Think Tanks Discuss Economic Prospects and Challenges in Central Asia

Baku, Azerbaijan (15 September 2022).

The Central Asia Regional Economic Cooperation (CAREC) Institute, in partnership with the ADB-PRC Regional Knowledge Sharing initiative, the Economic Scientific Research Institute (ESRI), the Center for Economic and Social Development (CESD) and with support of the Asian Development Bank (ADB), organized the Sixth CAREC Think Tank Development Forum “Recalibrating Growth Dynamics for Inclusive and Sustainable Economies” in Baku, Azerbaijan.

Mr. Syed Shakeel Shah, Director of the CAREC Institute, welcomed the participants of the forum and emphasized the importance of the forum as a multilateral platform for discussing economic prospects and challenges in the region and exploring joint knowledge solutions. This year’s forum is dedicated to discussing sustainability and inclusiveness, UN Sustainable Development Goals (SDGs), climate change, green energy, the impact of geopolitical uncertainty and economic recovery after the COVID-19 pandemic.

Mr. Shixin Chen, Vice President of the Asian Development Bank, in his opening speech congratulated the CAREC Institute’s Think Tank Network for joining the South-South Global Thinkers – the Global Coalition of Think Tank Networks for South-South cooperation, which is jointly established by UNOSSC and UNDP. Vice President highlighted the negative impact of the COVID-19 pandemic, climate change, geopolitical conflicts, and international confrontation on countries’ efforts to achieve the SDGs, which have led to a return to poverty, higher inflation, water shortages, health issues, natural hazards, loss of livelihoods, increased food and energy insecurity and school dropouts. To overcome these challenges, the ADB provides a broad spectrum of technical, financial and capacity development support to its developing member countries in the CAREC region.

Mr. Samad Bashirli, Deputy Minister of Economy of the Republic of Azerbaijan, in his keynote address emphasized the importance of the forum in advancing the policy dialogue among CAREC governments, think tanks and development partners towards regional economic cooperation. Deputy Minister warmly welcomed the signing of the Memorandum between the Economic Scientific Research Institute of the Ministry of Economy of Azerbaijan and the CAREC Institute that will promote joint research and partnerships in the development and implementation of policies, programs and projects aiming to support the regional economic integration.

During the second session of the forum Dr. Albert Park, Chief Economist and Director General of the ADB, provided an extensive overview of CAREC economies and discussed about how much recalibration is needed for inclusive and sustainable growth in the region. Mobilization of taxes for development, mitigating climate change and gender inequality, strengthening digitalization and enhancing regional cooperation are key policy priorities for CAREC countries to ensure inclusive and sustainable growth. Dr. Hans Holzhacker, Chief Economist of the CAREC Institute, and Dr. Kamalbek Karymshakov, Vice Rector of the Kyrgyz-Turkish Manas University, supplemented the discussion by sharing the results of their own research. Dr. Hans Holzhacker emphasized that for catching up with the developed economies, CAREC economies require a productivity push, which must be driven by higher technical and vocational education, innovation, foreign trade, and direct foreign investment. For sustainable and inclusive growth in the CAREC region, a well-designed and tailored fiscal and monetary coordination mechanism needs to be developed. Dr. Kamalbek Karymshakov highlighted the low-quality education and job-mismatch as the key impediments for sustainable economic development that need to be resolved.

During the third session, researchers from Azerbaijan, Kazakhstan, Pakistan and Uzbekistan shared the results of their research on access to healthcare, education, digital technologies and women’s labor force participation. The COVID-19 pandemic has seriously affected the economy of Azerbaijan, which has taken several policy initiatives in education, health and the digital sector to overcome the crisis. The impact of the pandemic on Kazakhstan’s economy was paramount, as services sector, investment and growth have reduced, oil prices have plummeted, and mortality rate went up. Kazakhstan must increase health care funding and improve women’s labor force participation and digital accessibility to overcome the losses. The pandemic has also had a significant impact on Pakistan’s economy, both directly and indirectly, affecting socio-economic sectors including human well-being, stagflation, job security and stagnation of educational services. The country needs to reduce gender and geographic disparities in the digital sector by increasing digital literacy, especially in rural areas. Similarly, the pandemic has negatively impacted the economy of Uzbekistan in terms of healthcare, education, access to digital technologies, and female labor force participation. The country needs to invest in and accelerate technology-based teaching and learning across the country, with a focus on rural and low-income areas. Uzbekistan also needs to consider tax incentives for telecom operators that prioritize Internet connectivity and install fiber optic lines to improve broadband connectivity in rural areas.

The fourth session of the forum began with a presentation by a UNDP representative on the progress on SDGs in the CAREC region, where there are different levels of progress of countries in achieving the SDGs and financing of the SDGs remains as a key issue. More innovative financing solutions are needed to cover the financing gap in some CAREC countries. Representatives of think tanks from the Kyrgyz Republic, Tajikistan and Turkmenistan shared their views on their countries’ progress in achieving the SDGs, the bottlenecks and policy prescriptions for achieving the targets. The overall picture of Kyrgyz Republic looks very encouraging, but a number of pre-pandemic challenges persisted in 2021, such as diversifying the economy and attracting foreign investment, as well as providing better public services, especially in the health and education sectors. The achievements and realization of SDGs has been mentioned by Tajikistan and Turkmenistan. In both countries, the key issue is attracting funding for the SDGs and developing a SDGs funding mechanism.

Today’s last session discussed climate change vulnerability and the case for green energy in the CAREC region. Four-“A” perspectives on energy security were presented for the CAREC region: between 2011 and 2015, the availability and the affordability of energy appear to have improved while the acceptability of energy appears to shrink considerably, and applicability of energy seems to be more likely the same. Participants discussed the transition to renewable energy sources, renewable energy and green energy zones initiatives. An “implementation strategy”, mainly the development of a regulatory framework, was mentioned as the key challenge. Major progress, commitment and initiatives in the form of domestic policies and actions including international cooperation of China’s climate change were presented by the PRC think tank representative.

The forum will continue tomorrow with discussions on i) the impact of geopolitical uncertainty and the COVID-19 pandemic on inequality, poverty, rising food and energy prices, and overall inflationary trends in global commodity markets; and ii) building regional alliances across governments, the private sector, civil society and development partners to support inclusive and sustainable economic growth.

The two-day forum is organized under the auspices of the CAREC Think Tank Network  a network of leading think tanks in the region that aims to provide innovative solutions and develop regional perspectives on emerging issues and challenges facing the CAREC region.

ABOUT:

The Central Asia Regional Economic Cooperation (CAREC) Institute is an intergovernmental organization dedicated to promoting economic cooperation through knowledge generation, capacity building and knowledge sharing in the CAREC region. The CAREC Institute is jointly shared, owned, and governed by eleven member countries: Afghanistan, Azerbaijan, China, Georgia, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. The CAREC Institute is a knowledge support arm of the CAREC Program which is a proactive facilitator of practical, results-based regional projects, and policy initiatives critical to sustainable economic growth and shared prosperity in the region, guided by the overarching vision of “Good Neighbors, Good Partners, and Good Prospects.”

The CAREC Think Tank Network was established by the CAREC Institute as a network of leading think tanks from the CAREC member countries. It brings together leading regional think tanks, universities and research institutions to promote regional cooperation and integration through shared ideas, information, and joint research.