Ministers Urge More Rapid Integration of Central Asian Economies

News Release | 6 November 2005

BISHKEK, KYRGYZ REPUBLIC - Ministers from Central Asian and neighboring countries agreed today on a series of specific measures to accelerate economic cooperation in the fast-growing region.

Building on the increasing trust and confidence among countries participating in the Central Asia Regional Economic Cooperation (CAREC) Program, Ministers called for a deepening of the program's agenda. "Through coordinated action Central Asia can build on its strengths and again become a vital trade route linking the countries of the famed Silk Road between Asia and Europe," said a joint statement issued in Bishkek, Kyrgyz Republic, at the conclusion of the Fourth Ministerial Conference on Central Asia Regional Economic Cooperation.

"The high rates of economic growth now being experienced in the region reflect a new chapter, with growing trade and other forms of openness and modernization replacing inward preoccupations, in a virtuous circle of strengthening relationships," said the statement. "While barriers to trade and the costs of shipping goods continue to seriously hamper competitiveness and development in the region, CAREC countries recognize that the way forward is 'development through cooperation'."

High-level delegations from Afghanistan, Azerbaijan, People's Republic of China (PRC), Kazakhstan, Kyrgyz Republic, Mongolia, Russian Federation, Tajikistan, and Uzbekistan attended the meeting.

They were joined by senior representatives of CAREC's supporting multilateral institutions: ADB, European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme, and World Bank. Representatives from neighboring countries as well as multilateral, bilateral, and civil society organizations also contributed to the proceedings.

In a keynote address to the Ministerial Conference, ADB President Haruhiko Kuroda underlined the central importance of regional cooperation to economic growth and poverty reduction in Central Asia.

"Strengthening your resolve to reap the benefits of regional cooperation has never been more crucial, because a tremendous opportunity lies at hand - an opportunity to significantly increase growth, boost trade, and integrate your countries with regional and global markets," he told the conference.

"We at ADB and in our partner institutions understand that regional cooperation takes time, patience and courage. We acknowledge there are risks, but we firmly believe that the benefits outweigh these by far. And we are dedicated to assisting your efforts."

"Over the last year, the CAREC collaboration has grown stronger, its objectives more clear. With new partners and a regional economy in high gear, we must reach higher, dream bigger, build better - to intensify our cooperative efforts to reduce poverty and bring lasting peace, prosperity and hope to all the people of Central Asia," Mr. Kuroda said.

Ministers called for intensified action, at both the national and regional levels, to overcome trade and other impediments to development, including the creation of transport corridors to integrate the region and connect it with markets in PRC, the Russian Federation, India, the European Union and ports on the Arabian Sea.

"The Ministers' statement is an important reflection of, and commitment to, the critical role regional integration will play in Central Asia's future," said Joseph Eichenberger, ADB Vice-President and co-chair of the Ministerial Conference.

"It is a welcome sign that CAREC countries are committed to moving in the same direction and producing concrete results in the key areas of transport, trade, and energy. The Ministers have laid out an ambitious agenda of work to push cooperation forward and demonstrate the potential of greater integration," he said.

In their statement, Ministers agreed that the gains from regional cooperation depend on continued growth, as well as policy reforms and joint efforts to encourage investment and trade. They renewed their commitment to work together to expand trade openness, develop transport corridors across the region, and further develop and share the region's energy resources.

Ministers also underscored the private sector's role as an engine of growth for the region and emphasized the importance of ensuring regional cooperation reflects the needs and interest of the private sector.

"Bringing the benefits of regional cooperation to a wider audience must be a priority. Regional cooperation momentum must be reinforced," the Ministers said. "The period of uncertainty must be swept aside, replaced by shared goals and clarity of purpose."

The Joint Ministerial Statement highlighted the significant progress made in each of CAREC's priority areas:

  • On transport, Ministers endorsed the adoption of a Transport Sector Roadmap (2005-2010) to develop an integrated and efficient multi-modal transport system for the region, and noted several major infrastructure investments over the past year.
  • On trade, Ministers noted bilateral transit and cooperation agreements signed in 2005 between Kyrgyz Republic and Tajikistan, Azerbaijan and PRC, and between Uzbekistan and PRC; and pilot testing by Kazakhstan and Kyrgyz Republic of joint customs control at the Kordai-Akzhol border crossing. They endorsed a specific work plan for 2006, including continued promotion of bilateral cooperation initiatives, training and regional knowledge forums, and deepening the program in partnership with private sector and other stakeholders.
  • On energy, Ministers noted the completion of the first phase of the North-South Transmission Line project in Kazakhstan, and progress in discussions for funding the second phase; completion of the Tajikistan-financed 220-kv Batken (Kyrgyz Republic)-Kanibodom (Tajikistan) transmission line; preparations for rehabilitation of the Uzbekistan-Dushanbe gas pipeline; and diagnostic review of regulatory approaches and challenges prepared by the CAREC Members Electricity Regulators Forum (CMERF). Ministers also signed a Memorandum of Understanding for the formal establishment of CMERF.

Ministers welcomed the commitments and plans of financial institutions for support to CAREC in 2005-2006, including a combined $1.2 billion for transport, energy, and trade projects.

The Fifth Ministerial Conference on Central Asia Regional Economic Cooperation will be held in Urumqi, Xinjiang Uygur Autonomous Region, PRC, in 2006.