Rebuilding the Silk Road: Encouraging Economic Cooperation in Central Asia

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Rebuilding the Silk RoadEncouraging Economic
Cooperation in Central Asia

• Central Asia Regional Economic Cooperation Unit
• June 2003

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Outline

• Rationale for and challenges of regional
  cooperation in Central Asia
• Role and approach of ADB
• Priority areas of transport, energy/water and
  trade facilitation
• Institutional support
• Regional cooperation strategy

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Central Asia Region
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Three Major Challenges for each Country

• Political transition
• Economic transition
• Institution building to meet transition and
  development needs

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Regional Economic Cooperation

• contributes to harmonious and sustainable growth.
• enhances private sector development.
• is complementary to national development
  strategies.
• is an important means to achieving stability.

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Putting regional cooperation into development
context

• Integration of regional markets expanding
  national markets reducing transaction
  (transport) costs facilitating further
  integration into world markets and providing
  buffer for globalization risks.
• This rationale is reinforced by
• regions location,
• shared resources and infrastructure,
• small national markets,
• shared heritage and tradition.
• 911 adds another strategic dimension to the
  rationale.

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Enlarged region extending to

• Important neighbors Russia, PRC, Iran,
  Afghanistan, South Asia, Turkey
• These economies are more complementary than among
  the CARs themselves
• Offer far larger markets
• Ensure regional security and stability

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Regional cooperation achieves progress by
addressing two sets of regional issues

• Regional public goods (RPGs) - require joint
  efforts for solution. They include natural
  resources management (environment), water and
  energy, trade and investment, security,
  governance (anti-money laundering and
  anti-corruption), communicable diseases,
  globalization (WTO accession).
• Common issues - where countries benefit from
  sharing experience and working together. They
  include human development issues of nutrition,
  education reforms, private sector development
  issues, etc.

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Role of ADB

• ADB Charter foster economic growth and
  cooperation
• A regional cooperation program launched in 1997
  for Central Asia
• Functions
• as an honest broker
• as a provider of information
• mobilizing public/private resources

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The Phased and Pragmatic Approach

• Phased increasing awareness, fostering trust and
  building consensus as foundation
• Results-oriented concrete progress in
  investments and policy improvements as building
  blocks in the process

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Sectoral Focus

• Transport
• To lessen the economic isolation of the region
• Energy
• To support efficient and rational use of energy
• Trade
• To promote trade, traffic, and transit within,
  and to/from, the region

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Transport

• Objective rehabilitating transport networks to
  lessen locational isolation
• Almaty-Bishkek Regional Road Rehabilitation
  Project (2000)
• Other priority transport projects (e.g.
  Kyrgyz Transport Corridor Dushanbe-Sary Tash
  road)

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Regional Map dots proposed regional
projects/lines ADB ongoing projects red
for road, blue for railway
AFGHANISTAN
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Energy

• Objective supporting efficient and rational use
  of energy (water) through cooperation
• Regional Power Transmission Modernization Project
  (2002)
• Regional Gas Transmission System Improvement
  (PPTA ongoing)
• Energy and Water Nexus Study (2002) --
  formulation of an action plan

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Trade Facilitation

• Objective promoting trade within, to and from
  the region, free from barriers especially
  non-tariff barriers
• Customs Sector Study (2001)
• Customs modernization in TAJ and KGZ (2002)

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CAREC Lending Program, 2003-2005
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CAREC Nonlending Program, 2003-2005
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CAREC Nonlending Program, 2003-2005
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CAREC Nonlending Program, 2003-2005
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An Overall Institutional Framework

• The framework was established in January 2002.
• Objectives
• Regular, high-level policy dialogue and
  consultation
• Improve overall planning, prioritization and
  implementation
• Effective coordination with all stakeholders

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INSTITUTIONAL FRAMEWORK For ADB-Supported
Regional Economic Cooperation Program in the
Central Asian Region
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ADBs Regional Cooperation Strategy (2004-2006)
Key Considerations

• Identifying common goals of participating
  countries to base ADB's strategic objective in
  support of regional cooperation
• Analyzing rationale for regional cooperation,
  past experiences (constraints), and future
  prospects, including ADB experience and lessons
  learned
• Analyzing key regional and emerging issues to be
  addressed jointly to clearly identify ADB's
  strategic thrusts and operational focus and
• Building more strengthened strategic partnership
  with development partners.

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Conclusions

• The Central Asia region is facing difficult
  challenges as it strives to achieve economic
  development and reduce poverty.
• Cooperation among countries in the region as well
  as with others is indispensable if they are to
  succeed.
• There are no easy short term solutions.
• Political commitment, patience, persistence, and
  confidence building are critical.
• ADB is committed to supporting the initiative.

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For More InformationEmailcarecu_at_adb.orgWeb
Sitehttp//www.adb.org/carec