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ADB: Regional Cooperation Essential to Economic Growth in Central Asia
MANILA, PHILIPPINES - Central Asian countries must work together to remove barriers hampering trade and improve roads and other infrastructure if the region is to maintain its rapid economic growth, a senior Asian Development Bank (ADB) official said ahead of a regional cooperation meeting.
The comment by Mr. Juan Miranda, Director General of ADB’s Central and West Asia Department, came ahead of the 6th Ministerial Conference of the Central Asia Regional Economic Cooperation (CAREC) Program in Dushanbe, Tajikistan, from Nov. 2-3.
“Improved cooperation on trade and transport challenges currently facing Central Asia will ensure its people and goods can move freely and efficiently across borders, providing a firm foundation for sustained growth,” Mr. Miranda said.
Economies in the region are growing rapidly. However, the boom is taking a heavy toll on infrastructure. In parts of the region, aging roads are deteriorating faster than rehabilitation works can compensate. The rail networks are also being strained.
The issue is due to be addressed at the Dushanbe meeting, where Ministers from CAREC’s eight participating countries are expected to discuss a proposed strategy calling for about $19 billion in investment in new transport corridors. They would link Europe with southern and eastern Asia, as well as Russia with the Arabian Sea and Persian Gulf.
“This could lead to the construction of the modern-day equivalent to the ancient Silk Road,” said Mr. Miranda. “Historically the region was braided by multiple routes linking east and west. It can do this again.”
Trade flows through Central Asia are growing, but the region so far only captures a small portion of the potential. Less than 1% of trade between Europe and China, for example, travels through Central Asia. The preferred route is by sea.
“Central Asia lies at the geographic center of the Eurasian continent, but it has been unable to capitalize on this advantage because of the lack of transport links,” said Mr. Miranda.
The strategy to be discussed at the meeting in Dushanbe also calls for the reform and modernization of procedures at border crossings, which are often bottlenecks for trade flows.
CAREC is an ADB-supported initiative to encourage economic cooperation in Central Asia. Initiated in 1997, the program to date has focused on regional initiatives in transport, trade facilitation, trade policy, and energy critical to improving the economic performance of the region and the livelihoods of all people-especially of the poor.
Eight countries participate in CAREC: Afghanistan, Azerbaijan, People’s Republic of China [PRC] (with focus on Xinjiang Uygur Autonomous Region), Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan.
CAREC is also an alliance of multilateral institutions active in promoting economic cooperation in Central Asia, namely, the European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme, and World Bank-in addition to ADB.