This autumn, on the 20th anniversary of the fall of the Berlin Wall, the world was reminded of the momentous collapse of communism. In Berlin, Lech WaĆÄsa, the legendary Solidarity leader, in the company of Mikhail Gorbachev, the former Soviet reformer, and other world personalities, pushed over the dominoes which symbolised the end of the totalitarian system in a succession of Central and Eastern European states. But it is worth remembering that the first building blocks of economic reform in the region were the Enterprise Funds, a new concept pioneered by the then US president George Bush and enacted in 1989 by the US Congress in the Supporting Eastern European Democracy Act (SEED Act) followed by the Freedom Support Act (FSA) three years later.
In his memoirs, George Bush recalls that July 1989 was a hot month in Warsaw. He was visiting the Polish capital when the region was still under Soviet control. The fall of the Berlin Wall was still months away. Democratic reforms were in train in Poland after an overwhelming election win by the Solidarity opposition the previous month. But the economy was a disaster area. Inflation was running out of control. The country had a large foreign debt run up by the communists and the soviet style economy was completely unprepared to compete with the outside world.