Contrasting Contexts for Entrepreneurship: Capitalism by Kyrgyz Decree Compared to Gradual Transition in Uzbekistan

By Lasch, Frank; Dana, Leo-Paul | Journal of Small Business and Entrepreneurship, Summer 2011 | Go to article overview

Contrasting Contexts for Entrepreneurship: Capitalism by Kyrgyz Decree Compared to Gradual Transition in Uzbekistan


Lasch, Frank, Dana, Leo-Paul, Journal of Small Business and Entrepreneurship


Introduction

While post-communist entrepreneurship in Eastern Europe (Dana, 2005; Obloj, Obloj, and Pratt, 2010; Vaduva, Keillor, and d'Amico, 2005), China (Kshetri, 2007; Tan, Yadong and Oded, 2005; and Xiaohong, 2009), and other emerging countries in Asia (Dana, 2002) have raised much research interest, there has been relatively less research about the nature of entrepreneurship in the formerly Soviet republics of Asia. Whereas independence from the Soviet Union enabled the economies of the Baltic States--that had a history of capitalism and independence prior to communist rule--to flourish with a prosperous firm-type sector, the situation in Central Asia reflects a variety of different models.

Between China and Russia lie Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. In 1991, at a meeting in Almaty--the capital of Kazakhstan at the time all five ex-Soviet countries of Central Asia joined the Community of Integrated States (CIS), which in 1993 came to include all of the formerly Soviet republics with the exception of the three Baltic states, namely Estonia, Latvia and Lithuania. O'Driscoll, Holmes and Kirkpatrick (2001) described Turkmenistan and Uzbekistan as "repressed" relative to Kazakhstan, the Kyrgyz Republic and Tajikistan.

What has been published is largely focused on single country studies, for example, Azerbaijan (Rustamov, 2009), Kazakhstan (Dana, 1997; Price, 2006), the Kyrgyz Republic (Dana, 2000), and Turkmenistan (Miller, 2009). Comparative studies are few (e.g., Kazakhstan and the Kyrgyz Republic: Luthans and Ibraveva, 2006). The countries of the Central Asia region are marked by different economic and entrepreneurship contexts.

This article focuses on two of the five Central Asian countries that became independent with the demise of the USSR in 1991--the Kyrgyz Republic and Uzbekistan--and describes how different transition models might be related to different levels of political stability, and to a different path of economic evolution. Our study presents an overview about transition, emergence and nature of entrepreneurship in a world's region that displays amongst the most important energy resources in gas and oil.

The Kyrgyz Republic

The Kyrgyz Republic neighbours China, Kazakhstan, Tajikistan, and Uzbekistan. This was formerly the land upon which 40 Kirghiz tribes led nomadic lifestyles. It was annexed by Russia in 1864, and Russians and Ukrainians introduced sedentary agriculture to the area. In 1918, the Kirghiz homeland became a part of Turkestan--an Autonomous Soviet Socialist Republic (ASSR), within the Russian Federative Socialist Republic (RFSR). In 1924, the Kara-Kyrgyz autonomous region was carved out of Turkestan to become, in 1936, the Kirghiz Soviet Socialist Republic. This became one of the constituent Soviet socialist republics of the USSR; it was commonly referred to as Soviet Kirghizia.

In 1928, the script of the Kirghiz language was changed from the Arabic alphabet to the Roman one. Collectivisation also began in 1928, putting an end to the traditional nomadic lifestyle of the Kirghiz, but resistance to collectivism was exceptionally strong. Rather than transfer their flocks to collective farms, many Kirghiz herdsmen slaughtered their sheep-as did the Kazakhs. In 1941, the nation's script was changed yet again.

The Kyrgyz Republic became independent in 1991 and has since implemented considerable reforms. Yet, in contrast with Uzbekistan, the Kyrgyz Republic is not self sufficient in food and energy (Saidazimova, 2009).

The Republic of Uzbekistan

The Republic of Uzbekistan borders Afghanistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and the Aral Sea. It is home to historically significant trading centres.

Already in the 2nd century, Samarkand was a wealthy trading centre, prospering thanks to its location at the junction of caravan routes. …

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