Regions and Countries

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p. 20 of 22 BACK | NEXT I. Summary II. Background and Rationale III. The ADB Initiative Towards Economic Cooperation in Central Asia IV. Sector Priorities and the Proposed Program 2001-2003 V. Addressing Poverty and Governance and other Cross-Cutting Concerns VI. Issues and Challenges A. Increasing Internal Resources B. Improving Coordination with Other International Funding Agencies C. Country Programming Integration D. Regional Institutional Support

Central Asian Regional Economic Cooperation : VI. Issues and Challenges

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B. Improving Coordination with Other International Funding Agencies

51. Within Central Asia, other international funding agencies have mounted or are planning to mount regional projects. The ADB is actively working with those that address common issues and areas.

• The European Union’s Technical Assistance to the Commonwealth of Independent States (EU-TACIS) program has had the most involvement with the ADB’s activities. The Transport Corridor Europe Caucasus Asia (TRACECA) program, which provides grant financing of small-scale infrastructure and consultant studies, has been particularly important. Although the PRC is not involved, TRACECA can bring together all of the former Soviet Union republics to address cross-border transit and transport issues. ADB has actively been exploring avenues of future collaboration in the transport sector.

• USAID’s regional technical assistance projects have focused on institutional development in such areas as water resource management and energy pricing and trade within the CARs. ADB staff are actively exploring the potential for collaboration in those areas as well as electricity market development.

• The World Bank’s regional programs tackled the very important issue of rehabilitation of the Aral Sea among the CARs. This program faces the hard challenge of reform of the Soviet-era water sharing agreement. Potentially this could have a positive impact not only on the environment, but also on the potential for rationalizing electric energy generation and distribution.

• The United Nations Development Programme (UNDP) has recently committed to initiating a project to encourage economic cooperation in Central Asia (including PRC and CARs). This project could potentially address many of the same sectors as the ADB’s project namely trade and transport. The two organizations are in close consultation to ensure that efforts are coordinated, as the UNDP plans for its inception work.

• The United Nations (UN), through joint efforts by the Economic and Social Commission for Asia and the Pacific (ESCAP) and Economic Commission for Europe (ECE), is similarly supporting a project to address regional needs in transport and trade in Central Asia. The ADB will endeavor to closely coordinate its activities with those of the UN agencies.

• As EBRD focuses its operation in promoting the growth of private sector, ADB is actively exploring potentials for cooperation on a regional scale.

52. The ADB’s efforts have been carefully directed towards sectors and projects in which ADB resources–-particularly staff resources—have some comparative advantage. The emphasis on transport flows from the lead financing role of the ADB in the region. ADB efforts, however, even in transportation have benefited greatly from work by other funding agencies, particularly that of TRACECA’s technical assistance work. The ADB is continuing to coordinate its regional activities with that of other funding agencies. As a result of the coordination efforts to date, cofinancing has emerged for the Almaty-Bishkek Road Rehabilitation Project from the European Bank for Reconstruction and Development (EBRD) for the Kazakhstan loan component and the European Union (through TRACECA) is expected to provide grant cofinancing for both the Kazakh and Kyrgyz components of the project.

53. In addition to mobilizing resources from traditional partners, the ADB will actively pursue cofinancing for future projects in Central Asia from: (i) multilateral sources, such as the Islamic Development Bank, and the OPEC Fund for International Development, (ii) bilateral donors, such as the Saudi Fund for Development, and the Kuwait Fund for Arab Economic Development, and (iii) commercial sources. In the case of commercial cofinancing, sources of assistance include the ADB’s Complementary Financing Scheme, its guarantee programs (i.e., the partial credit guarantee and the partial risk guarantee), and increased cooperation with export credit agencies. In order to realize the full potential of such assistance (and consistent with the ADB policy to “upstream” cofinancing), cofinancing staff will participate in Country Programming Missions and actively assist in mobilizing resources for projects that demonstrate potential for cofinancing, whether official or commercial.

54. There is a need to strengthen the coordination efforts. There is, in particular, a need to ensure that forward-looking programs by international funding agencies are done in coordination. With the completion of the Phase II consultant studies in transportation and on the CARs electricity grid, a series of consultation meetings should be held with other international organizations active in this area, to include the EBRD, Economic Cooperation Organization (ECO)¹¹, the EU-TACIS program, UNDP, and World Bank. These meetings would allow the ADB to share its plans and seek active collaboration. Over the longer term, it may be worthwhile to establish a regional clearing center for information on economic cooperation activities in Central Asia, including, for example, the establishment of a web site.

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