The demise of the USSR led to the collapse of its centrally organised retail system. With this collapse the supply of consumer goods dried up, especially in the remote parts of the former USSR. At the same time the advent of capitalism offered a new institutional framework for independent retail activities. In the Kyrgyz Republic, where the economic liberalisation followed strictly the Washington Consensus, a large number of small shops emerged in both urban and rural areas. This study analyses the reasons for this boom in retail start-ups as well as the constraints the mainly inexperienced merchants encounter. As will be shown, any success in retail activities depends greatly on the performance of other economic sectors. The main goal of starting a retail business is to minimize risks within the overall livelihood strategies of households in rural Kyrgyzstan.

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