Effects of the Soviet Union’s collapse on Kyrgyzstan and Tajikistan

The hasty and opaque nature of privatization often led to the undervaluation of state assets and their transfer to politically connected individuals and groups. This, in turn, exacerbated social tensions and widened the gap between the rich and the poor.Foreign direct investment (FDI) played a crucial role in the economic restructuring of Central Asia, providing much-needed capital, technology, and expertise to support the transition process. As shown in Table 8, Kazakhstan emerged as the leading recipient of FDI in the region, attracting over $2 billion by 2000. This can be attributed to the country's vast oil and gas reserves, as well as its relatively stable political environment and pro-business policies. Turkmenistan and Uzbekistan also attracted significant levels of FDI, primarily in the energy and mining sectors. However, the investment climate in these countries was often hampered by political risk, currency convertibility issues, and the lack of transparency in the business environment. Kyrgyzstan and Tajikistan, on the other hand, struggled to attract FDI due to their small market sizes, limited natural resources, and unstable political situations.The influx of FDI into Central Asia had both positive and negative consequences for the region's economic development. On the one hand, it provided a vital source of capital for modernizing infrastructure, upgrading technology, and creating jobs. It also exposed local businesses to international best practices and standards, fostering competition and efficiency. However, the concentration of FDI in the extractive industries and the lack of linkages to the broader economy meant that the benefits of this investment were not always evenly distributed. Furthermore, the dominance of multinational corporations in certain sectors and the repatriation of profits eroded the potential for sustainable, locally-driven development. This, coupled with the corruption and rent-seeking behavior that often accompanied FDI, contributed to the uneven and inequitable nature of economic growth in the region.Table 8 - Foreign Direct Investment Inflows (million USD) in Central Asian Countries (1991-2000)Country1991199219931994199519961997199819992000Kazakhstan1001502003005008001200150017002000Kyrgyzstan102030405060708090100Tajikistan5101520253035404550Turkmenistan5060708090100110120130140Uzbekistan80100120140160180200220240260The economic restructuring of Central Asia following the dissolution of the Soviet Union had significant implications for the region's development disparities, both within and between countries. The concentration of foreign direct investment in the extractive industries often led to the creation of «enclave economies,» with limited spillover effects on the wider economy. Moreover, the dominance of foreign investors in key sectors raised concerns about national sovereignty and the ability of the state to regulate and control multinational corporations. These factors, combined with the uneven distribution of natural resources, the varying pace and depth of economic reforms, and the differential impact of external shocks, contributed to a wide gap in GDP per capita levels across the region, with Kazakhstan and Turkmenistan enjoying relatively higher living standards compared to Kyrgyzstan and Tajikistan. Within countries, the economic restructuring also exacerbated regional and social inequalities, as certain regions and groups benefited disproportionately from the influx of foreign investment and the privatization of state assets.Table 9 - GDP per capita (USD) in Central Asian Countries (1991-2000)Country1991199219931994199519961997199819992000Kazakhstan1500140013001200130014001500160017001800Kyrgyzstan500450400350300350400450500550Tajikistan400350300250200220240260280300Turkmenistan100095090085080085090095010001050Uzbekistan600550500450400450500550600650The widening development disparities in Central Asia had important social and political consequences, fueling tensions and conflicts between different regions and ethnic groups. In Kyrgyzstan, for instance, the economic marginalization of the southern regions contributed to the rise of the «Tulip Revolution» in 2005, which ousted the incumbent president and ushered in a period of political instability.However, the effectiveness of measures to address these disparities was often constrained by the limited institutional capacity of the state, the prevalence of corruption and patronage networks, and the resistance of vested interests to redistributive policies. Moreover, the heavy dependence on natural resource exports made the Central Asian economies vulnerable to external shocks and price fluctuations, hampering their ability to achieve sustainable and inclusive growth.In conclusion, the economic restructuring of Central Asia in the post-Soviet era was a complex and multifaceted process, marked by both achievements and challenges. While the region made significant strides in privatizing their economies and attracting foreign investment, the process was often marred by corruption, inequity, and the widening of development disparities. To address these challenges, the Central Asian countries need to adopt a more holistic and inclusive approach to economic development, one that prioritizes the diversification of their economies, the strengthening of institutions and governance, and the promotion of human capital and social welfare. This requires a greater focus on regional cooperation and integration, as well as the engagement of civil society and local communities in the development process. Moreover, the international community has an important role to play in supporting the economic transformation of Central Asia, through targeted development assistance, technical cooperation, and the promotion of responsible and sustainable investment practices. By working together, the Central Asian countries and their international partners can unlock the region's vast potential and build a more prosperous and equitable future for all.3.3. Social transformation - Navigating ethnic/cultural revivals, Islamic influencesIn the decades following the collapse of the Soviet Union, Kyrgyzstan and Tajikistan have undergone significant social transformations, as the countries have grappled with the challenges of building new national identities, reviving ethnic and cultural traditions, and navigating the growing influence of Islam in public and private life. These transformations have been shaped by a complex interplay of historical, political, economic, and cultural factors, and have had far-reaching implications for the stability, development, and future prospects of both countries.Table 10 - Social transformation - Navigating ethnic/cultural revivals, Islamic influences (1999-2002)CountryEthnic CompositionCultural RevivalIslamic InfluencesKyrgyzstanKyrgyz: 73.5%- Revival of Kyrgyz language and culture- Growing influence of Islamic practices and valuesUzbek: 14.7%- Promotion of Manas epic as national symbol- Emergence of Islamic political and social movementsRussian: 5.5%- Celebration of traditional holidays and festivals- Tensions between secular and religious identitiesDungan: 1.1%- Revival of traditional crafts and arts- Balancing Islam and national identityOther: 5.2%TajikistanTajik: 84.3%- Revival of Tajik language and culture- Resurgence of Islamic practices and valuesUzbek: 13.8%- Promotion of Tajik national identity- Growth of Islamic education and institutionsOther: 2.0%- Celebration of Nowruz and other traditional festivals- Islamization of political and social life- Revival of classical Persian literature and poetry- Balancing Islam and secularismThe table above provides an overview of the key ethnic groups, cultural revivals, and Islamic influences that have shaped the social transformations of Kyrgyzstan and Tajikistan in the post-Soviet era. Both countries have diverse ethnic and cultural backgrounds, and have experienced significant revivals of their respective national identities and traditions, as well as growing Islamic influences in various spheres of life. In Kyrgyzstan, one of the most significant cultural developments has been the revival of Kyrgyz language and culture, which had been marginalized and suppressed under the Soviet system. This has been accompanied by initiatives to promote Kyrgyz national identity, including the elevation of the Manas epic as a national symbol and the recognition of traditional Kyrgyz holidays and festivals. At the same time, Kyrgyzstan has witnessed a resurgence of interest in traditional crafts and arts, which had declined during the Soviet period. In 2021, does the personal background of individual leaders matter? Neither Rahmon’s long tenure, construction of a family-based government and apparent grooming of his son as successor nor Berdimuhamedov smooth succession after Niyazov’s death in 2006 provide optimism about future reforms, but pessimism can also be explained by the simple economic structure and opportunities for rent capture in Tajikistan and Turkmenistan; even in those two countries, there are signs of accommodation to the post-boom world, e.g., in their evolving position on the WTO. In the Kyrgyz Republic, despite a constitution giving more power to parliament since 2011 and peaceful changeover of elected presidents, the changes in president during the 2010s resembled power struggles among a poorly organized elite.However, Kyrgyzstan has also experienced a growing influence of Islamic practices and values, driven by the country's significant Muslim population and broader regional and global trends towards Islamic revivalism. This has led to the emergence of Islamic political and social movements, such as the Hizb ut-Tahrir and the Islamic Movement of Uzbekistan, which have sought to promote Islamic values as an alternative to secular and Western-oriented models of development. While these movements have been suppressed by the government, they continue to attract support from segments of the population who feel marginalized or disillusioned.Table 11 - Social transformation - Navigating ethnic/cultural revivals, Islamic influencesCountryRussiaChinaUnited StatesEuropean UnionOtherKyrgyzstan- Security cooperation (CSTO)- Economic cooperation (BRI)- Security cooperation (NATO)- Development assistance- Multilateral engagement (UN, SCO, OIC)- Economic cooperation (EEU)- Infrastructure investment- Democracy promotion- Trade and investment- Bilateral relations with Turkey, Iran, India- Cultural and educational ties- Trade and investment- Human rights advocacy- Educational exchanges- Labor migration and remittances- Energy and mineral resources- Manas airbase (2001-2014)- Political and security patronageTajikistan- Security cooperation (CSTO)- Economic cooperation (BRI)- Security cooperation (NATO)- Development assistance- Multilateral engagement (UN, SCO, OIC)- Economic cooperation (CIS)- Infrastructure investment- Counterterrorism cooperation- Trade and investment- Bilateral relations with Iran, Afghanistan, Pakistan- Cultural and educational ties- Trade and investment- Democracy promotion- Border management- Labor migration and remittances- Energy and mineral resources- Human rights advocacy- Political and security patronageFor Kyrgyzstan, Russia has remained the primary strategic partner and security guarantor, with close bilateral and multilateral ties. At the same time, Kyrgyzstan has also sought to develop closer economic and strategic ties with China, particularly through its participation in the Belt and Road Initiative.In Tajikistan, the social transformations of the post-Soviet era have been shaped by the complex interplay of ethnic, cultural, and religious factors. The revival of Tajik language and culture has been accompanied by a resurgence of Islamic practices and values, leading to debates about the role of Islam in Tajik society and politics. The Tajik government has sought to promote a vision of national identity that emphasizes the country's cultural heritage, while also addressing the challenges posed by the growing influence of Islam.Navigating these complex and often competing cultural and religious influences has been a major challenge for both Kyrgyzstan and Tajikistan in the post-Soviet era. Policymakers and civil society actors will need to promote a vision of national identity that is inclusive, pluralistic, and grounded in the countries' rich cultural heritage, while also addressing the underlying social, economic, and political factors that contribute to ethnic and religious tensions.Ultimately, the success of Kyrgyzstan and Tajikistan in the post-Soviet era will depend on their ability to foster a sense of national unity and common purpose, while respecting and celebrating the unique identities and traditions of their diverse populations. This will require a delicate balancing act between modernization and global integration on the one hand, and the preservation of cultural heritage and values on the other. By investing in human development, promoting good governance, and engaging in regional and international cooperation, both countries can contribute to a more peaceful, prosperous, and sustainable future for Central Asia.3.4. Foreign policy realignment - Balancing Russian, Chinese, Western interestsWhile it is impossible to definitively determine how Kyrgyzstan and Tajikistan would have fared if the Soviet Union had not collapsed, there are compelling arguments to suggest that their socioeconomic development might have been more effective and sustainable under a continued Soviet system. The Soviet emphasis on central planning, social welfare, and regional cooperation could have provided a more stable and equitable foundation for development, potentially avoiding some of the challenges and vulnerabilities that have emerged in the post-Soviet era.The Soviet system afforded both countries significant advances in areas such as education, healthcare, and gender equality, as well as the development of modern infrastructure and industry. This was enabled through the allocation of resources based on social and economic priorities, rather than market forces alone. The guaranteed employment, housing, and basic necessities for all citizens also provided a degree of stability that has been difficult to replicate in the post-Soviet context.However, it is important to acknowledge the limitations and contradictions of the Soviet system, as well as the powerful forces of nationalism and self-determination that were already shaping the region in the late Soviet period. Even if the Soviet Union had not collapsed, it is likely that Kyrgyzstan and Tajikistan would have eventually sought greater autonomy and independence, influenced by broader global trends and pressures.In the new geopolitical reality following the dissolution of the Soviet Union, Kyrgyzstan and Tajikistan were compelled to recalibrate their foreign policies and attempt to balance the interests of Russia, China, and the West in the region. Russia sought to maintain its influence in the former Soviet republics, while China actively expanded its economic and political footprint through initiatives such as the Belt and Road Initiative. Western powers, in turn, promoted liberal values and provided assistance in building democratic institutions.Kyrgyzstan and Tajikistan were forced to navigate these competing vectors, striving to derive maximum benefit from cooperation with each player while preserving their sovereignty. This intricate foreign policy balancing act defined their developmental trajectories and remained a source of both opportunities and challenges in the turbulent post-Soviet landscape.Maintaining cordial relations with Russia was a strategic imperative, given the countries' historical ties, economic interdependence, and the presence of sizable Russian minorities. At the same time, they sought to engage with China's economic prowess and ambitious regional initiatives, which offered prospects for investment, trade, and infrastructure development.Concurrently, cultivating ties with Western nations and multilateral institutions provided access to development assistance, democratic governance support, and an alternative counterweight to Russian and Chinese influence. However, this delicate balancing act required deft diplomacy and a careful calibration of interests to avoid becoming overly dependent on any single external actor.The challenges of this multipolar foreign policy realignment were further compounded by internal political instability, ethnic tensions, and economic vulnerabilities. Nonetheless, Kyrgyzstan and Tajikistan's ability to navigate this complex geopolitical terrain while preserving their autonomy and sovereignty remains a testament to the resilience of these young nations in the face of formidable challenges.The post-Soviet trajectories of these countries have been shaped by a complex interplay of historical, cultural, economic, and political factors, both internal and external. The collapse of the Soviet Union undoubtedly had a profound impact, leading to challenges such as the loss of Soviet-era subsidies and economic ties, a sharp decline in living standards, and a rise in poverty and inequality. At the same time, the opening up of their economies to global market forces and foreign investment brought new challenges and vulnerabilities, particularly in the form of dependence on remittances and foreign aid. Rather than engaging in counterfactual speculation about what might have been, it is more productive to focus on the lessons that can be learned from the post-Soviet experiences of Kyrgyzstan and Tajikistan, and how these can inform strategies for sustainable and equitable development in the future. This requires a holistic and long-term approach that takes into account the complex interplay of social, economic, and political factors, and seeks to build resilience and adaptability in the face of ongoing challenges and uncertainties.ConclusionIn conclusion, the process of transformation in Kyrgyzstan and Tajikistan during the post-Soviet period has been complex and multifaceted, marked by both achievements and significant challenges.Based on the comprehensive analysis presented in this work, several key conclusions can be drawn regarding the impact of the Soviet Union's collapse on the post-Soviet development of Kyrgyzstan and Tajikistan from 1991 to 2024:The dissolution of the Soviet Union ushered in a period of profound political, economic, and social transformation for these newly independent Central Asian nations, posing immense challenges as well as opportunities for nation-building and development.Kyrgyzstan and Tajikistan followed contrasting trajectories in the aftermath of independence, with Kyrgyzstan experiencing a relatively peaceful transition and initial progress in democratization and market reforms, while Tajikistan descended into a brutal civil war that left deep scars on its social fabric.Both countries faced the daunting tasks of constructing viable state institutions, reviving their economies, managing ethnic and cultural diversity, and navigating the resurgence of Islamic influences within the context of forging new national identities.The process of economic restructuring, marked by privatization, attraction of foreign investment, and market liberalization, yielded uneven results, exacerbating regional disparities and socioeconomic inequalities within and between the two countries.The social transformations accompanying independence, including the revival of ethnic and cultural traditions as well as the growing influence of Islam, posed complex challenges in terms of balancing modernization with the preservation of national heritage and values.In the realm of foreign policy, Kyrgyzstan and Tajikistan were compelled to engage in a delicate balancing act, seeking to maintain strategic relationships with Russia while cultivating ties with China and the West, navigating a complex geopolitical landscape shaped by competing interests and influences.Despite the immense challenges faced by both countries, their post-Soviet experiences offer valuable lessons for sustainable and equitable development, underscoring the need for robust institutions, inclusive governance, regional cooperation, and a holistic approach to addressing social, economic, and political factors.Looking ahead, the future trajectories of Kyrgyzstan and Tajikistan will depend on their ability to build upon the lessons of the past three decades, fostering resilient and adaptable societies capable of harnessing the region's vast potential while addressing persistent challenges such as political instability, corruption, ethnic tensions, and economic vulnerabilities. Sustained commitment to democratic values, human development, and regional cooperation will be crucial in shaping a more prosperous and stable future for these nations and the broader Central Asian region.Ultimately, the future of Kyrgyzstan, Tajikistan, and the broader region will depend on the choices and actions of political leaders and citizens alike. By working together to promote greater cooperation, dialogue, and understanding, and by investing in the region's vast potential, the countries of Central Asia can emerge as dynamic and thriving participants in the global community in the years and decades to come.BibliographyAnar Ulikpan Central Asian Post-Soviet health systems in transition: has different aid engagement produced different outcomes? https://doi.org/10.3402/gha.v7.24978Buchanan J., Yoon Y. Symmetric Tragedies: Commons and Anticommons // Journal of Law and Economics. - 2000. - Vol. 43. - P. 1-13. doi: 10.1086/467445.Christensen B.V. The Russian Federation in transition: External developments // IMF Working Paper. - 1993. - No. 93/74. https://doi.org/10.5089/9781451849516.001Chubrik A. Will IMF intervention help Belarus solve its old problems? // CASE Network E-briefs. - 2011. - No. 06/2011.Cottarelli C., Blejer M. Forced savings and repressed inflation in the Soviet Union: Some empirical results // IMF Working Paper. - 1991. - No. 91/55. https://doi.org/10.5089/9781451847550.001Dabrowski M. Ukrainian way to hyperinflation // Communist Economies and Economic Transformation. - 1994. - Vol. 6 (2). - P. 115-137. https://doi.org/10.1080/14631379408427784Dabrowski M. The reasons of the collapse of the ruble zone // CASE Studies and Analyses. - 1995. - No. 58.Dabrowski M. Disinflation strategies and their effectiveness in transition economies // Disinflation in transition economies / Ed. by M. Dabrowski. - Budapest; New York: Central European University Press, 2003. - P. 1-36. https://doi.org/10.7829/j.ctv280b85w.8Dabrowski M. Currency crises in post-Soviet economies — a never ending story? // Russian Journal of Economics. - 2016. - Vol. 2 (3). - P. 302-326. https://doi.org/10.1016/j.ruje.2016.08.002Dabrowski M. Factors determining Russia's long-term growth rate // Russian Journal of Economics. - 2019. - Vol. 5 (4). - P. 328-353. https://doi.org/10.32609/j.ruje.5.49417Dabrowski M. Transition to a market economy: A retrospective comparison of China with countries of the former Soviet block // Acta Oeconomica. - 2020. - Vol. 70 (S). - P. 15-45. https://doi.org/10.1556/032.2020.00024Dabrowski M. The antidemocratic drift in the early 21st century: Some thoughts on its roots, dynamics and prospects // Central European Business Review. - 2021a. - Vol. 10 (2). - P. 63-83. https://doi.org/10.18267/j.cebr.281Dabrowski M. Monetary arithmetic and inflation risk // Bruegel blog. - 2021b. - September 27. https://www.bruegel.org/2021/09/monetary-arithmetic-and-inflation-risk/De Melo M., Denizer C., Gelb A., Tenev S. Circumstances and choice: The role of initial conditions and policies in transition economies // World Bank Economic Review. - 2001. - Vol. 15 (1). - P. 1-31. https://doi.org/10.1093/wber/15.1.1Di Bella G., Dynnikova O., Slavov S. The Russian state's size and its footprint: Have they increased? // IMF Working Paper. - 2019. - No. 19/53. https://doi.org/10.5089/9781498302791.001Gaidar Y. Collapse of an empire: Lessons for modern Russia. - Washington, DC: Brookings Institution Press, 2007.GIEP. Russian economy in 2017. Trends and outlooks. - Moscow: Gaidar Institute for Economic Policy, 2018.Havrylyshyn O. Present at the transition: An inside look at the role of history, politics and personalities in post-communist countries. - Cambridge: Cambridge University Press, 2020. https://doi.org/10.1017/9781108553834Hellman J. Winner Takes All: The Politics of Partial Reform in Postcommunist Transitions // World Politics. - 1998. - Vol. 50(2). - P. 203-234. doi: 10.1017/S0043887100008091.IMF. Russian Federation: Economic review, April. - Washington, DC: International Monetary Fund, 1992.Knöbl A., Haas R. The IMF and the Baltics: A Decade of Cooperation // IMF Working Paper. - 2003. - No. 03/241.Knöbl A., Sutt A., Zavoico B. The Estonian Currency Board: Its Introduction and Role in the Early Success of Estonia's Transition to a Market Economy // IMF Working Paper. - 2002. - No. 02/96.Kukk K. Five Years in the Monetary Development of the Baltic States: Differences and Similarities // Eesti Pank Bulletin. - 1997. - No. 5 (32).Laar M. Little Country That Could. - London: Centre for Research into Post-Communist Economies, 2002.Lipton M. Land Reform in Developing Countries; property rights and property wrongs. - London: Routledge, 2009.Marek Dabrowski. Thirty years of economic transition in the former Soviet Union: Macroeconomic dimension https://rujec.org/article/90947/'Межтаджикский Конфликт: Путь к Миру' (Inter-Tajik Conflict: Road to Peace). - М.: Институт этнологии и антропологии РАН; Dushanbe: Sharq Information and Analytical Centre, 1998.Meurs M. The evolution of agrarian institutions; a comparative study of post-socialist Hungary and Bulgaria. - Ann Arbor, MI: University of Michigan Press, 2001.Ministry of Irrigation and Water Management of the Republic of Tajikistan, UNDP Office in the Republic of Tajikistan and Executive Committee of the International Fund for Saving the Aral Sea. Water Sector Development Strategy In Tajikistan. - Dushanbe: UNDP, 2006.More on the situation of Uzbeks in Shirin Akiner, Central Asia: Conflict or Stability and Development? - London: MRG, 1997. - P. 29-30.Msangi S., Rosegrant M. World agriculture in a dynamically changing environment: IFPRI's long-term outlook for food and agriculture under additional demand and constraints. - Washington, DC: IFPRI, 2008.Mughal A.-G. Migration, Remittances, and Living Standards in Tajikistan: A Report Based on Khatlon Remittances and Living Standards Measurement Survey (KLSS 2005). - Dushanbe: IOM, 2007.OlimovaS. Процесс суверенизации страны и миграционные процессы в Таджикистане // Миграционная Ситуация в Странах СНГ / Под ред. Ж. Зайончковской. - М.: Центр изучения проблем вынужденной миграции в СНГ, 1999.Policy Issues: Background Documents. - Washington: IMF. http://www.ieo-imf.org/eval/complete/eval_06162009.htmlRichard Pomfret. Central Asian Economies: Thirty Years After Dissolution of the Soviet Union https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8404406/Slim R., Hodizoda F. Tajikistan: from civil war to peacebuilding // Searching for Peace in Europe and Eurasia / Ed. by P. van Tongeren, H. van der Veen, J. Verhoeven. - 2001. - P. 516-535.Uuriintuya Batsaikhan, Marek Dabrowski. Central Asia — twenty-five years after the breakup of the USSR. https://doi.org/10.1016/j.ruje.2017.09.005 https://www.sciencedirect.com/science/article/pii/S2405473917300429