The Economic Prospects of the CIS: Sources of Long Term Growth by Gur s> Ofer Richard Pomfret (review)

Abstract

I90 SEER, 85, I, 2007 Ofer, Gur and Pomfret, Richard (eds). TheEconomic Prospects of theCIS:Sources ofLongTermGrowth. EdwardElgar, Cheltenham and Northampton, MA, 2004. xiv + 300 pp. Tables. Figures.Notes. Bibliography.Index. [69.95. THE papersthat Gur Ofer and Richard Pomfrethave broughttogetherin T7he Economic Prospects of theCISwere originallyprepared within the context of a projecton 'UnderstandingGrowth'run by the Global Development Network. The resulting book is to be commended for several reasons. First of all, it makes predominantlynative researchavailableto Englishspeakers.Secondly, it has managed to provide separatechaptersfor as many as ten of the twelve membersof the Commonwealth of Independent Statesand has not allowed its treatment of Russia to dominate the discussion.Thirdly, its approach to the theme of economic prospects is both country-orientatedand comparative. And finally, it fulfilsits remit in consideringthe future as well as the present. An importantpoint establishedat the startis the difficultyof making comparisonsbetween differentcountrieswith ostensiblythe same historicallegacy. The new ex-USSR and ex-Soviet bloc states may have suffered together under a so-called socialist system, but the former lacked the governance experience of the latter and have had to divert energy from economic transformation to nation-building. The CIS countries also live within different ambits on the edge of Europe or roughly around the Caspian and in most instances are ethnically diverse. Their resource bases differ, too. And ironically, what they do share are the disadvantages that stemmed from a crippled centrally-plannedeconomy. One of the two CIS countries not considered is Georgia. This was apparently because a team could not be assembled, but it may also have been an early sign of the 'Rose Revolution' that has since carried Georgia almost out of the Commonwealth. The coverage of individual states is pertinent and perceptive but, while stressingshared characteristicsand experiences, it also brings out their differences. The following quotations are taken, one from each of the geographicallyarranged country chapters. Russia: 'both processes,that is the adaptationof institutionsand the alignment of expectations, are not yet finished' and 'futuregrowth depends crucially on the speed of these processes' (p. 55). Belarus:its 'long-term growth depends on a shift of strategy from depending on the artificialcomparative advantagesof the past and on state control, to reorientationof the production structureaccompanied by the continuation of the stalled domestic reforms' (p. 73). Ukraine, predating the 'Orange Revolution': 'if the radical positive changes come before the human capital deteriorates, Ukraine has a good chance of achieving a two-digit rate of economic growth' (p. ioo). Moldova: 'the most crucial task of the government in Moldova is to reintroduce confidence among economic agents in the rule of law', not to mention 'most importantly, the resolution of the Transnistrian conflict' (p. 125). Armenia: 'continuation and completion of institutional reforms [... ] can create the necessary impetus for the quest for sustainable development and economic growth of Armenian state and society' (p. I53). Turkmenistan:'much-neededinstitutionaland marketreformsare the kind of public good the autocraticpower in Turkmenistanis not willingto provide, REVIEWS I9I since this provision would weaken their grip on power' (pp. I75-76). Uzbekistan: 'the Uzbek record so far bears out the favourable view of the "evolutionary-institutional" model, rather than the neo-liberal one, at least in Central and East Asian circumstances' (p. I96). Tajikistan: 'inadequate economic growth in Tajikistanis to a great extent related to the insufficient development of marketinstitutions'(p. 214). Kyrgyzstan:'there is a quite considerablespecificityof the situationin Kyrgyzstan i.. .1') the small size of the countryand its unfavourablegeographiclocation, 2) the lack of rich and easily tradablenaturalresources,3) the strongdependence on external aid' (p. 246). Finally, Kazakhstan: 'transitionhas eliminated much of the industrial base and left the Kazakhstaneconomy dependent upon raw materials- especially oil and gas' but 'the sheer size of the country'sproven reserves [...] means that it is not necessarily undesirable to remain primarily oil-dependent for some time to come' (p. 267). What about the future? Some of the ten are already into institutional reform; some see hope in it. Some describe their symptoms; some despair. One has adequate energy. But an outcome Ofer and Pomfret suggest is that 'those among the CIS states that will meet the institutionalchallenge more readilywill find higher and more sustainablegrowth, and the global economy will move in to...