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Chapter from: "The Commonwealth of Independent States Economies: Perspectives and Challenges"
Published by: Business Expert Press
Originally published in: 2017

Abstract

This chapter is excerpted from ‘The Commonwealth of Independent States Economies: Perspectives and Challenges'. The year 2016 marks the 25th anniversary of the official inauguration of the Commonwealth of Independent States (CIS), a free association of sovereign states comprised of Russia and 11 other republics that were formerly part of the Soviet Union (The CIS - Belarus, Moldova, and Ukraine, the South Caucasus - Azerbaijan, Armenia, Georgia plus disconnected Abkhazia and South Ossetia, and Central Asia - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Although this loose association of states may not exist as a fixed-entity on the globe, it is believed that this bloc of countries will continue to build upon the various separate regions in the former Soviet space in the coming decade. Despite major differences country-to-country, groups within each state share many common economic, political, and cultural characteristics, which many hope will fade with the passing of those generations that remember the common state. In this context, the Russian Federation holds a unique position in the Euro-Pacific area. Separate, distinct, but still bordering these regions and related to all of them to differing degrees, in the 2010s Russia will step up efforts to become an independent center of gravity in Northern Eurasia. Leaning on its CIS allies and partners, Moscow is willing to fortify its stance vis-a-vis its geopolitical competitors - the European Union in the west, and China in the east. Nevertheless, the combination of factors that determined the plunge in the economy of the CIS since the second quarter of 2015 persists today. These factors included the sharp fall in commodities prices, restrictions on access to international capital markets due to sanctions against Russia and a deceleration in China, which is the region's main trading partner. Although economic conditions in most of the CIS economies are challenging, differences in growth dynamics persist. Oil and gas exporting countries, namely Azerbaijan, Kazakhstan, Russia, and Turkmenistan, are seeing economic conditions deteriorating rapidly because of the sharp fall in energy prices. Meanwhile, most of the labor-exporting countries (Armenia, Kyrgyzstan, Moldova, and Tajikistan) are seeing the deterioration in growth rates, mainly due to strong production in the agricultural sector and, in some cases, increased activity in the extractive sector. This book provides a regional analysis, as well as country scan, of the CIS regional block economies. We will examine their history since the breakup of the formal Soviet Union and the formation of the CIS bloc, including creation of regional agreements such as the CIS Free Trade Area and the Eurasian Economic Union, a single economic market which now represents more than 180 million people. As a whole, our text attempts to better understand current, and future, prospects for economic growth in the region, as well as their individual national challenges.

About

Abstract

This chapter is excerpted from ‘The Commonwealth of Independent States Economies: Perspectives and Challenges'. The year 2016 marks the 25th anniversary of the official inauguration of the Commonwealth of Independent States (CIS), a free association of sovereign states comprised of Russia and 11 other republics that were formerly part of the Soviet Union (The CIS - Belarus, Moldova, and Ukraine, the South Caucasus - Azerbaijan, Armenia, Georgia plus disconnected Abkhazia and South Ossetia, and Central Asia - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Although this loose association of states may not exist as a fixed-entity on the globe, it is believed that this bloc of countries will continue to build upon the various separate regions in the former Soviet space in the coming decade. Despite major differences country-to-country, groups within each state share many common economic, political, and cultural characteristics, which many hope will fade with the passing of those generations that remember the common state. In this context, the Russian Federation holds a unique position in the Euro-Pacific area. Separate, distinct, but still bordering these regions and related to all of them to differing degrees, in the 2010s Russia will step up efforts to become an independent center of gravity in Northern Eurasia. Leaning on its CIS allies and partners, Moscow is willing to fortify its stance vis-a-vis its geopolitical competitors - the European Union in the west, and China in the east. Nevertheless, the combination of factors that determined the plunge in the economy of the CIS since the second quarter of 2015 persists today. These factors included the sharp fall in commodities prices, restrictions on access to international capital markets due to sanctions against Russia and a deceleration in China, which is the region's main trading partner. Although economic conditions in most of the CIS economies are challenging, differences in growth dynamics persist. Oil and gas exporting countries, namely Azerbaijan, Kazakhstan, Russia, and Turkmenistan, are seeing economic conditions deteriorating rapidly because of the sharp fall in energy prices. Meanwhile, most of the labor-exporting countries (Armenia, Kyrgyzstan, Moldova, and Tajikistan) are seeing the deterioration in growth rates, mainly due to strong production in the agricultural sector and, in some cases, increased activity in the extractive sector. This book provides a regional analysis, as well as country scan, of the CIS regional block economies. We will examine their history since the breakup of the formal Soviet Union and the formation of the CIS bloc, including creation of regional agreements such as the CIS Free Trade Area and the Eurasian Economic Union, a single economic market which now represents more than 180 million people. As a whole, our text attempts to better understand current, and future, prospects for economic growth in the region, as well as their individual national challenges.

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