcommunist parties in both theEastern andWestern Blocs had been governed by the example of theSoviet Union. In most countries in the Eastern Bloc, following theRevolutions of 1989 and the fall ofcommunist-led governments that marked the end of theCold War, the communist parties split in two factions: a reformistsocial democratic party and a new lessreformist-oriented communist party. The newly created social democratic parties were generally larger and more powerful than the remaining communist parties—only inBelarus,Ukraine,Kazakhstan,Moldova,Russia, andTajikistan the communist parties remained a significant force.[3][4]
In the Western Bloc, many of the self-styled communist parties reacted by changing their policies to a social democratic and democratic socialist course. In countries such asJapan,Italy andreunited Germany, post-communism is marked by the increased influence of their existing social democrats. Theanti-Soviet communist parties in the Western Bloc (e.g. theTrotskyist parties) who felt that thedissolution of the Soviet Union vindicated their views andpredictions did not particularly prosper from it—in fact, some became less radical as well.
Several communist states had undergone economic reforms from acommand economy towards a moremarket-oriented economy in the 1980s, notablyHungary,Poland,Bulgaria andYugoslavia. The post-communist economic transition was much more abrupt and aimed at creating fully capitalist economies.[5]
All the countries concerned have abandoned the traditional tools of communist economic control and moved more or less successfully toward free-market systems.[6] Although some, such as Charles Paul Lewis, stress the beneficial effect ofmultinational investment, the reforms also had important negative consequences that are still unfolding. Averagestandards of living registered a catastrophic fall in the early 1990s in many parts of the formerComecon—most notably in theformer Soviet Union—and began to rise again only toward the end of the decade. Some populations are still considerably worse off today than they were in 1989 (e.g.Moldova, andSerbia). Others have bounced back considerably beyond that threshold (e.g. theCzech Republic, Hungary, and Poland) and some such asEstonia,Latvia,Lithuania (Baltic Tiger), andSlovakia underwent an economic boom, although all have suffered from theGreat Recession, except for Poland, which was one of two countries (the other wasAlbania) in Europe maintained growth despite theGreat Recession.
Armenia's economy, like that of other former states of Soviet Union, suffered from the consequences of a centrally-planned economy and the collapse of former Soviet trade patterns. Another important aspect for difficulty of standing up after the collapse is that the investment and funding that was coming to Armenian industry fromSoviet Union has been gone, leaving only a few large enterprises in operation. Furthermore, the aftereffects of the1988 Armenian earthquake were still being felt. Despite the fact that a cease-fire has been in place since 1994, the dispute withAzerbaijan overNagorno-Karabakh has not been resolved. SinceArmenia was heavily dependent on outside supplies of energy and most raw materials at that time, the resulting closure of both the Azerbaijani and Turkish borders has devastated the economy. During 1992–1993, the GDP had dropped around 60% from its peak in 1989. Few years after adoption of national currency, thedram in 1993, it experiencedhyperinflation.[7]
As of 2021, most post-communist countries in Europe are generally seen to havemixed economies, although some such as Estonia, Romania, and Slovakia often adopt more traditionally free-market policies, such asflat tax rates, than does the Western Bloc. A fundamental challenge in post-communist economies is that institutional pressures that reflect the logic ofcapitalism anddemocracy are exerted on organizations, includingbusiness firms andgovernment agencies, that were created under communism and to this day are run bymanagerssocialized in that context, resulting in a great deal of continuing tension in organizations in post-communist states.[8]
