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Arindam Banik

Contributor

Arindam Banik is an Indian economist who is the ICCR's Chair of Indian Studies (Economics) at Samarkand State University. The recipient of numerous awards Banik has worked as a consultant for various government and multilateral agencies, including the World Bank and the Asian Development Bank. Banik has authored several books and written for numerous magazines and newspapers.

Articles

Unpacking the Effects of Trump’s Tariffs on Central Asia

Trade analysts across Central Asia generally agree that the immediate impact of the United States' tariff policy on the export dynamics of their nations will likely be minimal, as observed in past experiences, except for Kazakhstan. However, there is a palpable concern regarding potential unforeseen consequences arising from a broader global trade conflict. Notably, the timing of the Trump administration's announcement regarding global tariffs on imports coincides with a period when Central Asian countries are actively working to enhance their regional trade relationships. This new tariff policy raises significant doubts about the authenticity of recent U.S. efforts to promote increased trade and investment in the region. The mixed signals coming from Washington may lead Central Asian leaders to re-evaluate their current trade partnerships, especially as they consider the benefits of strengthening ties with China and Russia against the attractiveness of expanding commerce with the United States. Similarly, the European Union may find an opportunity to improve its position, while India could leverage the Chabahar route (a multi-modal transportation route connecting India, Iran, Afghanistan, and potentially Central Asia and Europe). It is worth noting that the market is primarily situated in Asia, and this alternative could have adverse long-term effects on the United States. Kazakhstan, acknowledged as the United States’ largest trading partner in Central Asia, is poised to face significant repercussions from introducing new tariffs set at 27%. In 2024, trade relations between the U.S. and Kazakhstan reached an impressive total of $3.4 billion, with $1.1 billion in U.S. exports to Kazakhstan and $2.3 billion in imports from Kazakhstan to the U.S. However, a statement from the Kazakh Trade Ministry indicates that exports to the U.S. primarily consist of crude oil, uranium, silver, and other raw materials, all exempt from these tariffs. In 2024, Kazakhstan exported only $95.2 million worth of goods, which will now incur surcharges – a relatively modest figure compared to the country’s overall foreign trade turnover of $141.4 billion. Trade analysts suggest that Kazakhstan has little cause for concern, viewing this situation more as a psychological impact than a serious economic threat. Resource-driven Central Asian economies, such as Kazakhstan, may even find enhanced opportunities in the expanding Asian market. Trade dynamics in Central Asia reveal a complex landscape, especially concerning the United States. In 2024, Uzbekistan managed to export a modest $42.4 million worth of goods to the US, a small fraction considering its total foreign trade turnover, which reached an impressive $66 billion for that year. This stark contrast highlights the limited engagement of Uzbekistan in the American market. With its total trade turnover of $16 billion in 2024, Kyrgyzstan similarly struggled with exports to the US, which amounted to merely $16.7 million. This reflects a broader trend where Central Asian economies exhibit low volume exports to the US, suggesting significant barriers or challenges in establishing a foothold in this lucrative market. Tajikistan's economic performance presented an even more sobering picture. Recording a total trade turnover of $8.9 billion, the country achieved only $4.6 million...

1 month ago

Mirziyoyev Champions a Flourishing Central Asia by Enhancing Collaboration With the European Union

The global landscape is transforming, driven by geopolitical instability, economic uncertainties, and climate-related challenges. These dynamics are fostering innovative forms of international collaboration. A notable example of this shift is the remarkable fourfold increase in trade between Central Asia and the European Union over the past seven years, culminating in an impressive €54 billion. This surge highlights a growing interest among European businesses in the diverse markets of Central Asia, strategically situated at the intersection of crucial global trade routes. Against this backdrop, the Central Asia-EU summit was held over two days in Samarkand, the "Eternal City", on April 3-4, 2025. During his inaugural address on April 3, 2025, Uzbekistan's President Shavkat Mirziyoyev articulated the summit's significance, stating his view that this gathering represented a transformative moment that could redefine regional partnerships. Mirziyoyev reflected on the deep historical connections and shared interests driving the momentum toward closer ties with the EU. The choice of Samarkand — renowned for its rich historical legacy as a center of trade, science, and diplomacy — as the venue for this significant meeting was particularly poignant, as it symbolizes the intersection of cultures and ideas. Mirziyoyev evoked the historical interactions between Amir Temur and European monarchs, underscoring Samarkand as a melting pot of diversity and intellectual exchange. He introduced the notion of the “Samarkand spirit,” which he described as a symbol of unity and interconnectedness that could serve as the foundation for a new chapter in international relations. The President emphasized the sweeping transformations occurring in Central Asia, reinforcing Uzbekistan’s dedication to nurturing good-neighborly relations built on mutual benefit. Miriyoyev candidly acknowledged the region's history of conflicts and disputes but expressed hope for a shift toward constructive dialogue and trust, pointing to the recent resolution of border disputes between Kyrgyzstan and Tajikistan as a concrete example of this positive trajectory. Furthermore, he elaborated on ongoing initiatives to establish border trade zones, joint investment funds, and transportation corridors that could enhance connectivity and economic collaboration. Mirziyoyev outlined several key priorities: fortifying regional security, advancing economic integration, and promoting environmental sustainability. He conveyed a sense of optimism, proclaiming, "We are facing a historic chance to make our region not only sustainable but also prosperous." The President discussed Uzbekistan's comprehensive economic reforms to create a conducive business environment and liberalize the foreign exchange market. He expressed optimism that the Enhanced Partnership and Cooperation Agreement (EPCA) with the EU would significantly enhance trade and investment relations and proposed aligning the EU's Global Gateway strategy with regional transport initiatives to support this. He also advocated for developing an Action Plan for the Trans-Caspian Transport Corridor. Additionally, he believes there is potential to establish Tashkent as a financial center similar to Hong Kong, as the initial conditions meet the necessary criteria. On energy matters, Mirziyoyev positioned Central Asia as a dependable partner for Europe, highlighting the region's potential to contribute to energy stability and decarbonization efforts. He cited the ambitious Green Strategic Corridor project and the prospect of a Central Asia-EU...

1 month ago

A Historic Gathering: The First Central Asia-European Union Summit in Samarkand

Excitement is building in Samarkand as it gears up to host the inaugural Central Asia-European Union Summit. This landmark event promises to pave the way for significant negotiations and collaboration, bringing together leaders and representatives from both regions. With a rich cultural backdrop and a vibrant atmosphere, Samarkand is poised to play a crucial role in shaping the future of partnerships and cooperation between Central Asia and the European Union. In recent weeks, Uzbekistan has experienced notable advancements in its foreign policy, signaling a proactive approach to international collaboration. A highlighted event was the fruitful engagement between Uzbekistan's head of state and Kaja Kallas, the High-level Representative of the European Union for Foreign Affairs and Security Policy. Additionally, a delegation led by Josef Sikela, the European Union Commissioner for International Cooperation, participated in discussions to foster deeper ties. A significant milestone on the horizon is the inaugural Central Asia-European Union summit, set to unfold in the historic city of Samarkand on April 3-4. During a pivotal meeting on March 27 with Kallas, President Shavkat Mirziyoyev meticulously explored the preparations for this groundbreaking summit, which has captured global attention due to its potential to reshape regional dynamics. The leaders engaged in a rich exchange of ideas focused on bolstering practical cooperation between their regions and planning future collaborative events that could further strengthen these ties. The significance of fostering mutually beneficial cooperation between the two regions in trade and logistics was emphasized during the meeting. This includes harnessing the potential of the Trans-Caspian Transport Corridor, advancing digitalization, promoting green energy, addressing ecological concerns, modernizing infrastructure, and other priority areas. The introduction of effective mechanisms for implementing initiatives and projects in these fields was also highlighted. Participants exchanged views on enhancing Uzbekistan's relations with European Union organizations, discussing adopting a new agreement for enhanced partnership and cooperation and Uzbekistan's accession to the World Trade Organization. Current international and regional policy issues were also addressed. Additionally, on March 18, President Shavkat Mirziyoyev met with a delegation led by Josef Sikela, the European Union Commissioner for International Cooperation. This meeting discussed critical matters regarding further developing multifaceted relations between Uzbekistan and the European Union. Moreover, plans for organizing the inaugural "Central Asia - EU" summit and the Climate Forum in Samarkand were considered. In recent years, bilateral cooperation with the European Union has accelerated across political, trade, economic, investment, and cultural-humanitarian spheres, presenting extensive opportunities for the continued expansion of these ties. A new Enhanced Partnership and Cooperation Agreement between Uzbekistan and the European Union is anticipated to be signed soon. Both parties have expressed a keen interest in promoting joint projects and programs across transport and logistics, energy, digitalization, agriculture, water management, and other key areas. Kallas conveyed warm greetings and best wishes on behalf of key EU figures, including António Costa, the President of the European Council, and Ursula von der Leyen, the President of the European Commission. The discussions underscored the necessity of cultivating mutually beneficial cooperation across various sectors, including...

2 months ago

Climate Change – A Catalyst for Poverty and Environmental Degradation in Central Asia

Climate change encapsulates the gradual yet profound shifts in temperature and weather patterns over extended periods. While these changes can arise naturally from various phenomena — such as fluctuations in solar energy or significant volcanic eruptions — the advent of the industrial age in the 1800s marked a pivotal point where human influence became the predominant force driving climate change. This influence stems chiefly from burning fossil fuels, including coal, oil, and natural gas. The combustion of these fuels releases vast quantities of greenhouse gases into the atmosphere, creating a thick layer that envelops the Earth and traps heat from the sun, resulting in a steady rise in global temperatures. Carbon dioxide (CO2) and methane (CH4) are the most significant greenhouse gases contributing to this crisis. Carbon dioxide predominantly emerges from driving gasoline-powered vehicles and burning coal for heating. Additionally, the widespread practices of deforestation and land conversion continue to elevate carbon dioxide levels. Methane, meanwhile, is primarily produced through agricultural practices and the extraction processes associated with the oil and gas industries. The sectors that bear the heaviest burden in terms of greenhouse gas emissions include energy production, industrial processes, transportation, building operations, agriculture, and land use changes. The ramifications of this unfolding climate crisis are dire, especially for the world’s most vulnerable populations, particularly those residing in poverty. According to alarming insights from the World Bank, the 74 countries with the lowest income levels contribute a mere one-tenth of global greenhouse gas emissions. Yet, ironically, these nations are poised to endure the harshest repercussions of climate change. Over the past ten years, they have experienced an astounding surge in natural disasters, facing approximately eight times the frequency of such events compared to the 1980s. The effects on the lives of vulnerable populations are profound and far-reaching. Many face severe health challenges, including the prevalence of illnesses exacerbated by inadequate healthcare access. Erratic water supply creates a critical situation, often resulting in polluted drinking water that can lead to waterborne diseases. Additionally, the standard of education for these communities tends to be alarmingly poor, limiting future opportunities for young individuals. Many are forced to relocate as refugees, fleeing conflict and instability, which further complicates their lives. Moreover, those who find employment often encounter hazardous working conditions that put their safety and well-being at significant risk. Climate change presents profound security challenges for Central Asia, a region grappling with the dual threats of environmental shifts and social vulnerabilities. The interplay of climate change with existing fragility intensifies the risks to peace, stability, and security across the globe. This convergence will exacerbate human insecurity and escalate socio-economic and political instability. As a result of these changing climatic conditions, critical resources such as water, food, and energy face increasing threats. Countries already characterized by vulnerability — those grappling with conflict or instability — are among the most likely to experience detrimental effects. For instance, reports indicate severe drought conditions have led to a 30-40% decrease in agricultural production in some Central Asian...

2 months ago

Empowering Central Asia: A Unified Approach to Poverty Alleviation

Many developing nations have prioritised the eradication of poverty. They employing various strategies, such as pursuing higher economic growth and more equitable income distribution. These efforts have yielded mixed results, underscoring the importance of caution and awareness of the challenges involved. East Asian countries have made significant strides in eliminating poverty. China has made significant progress, and India has seen more moderate headway. Latin American nations have faced difficulties in reducing poverty due to sluggish economic growth, and unfortunately, poverty has risen in Africa. Extreme poverty has historically not been an issue in Central Asia, because of various support schemes provided by the former Soviet government. Nevertheless, while Central Asia's poverty rates continue to decline, poverty reduction is slowing in some countries. Interestingly, Uzbekistan has made notable progress in reducing poverty since 2021. The poverty headcount rate based on the national poverty line fell from 17.0 per cent in 2021 to 14.1 per cent in 2022 and further declined to 11.0 per cent in 2023. Robust real wage growth was the main driver of the recent poverty reduction. Between 2022 and 2023, increases in wage income accounted for nearly two-thirds of the total poverty reduction. However, wage growth was much higher among skilled workers, especially in urban areas, due to skills shortages in the labour market. The latest official statistics show that the average wage increased the most in the services sectors, with a higher share of high-skilled workers in telecoms, pharmaceuticals, and IT. Consequently, income growth favored the better-off skilled population. Such wage inequality leads to income inequality, measured by the Gini index, increasing from 31.2 in 2022 to 34.5 in 2023. It is also noted that the socio-economic conditions are better in all Central Asian economies than in other developing economies. In Central Asia, poverty reduction has been influenced by several factors, such as implementing a national welfare standard, improved access to quality education, and financial assistance for elderly individuals and households led by single mothers. For example, in Uzbekistan, introducing a national welfare standard in 2021 significantly reduced poverty. The poverty rate decreased from 17 to 11 per cent by 2023, with a more noticeable decline in rural areas (8 percentage points) compared to urban areas (4 percentage points), resulting in approximately 1.6 million individuals being lifted out of poverty. The government's initiatives suggest it is making progress towards halving poverty between 2021 and 2026, indicating a hopeful future for poverty reduction in the region. Notably, the World Bank has recalculated poverty estimates in Central Asia using updated international poverty lines. For lower-middle-income countries -- which globally include Kyrgyzstan, Tajikistan, and Uzbekistan -- the poverty line is set at US$3.65 per day. In contrast, it is $6.85 daily for upper-middle-income countries like Kazakhstan. According to these new poverty lines, approximately five million people are considered poor using the lower-middle income country threshold, and 20 million people are considered poor using the upper-middle income country threshold. These updated poverty lines account for differences in living costs between countries....

9 months ago