Project: The Financial Systems and Economic Development in Post-Soviet Central Asia

This project maps recent developments in the financial system of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. These developments are analysed in relation to the overall economic development of these countries.

This project was concluded in 2019.

Project information

Project manager
Heiko Fritz
Participating organizations
Linnaeus University; Shanghai University of Political Science and Law, China
1 Dec 2017-30 Sept 2018
Peace and Development Studies (Department of Social Studies, Faculty of Social Sciences)

More about the project

The role of the financial system comprising financial markets, intermediaries, regulation and supervision for economic development has been well established. An effective and efficient financial system channels funds from savers to borrowers at low cost and can accelerate economic growth. An inclusive financial system provides customised services to otherwise financially excluded firms and households and can thus help enhance entrepreneurship and alleviate poverty.

The aim of this project is to shed light on the relationship between the financial system and economic development in post-Soviet Central Asia. To this end the project maps developments of the financial systems in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan since the global financial crisis in 2008-09 and relates them to the trajectory of different indicators of economic development. Focusing on both financial markets and financial intermediation, the project analyses the volume and structure of funds channeled through the financial system as well as the cost at which the system provides these services to the societies in Central Asia. Given low levels of financial inclusion across the region, the project assesses the role of microfinance in enhancing outreach of financial services.

The project compiles, combines and analyses international and national financial statistics. The findings are substantiated through expert interviews with actors in the financial systems in Central Asia. The project concludes with policy recommendations.