This paper was originally published by the Russian Journal of Economics and is an extended version of the Policy Contribution Central Asia at 25
Central Asia consists of five culturally and ethnically diverse countries that have followed different paths to political and economic transformation in the past 25 years since achieving independence from the Soviet Union. Kazakhstan and Kyrgyzstan have in relative terms made strides in market reforms, while Turkmenistan and Uzbekistan have not yet completed their transitions to market economies.
Tajikistan represents an intermediate case. After experiencing more than a decade of growth based on hydrocarbon booms, Central Asian countries are faced with increasing challenges resulting from falling commodity prices, declining trade and lower migrant remittances.
The main policy challenge is to move away from commodity-based growth strategies to market-oriented diversification and adoption of a broad spectrum of economic, institutional and political reforms. The major obstacles to political reform and structural diversification in the five Central Asian economies are internal and external geopolitical factors and deeply embedded institutional weaknesses within each country, particularly in areas where economic management interacts with authoritarian political systems and imperfect legal institutions.