Other FSU Republics

The pattern of economic transition in other FSU republics followed broadly the same path as Russia's. The Baltic states were the earliest adopters of the Western free market, with large proportions of their economies privatized by the mid-1990s. By the turn of the century they were already well off enough to be considered for membership in the EU, which they successfully joined in 2004. They have multiparty systems; nationalistic free-market parties won elections easily to begin with, but more recently they have lost to the more left-leaning or liberal parties.

Ukraine and Moldova have followed a slower pace of reform than either the Baltics or Russia, but have essentially had the same periods as Russia of rapid inflation, unfair privatization, and battles for key assets. Unlike Russia, however, both have experienced political shifts back and forth from one clan to another—something that Russia has not yet seen. The president of Moldova in 2008, Vladimir Voronin, was a Communist, although his predecessor was not. Belarus went into an early period of political isolation because of the authoritarian antics of Alexander Lukashenko, its autocratic president. Nevertheless, Belarus is economically better off than neighboring Ukraine, at least in terms of its GDP. A large part of the reason for this is the strong interdependence between the Belarusian and Russian economies, which has remained largely unchanged since Soviet times. The two countries have managed to preserve a much higher degree of economic integration than the rest of the FSU. Many products assembled in Belarus factories are made from Russia-made parts. Many Russian goods travel to Europe via Belarus, and many imports to Russia travel in the opposite direction; each time, Belarus takes a cut in the proceeds. Also, Russia provides natural gas to Belarus at a much lower cost than for any other country in the FSU. The two countries are negotiating an even tighter integration into a union of sorts, as you can already see in Russian passport control lines at the airports, where Belarusian citizens are the only ones allowed passage alongside Russians.

The trans-Caucasian republics and the Central Asian states have all managed to go through reforms. Kazakhstan has arguably been the most successful, with many years of positive GDP growth, heavy privatization, and a high share of foreign participation in its new industries. Turkmenistan represents the opposite case of very inward-looking development, with its authoritarian leader managing to destroy much of the economy and trade in the process of self-adoring nation building. The economies of Kyrgyzstan, Uzbekistan, Tajikistan, Georgia, and Armenia have all done fairly poorly lately. Azerbaijan's economic revival is tied to high petroleum prices at the moment, but even there the situation remains rather desperate for the majority of its population. Regional conflicts, political unrest, and/or autocratic regimes in these countries make reforms go slowly.