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AbstractRural areas in the transition countries of Eastern Europe and Central Asia are often excluded from the fruits of economic growth. In this paper it is argued that this exclusion goes beyond the mere 'rural‐urban divide' caused by unequal income distribution. Social exclusion, measured by three dimensions, exclusion from economic life, exclusion from social services, and exclusion from civic life and social networks, is captured by an innovative multidimensional exclusion index (MEI), developed in the Regional Human Development Report. The empirical base for the MEI is a set of large household surveys in six transition countries, Kazakhstan, FYR Macedonia, Moldova, Serbia, Tajikistan, and Ukraine, held in the period September‐November 2009, during the height of the economic crisis. Special emphasis is given to the location factor, showing that social exclusion is overall stronger in rural areas in Eastern Europe and Central Asia, in particular caused by the stronger influence of the second dimension, exclusion from social services, which includes access and quality to public utilities.

The haunting picture of a disappearing Aral Sea is just part of an overall environmental crisis in the Aral Sea Basin, where millions of people are dependent on agricultural production around the flows of two main rivers, the Amu Darya and Syr Darya. Forced cotton cultivation in the former Soviet Union, in the context of inefficient agricultural organization and production, caused water mismanagement, salinization, water and soil contamination, erosion and the desiccation of the Aral Sea. In the post‐Soviet era of 'transition', the governments of the Central Asian states and international donors have tried to mitigate the impact of the crisis and contain its scope. Resource‐based tensions in the region reflect national (and sometimes ethnic) interests vested in the crucial agricultural sectors that provide foreign exchange and food. Although the Central Asian governments are gradually formulating regional water, land and salt management strategies, the room for manoeuvre that exists to implement policies which would immediately improve the environment, such as efficient water management and sustainable land use, is not being sufficiently utilized.