Strategies of the Development of Entrepreneurship and SME

the region was the site of fighting between the empires. The influence of different, sometimesconflicting imperial and religious interests would have been sufficient factors prompting thecurrent ethnic conflicts in the Caucasus, even if the region was mono- ethnic. Yet, theCaucasus is one of the most poly-ethnic regions in the world, comprising many ethnic groupsthat have uniquely different languages, religions and political orientations. Political and ethnicboundaries that do not coincide with each other, however, complicate the regional situation.The former Soviet Union bequeathed a number of problems to the Caucasus countries,including artificially drawn national borders and centrally planned economies that were heavilydependent on Russia. Even before Azerbaijan and Armenia declared independence, fightingbroke out in 1988 between the then-Soviet republics over the disputed area of Nagorno-Karabakh, and separatist conflicts sparked in Georgia soon after independence. Some of theregional conflicts that flared in different parts of the Caucasus throughout the 1990's are nowdormant, but few have been officially resolved.Source: UNECE databaseUpon independence these countries were saddled with distortion typical of centrallyplanned economies-economic distortion and contraction, deterioration in social services andinfrastructure, loss of traditional markets and a rise in poverty. Prices and wages were setadministratively; trade and distribution were conducted by government monopolies, and themost enterprises were state-owned. Because activity was mainly directed from Moscow,government and enterprise capacity was quite limited.Current government social economic policies aim at accelerating structural reforms andkeeping the economies on a sustainable growth path while improving social security provision.Appropriate development strategies to create employment and eliminate poverty have to beadopted.In consequence of several efforts by PERMIS BSEC, UN and other internationalorganizations, the Konrad Adenauer Foundation, GTZ etc. the stakeholders slowly started tounderstand the role of the entrepreneurship in these three countries, however, from politicalreasonl they are still far from a crystal-clear triad.85