CAREC Institute Hosts Dialogue on Trade Diversification: Experts Highlight Opportunities and Challenges for Regional Growth

The CAREC Institute facilitated a pivotal virtual Think Tank Network (CTTN) Dialogue on August 9, focusing on “Trade Diversification in the CAREC Region: Opportunities and Challenges.” This gathering brought together distinguished experts from the CAREC Institute (CI), the Asian Development Bank (ADB), and national representatives from Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, and Pakistan. The event explored the complexities of current trade dynamics, barriers, and pathways toward diversification within the region.

Ms. Altynay Arapova, an Economist at the ADB, addressed challenges within global value chains such as high trade costs and the reliance on primary-sector exports. She advocated for regional cooperation to streamline trade processes, digitalize operations, and develop economic corridors that emphasize sustainability and green value chains.

Mr. Yuliy Yusupov from the Center for Economic Development at CAPS Unlock highlighted Central Asia’s reliance on raw materials and imports from dominant trading partners. He recommended crucial reforms such as tariff reductions, enhanced digital infrastructure, and greater regional integration to strengthen economic resilience and diversify exports.

Dr. Hans Holzhacker, Chief Economist at CI, explored the impact of decarbonization and new industrial policies on CAREC’s foreign trade, highlighting the region’s heavy reliance on mineral fuel exports, which account for over 50%. He stressed the rising importance of copper and the potential for growth in transport and tourism services. To seize these growth opportunities and diversify the economy, he advocated for reducing trade barriers and strengthening regional collaboration.

Panelists from CAREC Think Tanks and Development Partners contributed deep insights into the region’s unique trade challenges and opportunities. Discussions highlighted the urgent need for improved infrastructure to reduce transportation costs, lower trade barriers, and leverage digitalization to enhance trade and economic growth.

The dialogue concluded with a robust call for strategic policy reforms and investments, urging coordinated government actions to leverage trade diversification opportunities. The aim is to lessen the region’s reliance on raw materials and commodities, fostering a more diversified and resilient economic future.