In December of 1998, Krygyzstan became the first Central Asian nation to join the WTO. Hailed as an "island of democracy" and "the Switzerland of Central Asia" by its Western boosters, Kyrgyzstan seemed to have finally joined the family of civilized nations, marching into the gold-lined free market future, leaving behind its former imperial overlord Russia, which at the time was reeling from both economic shock and political instability following the August financial meltdown.
Yet a funny thing happened. Entry into the WTO didn't do a single good thing for Kyrgyzstan. In fact, in the 3-1/2 years since joining, the country's economy, which was one of the best performing in the region until then, slowed dramatically to the point of contraction this year, its debt ballooned and foreign investment has practically disappeared. The WTO-enforced liberalization of the economy meant that neighboring autocratic regimes like Uzbekistan, which violate neo-liberal orthodoxy by subsidizing industry, have since undercut the Kyrgyz and devastated local industry.
Worse still, its experiment with democracy, which according to the dogma preached by fundamentalist neo-liberals like Michael McFaul is supposed to walk hand-in-hand with free markets, has, since joining the WTO, been abandoned for the usual Central Asian autocracy. The New York-based Committee to Protect Journalists recently chose Kyrgyzstan as one of the 10 worst places for a journalist to work in the world due to government harassment. President Askar Akayev brutally cracked down on the opposition and arrested his critics, leading to a massive rebellion in the south this year in a nation known for its once-docile population.
Kazakhstan, which is not a member of the WTO, is the fastest growing economy in Central Asia, followed by Uzbekistan, also not a member. Is the World Trade Organization to blame for Kyrgyzstan's problems?
Who knows, although one thing is for sure: if the economy had boomed over the past three years, you can bet that all the WTO boosters would have been frantically batting out pro-WTO "see, I toldja so!" editorials pointing to Kyrgyzstan as proof of their model's success. As it is, they're today oddly silent.
The other ex-Soviet states which managed to join the WTO are Georgia, Moldova and the Baltics. The stats there don't paint a very tempting picture for joining the WTO either. Georgia joined some three years ago. USAID's web site brags that it had helped Georgia, which barely has an economy or even a state to mention, join the WTO: "USAID played a large role in Georgia's successful accession to the World Trade Organization (WTO). [. . . ] WTO accession in October 1999 was a major benchmark for Georgia, further integrating the country with the world market and at the same time making Georgia more attractive for foreign investors. "
The jaw-dropping result of Georgia's accession into the WTO is that Georgia's economy grew 2% in 2000, 4.5% in 2001, and looks set to fall to the 2-3% range this year. Foreign investment has fallen by a third since joining the WTO. By contrast, Caucasus neighbors Armenia and Azerbaidjan, neither of which have made it into the WTO, have grown in the 10% range for each of the past three years.
Did politics have anything to do with Georgia's accession? Let's ask ourselves this: does a transnational oil company shit in the woods? There's your answer.
Moldova, the poorest country in Europe next to Albania (another WTO member), joined the WTO last summer after a decade of being the IMF darlings -- and its own population's nightmare. That decade saw Moldova become the basket case of Europe, whose only export became shipping its girls into war zones with a large international peacekeeping presence. Around the same time that Moldova was accepted into the WTO, it became the first ex-Soviet republic to democratically re-install the Communist Party into power as a reaction against the very neoliberal policies that the WTO demands. While Moldova's economy has continued to shrink as fast as its population, non-WTO member Ukraine, which should be even more of a basket case, has actually seen its industrial output soar.