WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

This report analyses the recent economic performance of the oil- and gas-rich FSU 'Islamic' Caspian states Kazakhstan, Azerbaijan and Turkmenistan, focusing on the period from the Russian financial crisis of August 1998 through 2001. Special reference is made to the energy sector, since hydrocarbon investments and exports have since the late 1990s been by far the most important drivers of economic growth. Russia, a 'Slavic' Caspian state, is compared and contrasted with the other Caspian states, in its capacity as an oil and gas producer and exporter, transit country, and growth pole for the rest of the FSU. Vulnerability of various sectors of the economies to oil price volatility and 'Dutch disease' are discussed. Also discussed are possible effects of the September events on their political situations, major investment projects, export revenues, exchange rates, budgets, and prospects for transition in general.