Regional Development - The Times Of Central Asia

Viewing results 1 - 6 of 6

Central Asia Faces Devastating $9 Billion Annual Loss from Climate Crises

Central Asia faces a complex mix of development challenges, according to a study conducted by the Analytical Credit Rating Agency (ACRA). These include global issues such as climate change, rising inequality, and demographic shifts, alongside regional concerns like water crises, aging infrastructure, border conflicts, and lack of access to sea routes. The region’s challenges can be categorized into external and internal risks. Since gaining independence, Central Asia has been shaped by the influence of global powers. Trade, security, energy, and education ties with Russia remain strong, while China’s Belt and Road Initiative has led to significant investment in infrastructure. Western nations and multinational corporations are active primarily in the raw materials sector, particularly in Kazakhstan, Uzbekistan, and Turkmenistan. While these international connections drive economic growth, they also heighten the region’s vulnerability to global shocks. For example, heavy reliance on remittances from migrant workers and low export diversification increase economic fragility. Climate change poses one of the most pressing threats to the region. Natural disasters—including floods, which affect about one million people annually, and earthquakes, impacting two million - result in $9 billion in annual GDP losses. Rising temperatures are expected to exacerbate issues such as water scarcity, droughts, heat waves, and the loss of agricultural land. Adopting sustainable development practices and green technologies could help mitigate these effects. Aging water and energy infrastructure is a major hurdle for the region. Energy insecurity, compounded by climate change, limits economic potential. Despite a rise in foreign investment from $1.5 billion in 2000 to $7.4 billion in 2023, the majority of funds are concentrated in raw materials, with only a small share allocated to infrastructure improvements. Transport development is equally critical. The lack of sea access places Central Asia at a 20% developmental disadvantage compared to coastal nations. Expanding roads, railways, and logistics hubs could significantly enhance regional and international trade. Territorial disputes, particularly around enclaves, remain a source of periodic clashes, with the Kyrgyz-Tajik border clashes of 2022 being a notable example. While these conflicts may not immediately affect economic stability, escalations could damage the region’s investment climate and trade prospects. A peace agreement signed later in 2022 has helped to stabilize the situation. Additionally, the situation in Afghanistan continues to present challenges, including terrorism, refugee flows, and border security concerns. These risks intensified following the regime change in Afghanistan in 2021, increasing the urgency for stronger border controls. Addressing these interconnected challenges will require coordinated efforts among all Central Asian nations. International organizations and major global partners must also play a role by supporting infrastructure and technological modernization. Such collaboration is essential to mitigating economic risks and fostering long-term development in the region.

Economy Economic Growth Regional Development GDP Regional Security EDB

Central Asia’s Economy Expands Fourfold Over Two Decades, Outpacing Global Growth Rates

Over the past two decades, the gross domestic product (GDP) of Central Asia has grown fourfold in real terms and sevenfold in nominal terms, according to Evgeny Vinokurov, Deputy Head of the Eurasian Development Bank (EDB). Vinokurov highlighted significant improvements in the region’s economic landscape. Over the same period, population mobility has tripled, and incoming investments have surged by more than 17 times. Vinokurov emphasized that the last two years have underscored Central Asia’s status as an economically attractive and strategically important region. Positioned at the heart of Eurasia, Central Asia boasts strong transport and transit potential, a growing consumer market, and expanding opportunities for investment. Despite external challenges, the region’s economies have displayed remarkable resilience, maintaining steady growth and weathering global shocks effectively. Between 2022 and 2023, Central Asia’s economies grew at an average annual rate of 4.8%, significantly outpacing the global average of 3.4%. This makes the region’s growth rate 1.4 times faster than the global average. Vinokurov projected that Central Asia’s nominal GDP will surpass $500 billion in 2024. Despite these achievements, Central Asia faces complex challenges that require regional collaboration. Key issues include: -- Lack of access to the sea: Geographical isolation limits trade and economic integration. -- Climate and environmental risks: These pose threats to sustainable development. -- Water and energy management: Disjointed policies among countries hinder efficiency and sustainability. Vinokurov stressed the importance of joint efforts to address these challenges. Coordinated development of water and energy resources, renewable energy, and the Eurasian transport framework can yield cost-effective and efficient solutions. Central Asia’s impressive economic growth over the past 20 years reflects its potential as a key economic and transit hub in Eurasia. While the region faces significant challenges, collaborative solutions and investments in infrastructure and sustainability could unlock further growth and prosperity.

Economic Cooperation Silk Road Economic Belt Regional Development International Cooperation Business Support International investment

American Chamber of Commerce in Kyrgyzstan: Future Development and Investment Climate

As Central Asia continues to become a regional hub for trade and innovation, The Times of Central Asia spoke with Altynai Asanova, the Executive Director of the American Chamber of Commerce in the Kyrgyz Republic, to discuss the investment climate in Kyrgyzstan, economic trends, and future development. TCA: I see that your background is primarily in hotel management and sales; how did you transition from this role to your current position? “My background includes 18 years in the hotel business. Ten years at Hyatt, starting in food and beverage and ending in the hotel sales department; then, I worked at the Orion Hotel for the pre-opening and opening stage for about three years. After this, I was hired by Sheraton, one of the Marriott chain hotels, to work on the pre-opening and opening stage for two years. I was still involved with the business audience and wanted to continue working with the stakeholders and companies who know me.” TCA: How would you describe the hospitality industry in Kyrgyzstan? Is it mainly in Bishkek or other regions? “It is developing; before, it was only the Hyatt. Now, there are three or four chain hotels in Bishkek. It is good that there are more players in the market. It is developing day by day. The development is mainly in Bishkek, but we have good perspectives for Issyk Kul as long as the roads and infrastructure are completed. The chain hotels are also becoming interested in Issyk Kul. The good thing is that enough businessmen understand and accept the market challenges in Issyk Kul. They know it will not be financially stable at launch since the busy season is only about 50 days. But if the hotels provide full service and comfort, people will travel there for the full season.” TCA: Stepping away from hospitality, what did American investment in Kyrgyzstan look like ten years ago?” “Before, there was an American base in Kyrgyzstan. During that time, the hospitality business was amazing. The rates were high considering the charter flights and pilots who needed a place to stay. Now, these rooms are listed at the lowest rates. At that time, the Hyatt was the only five-star hotel in Bishkek, so all the American guests were staying at the Hyatt. The investment climate dropped after the U.S.-Kyrgyzstan agreement ended. There is opportunity, but it goes slowly.” TCA: Since then, what has changed in the business climate? “Business-wise, if we look from the angle of the association, we do not have any purely American business; we have franchise members: KFC, Hyatt, Sheraton, and some banks. It would be nice to have purely American [businesses] here.” TCA: Who are the current major investors in the Kyrgyz market? And is competition relevant to win contracts with local companies? “China, Russia, Kazakhstan, the Netherlands, and Turkey are the main investors. Before making any contracts or tenders, we need to understand the possibilities of our market, ‘Is our country ready to accept this level of business?’ The first question...

Regional Development ADB Strategy Economy

ADB Launches New Strategy for Turkmenistan

The Asian Development Bank (ADB) announced its new country partnership strategy for Turkmenistan on August 28. The strategy is designed to help the country develop a competitive, diversified, and knowledge-based economy driven by an innovative private sector. Under the new strategy, which spans from 2024 to 2028, the ADB’s assistance will focus on three strategic priorities: supporting the green transition to a sustainable and climate-resilient economy, promoting economic competitiveness through diversification with an emphasis on private sector and human capital development, and promoting structural reforms and institutional development. The ADB Director General for Central and West Asia, Yevgeniy Zhukov, commented: “ADB and Turkmenistan have a longstanding partnership, and the new strategy underscores our unwavering commitment to the country’s development. We will continue working closely with the government and Turkmenistan’s development partners to help the country realize its ambitious long-term development goals.” The ADB will support Turkmenistan’s green transformation with investments in energy efficiency, renewable energy, low-carbon pilot projects, and policy reforms. The bank will continue to help Turkmenistan develop long-term decarbonization plans and reduce methane emissions. The ADB will also support the development of sustainable and integrated transport networks focusing on railways along crucial trade corridors. Recognizing the critical role of the private sector in driving inclusive economic growth in Turkmenistan, the ADB will help build an export-oriented private sector and continue supporting domestic financial institutions, including improving access to capital for small and medium-sized enterprises targeting export markets. To support human capital development, the ADB will help reform the country’s healthcare sector to improve access, quality, and the range of services.

Kazakh Invest Regional Development Astana Industry Economy China

China to Build a Trade and Industrial Park in Astana

Last week, Xinjiang Hengyuan Investment Management Co., Ltd., based in the Chinese city of Baiyang, and Kazakh Invest signed a memorandum to implement the construction of a trade and industrial park, spanning 50 hectares, in Astana. As reported by Kazakh Invest, the project is expected to positively impact the development of critical sectors of Kazakhstan's economy, including logistics, warehousing, processing, trade, and real estate management. The project will also attract Chinese trade and manufacturing companies to operate in Kazakhstan. Yan Wang, Deputy Mayor of Baiyang, commented: "We are entering this project with great enthusiasm, seeing the enormous potential of Kazakhstan as a key logistics hub in the region. Creating the Kazakhstan-China Trade and Industrial Park in Astana will significantly expand the country's logistics capabilities and strengthen its role as an important transit corridor between East and West. We believe this project will catalyze attracting new trade flows and manufacturing." Yerzhan Yelekeyev, Chairman of the Board of Kazakh Invest, added: "This project opens up new horizons for cooperation between Kazakhstan and China. The creation of the Kazakhstan-China Trade and Industrial Park in Astana will not only accelerate the development of key sectors of our economy -but-also create numerous new jobs.”

Regional Cooperation Regional Development CAMCA

Eurasian Connectivity Comes One Step Closer at the 2024 CAMCA Forum in Bishkek

The wider Eurasia region took another step towards cooperation and connectivity last week, as the 10th annual CAMCA Regional Forum was held in Bishkek. CAMCA – standing for Central Asia, Mongolia, the Caucasus and Afghanistan – is an initiative to accelerate dialogue between governments, private enterprises and media figures from these ten nations. Organized by the Washington, D.C.-based Central Asia-Caucasus Institute and the Rumsfeld Foundation, this year’s Forum – the first such event to take place in Kyrgyzstan – featured over 300 delegates across its two days, and presented insights from over 70 speakers. Attendees came from 25 countries in total. Professor Frederick Starr, the Central Asia-Caucasus Institute’s chairman, used his opening address to call on the countries of the region to start preparing for a future within a cohesive international bloc. Dr Starr reasoned that Russia and China, imperial powers that have traditionally had a controlling presence in Central Asia, may see their global influence wane in the coming decade. This would give the countries of Central Asia, and their neighbors, more space to create projects that serve their economies directly. A leading CAMCA regional project is the ‘Middle Corridor’ trade route, which bypasses Russia to transport goods more efficiently between Europe and China. Discussions are also taking place concerning the creation of single business and tourist visas for the whole Central Asia region. The importance of collaboration between countries in the Caucasus and Central Asia to mitigate the impact of climate change has never been so great. Addresses by senior members of the Kyrgyz government highlighted the progress that Kyrgyzstan has made since the administration of president Sadyr Japarov began its work in 2021. The country’s deputy prime minister Edil Baisalov reported that Kyrgyzstan is on track to double its GDP to $30 billion by 2030, while the minister for digital development, Nuria Kutnaeva, spoke about the rapid digitalization of the country’s government services. In a noticeably warm and collaborative atmosphere, the event nonetheless highlighted the barriers that prevent the ten countries from forming a tangible ‘CAMCA’ space in the present. A key goal is the harmonization of their legislation and policy directions; however, no delegates from Tajikistan could travel to Bishkek for the Forum, as otherwise solid relations between Tajikistan and Kyrgyzstan are still strained by a dispute over their common border. Likewise, Armenian voices were also absent this time, in light of several of the sessions featuring Azerbaijani speakers and talking points. The event featured only one guest from Turkmenistan. Even in these conflicts, however, Central Asian diplomacy is at work. The conflict on the Kyrgyz-Tajik border, mainly in Tajikistan’s Vorukh district, is being resolved through negotiations between the two countries’ governments, which would have been unthinkable even five years ago. Meanwhile, Kazakhstan is acting as a mediator between Baku and Yerevan in the aftermath of the war in Nagorno-Karabakh. Other topics on the agenda included security priorities for Central Asia, digital innovation in business, cooperation with Afghanistan, transitions in global energy markets, and infrastructure projects...