Central Asia was behind during the Soviet era. The region is still behind.
One of the most important steps these countries could take today would be to free their economics. Central Asia’s economic potential is enormous. In a new study, James M. Roberts and Ariel Cohen of the Heritage Foundation observe: “Oil- and gas-rich Kazakhstan, the world’s largest landlocked country, and the four other former Soviet republics in Central Asia—Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan—are the focus of many Fortune 500 companies seeking new business development and market penetration in emerging economies.”
However, none of these nations makes it easy for investors. Kazakhstan does the best of the five, yet, on the Index of Economic Freedom, comes in only at number 65 worldwide. Write Roberts and Cohen, Astana “can significantly improve its Index standing in the future if it pursues additional market-oriented reforms, including the rule of law.”
There is good news: Kazakhstan has sought to integrate its economy internationally and attract foreign investment, joining the Eurasian Union last year, for instance, and the Russian Customs Union the year before. The country also has improved economic policies at home, steadily improving its Index rating since 2009.
Nevertheless, much more needs to be done. Kazakhstan’s greatest weaknesses are in the areas of corruption, political freedom, property rights, and rule of law.
Explain Roberts and Cohen, Astana should implement serious reforms “improving and upgrading the legal foundations of the Kazakh market economy, strengthening the court system and professionalism of judges and legal counsels, increasing efforts by the government to fight corruption and changing the local culture that tolerates it, and improving regulatory efficiency.” Structural reforms limiting state spending and reducing regulatory restrictions also are required.
Kazakhstan’s neighbors lag even further behind. Kyrgyzstan comes in at 88 on the Index. Tajikistan rates a disappointing 129. Uzbekistan is an even worse 164. Turkmenistan brings up the rear in a dismal 168 (out of 179).
All of these nations would benefit from a substantial dose of freedom. The peoples of Central Asia will flourish once they are able to take charge of their respective economic and political destinies.
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