Vital Caspian Graphics - Challenges Beyond Caviar




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Figure: Share of food in total household expenses. In the 1990s, following the collapse of the Sovi- et regime and massive market de- regulation, the breakdown of total household expenditure radically changed. Its focus shifted towards basic human needs, such as food, for which spending increased two or threefold in 10 years, reducing funds available for other essentials such as education and health.

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Sharing the new oil wealth

– transport, telecommunications, drinking water – in small towns and rural areas is very run-down. The poverty gap is widening, with much of the popula- tion increasingly excluded from services and wealth as privatisation of social services progresses. In all the areas bordering on the Caspian, priority must be given to diversifying activities and invest- ment. Particular attention should be given to sectors such as tourism, agriculture and food production as well as services. Oil and gas alone cannot be ex- pected to provide sufficient jobs for the fast-grow- ing population. Only widespread diversification can contain rising unemployment, which is severely af- fecting several areas around the Caspian and forcing many young people to find work elsewhere.

The prospects for rapid oil wealth contrast with fast spreading poverty following the collapse of the So- viet economy. Although massive investment has suddenly been channelled into the area, its effect is still both geographically and socially very limited, with little widespread impact on society. Nor does it compensate for the crisis in older, more traditional activities such as fisheries and agriculture and in the case of former Soviet republics, the closure of inef- ficient industrial complexes. In many countries the benefits of oil revenue are still restricted to the ruling elite. A few cities – Baku, and to a lesser extent Ma- khachkala and Astrakhan – have enjoyed spectacular growth. In the meantime much of the infrastructure

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