The land that time forgot - Sorting out the impoverished rural parts of Eastern Europe is one of the stiffest challenges facing the European Union. All the odder that it seems not to care

A father and his two small sons sit beside an emerald pond, netting frogs amid the rising dragonflies and falling swallows. The father trades the frogs for sugar or cooking oil. "It's one way of staying alive," he says. Beyond the pond, a valley unfolds: Pushkin's woods in the heights (somewhere in those trees, in 1821, the exiled poet fell in love with Zemfira, a Gypsy princess) then cow pasture, vineyards, orchards, and at last the blue-washed houses and rutted dirt lanes of Dolna, a village of 2,000 souls, lost in central Moldova.

Maria, arms crossed against her ample chest, stands at the end of a dung-spattered lane where Dolna peters out into the orchards. A toddler son and a ten-year-old daughter squat at her feet, displaying the tell-tale listlessness of malnutrition. A softly bearded elder son stands off to one side wearing a curious, vacant expression. "He's epileptic," Maria explains. She works as a day-labourer in the fields, when she can, for the equivalent of 80 cents a day. Sometimes she works just for food. She receives occasional handouts of pasta from an American government food programme, but no other state support. Her son's medicine costs half her monthly earnings; often she saves by giving him herbs instead. What would make her life better? "A piece of butter for the children once in a while," she says.

Just one story, among millions like it, in Eastern Europe's forgotten villages. It is difficult, criss-crossing the region, to credit that the 21st century has arrived at all. Rather, the millennium seems to have marked a return to the 19th century. Out of necessity, villages have reverted to survivalism. Pathetically, the symbol of post-communism there is the hoe, the cheapest farming tool available. People have replaced tractors in the fields, rows of them bent double in the sun.

Under communism, poverty was covered up. Official figures were artificially enhanced and are deeply unreliable. But even allowing for that, Eastern Europe's villages are in fast and visible decline. This state of affairs-the slide of tens of millions of Europeans into the third world-may end up costing the European Union, in the long run, far more than any war.

Unplugged from the state

In these villages, as in the towns, life-expectancy has been cut by five years or more since communist times. Illiteracy, in the poorest villages, has tripled. Again, allowance should be made for falsified communist figures; but signs of deterioration are evident. Malnutrition is rife. Villagers eat less food and of lower quality: the OECD estimates that the consumption of meat in Eastern Europe has halved since 1990. Since then, too, the incidence of tuberculosis and hepatitis has doubled in the region. Poverty is on the rise. Half of all Moldovans, according to a recent World Bank study, now earn less than $220 a year, down from $2,000 in 1992. "Moldova," the study notes, "has possibly the highest endowment of human capital for a country at its level of income."

Not for much longer. Human capital-the skills of tractor mechanics, nurses, winery managers, indeed, of almost everyone with an education-is dissipating at an alarming rate. Economic collapse and government neglect have seen a rapid erosion in the basic social services villages provided, albeit poorly, under communism. The notion of the village as a primary care unit offering basic schooling and health services, limited employment and rudimentary community life is being lost.

The situation east of the so-called Belgian curtain-the new Brussels-imposed line that skirts the former Soviet border, excepting the slightly more prosperous Baltics-is especially dire. Judged by cash and in-kind income, almost all of rural Moldova, Belarus and Ukraine has seen a collapse in living standards since 1991. These economies were not so much unshackled as unplugged from the Soviet Union, and many economists wonder whether Moldova and Belarus are viable nation states at all.

Elsewhere, the picture is not uniform. In Slovakia and Hungary, the poorest villages are often welfare-dependent Gypsy communities that lack leaders and farming skills. In Poland, apart from the poor south-east, villages are better-off than in 1990. Communities along the Bug river in eastern Poland, a region which most Poles consider to be in terrible shape, look prosperous compared with those on the other side of the Belgian curtain. On the Bug, the land is worked by machinery; most homes have a reliable, if expensive, supply of gas and electricity; villagers shop in well-stocked stores and, most important, the state is visible and strong.

Large and inefficient agricultural sectors-in human terms, impoverished villages-are one of the main obstacles to admission into the European Union for Poland, Romania, Bulgaria and, possibly, Slovakia. Some 24% of Poles and 36% of Romanians still work in agriculture. In Moldova, that figure is closer to 50%. Across the region, agricultural inefficiency is the rule. Ukraine has some of the best farmland in the world-freshly ploughed, the soil is jet-black-but exports pitifully little produce. Poland has a $600m trade deficit in agricultural products, Romania a deficit of $311m. Raw material is often scarce: only 10% of Moldova's cattle stock is now on large farms. The rest, owned one or two to a family by villagers, are too scrawny and diseased to interest agro-processors. Polish supermarkets prefer to fly in watermelons from Morocco rather than ship them from neighbouring Ukraine.

Strip farming, flower seeds

Across the region, formerly collectivised land has been reduced to a kind of medieval strip-farming, with slices of field just large enough to support a family but not to compete in any market. Even for farmers with the skills and capital to succeed, the economics are crushing. Polish farmers saw a 5% decline in gross revenue last year, while the cost of their inputs-mostly fuel and machinery-rose by over 10%.

Closer to the bottom is Anatol Ojog, a farmer in Slobozia Dusca, a village of 3,500 on the banks of the Dniester river in eastern Moldova. Before the Russian financial crisis of 1998, Mr Ojog sold his tomatoes for almost a dollar a kilo; now he gets ten cents. Over the same period, he reckons, the price of his dollarised inputs-plastic, electricity, gas to heat his greenhouses-has risen by 600%. To survive, Mr Ojog has stepped up productivity and has joined a co-operative intent on exporting flower seeds to the EU. If Mr Ojog, a trained agronomist and well travelled, cannot find a way of succeeding, few will.

Where Dolna is average, Slobozia is rich and educated. It managed to preserve its human capital and benefited from its closeness to Chisinau, the capital, an hour to the west. Before 1998, several farmers there had made enough money (mainly by growing fruit and vegetables under plastic) to buy cars and start building new houses.

In Soviet days, the village collective was an experimental farm for Moldova's agricultural university. It had the best livestock and technologies and the know-how to make them work. Fine fruits were grown here and sent, hand-wrapped in tissue, to the Soviet space programme. "Comrades", a cosmonaut wrote back, "your pears were most delicious. We ate them in orbit."

That was 20 years and a civilisation ago. Now the remains of Slobozia's collective farm poke up behind the village like a scuttled battleship. Its dairy, built with American equipment in heady perestroika days of the mid-1980s, has been ransacked. Everything has been stolen, down to the metal hinges on the door. Slowly, the bricks are being pilfered. The water pipes that once irrigated the fields have been dug up-from four feet underground-and sold for scrap. This means serious problems for Slobozia, since wells in the village are drying up. Only yards from the Dniester, the crops are now dependent on rainfall. Water is a problem across the region, even in basic ways. The communist-built public baths where people used to wash and relax have closed in most villages.

Communism offered women equal opportunities, to a point; but there was always a dark side to it, and that side has endured. Alcoholism deprives many women of support at home. Moonshine vodka also contributes to increasing levels of physical and sexual abuse: according to a women's rights group in Ukraine, 30% of women in Ukrainian villages have been raped. As for the elderly, many survived Stalinism and the second world war only to see their pensions become worthless. Mihail Arsene, a 74-year-old in Slobozia, lost both his legs in the war and receives a disability pension of about $10 a month. His wooden legs are broken; but the only factory that manufactured prostheses in Moldova closed five years ago.

Across the battered parts of Eastern Europe, children are the greatest hope and the biggest cause for concern. The education system is failing them. Never mind Internet access; many village schools have to close in the winter for lack of heat and electricity. Children used to be fed two or three meals a day by the schools; now they get nothing. Hungry children, teachers passionately point out, find it hard to concentrate. Even well-fed children must tend animals and pick crops at the expense of homework.

Teachers are little better off. Their salaries, particularly in Ukraine and Moldova, often go unpaid and, in any case, rarely exceed $50 a month. Supplies are often pitiful, with books and equipment dating from the Soviet period. "We need financial and moral support," says Constantin Nicula, the headmaster of Dolna's village school. Yet his school is one of the lucky ones. A World Bank programme has paid for a new heating system, another scheme gives the school free coal. Teachers cheer up their classrooms with fresh flowers. "But even if we do a good job," says Mr Nicula, "these children have nowhere to go." In communist times, 90% of children from Dolna went on to some kind of vocational or further education. Now only 5% go on to further education, and these are the richest rather than the brightest children.

Medical clinics are in even worse condition than the schools. At first glance, Dolna's clinic is reassuring. The doctor, Vera Mutu, wears a clean white uniform; everything around her is neat and tidy. It soon becomes apparent, however, that she has little to offer the sick. Even thermometers and bandages are in short supply. The Dolna clinic received $90 from the government last year, not including Mrs Mutu's monthly salary of $15 (another theoretical figure-she has not been paid since August last year). To survive at all, village doctors take small payments from patients. The death rate in the village has increased alarmingly over the past ten years.

No one, save the critically ill, can expect medicines without first paying for them. This was common under communism too; but UNICEF reckons Moldova now has only 20% of the insulin it needs for diabetes patients. There is talk of setting up local health co-operatives, administered and paid for by villagers themselves. But time is running out. Destitute village doctors are leaving their rural practices in large numbers. Within five years, some analysts say, there will be no rural clinics worth saving in the poorest areas.

The atrophy of state institutions presents similar problems. Where there was once some authority, albeit communist, there is now just a vacuum. The state, when it reaches the villages at all, is too often hopelessly underfunded or corrupt, or both. Sometimes the situation is almost laughable. Oleg Bulat, a stout police captain from near Slobozia, is trained to investigate rural car crashes. He used to attend a hundred prangs a year, sometimes cutting people from the wreckage. Nowadays, he says, he can never get to a crash because there is no petrol for his car. Policemen everywhere rely on small bribes to survive, undermining the credibility of law enforcement for decades to come.

Why, compassion aside, should Europe care? Perhaps because Eastern Europe's villages have become a wellspring of illegal immigration into Western Europe. Around 600,000 out of 4.3 m Moldovans are now estimated to be working abroad, mostly illegally. Some of this movement is temporary; people work abroad for a while, then return. But between Belarus and Bulgaria it is hard to meet a young person who is not desperate to start a new life in the West. Villages should not, and cannot, hold back their bright young people; but they need to retain at least some of them to survive. As it is, Dolna and Slobozia's best are working as hotel maids in Italy, prostitutes in Turkey and construction workers in Portugal.

They go through the Belgian curtain into Western Europe with the same persistence as Mexicans who smuggle themselves into the United States, their desperation intensified by the high interest rates on the money they have borrowed to get there. In Eastern Europe's small towns, Western Union offices have sprung up to disburse funds from relatives working overseas. This movement of people presents the EU with a conundrum: a continued flow of undocumented workers threatens European stability, but shutting off the flow has terrible consequences. The $50 Maria gets from her brother in Germany once or twice a year, for example, helps to keep her children alive.

In considering how to help, EU officials have to unravel how Eastern Europe's villages have got this way. In truth, they are dogged not just by communism but by longer history. In contrast to Western Europe, where villages have an ancient tradition of inherited land, many villages in Eastern Europe were released from serfdom only with the land reforms of 1863 and were swallowed by communism a few decades later. The murder and expulsion of the brightest and wealthiest landowners, especially during the Stalinist period, is still acutely felt in former Soviet lands. "Our best died in Siberia," says a melancholy elder, when asked what has held his village back.

In some places, it is possible to retrieve a sense of local pride and enterprise. In western Ukraine, the spectral legacy of Austro-Hungarian rule, with its stronger sense of civic participation and private ownership, can still be felt. Community life in Cherche, a village 80 miles south of Lvov, is strong. The village hall there is being renovated. In place of Lenin on the walls are portraits of notable Ukrainian nationalists. The village mayor, Ivan Antoniv, a retired physics professor, says the situation is hard but not critical. He sees hope in the transformation of the abandoned collective farm into a state-of-the-art pig farm, underwritten by Dutch and British venture capital. Colonel Myron Pankiv, the farm's director, used to command a nuclear-missile silo in Kazakhstan. Now he is in charge of feeding pigs by computer.

Even in places like Dolna, a new sense of ownership and responsibility is slowly taking root. The worst of the poverty is offset by the fact that villagers own their own homes, grow most of what they need and receive assistance, at critical times, from relatives. Technical-service stations are being developed where small farmers can buy simple equipment against future earnings.

Back to the kulaks

Yet much more needs to be done. First, land reform. Formerly collectivised land has, or is about to be, parcelled out to villagers across Eastern Europe, except in Belarus. But because the land parcels are so small-rarely more than a few hectares-this privatisation has created a new kind of dependency. Where a state does not provide welfare payments, land becomes what the OECD dryly calls "food security". The emphasis now is on consolidating land into medium-sized farms capable of surviving in the market place. Villagers are encouraged to lease their strips of land to enterprising farmers, a sort of neo-kulak class, in return for a share of the harvest. "An entrepreneur finds markets," says Patricia Orlowitz, a Chisinau-based specialist in land reform.

She is right; but Eastern Europe still has to compete against EU producers. To help level the playing field, the EU has created a fund for rural infrastructure and agro-processing initiatives called SAPARD (Special Accession Programme for Agriculture and Rural Development). Some $1 billion of the $3 billion Poland plans to spend on rural development up to 2006 will come from this scheme. Most of it will be used to bring the country's agro-processors up to speed; at present, only 6% of Poland's dairies and 1% of its meat-processors meet EU standards.

But SAPARD is not capable of engineering change where it is most needed: in the villages in countries that will not be joining the EU in the near future. What can be done for them? First, decision-makers must spend time in the countryside, examining the destitution for themselves. Western judgments on Eastern Europe are too often made from the perspective of a comfortable hotel in, say, Prague, without taking into account the actual conditions in rural areas where over a third of the population lives. East European governments need to try harder, too. Almost half of Romanians live in the countryside, and more than half its farmers live below the poverty line; yet the country only came up with a rural-development policy in 1998.

Educating villagers to exploit agricultural niche markets, as Mr Ojog is doing with his flower seeds, could yet bring results. Organic farming has potential, though production on a scale that would interest western supermarkets would require well-administered co-operatives. Tourism is a potential earner, especially in the unspoilt Carpathians. The hedgerows and wildlife lost and mourned in Western Europe still flourish in the east; wolves still lope in Pushkin's woods. With imagination, villages could benefit from "leapfrog technologies" such as mobile phones and computers, while enhancing rather than obliterating the best of their folk traditions. But they cannot do any of this without considerable outside help.

That help would have to include technical expertise and enough money to kick-start rural savings-and-loan associations, rebuild rural roads and sewers, bring in new technology and underwrite the schools. Villages would also have to play their part by rebuilding community structures, assuming responsibility for the competitiveness of their local agro-processing plants, tackling corruption and supporting co-operative efforts based not, as before, on collectivisation from above, but on enterprise from below.

Perspective, however, should not be lost. Fiscal indicators mean nothing to a shepherd who measures his wealth in sunny days. The needs of villages are primary ones. In Dolna, villagers have a humble wish-list: cheaper medicines, more meat to eat, more jobs, a chance for young people to attend college or get training after school, the return of the little village "culture palace" with its occasional films and plays, and, perhaps, the reopening of the rustic house where Pushkin stayed. In communist times, when clubs and schools were instructed to visit, it attracted up to 20 busloads of tourists a day; now it is boarded up. "I used to earn a little selling lemonade to the tourists," says one old lady. "Will they come again soon?" Here's hoping.

© The Economist

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