Central Asia Regional Economic Cooperation

Progress and Achievements

Since its initiation in 1997, the Central Asia Regional Economic Cooperation (CAREC) Program has been financed through a series of 6 regional technical assistance (TA) projects amounting to $5.164 million, of which $3.264 million has been financed through the Japan Special Fund (JSF). Operationally, the CAREC Program has focused on promoting market integration within the region and with the world economy by improving both hard and soft infrastructure in the priority areas of transport, energy, and trade facilitation.

The CAREC Program has followed a consensus-based and results-oriented approach, recognizing the inherent difficulty and complexity of economic cooperation. This approach has repeatedly been reaffirmed by the participating countries. Principally, the approach aims to achieve longer-term strategic objectives through tangible benefits from concrete projects as building blocks. With strong country support and active participation, ADB has now developed a strong partnership with the countries in Central Asia. The core member countries increased from four (Kazakhstan, Kyrgyz Republic, Uzbekistan and the People's Republic of China focusing on the Xinjiang Uygur Autonomous Region) in 1997 to seven (later joined up by Tajikistan, Azerbaijan and Mongolia).

The CAREC Program has to date achieved some degree of success. Three regional loan projects have been approved since the Program started amounting to $172 million, $122 million of which was funded through Ordinary Capital Resources (OCR) and $50 million through the Asian Development Fund (ADF). In addition, ADB leveraged cofinancing amounting to $111.3 million for 2 of these 3 loan projects. The first regional loan, which was approved in 2000, supports the rehabilitation of the Almaty-Bishkek road with cross-border arrangements between Kazakhstan and the Kyrgyz Republic. The other 2 regional loans were approved in 2002: one supports a Regional Trade Facilitation and Customs Cooperation Program for the Kyrgyz Republic and Tajikistan; and another provides for the modernization of the regional power transmission system in Uzbekistan and Tajikistan and enhancing power trade relationship between these countries. Before end-December 2003, a loan for the rehabilitation of the Dushanbe-Kyrgyz Border Road amounting to $15 million is expected to be submitted for Board consideration.

Furthermore, the CAREC Program has mobilized to date a total of $8.0 million in 14 TA grants covering its priority areas-$2.4 million for regional power and gas transmission improvement; $3.0 million for trade facilitation and customs reform; and $2.6 million for regional transport improvement projects.

Finally, cumulative regional TA grants, not directly under the Program but which provided targeted assistance on issues with long-term poverty reduction impact in the region, particularly in social infrastructure, environment and finance, amounted to $13.8 million¹. In 2001, a project amounting to $6.85 million, financed under the Japan Fund for Poverty Reduction, was approved for improving nutrition for poor mothers and children of Asian countries in transition.

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