Catalog

Prosperity Tied to Regional Cooperation
ADB Review [ November 2004 ]

Regional cooperation plays a vital role in the future peace and prosperity of the subregion

By David Kruger (dkruger@adb.org)
External Relations Specialist

Successful regional cooperation will be a crucial element in the future peace and prosperity of Central Asia, according to a recent Asian Development Bank (ADB) survey of the subregion.

ADB’s experience across Asia shows that rapid, sustained, and pro-poor economic growth is the most effective tool in the fight against poverty. In Central Asia, achieving such growth will require expanded export activity, stronger private enterprise, and an increase in investment in areas currently excluded from economic gains, according to ADB’s Regional Cooperation Strategy and Program for Central Asia.

Regional cooperation offers the fastest and most effective way to put the building blocks of sustainable growth in place,” says M.E. Tusneem, Director General of ADB’s East and Central Asia Department.

“To expand growth and reduce poverty, Central Asian nations need to create efficient transport infrastructure, rehabilitate energy networks, restore and improve irrigation systems, and enable seamless transit across the region to external markets. Success in each of these areas will require close cooperation,” Mr. Tusneem says.

FINDING MARKETS Regional cooperation will expand trade opportunities

Ministers and senior officials from the governments of Azerbaijan, People’s Republic of China (PRC), Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan, addressed these issues and others in Astana, Kazakhstan, on 31 October 1 November at the 3rd Ministerial Conference on Central Asia Regional Economic Cooperation.

The conference was hosted by the Government of Kazakhstan with the support of the Central Asia Regional Economic Cooperation (CAREC) Program, comprising ADB, European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme, and World Bank.

“The broad alliance of development partners who manage the CAREC Program bring together resources and expertise in a range of sectors that will provide regional governments with the tools they need to make informed decisions and to ensure that regional cooperation benefits their people,” says Craig Steffensen, Head of ADB’s CAREC Unit.

“Central Asia appears to be in a takeoff stage,” says Mr. Steffensen. “The region is surrounded by engines of growth and new opportunities. It is rich in natural resources and has a well-educated and disciplined labor force. There is every reason to be highly optimistic about the future. But economic integration regionally and globally is essential for securing that future.”

Following the breakup of the Soviet Union in 1991, the newly independent states of Central Asia experienced a severe economic decline and a sharp deterioration in social indicators. Nearly a third of the subregion’s population slipped into poverty.

In the late 1990s, the region regained its economic footing. Since 2000, Central Asia as a whole has attained impressive rates of economic growth, averaging 8.7% per year. This growth is fueling the creation of new jobs in nontraditional sectors and helping reduce persistent unemployment and poverty.

Central Asia’s rebound coincided with an economic upturn in Russia, continued rapid growth in the PRC, and new trade opportunities for Central Asian nations in Afghanistan and South Asia.

The seven CAREC member governments have identified four areas of concentration where vital work is needed and significant progress in regional cooperation is possible. The target sectors are trade facilitation, trade policy, transport, and energy.

In the past year, member governments and multilateral institutions active in the region expanded activities in each area. The Ministerial Conference is expected to discuss specific targets and plans for the years ahead.

“A lot of important working-level activity in each priority area is now in full swing,” says Mr. Steffensen. “Trade and data sharing agreements are being negotiated; border processing arrangements are being worked out; studies on the region’s comparative advantages and barriers to expanded trade are under way; roads are being built; power-sharing arrangements are being discussed.”

“This is real progress. And if the momentum is maintained, it will bring real results,” he says.

ADB’s Regional Cooperation Strategy and Program for Central Asia provides a long-term framework for the development of the subregion. It outlines ADB’s four central strategic objectives and provides a focused medium-term program to help the region address shared challenges and capitalize on shared opportunities.

The four strategic objectives are to secure access to profitable markets for exports in large neighboring countries; reduce transaction costs and facilitate transit and transport across CAREC members; improve energy supplies for sustaining growth; and prevent negative outcomes, such as environmental degradation, desertification, trafficking in humans and drugs, and the spread of communicable diseases.

ADB’s core Central Asia program for 2004–2006 will continue to focus on energy, transport, and trade facilitation.

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