Staring past Central Asia's strongmen

http://atimes.com/atimes/Global_Economy/GECON-01-260314.html



Staring past Central Asia's strongmen
By Julika Peschau
Mar 26, '14

Last month, the National Bank of Kazakhstan devalued its national currency tenge by 19%. The move followed a 5.4% weakening of the ruble to which the tenge is pegged in a currency basket. While the depreciation is supposed to increase Kazakh exports' competitiveness, large parts of the population saw their savings lose in value for the third time in two decades. Although rules on public protest are very strict in Kazakhstan, around 50 people gathered to show their disapproval before the National Bank in Almaty. [1] Resentment also erupted in the Internet.

It is worth paying attention to these protests because the current difficult economic situation in Kazakhstan threatens a somewhat tacit agreement existing between the ruling elite and the population since the dissolution of the Soviet Union in 1991 launched the era of independence and transition to market economy in Central Asia: people forego certain civil liberties and democratic privileges for relative social and economic stability.

While several cross-country surveys in the last decades have not provided clear-cut evidence on the relationship between growth and democracy [2], successful economic growth trajectories of East Asian Tiger states have been attributed to their authoritarian modes of governance. [3]

However, the case of another region on the same continent requires a more cautious approach to such generalizations: if Asia's growth model is inherently based on an autocratic regime-type, why are China's least developed neighbors in Central Asia still low-income economies with the only exception being Kazakhstan, which is blessed by easily accessible natural resource wealth?