Volatility, Diversification and Oil Shock in Resource-Rich Turkic Countries: Avenues for Recovery

The paper analyses the current level of economic and export diversification in three resource-rich Caspian basin Countries: Kazakhstan, Azerbaijan and Turkmenistan and attempts to reveal the underlying causes of high vulnerability of these economies to the recent oil price shock. On the other hand, the economies are evaluated in the light of so called subsidized economies, e.g. an economy mainly driven by public spending and current consumption expenditure. The latter in this case are mainly fueled by monetary injections as a result of large resource windfalls encountered by an economy.