The Central Asian republics have inherited a common past, which is a complex set of economic, social, institutional and environmental conditions that have affected their abilities to develop in the post-Soviet era. Current literature discusses economic and social challenges of the five republics transiting to the market economy and building a civil society, issues of security and religion (Hanks, 2010; Rumer, 1996; Rumer 2005; Vassiliev, 2001), but a little less attention is spent on institutional lock-in effects in environmental management (Weinthal, 2002). This paper aims to re-iterate the importance of the environmental challenges to the future development of the region and to look at the causes of the problem – to show how the institutional practices inherited from the past, which are still present, continue to affect regional development. The discussion of the possible solutions to the regional problems and existing projects suggests that a comprehensive approach may be the most viable solution. Although the region is facing serious economic, social and environmental problems, it still provides examples of good practices, at least at the level of small scale projects.

The main conceptual framework of this paper is institutional analysis, which in this paper evaluates the institutional capacities and barriers of the studied region and the concept of sustainable development. Institutions are understood as formal and informal rules of human social behaviour. They are defined as the structures that impose on human interaction and therefore (together with the other constraints (budget, technology, etc.) determine the choices that make and that shape the performance of societies and over time (North, 1990).

Sustainable development as a concept has been populated since 1987, when the UN World Commission on Environment and Development published its report, known as the Brundtland report. The report has introduced the main cornerstones of the new framework of contemporary development policies in a form of three pillars of development – economic growth, social development and nature’s conservation (WCED, 1988).

The chosen method for conducting research in this paper is comparative analysis of environmental policies of the five republics of Central Asia (Uzbekistan, Kyrgyzstan, Kazakhstan, Turkmenistan, Tajikistan) which allows us to identify general regional trends with a common Soviet past as the basis to find similarities and differences in the states’ approaches. Comparison is also used in the discussion on how these policies have changed over time, from Soviet times till recent times.

The question of natural resources and institutional capacities is the corner stone for economic and social development at national, regional and international levels. In Central Asia this particularly applies to water resources. The two great rivers of the region – the Amu Darya and the Syr Darya and their basins provide main water resources for the region. The Amu Darya flows from Tajikistan through Uzbekistan and Turkmenistan into the Aral Sea, and the Syr Darya goes from Kyrgyzstan to Turkmenistan, Uzbekistan and Kazakhstan. Water plays the key role in the formation and maintenance of local ecosystems. The fact that Kazakhstan and Turkmenistan are rich in gas and oil, while Tajikistan and Kyrgystan control the headwaters of the two major rivers, adds another tension, as countries exhibit pressure politics on each other. As water resources are essential for agriculture and general population’s well-being, these limited resources create a demand in regional cooperation in a sustainable manner so that resources can be spread out enough for all the needs of the five Central Asian republics. Unsustainable uncoordinated use of water resources could lead to serious conflicts in the region, even water wars which is highly undesirable. Such warnings have been made since the beginning of the independence era:

“The social and economic crisis faced by all the republics is not likely to foster respect for their own environment, let alone for the economic problem in the Aral Sea region. In the foreseeable future, the republics will increasingly focus on their national development program including water management, reclamation of new irrigated lands, crop diversification, optimization of hydropower production and food requirement for their growing population. Their water demands may differ significantly from the current allocation based on the former Soviet quotas. If no equitable water utilization plan can be found, different national water principles will lead to conflicts…The competition for scarce water will then become a key factor in carrying out conflicts and shape inter-republican cooperation in Central Asia” (Klotzli, 1994, p.68).

At the same time, since independence, all the Central Asian republics have realized the need to carry out more sustainable policies and made some steps in that direction. This requires a radical shift in attitudes and institutional behaviour at all levels, but particularly at the policy-making level. However, these changes are arguably the most difficult part in the development of the region. The set of required institutional changes have covered reforms in most aspects of resource management: from reviewing legislation, outdated standards and tariffs to introduction of monitoring systems and strict rules of protection of environment, let alone educational programs for local people. The projects to restore degraded environmental resources were costly. For example, the project to revive the Northern part of the Aral Sea and to control water levels of Syr Daria River cost 64.5 million USD (WB, 2011).