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  • Writer's pictureMagdalena Gołębiewska

Countries of Eastern Europe - please, stop mixing Russia with other EE markets.

Tired of listening how wrong perception people have about Eastern Europe. Dear "majority of Western population", maybe 20 years ago it was difficult/dangerous/not worth to start business/expand to Eastern Europe. Time flies and economies in the region are booming. Take that chance and understand different markets in the region. Not all the countries in that part of the world belongs to Russia (echhh).

Eastern Europe is a region that encompasses many different cultures, ethnicities, languages, and histories. Grouping all of these countries under a single designation can sometimes be problematic.

Experts, scholars, and those living there label parts of the region according to varying sets of criteria, and heated debates have been known to erupt when one party has felt that a certain country has been miscategorized. However, it's important to note that the countries broadly classified as being a part of Eastern Europe have one thing in common: they were all behind the Iron Curtain before its fall, and this political boundary of the last century helps us define a region whose development, especially until the 1990s, has been very different from that of Western Europe.

Sub-regions of Eastern Europe include:

  • East Central Europe

  • The Baltics

  • Southeastern Europe/Balkans

  • Eastern Europe

The countries within these regions are as follows:

  • Russia

  • Czech Republic

  • Poland

  • Croatia

  • Slovakia

  • Hungary

  • Romania

  • Moldova

  • Serbia

  • Lithuania

  • Latvia

  • Estonia

  • Slovenia

  • Bulgaria

  • Ukraine

  • Belarus

  • Montenegro

  • Bosnia and Herzegovina

  • Albania, Kosovo, and Macedonia

Acknowledge that each of those countries had their own culture, own history and business opportunities. All of them are separated nations with different people who doesn't hold Russian passport and are proud of their homeland for which they fought really hard!

Eastern Europe's Regional Differences and Similarities

We can acknowledge that countries, like Poland and the Czech Republic, are more "central," (actually Poland is the middle of Europe - geographically it is in small village - Suchowola, close to Bialystok) and, if we want to be specific about their location, can refer to them as a part of Central Europe, East of Central Europe.

The Baltics, populated by people ethnically different from the rest of Eastern Europe, can also be grouped accordingly (here I am talking about Latvia, Lithuania, Estonia). Especially Estonia here is quite close culturally to Scandinavia, and if you will spend more time in that place, you will wonder if Estonians are more Russians or more Finish - I am still not sure, however everywhere in Tallin, you will see Russian influence.

The countries of the Balkans are classified differently depending on what factors you're using, and Southeastern Europe is a good description for those countries that occupy the southern corner of Eastern Europe. The Balkans are usually said to comprise Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Kosovo,, Montenegro, North Macedonia, Romania, Serbia, and Slovenia. Its total area is usually given as 666,700 square km (257,400 square miles) and the population as around 60 mln.

And, as for everyone else - they're so far east there's no disputing the fact that they're a part of Eastern Europe, but naming like East Eastern Europe seems redundant.

It's understandable for some countries - whose national identities were so repressed under authoritarian regimes - to tire of being affiliated with a term that they feel is outdated and which unfairly associates them with other countries from whom they would rather distance themselves. But the truth is that Eastern Europe and all its sub-regions is a culturally, geographically, and historically fascinating place. And.. most importantly - those countries are underestimated from business point of view. The potential is enormous!

The negative PR, and lack of education about that region in Western Europe, cause a a big lost opportunity for the investors and businesses who could benefit from entering that region.

Funny fact - still a lot of well educated people, professional businessmen think that it is dangerous to enter Russia, that whole EE is corrupted, and that ethics of work is compromised. That was true maybe 20 years ago, now - in countries like Poland, Czech Republic or even Romania, running a business is no different than in Western Europe, and ROI can be much higher.

Entering those countries give access to hundreds of million people with growing purchasing power, people hungry for work, hungry to spend money, hungry to innovate! Do you still think that that region is "behind"? On 29th of September 2017, the index provider FTSE Russell announced the results of the annual classification of markets. The Polish market has been upgraded from an emerging market to developed market status. Yes - the first country in a region which got there. Worth to mention that it happened in relatively short time after communism collapsed. The Polish economy has been growing steadily for the past 28 years, a record high in the EU. Such growth has been exponential, with GDP per capita at purchasing power parity growing on average by 6% p.a. over the last 20 years, the most impressive performance in Central Europe resulting in the country doubling its GDP since 1990. And Poland is not the only one - Romania, Czech Republic, Estonia (this one deserves separated article which i will write soon :)) and a lot more. Please, wake up and take that opportunity! Much bigger one than in developed economies, especially if your product/service is a commodity or innovation.

And one more thing - a lot of countries in the EE region joined EU long time ago (Yes, I am not joking, even if country has a different currency can be EU member - you don't need EUR to be a part of Union, the same like UK with GBP :)). Sorry for sarcasm but this thinking is so common that I had to write it!

Under EU law you can make business in Bulgaria, Czech Republic, Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. And soon more to come....

And, just to confuse anyone and blow your mind. There is a country which use EUR and is not in EU. It is Montenegro! Boom. Why - they simply don't have their own currency so in 2002 decided to use EUR (previously they were using Deutsche Mark).

Enough groundbreaking news from Eastern Europe for today! Hope you enjoyed. If you would like to discuss business in that region, drop me a line!

Sources: 1 - Countries description

2 - Wikipedia

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