Transition and economic development challenges in the resource-poor countries

Independence brought unprecedented challenges to the natural resource-poor countries of the former Soviet Union (FSU), the Kyrgyz Republic and Tajikistan in Central Asia, and Armenia and Georgia in the Caucasus. Since declaring themselves as independent states in late 1991 these countries have had to deal with a double transition, from a centrally planned to a marketbased economy and from republics of the FSU to independent nations at the same time. In the process, Armenia, Georgia and Tajikistan suffered from either protracted regional conflicts or civil wars, which affected, and are still affecting, their economic and political transitions in important ways. Another important aspect of the independence of the resource-poor countries has been the loss of large transfers from the FSU, which combined with trade and payments disruptions after the Union dissolved to cause massive contraction in measured output and to push inflation to unprecedented peaks.