While a small elite has profited handsomely in this new economic environment, a new mass of poor is growing on the other end of the spectrum. With the IMF insisting on reduced budget deficits, governments have cut back on social services such as health care, child care, and pensions. A shrinking social safety net is paradoxically expected to support an ever-increasing burden. A key policy fueling conflict between the transition's winners and losers has been privatization. A cornerstone of Western policy, the rapid sell-off of state properties has also been enormously attractive to the governments in the region.
Privatization is a narcotic.
It provides a large infusion of capital that can help balance budgets and pay off debts. Finally, the West has done little to improve the environment in the region. But without Western pressure, the governments in the region did not take advantage of this window of opportunity. The structural-adjustment model has placed profit and efficiency above the value of a clean environment. Energy lobbies, backed by their Western partners, have tightened the region's dependency on fossil fuels and nuclear power.