Regions and Countries

	Table of Contents
p. 9 of 22 BACK | NEXT I. Summary II. Background and Rationale III. The ADB Initiative Towards Economic Cooperation in Central Asia A. Phase I: 1997-1998 B. Phase II: 1999-2002 IV. Sector Priorities and the Proposed Program 2001-2003 V. Addressing Poverty and Governance and other Cross-Cutting Concerns VI. Issues and Challenges

Central Asian Regional Economic Cooperation : III. The ADB Initiative Towards Economic Cooperation in Central Asia

---

B. Phase II: 1999-2002

21. Phase II of this regional initiative commenced in 1999 and seeks to support, in the context of regional cooperation, the continuing policy dialogue to remove cross-border barriers and facilitate the efficient movement of goods and peoples. Phase II maintained the initial strategic thrust noted above and has been guided by the following tactical concerns:

• The ADB’s initiative should stay tightly focused, emphasizing areas of comparative advantage such as transport.⁶ Reflecting the ADB’s comparative advantages, the work in the transport sector should be broad-based, the work in energy much more tightly oriented, concentrating on specific project areas as described below. Infrastructure investment projects should utilize the Almaty-Bishkek Rehabilitation Project as a model for future activities, particularly in the respect of tying investment to policy reforms designed to encourage trade.

• The trade environment has deteriorated, particularly with respect to cross-border trade. This reflects: (i) regional currencies that are not uniformly convertible, (ii) frequent border closures sometimes due to security concerns, (iii) tariff structures that impede trade, (iv) poor governance encouraging corruption in trade and travel clearance, and (v) national policies oriented towards national self-sufficiency. The ADB’s policy dialogue, supported by four regional workshops on trade issues and bilingual publications needs to be continued and strengthened.

• The recent membership of Azerbaijan and Turkmenistan in the ADB calls for careful thought to understand the particular needs of these countries in the context of the ADB’s regional efforts. Phase II has supported a study of the needs and relevance of regional cooperation to Tajikistan after it joined the ADB in 1998. It is anticipated a similar study would be undertaken in Azerbaijan and Turkmenistan.

• Modest, measured activities, should be undertaken to complement and support strong country-specific ADB programs with regional projects where appropriate. In this spirit, a workshop on rural financial systems development was held in Bishkek in October 1999 to support cross-country discussion concerning policy and institutional needs in the sector. This is expected to lead to further work in this area. In the future, it may be worthwhile to extend ADB’s regional efforts more broadly to address regional banking and financial issues. A workshop on education reforms and policies is similarly planned for the region in 2001.

• Equally important, the regional initiative’s plans and activities must be thoroughly integrated within the country programs. The priorities for action established by regional discussions must be consistent with ADB’s national programs of assistance. Establishing pipelines of regional projects, as discussed below, demand that loan, TA, staff, and consultant resources are budgeted within the national assistance programs.

• A more systematic and institutionalized approach should be adopted to facilitate further progress in regional cooperation. As activities are moving from the preparation towards the implementation stage, it is critical to ensure consistency and compatibility of ADB supported activities with the countries’ development priorities. Establishing an institutional framework would therefore enable effective facilitation of high-level policy dialogue and consensus building among the participating countries and between these countries and the ADB.

___________________

Back A. Phase I: 1997-1998	Next IV. Sector Priorities and the Proposed Program 2001-2003