Column: Those born free in 1989 & our young

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: When the Berlin Wall fell, 20 years back, Eastern Europe began a project of economic development akin to what we in India have been engaged in. There were a few important differences when compared with what we have done.

The first was the attitude towards capitalism and freedom. Eastern Europe had chafed in misery for decades under a totalitarian regime, based on central planning and a welfare state. They knew how bad that was, and were single-mindedly focused on the task of achieving freedom and capitalism. As an example, in Warsaw, the posh building that housed the communist party was given over to the new stock exchange. In India, we have never had this level of clarity on the goal.

The second big difference was the tangible dimensions of this goal. Capitalism and freedom are big words—how are they to be achieved at an operational level? In Eastern Europe, there are two tangible goals: to join the European Union, and to join NATO. All economic policy decisions are viewed from the perspective of getting into the EU, and all international relations questions are viewed from the perspective of getting into NATO.

This matters a lot. In India, it is not hard for an expert to look at the international experience, identify best practices, and offer blueprints. For example, nothing prevents India from learning how the VAT works in the EU, and rapidly implementing the GST. But political support for change is generally hard to find. In Eastern Europe, specific questions about law, regulation and the role and function of government agencies were and are answered through reference to the EU. Politicians are willing to undertake difficult reform because EU admission is the tangible proof of having graduated to capitalism and freedom.

The project of achieving freedom and capitalism on the Western model saved a lot of time in domestic debates. As an example, in Eastern Europe, there is no policy discussion about capital account convertibility. All the countries adopted capital account convertibility because this was a basic element of the package deal of being European.