When I lived in Rio de Janeiro, Brazil, one of my good friends was a Brazilian guy from Espírito Santo, a state just to the northeast of Rio de Janeiro. While he certainly looked Brazilian, he didn’t act like a typical Brazilian. For starters, he spoke fluent English with an American accent. He knew all the American idioms and slang. He knew the best rodizio restaurant in Los Angeles. He could also tell you the quickest way to get from Santa Monica to Studio City.
None of that should surprise you once you learn that he spent the last 15 years of his life in America. When he was 13, he immigrated to Los Angeles and lived there until he turned 28. Then he packed up and returned to Brazil.
After spending a year adjusting to his new life in his country, he opened a cafe in Buzios, Brazil (a resort city about two hours from Rio de Janeiro). He’s doing exceptionally well now and has absolutely no plans to leave his homeland.
I’m very envious of my Brazilian friend. But not for the obvious reasons. I’m not envious of his wealth. I’m not envious of his success. I’m not envious that he’s running a very successful café/restaurant in a gorgeous Brazilian coastal city.
What I’m really envious—even jealous—of is the fact that he was able to live abroad for a while and then return and build a very meaningful life in his own country. I’m envious that he’s Brazilian—and not from some third-world country in Eastern Europe.
In addition to Brazilians, I’m also envious of Spaniards and Catalans. I’m envious that they can walk the narrow streets of Barcelona’s beautiful Gracìa neighborhood or the wide boulevards of Eìxample and proudly say that this city (and this country) is their home. I’m envious that they can spend many years studying or working in places like America, England or Australia and then return home with their newly acquired knowledge and experience and build a new life in their own country among their own people.
As a matter of fact, my envy is not limited to Catalans and Spaniards; I’m envious of all Western Europeans; from Spain and Italy in the South to Austria, Germany and Denmark in the North, there are cities and countries that are replete with seemingly unlimited wealth and opportunities: Rome is an open-air museum; Vienna is gorgeous and stately; Munich is clean and orderly; Copenhagen is rich and tidy. Everyone knows how magnificent Paris is (ignore the haters, it’s truly a fantastic city), so I’ll just spare you a long list of nice adjectives.
Between a rock and hard place
Put on a blindfold and throw a dart at a map of Western Europe. Regardless where the dart will land, there’s a pretty good chance that the city will have majestic architecture. It will have beautiful parks and streets. There will be order and stability. It will be clean. It will be a city that you’ll enjoy walking around while constantly taking random pictures to share with your family and friends back home. It might also be a city where you wouldn’t mind living for several months or even years.
Now, put on a blindfold, take a dart and throw it at the map of Eastern Europe. Should you get lucky and hit a big and well-known city, you’ll discover a place with at least a nice downtown or nightlife district. Or maybe you won’t get so lucky and the dart will land on some little village with broken down roads (or no roads at all), a village full of anti-social inhabitants.
Even if the dart lands in a relatively large and famous city, it doesn’t really matter: once you leave the decently maintained center, you’ll suddenly find yourself in a place that’s frozen in time—Soviet Union time.
Regardless how you look at it, comparing a typical neighborhood in Barcelona with its counterpart in any Eastern European city is a complete joke. And I’m not even talking about the best parts of Barcelona (or any other Western city). I dare you to compare an average neighborhood in an average Western European city with its counterpart in Eastern Europe.
Not doable. There’s no comparison whatsoever. Fine, then forget a gorgeous city like Barcelona altogether and compare another Spanish city, a smaller one, such as Valencia, Córdoba, Seville or Girona. Nah, that’s still not a very fair comparison.
I can’t think of many people who would refuse to spend time in a charming city like Cordoba or Girona, but I can’t think of many people who would accept to do the same in some medium-sized city in Bulgaria or Russia. Need more proof? Just follow the money; look at all the rich Eastern Europeans who are leaving their cities and buying up expensive villas and mansions all over the beautiful Mediterranean coasts of France and Spain.
As you head East, past the Central European nations of Austria and Hungary, things start to change. The landscape alters. Cities and towns begin to look remarkably different. In some cases, it’s because whole cities had to be rebuilt after being destroyed or damaged in World War II. Although, usually, they look different not because they’ve been destroyed by bombs but because a different ideology was employed when planning, architecting and constructing them.
Why is this?
It’s been around five years since I returned to my home continent after living in America for more than twenty years. I’ve visited almost every country in Europe. I’ve also had sojourns in an array of countries that lasted anywhere from several months to several years. And throughout my journeys, I’ve spent a lot of time pondering why Eastern Europe is such a mess.
How is it possible that Eastern Europe is so underdeveloped? How can you have one continent where the left side is one of the richest regions in the world and the right side is so embarrassingly destitute? Why does Eastern Europe lag so much behind Western Europe? Why is a Ukrainian worse off than a Spaniard? Why is a Bulgarian worse off than a Fin? Why is a Lithuanian worse off than a Frenchman? Why is a Moldovan worse off than a German?
It’s far from an easy question. Chances are if you ask a hundred people to give you a reason, you’ll get a hundred different reasons. The most common ones will probably be communism, rampant corruption, undemocratic political institutions, lack of freedom of speech and poor economic policies. To some extent, they’re all true.
Napoleon Bonaparte once famously said that a country’s geography is its judgment. Most of the woes or achievements of a country or region can be easily explained by looking at the map. Want to know why there are endless conflicts and wars in the Middle East? Just look at the map. Want to know why Eastern Europe is so poor? Just look at the map.
After a careful examination on the map, you’ll see that Eastern Europe is actually stuck between a rock and a hard place—and has been stuck there for hundreds of years. It has had the misfortune to be situated between two great world powers: Germany (Prussia and, later, the German Empire), which has traditionally been (and still is) the dominant power in the West and Russia, the dominant power in the East.
Geography also explains why Eastern Europe is so poor. In the fifteenth and sixteenth centuries, Western Europe’s strategic location and its access to oceans for crucial trade allowed it to prosper relatively quickly. In the late nineteenth century, England was the site of the industrial revolution, which later spread to other Western European nations. While Western Europe was rapidly industrializing, Eastern Europe was still mostly a pastoral backwater.
The twentieth century wasn’t much kinder to Eastern Europe. Before the Bolshevik Revolution that brought Lenin to power and established Communism as the economic and political system, a big chunk of Eastern Europe was part of the Russian Empire. After the revolution, these states were given some (very limited) autonomy and re-integrated into the newly formed Soviet Union (the notable exception was Finland, which gained independence and became a sovereign country in 1917).
For almost the past century, communist Eastern European states were separated from the capitalistic Western Europe by the Iron Curtain, hampering their economic, political and social links with the rest of the world even further.
As a blunt Eastern European who knows the region and people pretty well, I think the real reason why Eastern Europe has failed is much simpler: Russians didn’t know what the fuck they were doing. And I say this as a guy whose native language is Russian and who also deeply respects Russia and Russians.
Russians didn’t know how to create a modern political system that allowed people to express their will—a political system that has organically developed in Western European countries like England for more than five hundred years. On top of that, they didn’t know how to create an economic system that leveraged an individual’s self-interest called capitalism.
They didn’t know how to do it during the time of the Russian Empire. They didn’t know how to do it during the time of its successor, the Soviet Union. Even in present times, when the rest of Europe is undergoing massive integration (a project called European Union), Russia is still struggling to build something resembling a modern political and economic system.
As a result of Western propaganda, most people don’t know that in terms of natural resources, Russia is a pretty wealthy country—if not one of the wealthiest in the world. It has lots of proven oil reserves (second in the world), lots of natural gas (first in the world), and tons of natural resources like iron, nickel, copper, aluminum, timber, etc.
The perennial problem is that Russians just don’t know how to build a robust socio-economic system, one that can utilize all this seemingly unlimited wealth to increase the country’s standard of living.
Why? Where did all this wealth go? A wealth of such enormous magnitude can’t just disappear into thin air—it has to go somewhere. There’s only one explanation: corruption and theft. Misappropriation of funds is what turned the world’s largest and richest country into a third-world backwater where most of the population lives in dire poverty.
For comparative purposes, take a look at a country like Dubai or Singapore. Although Dubai is swimming in oil, they’ve been able to diversify away from the black gold and build a prosperous, stable and secure society that thrives on tourism and services. Singapore is a tiny nation-state without any resources whatsoever, but its per-capita income is one of the highest in the world. Japan is another country without a drop of oil and other natural resources and look at what they’ve achieved.
Russia is the exact opposite. They squandered (and continue to squander) all their wealth. Not only did they fail to build a thriving and prosperous society for themselves, but they also failed do it for their Eastern European satellites. They had their chances, but they blew every single one of them.
After the collapse of Communism, the balance of power has now shifted to its victors: America and Western Europe (namely Germany). Now, the game is being played according to their rules.
Disappearing Eastern Europe
We’re living in an age of one globalized world economy. The name of the game is capitalism and efficiency. If someone else can do something better than you (i.e. they have a comparative advantage), they win and you lose. If you are the greatest salesman in the world with fifteen years of experience, and I’m a recluse living in my mom’s basement who enjoys programming or playing video games instead of talking to live humans, it makes much more sense for me to work for you (building products) while you sell these products to others, instead of the other way around.
Germany is an amazingly productive country. Not only can they make all kinds of cool stuff, but they also make it with impeccable quality. A German product is synonymous with quality pretty much anywhere in the world. Germany has the know-how and resources to make the best cars in the world (if you haven’t driven a BMW, you simply haven’t lived). Germany has the most efficient factories in the world for making these cars. These conditions allow Germany to produce the best cars in the world. Germany wins. Germany needs labor for their workforce, so they get labor for their workforce.
And what about Eastern Europe? What does Eastern Europe produce that other people are willing to buy? What’s Eastern Europe’s comparative advantage? Does Eastern Europe produce cars? Nope. Does Eastern Europe produce trucks? Nope. Does Eastern Europe produce high-tech machinery? Nope. Does Eastern Europe produce ships? Nope. Or, let me ask more bluntly: What the fuck are they good for?
Since Eastern Europe has always been a buffer zone between great powers, it never really developed any of its own industries. It doesn’t really produce anything of great value. Germany makes durable and high-performance cars. Sweden makes trucks and planes. Denmark is home to one of the world’s largest shipping companies. Russia is the world’s second military hardware exporter in the world. They also make their own buses, trams, (crappy) cars and other machinery.
The collapse of Soviet Union marked the ultimate triumph of liberal democracy over communism. And, as you already know, there’s no free lunch in capitalism. If you can’t produce and sell something of value to advanced countries with money, then one of your limited options is to become a source of resources to feed their hungry factories. There are two kinds of resources: natural and human. Both are being imported into Western countries. Western countries becomes richer; Eastern countries becomes emptier.
The loud sucking sound
That loud sucking sound you hear is the natural resources and people being sucked out of Eastern Europe. They’re being sucked by the West in order to be put into more efficient use. The vultures (aka capitalists) are coming, and they’re removing the people, the natural resources, and, along with them, the local economies. Eastern Europeans are migrating West to work at German factories, Danish souvenir shops, and Norwegian toilets.
As a result, Eastern Europe is being changed in a million subtle (and not so subtle) ways. From Estonia to Bulgaria, from Latvia to Moldova, and from Lithuania to Ukraine, people are migrating to countries with better economic potential and a higher standard of living.
As the most northerly Eastern European country, Estonia is the least “Eastern European” in the economic sense. Ethnically and culturally it’s closer to Finland than to either of its Baltic or Slavic neighbors.
The country’s population has dropped to around 1.3M people. The government has realized that the entire nation is on the brink of extinction and is implementing all kinds of incentives such as the new e-Citizen program. Estonia’s tourism agency has also developed a new slogan: “Visit Estonia today because it might not be around tomorrow.”
Latvia’s population has fallen to less than 2M people. Latvia’s most famous export is what we (Russian-speakers) call “sprats,” (canned fish). Most of that goes to Russia and other Eastern European countries. I have absolutely no clue what Latvia exports to the West.
I spent more than a year living in Lithuania. Lithuania is light years ahead of other post-Soviet Union countries. It’s a country with great potential. The problem is that it might not be around long enough to exploit it.
I once joked that, since Lithuanian language doesn’t resemble any other language, if you’re speaking it with another friend abroad, no one will be able to understand you. My friend corrected me: “…unless you’re in England, Ireland, Denmark or Norway.” He was referring to large—and rapidly growing—Lithuanian communities in those countries.
Romania & Bulgaria
Romania and Bulgaria are experiencing similar demographic changes. During my travels, I’ve met lots of Bulgarians and Romanians in countries like Denmark and Germany (it seems that every 3rd or 4th Bulgarian is now living in Germany somewhere).
Here in Spain, I’ve also met lots of Bulgarians and Romanians.
As one of the poorest countries in Europe, Bulgaria is especially hit hard. A quick trip to the capital, Sofia, is all it takes to understand exactly what I mean.
In terms of natural resources, Ukraine is a pretty rich country (it was called the breadbasket of Europe), but thanks to lots of corruption and theft, most of those natural resources found their way to a select few oligarchs.
Ukraine’s industries aren’t competitive; there’s nothing that Ukraine makes or has (except for cheap labor) that’s needed by the more industrialized Western European economies.
Following the collapse of Soviet Union, Ukraine’s population has remained more or less stable, but that’s only because other countries don’t want to see Ukrainians on their territories; Ukrainians must obtain a visa for every non-former Soviet Union country. If that visa is ever abolished, Ukrainians will emigrate West to never return.
Then there’s Moldova, Europe’s poorest country. Before WWII, it was part of Romania. There are some people in Romania who want to annex their former territory, but they won’t need to do that: Moldovans are digging up their Romanian roots, getting Romanian passports and leaving their homeland in droves. While Romania isn’t a wealthy country by any stretch of imagination, it still says a lot when people are desperate to immigrate there from somewhere even poorer.
To Eastern Europe With Love
When I lived in New York, many of my friends were immigrants like myself. They emigrated to the US when they were young, went to school and worked at various jobs. Many remained and built their lives in America, but many also moved back to their homeland. Lots of them were from the so-called “Third World”: Mexico, Brazil, Chile, Colombia, China, Taiwan, etc.
Naturally, many of my friends were also Eastern European. As opposed to my Latin American or Asian friends, I didn’t know a single Ukrainian, Belorussian or Russian who would be crazy (or stupid) enough to give up their life in America and move back to their former homeland. And I’m talking about locals who speak the language and know the culture—some of them even have friends and relatives there—never mind a foreigner who will have no clue what’s going on or how to adjust.
The only people I can see returning are those who’ve already made their money elsewhere, or are making their money online and therefore don’t need to depend on the local economy that’s riddled with rampant corruption in order to put bread on the table. This isn’t the case with my Latin American and Asian friends who can easily integrate themselves into the local economies in their respective countries.
Come to think of it, Eastern Europe won’t really disappear. Sure, the outflow of people and natural resources will turn Eastern Europe into a barren land replete with rundown factories and ugly and dirty Soviet-era buildings. But the land will still be valuable; it will continue to serve the same function it has served for hundreds of years: as a strategic buffer zone between two great powers, European Union (with Germany at its helm) and Russia.
Who knows, maybe in ten, twenty or fifty years, Eastern Europe will be the bastion of law, security and stability. But then it will no longer be “Eastern Europe” but something else entirely.Tired of working for an ungrateful boss and seeing your life slip away? Want to turn your ideas into a profitable business that can run from anywhere in the world? If so, check out the Maverick Entrepreneur Bootcamp, the premier course that freed thousands of guys from the tyranny of the 9-5. Click here to learn more.
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James Maverick used to work in a cubicle as a code monkey in Silicon Valley. Then, in 2007, he quit his job and a one-way ticket to Brazil. Ever since, he continued to travel, visiting over 85 countries and living in more than a dozen of them. He loved his location-independent lifestyle and has no plans to live in America.