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Central/South Asia: Forum Examines Regional Trade Prospects

For many, Central Asia's increased efforts to peddle its gas and oil abroad have highlighted that region's economic potential. But outside the market for natural resources, private investment from outside the Central and South Asia remains sluggish. Representatives from the embassies of Central Asia, international financial institutions, and U.S. government agencies were joined in Washington, D.C., on April 4 by a handful of private businessmen to discuss ways to boost Central and South Asian economic activity. Their efforts focused on ways to position Central Asia and Afghanistan as a regional crossroads for trade.

WASHINGTON, April 5, 2006 (RFE/RL) -- Participants suggested that global conditions are ripe for economic gains in Central Asia, and stressed the need for regional cooperation and the participation of international financial institutions.

Brent Dark, deputy resident director of the Asian Development Bank's (ADB) office in Washington, described the business climate in Central Asia as "improved" but "far from perfect."

"Truckers and traders faced closed roads on a daily basis," Dark said. "Small business owners are struggling to stay competitive in new market economies. Something as simple as obtaining a tourist visa is time-consuming and expensive."

He suggested, however, the potential for economic growth in the region remains strong. Its key advantage, he said, is its location.

"With proximity to rapidly growing markets like China, India, and Russia, all of which have huge demands for energy and with the greater transit access to the sea through Afghanistan, the region is well poised to reap the benefits of its strategic location," Dark said.

Dark said the ADB believes that if the global economic environment remains favorable -- and if Central Asian countries continue to press ahead with necessary economic reforms -- per capita incomes could double by 2015. At the same time, the poverty rate of about 40 percent of the population could fall to 25 percent within a decade.

The ADB predicts that commodity exports, especially oil and gas, will be the primary driver of growth in the region.

Another key driver of growth will be the large influx of funds from multilateral financial institutions under the auspices of the Central Asian Regional Economic Cooperation (CAREC) program. Founded in 1997, CAREC is a multi-institutional, multinational alliance.

The nine member states of CAREC are: Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Russia, Tajikistan, and Uzbekistan. And, there are six multilateral institutions: the Asian Development Bank, the European Bank for Reconstruction and Development, the Islamic Development Bank, the International Monetary Fund, the World Bank, as well as the United Nations Development Program. In 2006-07, the institutions in CAREC will provide more than $1.5 billion in the priority areas of transport, energy, and trade.

But efforts to create greater regional economic cooperation are not only being imposed from the outside. Mainura Murzamadiyeva, economic counselor from the Kazakh Embassy in Washington, detailed her government's successes at promoting regional trade.

"From 1999 to 2004, Kazakhstan's trade with other Central Asia states increased threefold," according to Murzamadiyeva. "In 2005, there were 122 Kazakh-Kygyz joint ventures, 110 Kazakh-Uzbek, 30 Kazakh-Tajik, and 12 Kazakh-Turkmen joint ventures in various sectors."

Murzamadiyeva said that Kazakhstan, as what she calls the "recognized regional leader," is promoting greater economic cooperation not only within the former Soviet republics. She said her country is pushing for more cooperation with Afghanistan as well.

Murzamadiyeva also pledged that her country was willing and able to make a meaningful contribution to the postwar reconstruction of Afghanistan. In particular, she noted her country's willingness to assist with developing oil fields in northern Afghanistan.