CAREC economic corridors: Almaty-Bishkek and many more to come

Almaty-Bishkek, and Shymkent-Tashkent-Khujand corridors. [Google maps]

This article is part of our special report ‘Belt and Road’: Linking up Europe and Asia.

The experience of the first economic corridor in Central Asia is Almaty-Bishkek, and the second in preparation, Shymkent-Tashkent-Khujand, were highlighted as blueprints for myriads of others to follow, at a debate in Nur-Sultan, the capital of Kazakhstan.

The Central Asia Regional Economic Cooperation, or CAREC, Program is a partnership of 11 countries (Afghanistan, Azerbaijan, People’s Republic of China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan), supported by 6 multilateral institutions. CAREC promotes development through cooperation, leading to accelerated growth and poverty reduction.

The Almaty–Bishkek Economic Corridor (ABEC) is the pilot economic corridor under the CAREC program. The motivation for ABEC is that Almaty (the biggest city of Kazakhstan) and Bishkek, the capital of Kyrgyzstan, can achieve far more together than either can achieve alone. The two cities are only 240 kilometres apart with relatively high economic density concentrated in services in the cities and agriculture in their hinterlands.

CAREC corridors and Belt and Road Initiative routes cross ABEC. The historic Silk Route, mountain ranges, and lake Issyk-Kul underline the potential for tourism. But trade, especially in agricultural goods and services, between the two countries is below potential and the region does not yet benefit from being one economic space.

The Shymkent-Tashkent-Khujand Economic Corridor is the second such project in the pipeline. It links Kazakhstan’s city of Shymkent with the capital of Uzbekistan Tashkent, and the city of Khujand in Tajikistan. The three cities and adjacent areas are within easy access to each other and they have a relatively large population – about 15% of the total population of Central Asia live in the Turkestan, Tashkent and Sogd regions.

Sultan Akhmatov, Director of Aid for strategy Department of Ministry of Economy in Kyrgyz Republic, spoke about his country’s experience in the ABEC corridor. He pointed out that after five years, many problems that the two countries had experienced were in the process of being resolved. He stressed that the integration of both Kazakhstan and Kyrgyzstan in the Eurasian Economic Union had a positive impact on the expansion of our trade relations and on bilateral cooperation. “By someone accessing one of our countries, he accesses the five EAEU countries”, he said, referring to Russia, Belarus and Armenia.

In particular, he pointed out of the need to create a cluster for tourists coming to Kyrgyzstan or Kazakhstan, so that they visit the region as a whole. He said that according to statistics, Central Asia region has a population of over 71 million people, which by itself is in his words an interesting market also for tourism. We would like to enhance our work on expanding these opportunities, allowing someone coming into Kyrgyzstan to move freely to Uzbekistan, Kazakhstan, and Tajikistan.

Akhmatov praised the work of the Asian Development Bank, looking at sub-region of the Greater Mekong Subregion,  as an example, where he said  trade had increased approximately 82 times within the region, investments – 11 times, tourism almost doubled. “It’s a good example and we should be aware of it”, he said.

Madi Takiev, ViceMinister of National Economy of the Republic of Kazakhstan, said that his country had a unique experience to share with the ABEC corridor, and “huge work” had taken place since November 2014 on the project, including at inter-governmental level. He mentioned the modernisation of the border crossing point between Kazakhstan and Kyrgyzstan, the creation of a regular bus line between the cities of Almaty and Bishkek, as well as between their airports.

Regarding the the Shymkent-Tashkent-Khujand corridor, he said studies were ongoing, of the economic, commercial and social aspects, and that the experience of ABEC was expected to be precious.

Gulru Jabborzoda, Deputy Minister, Ministry of Economic Development and Trade of Tajikistan, pointed out at crisis factors which continue to impact the global economy. Sanction policy and trade wars are still a threat to the word, she said, arguing that in this context, the CAREC region is a bridge that connects the biggest world markets, and the CAREC projects carry “strategic importance”.

“That’s why we are certain that the development of economic corridors in CAREC region has a great potential and despite issues, it opens up possibilities for strengthening the regional economic integration in CAREC region”, Jabborzoda said.

At the moment, Tajikistan is working on the national development strategy until 2030, she said. In the document, one source of economic growth is stated to be the effective use of the opportunities of the new transit infrastructure and of the economic corridors, linking regions from Tajikistan with Central Asian countries, China, Afghanistan, Pakistan, India, South-East Asia, Russia, Near East and other regions, the official from Tajikistan informed.

Shixin Chen, Vice President of the Asian Development Bank, said his institution has happy to serve as secretariat for CAREC.

He said the biggest challenge was how to move from transport corridors to real economic corridors. A railway is not enough, he argued. Chen spoke about the cooperation among existing and new programs, such as CAREC, the Belt and Road Initiative, and others.

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