Role of Economic Cooperation in Central Asia
After gaining independence in 1991, the former Soviet republics in Central Asia faced the twin challenge of nationhood building and transition to a market-based economy. These tasks were made particularly formidable by a number of specific long term development factors (LTDFs) characterized by:
- landlocked location and remoteness from major world markets
small domestic markets - rational use of complementary resource endowments especially in water and energy.
These challenges combine to suggest that developing regional markets would save large transport costs, exploit scale economies, and yield gains from trade, including those based on resource complementarity. Effectively meeting these challenges to realize such gains and raise the living standards of the people requires joint action of the countries in the region. This is the fundamental rationale for regional economic cooperation.
Xinjiang Uygur Autonomous Region PRC is the western-most territory of the PRC, bordering the Central Asian republics (CARs). While the development path it has followed in the past decades differs from that of the CARs, it faces similar LTDFs as the CARs, and thus has similar needs for economic cooperation.
Objectives and Approach
The overall objective of the CAREC Program is to promote economic growth and raise living standards by encouraging economic cooperation in the Central region. The Program has focused on financing infrastructure projects and improving the policy environment for promoting cross-border activities in the areas of transport (especially road transport), energy (including the water-energy nexus), trade policy and trade facilitation (especially customs cooperation).
The Program reflects the four strategic objectives of ADB's regional cooperation strategy for CAREC:
- securing access to profitable markets in large neighboring countries for exports from CARs
- reducing transaction costs and facilitating transit and transport across the region
- improving energy supplies for sustaining growth
- preventing negative regional outcomes such as environment degradation, desertification, human and drug trafficking, and the spread of communicable diseases
Donor Coordination and Cooperation
CAREC provides scope for interagency collaboration and coordination among ADB's major multilateral development partners
European Bank for Reconstruction and Development (EBRD)*
International Monetary Fund*
Islamic Development Bank*
United Nations Development Programme*
World Bank*
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