Post-Secession Economic Viability

Abstract

The period of reequilibration is characterized by precarious adjustments in the political, social, and economic spheres. Post-secessionist regions will vary in their ability to tide over the hurdles that will present themselves after severance of ties with the center. With respect to the economic adjustment, its smoothness will depend upon several economic characteristics that are embodied in the term viability. Economic viability is a concept often used and rarely defined. A simple working definition adopted here is the following: viability of a region implies the ability to sustain growth in the aftermath of secession at the preindependence levels. In adopting this definition, a distinction must be made between the short run and the long run, since most regions are capable of economic survival in the long run after forging new relationships with the international economy and the nation from which they seceded. With secession, regions strive to at least continue (if not improve) their level of economic performance. The concept of an economic status quo in the aftermath of secession has been addressed by Buchanon, who points out that, from a philosophical perspective, there is no reason to assume that a region has a right to an economic status quo. Indeed, according to Buchanon, “this dubious principle of entitlement to the status quo” is simply not justified in either secession or divorce.³ It is nevertheless a useful tool used in hypothesizing about post-secessionist viability.

It was fundamentally a matter of recognizing reality… It made no sense to antagonize the Indonesians… East Timor was not a viable entity.

—Brent Scowcroft, President Ford’s national security adviser, when asked why the Ford administration did not warn the Indonesians against invading

East Timor¹

I am absolutely convinced that a confederation is a… liberal illusion that can lead either to a federation or to war.

—Gennady Burbulis, Russian government official discussing the future of relations among the independent states of the former Soviet Union in 1992²