<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The economy of Latvia lags behind economically developed nations approximately fourfold in terms of labour productivity in the tradable sector, which is the key constituent of a modern economy, thereby affecting future sustainable development in the entire country, including the rural areas. The economic backwardness is characteristic of the entire Central and Eastern Europe. This is the heritage of a communist regime that lasted for about half a century and the economic system termed a (centrally) planned economy or a command economy. However, such a term for the communist-period economy is not correct, as it does not represent the purpose it was created for. Accordingly, the paper aims to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU. A planned economy that existed in all communist countries, with the exception of Yugoslavia, was not introduced to contribute to prosperity. It was intended for confrontation or even warfare by the communist countries under the guidance of the USSR against other countries where no communism regime existed, mostly Western world nations with their market economies. For this reason, it is not correct to term it a (centrally) planned economy or a command economy; the right term is a mobilised (war) economy. An extrapolation of a geometric progression for GDP revealed that during the half a century, Latvia as part of the USSR was forced to spend on confrontation with the West not less than EUR 17 bln. (2011 prices) or approximately one gross domestic product of 2011. The research aim of the paper is to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU.</p></abstract>

The economy of Latvia lags behind economically developed nations approximately fourfold in terms of labour productivity in the tradable sector, which is the key constituent of a modern economy, thereby affecting future sustainable development in the entire country, including the rural areas. The economic backwardness is characteristic of the entire Central and Eastern Europe. This is the heritage of a communist regime that lasted for about half a century and the economic system termed a (centrally) planned economy or a command economy. However, such a term for the communist-period economy is not correct, as it does not represent the purpose it was created for. Accordingly, the paper aims to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU. A planned economy that existed in all communist countries, with the exception of Yugoslavia, was not introduced to contribute to prosperity. It was intended for confrontation or even warfare by the communist countries under the guidance of the USSR against other countries where no communism regime existed, mostly Western world nations with their market economies. For this reason, it is not correct to term it a (centrally) planned economy or a command economy; the right term is a mobilised (war) economy. An extrapolation of a geometric progression for GDP revealed that during the half a century, Latvia as part of the USSR was forced to spend on confrontation with the West not less than EUR 17 bln. (2011 prices) or approximately one gross domestic product of 2011. The research aim of the paper is to assess the effect of the communism period on the economic backwardness of the Central and Eastern European region of the EU.

Backwardness of Central and Eastern Europe as a Heritage of the Soviet Period

Faculty of Economics and Social Development

Latvia University of Life Sciences and Technologies

Rural Sustainability Research

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Backwardness of Central and Eastern Europe as a Heritage of the Soviet Period"}

The economy of Latvia lags behind economically developed nations approximately fourfold in terms of labour productivity in the tradable sector, which is the...

Backwardness of Central and Eastern Europe as a Heritage of the Soviet Period

Published Online: Jul 31, 2020

Page range: 61 - 66

Received: Mar 31, 2020

Accepted: Jun 11, 2020

DOI: https://doi.org/10.2478/plua-2020-0008

Keywords
economic backwardness, centrally planned economy, mobilised (war) economy

© 2020 Sandris Ancans, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Backwardness of Central and Eastern Europe as a Heritage of the Soviet Period

Published Online: Jul 31, 2020

Page range: 61 - 66

Received: Mar 31, 2020

Accepted: Jun 11, 2020

DOI: https://doi.org/10.2478/plua-2020-0008

Keywordseconomic backwardness, centrally planned economy, mobilised (war) economy

© 2020 Sandris Ancans, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
economic backwardness, centrally planned economy, mobilised (war) economy