How CAREC Stands to Build a Prosperous Central Asia | Asian Development Bank

How CAREC Stands to Build a Prosperous Central Asia

Op-Ed / Opinion | 14 April 2010

Nowadays trade, transport and energy relations play an important role in the regional cooperation and economic development of the countries. Asian Development Bank (ADB) pays serious attention to the regional cooperation. Mr. Juan Miranda, Director General of the ADB Central and West Asia Department prepared an op-ed devoted to the Uzbekistan-Afghanistan regional partnership under CARED program.

The presence of massive bulldozers on the dusty northern plains of Afghanistan demonstrates that Central Asia is on the move and poised to reap the benefits of its strategic location. It is here, just across the river from Uzbekistan, that the first building blocks of a 75 kilometer single line railway are being put in place that will soon connect Hairatan with Mazar-e-Sharif, Afghanistan's second largest city.

The new line will link Afghanistan to Uzbekistan's expansive rail network as well as help remove the major physical bottlenecks that have recently formed at the border. This will open up alternative routes of supply for national and international trade, and benefit the lives of millions of people.

The project builds upon another successful cross-border scheme. This time last year, electricity began to flow into Kabul along a newly constructed transmission line that runs from Uzbekistan all the way across the Hindu Kush mountains to the Afghan capital.

The examples of Uzbekistan and Afghanistan show the benefits of collaboration. Initiatives such as these are the life-blood of the Central Asia Regional Economic Cooperation Program, or CAREC, a partnership of eight countries that are actively working together to make the region a pivotal crossroad for international trade and commerce.

Founded in 1997, CAREC comprises Afghanistan, Azerbaijan, the People's Republic of China (PRC), Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan, along with six multilateral institutions: the Asian Development Bank, European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme, and the World Bank.

CAREC's mandate is to help its member countries – mostly vast, land-locked geographies with small, scattered populations – build the trade, transport and energy links that are necessary to promote economic development and reduce poverty.

CAREC's backbone is a plan to develop a seamless network of six transport corridors to connect member countries to one another as well as to the fast-growing economies of East and South Asia and established markets in Europe and the Russian Federation.

It is a huge undertaking, encompassing ports and airports, at least 29 priority border crossings, 20,000 kilometers of railway track and some 24,000 kilometers of road stretching from the PRC in the east to Azerbaijan in the west; from the Russian Federation in the north through to Afghanistan in the south.

Despite the success of the Uzbekistan and Afghanistan rail and electricity projects, getting CAREC's many diverse countries to work together has not always been easy.

CAREC aims to assist in solving these issues.

CAREC's Implementation Action Plan for Transport and Trade Facilitation is expected to total $26 billion between 2008 and 2017. These investments aim to build smooth-running roads and swift railways between key cities and towns in the region, connecting innumerable communities along the way.

Simplified and harmonized customs regimes and upgraded border posts will make it easier for people and goods to cross borders, easing the way for more business between neighbors and, ultimately, with partners in other further-flung regions.

When the Action Plan is completed in 2017, a modern, efficient network of CAREC corridors is expected to ferry at least 5% of all goods traded between the massive markets of Europe and East Asia.

Equally as important as financing is the role CAREC plays in providing a forum for its members to overcome their differences, work on the mechanics and economics of cooperation, and explore and experience the merits of collaboration.

Ministers, advisors, technical experts and civil society representatives from each of the CAREC countries meet regularly to discuss issues of mutual importance and devise ways to collectively benefit from growing trade and commercial links.

Thorny issues, especially over water and energy, must still be resolved. CAREC is the ideal entity in which to grapple with these and other issues. In doing so, the region will become a vital and prosperous crossroad connecting north and south, east and west.