Gerard Malie / AFP / Getty Images
Gerard Malie / AFP / Getty Images

25 years on: How the fall of the Berlin Wall changed the world

Twenty-five consequences of the earth-shaking events of 25 years ago

Russian oligarchy

Businessman Boris Berezhovsky helped Yeltzin and Putin in their rise to power.
Daniel Berehulak / Getty Images

Nobody was allowed to legally accumulate substantial amounts of capital in the Soviet Union, although a handful of bureaucrats and entrepreneurial tough guys managed to grow moderately rich by Soviet standards. The fall of communism was followed by rapid privatization, under U.S. tutelage, of many of the prize assets of one of the world’s largest countries.

A handful of men — most of whom had accumulated wealth and political connections in the Soviet era to take advantage of the bargain-basement sale of the national patrimony — rapidly became billionaires, some of them key political players in the disarray of the Boris Yeltsin years.  Sensing the danger of being stripped of their wealth if they found themselves on the wrong side of the Kremlin, a number of those oligarchs stashed their assets abroad. An estimated $150 billion of Russian capital left the country in the decade that followed the collapse of the Berlin Wall, draining the Russian economy as it flooded into Western banks and property markets. Forbes’ 2014 list of the world’s richest people includes eight Russians in the top 100. Today more than 35 percent of Russia’s economy is owned by just 110 people.

Arafat, meet Rabin …

From left: Yitzhak Rabin, Bill Clinton and Yasser Arafat in 1993, after Israel agreed to begin withdrawing from the occupied territories.
AFP/Getty Images

The Israeli-Palestinian conflict was hardly a product of the Cold War (the U.S.S.R. was the first country to recognize the newly created state of Israel at the U.N. in 1948), and Soviet military backing for Syria and Egypt had by the 1980s given way to a Pax Americana in the region, with minimal influence from Moscow. Still, the fall of the Berlin Wall ushered in a new season of seeking political solutions to regional conflicts, which, together with the U.S. need to secure Arab support for the military campaign to eject Iraqi forces from Kuwait in 1991, set the stage for the Oslo peace process.

The 1991 Madrid Conference, which marked the first open talks between Israel and Palestinian representatives, was co-sponsored by the U.S. and the Soviet Union (months before the latter’s collapse). In the decade that followed, Washington maintained a monopoly over diplomatic efforts to resolve the conflict, although, curiously enough, when those efforts hit a wall in the wake of the failed Camp David talks and the intifada that followed, the U.S. initiated a diplomatic quartet to broker negotiations that included the European Union, the U.N. and Russia.

The Oslo process failed to resolve the conflict, of course, and Moscow and Washington today find themselves on opposite sides of the conflict in Syria. But it was the post–Cold War moment that established a diplomatic consensus around the principle of a negotiated solution between Israel and the PLO. 

Uncle Sam’s lost backyard

Bolivian President Evo Morales speaks at the inauguration of the Organization of American States General Assembly in Bolivia in 2012.
AFP / GettyImages

In the years leading up to the fall of the Berlin Wall, the U.S. found itself engaged in a proxy war against Nicaragua’s Sandinista government, backing brutal counterinsurgency campaigns in El Salvador and Guatemala and serving as the long-standing patron of right-wing dictators across Latin America, many of whom it helped bring to power.

The Monroe Doctrine of the early 19th century defined Latin America as a U.S. sphere of interest in which Washington reserved the right to intervene to prevent any other foreign powers from establishing a foothold. During the Cold War, on the grounds of countering Cuban and Soviet influence, the U.S. intervened early and often to oust governments deemed inimical to U.S. interests — even when those (usually leftist) governments were democratically elected, as in the case of Chile’s President Salvador Allende.

The end of the Cold War changed the geopolitical game on the continent, ending the civil wars that plagued Central America in the 1980s and ushering in a new era of democracy — and foreign policy independence from Washington. Today the majority of countries in Latin America are governed by socialist or social-democratic parties, and China is a bigger trading and investment partner with the continent’s economies than the U.S.

Cuba, a revolutionary orphan

Fidel Castro
Sven Creutzmann / Zeitenspiegel / Getty Images

Failure — although through no lack of trying — to overthrow Cuba’s revolutionary regime rankled U.S. cold warriors long after the Berlin Wall fell. Still, fear that the Caribbean island could provide a springboard for Soviet military action against the U.S. receded after the 1962 missile crisis, and the collapse of the U.S.S.R. looked set to deal an economic death blow to the regime of Fidel Castro. After all, socialist Cuba was constructed on the basis of massive annual subsidies from Moscow, which disappeared at about the same time the Berlin Wall did. 

Cuba’s GDP shrank by 35 percent from 1989 to 1993, and the “special period” through 1995 that the regime decreed saw many Cubans going hungry as the country teetered on the brink of famine. But Fidel Castro’s regime muddled through, helped in no small part by Venezuela’s Hugo Chavez, who stepped up to replace the Soviet Union’s patronage of the Cuban economy through discounted oil supplies. Cuba's economy continues to struggle, although stuttering efforts at reform continue. Nonetheless, 54 years after it was first imposed, the U.S. economic embargo on Cuba has failed to effect regime change.  

Economic globalization

Clinton at a rally speaking about the North American Free Trade Agreement, which went into effect in 1994.
Diana Walker / Time Life Pictures / Getty Image

The Cold War's end inaugurated one of the most rapid economic expansions in world history, as the separate Soviet international economic system collapsed and the market-led global economy extended its reach into massive new territories at breakneck speed. The result has been unprecedented growth, with profound consequences for the lives of millions and their communities.

Skyrocketing economic growth over the past 25 years has propelled hundreds of millions of people for the first time into a global middle class, most notably in China and India, the world’s most populous countries.

While the percentage of people among the world’s poorest is lower than at any other point in human history, the entrenchment of the post–Cold War economic order has been accompanied by severe transnational economic shocks — such as the 2008 financial crisis, whose effects were felt continents away from Wall Street; rising global inequality; and looming climate-change peril as the spread of middle class consumption has dramatically expanded the carbon-emitting economy.

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