Regional integration and economic convergence in the post-Soviet space: Experience of the decade of growth

This paper examines the dynamics of regional integration and economic convergence in the post-Soviet world during the period 1999-2008. This is the period, when FSU countries experienced rapid economic growth, following the “Big Bang” of the disintegration of the Former Soviet Union (FSU) and the deep economic recession of the 1990s. It starts by discussing a set of indicators reflecting various aspects of interaction of post-Soviet countries (trade, labor migration, integration in key functional markets and economic convergence in different areas) and examines the dynamics of these indicators for the whole region and sub-groups of countries, as well as potential causes and conclusions to be drawn. In addition, it looks at the clusters of regional integration and economic convergence using the hierarchical cluster analysis and attempts to identify the reasons for their formation. We find that during the period studied the trade integration experienced a negative trend, but at the same time we observe an unprecedented expansion of labor migration – thus suggesting that integration of factor flows can outperform integration of markets for goods and services. Finally, clustering processes of the post-Soviet states for the economic convergence and for the economic integration seems to be unaffected by each other.