Central Asian Cooperation Stands at Crossroads of New Era | Asian Development Bank

Central Asian Cooperation Stands at Crossroads of New Era

Article | 18 September 2015

As a connecting link between Europe and East Asia, Central Asia is set to reap the benefits of burgeoning trade between the two economic giants.

With the rapid expansion in trade from the People's Republic of China, Japan, and Republic of Korea to the east, the Russian Federation to the north, and India and Pakistan to the south, Central Asia has the potential to meet real and growing demand for improved connectivity between Europe and Asia.

”There is an unprecedented opportunity for the countries of the Central Asian Regional Economic Cooperation (CAREC) Program to emerge as the center for trade and commerce, while sustaining higher levels of economic growth, and reducing poverty,” said Hong Wang, CAREC Unit’s Head at ADB.

“But the subregion's economies will not be able to fully capture this opportunity on their own. They will all benefit if they can work together to build on their strengths for mutual progress.”

Turning trade potential to reality

CAREC focuses on four priority sectors: transport, trade facilitation, energy, and trade policy. Total CAREC-related investment between 2001 and 2015 is about $28.3 billion, of which more than $10 billion was financed by ADB.

“There is an unprecedented opportunity for the countries of the Central Asian Regional Economic Cooperation (CAREC) Program to emerge as the center for trade and commerce, while sustaining higher levels of economic growth, and reducing poverty.”

Hong Wang, CAREC Unit’s Head at ADB

Turning this trade potential into reality requires significant improvement in the subregion's physical infrastructure such as roads and rail systems.

To this end, the CAREC Transport and Trade Facilitation Strategy 2020 identifies a total of 108 priority projects amounting to about $39 billion for implementation before 2020.

In addition to rebuilding domestic transport networks and expanding connectivity with neighbors, the CAREC program has also started work on economic corridors to connect markets by leveraging physical connectivity. For example, the Governments of Kazakhstan and the Kyrgyz Republic have agreed to pilot an economic corridor approach between the cities of Almaty and Bishkek.

Ministers gathering in Mongolia

Progress on these initiatives will be among the topics up for discussion by ministers from the 10 CAREC countries gathering this week in Ulaanbataar for the 14th CAREC Ministerial Conference. ADB President Takehiko Nakao will also attend.

On the agenda this year—the second time for the Mongolian capital to host the event—is a special session on the economic outlook for CAREC member countries, as well as a discussion of progress in the four priority sectors, and new initiatives such as Ten Actions to Make CAREC Corridors Safer, and the Common Agenda for Modernization of Sanitary and Phytosanitary Measures.

CAREC Ministers are also scheduled to get an update on the CAREC Institute launched in March 2015 based in Urumqi, Xinjiang Uygur Autonomous Region, the PRC. “It is expected that the CAREC Institute will provide a strong knowledge base and enhance capacity development efforts as part of the CAREC Program,” said Mr. Wang.

About CAREC

Founded in 2001, the CAREC Program is a partnership of the 10 countries—Afghanistan, Azerbaijan, People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan—and six multilateral development partners aiming to promote development through cooperation. ADB functions as the secretariat.