Almaty Programme of Action for the. Nikolay Pomoshchnikov Head ESCAP North and Central Asia Office
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1 Final Regional Review of the Almaty Programme of Action for the Landlocked Developing Countries Nikolay Pomoshchnikov Head ESCAP North and Central Asia Office
2 LLDCs in North and Central Asia (NCA) ESCAP North and Central Asia Office (ENCA) provides assistance to 9 countries of the subregion, seven of which are landlocked developing countries, namely: Armenia, Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. These LLDCs belong to the group the development of which over the past decade has been extremely difficult due to diverse shocks and disruptions created by the break-up of the former Soviet Union. These changes adversely affected international trade as the number of borders to be crossed increased and the earlier unified transit rules became different for each country and access to markets and transit rights became cumbersome and costly.
3 Challenges Faced Building transport infrastructure and bridging infrastructure gaps Border-crossing issues Removing transportation inefficiencies Transit policy issues Harmonization of legal regimes Integrated approach to trade and transport facilitation Addressing non-tariff measures Deepening regional integration
4 Doing Business Report 2012 (World Bank) For landlocked county it is 3 times more expensive to import and export comparing to coastal countries.
5 LLDCs Growth Rates The LLDCs in the subregion face a number of challenges and demonstrate various rates of economic growth Real GDP growth rate (annual, %) * Armenia Azerbaijan Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Source: ESCAP, Economic and Social Survey of Asia and the Pacific 2012, Bangkok. * Estimates
6 Productive capacity of NCA LLDCs Standard deviations from the world average* Source: ESCAP 2011 World average equals to 1
7 Difference in export and import structure Imports are diversifiedifi d Exports are highly concentrated
8 Partial export recovery for LLDCs Because of reliance on resources and commodities, od countries are vulnerable to price and demand shocks Exports were seriously hit by the 2008 global economic crisis Only partial export recovery in 2010 (no data for 2011 for larger LLDCs)
9 Exports did not recover because they target non- Asian markets LLDCs exports mainly went to outside the region Exports to developing AP were about 30% (2010) Intraregional imports were important Almost 60% of imports came from the region
10 * Challenges and gaps of LLDCS in trade facilitation: ESCAP findings Challenges 1) Inadequate trade and transport infrastructure and logistics services; 2) Cumbersome documents and procedures, and excessive physical inspections; 3) Insufficient availability and use of information and communication technologies; 4) Lack of appropriate regional transit regimes and insufficient participation in multilateral cooperation on transit; 5) Weak institutional and human capacities; 6) Lack of inductive legal and regulatory systems; and 7) Uneven trade/transit facilitation performance across ESCAP region. Major Gaps of LLDCs in Overcoming Challenges* 1) Lack of human and financial resources, 2) Lack of technical and institutional capacity, 3) Lack of political and policy support *Asia Pacific Trade facilitation Forum 2009
11 Official Development Assistance Armenia, Kyrgyz ygy Republic and Tajikistan are receiving more than 63% of the total ODA of the region. Distribution of ODA among LLDCs is quite diverse, ranging from US$44.65 million for Turkmenistan to US$ million for Tajikistan in Armenia, Kyrgyz Republic and Tajikistan received US$ millions of the total US$ millions received by LLDCs of the subregion same year. Countries Country programmable aid Net ODA Armenia Azerbaijan Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Uzbekistan Source: OECD (2012), World Bank (2012)
12 Country Programmable Aid (CPA) The CPA will mainly increase by 2013 in comparison with Azerbaijan, Kazakhstan and Turkmenistan will see the decrease of CPA by average 3.36%.Significant increase of CPA is expected to Uzbekistan. CPA % change Countries from 2010 to 2013 Armenia % Azerbaijan % Kazakhstan % Kyrgyz Republic % Tajikistan % Turkmenistan % 5.5% Uzbekistan % Source: OECD CPA.
13 Domestic savings and FDI flows Countries Gross Domestic Savings (% of GDP) FDI inflows (% of GDP) Armenia Azerbaijan Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Uzbekistan
14 Importance of Intra-Central Asia Trade in Total Central Asia Trade Intra- Central Asia Exports Total Central Asia Exports 59.0 Intra- Central Asia Exports as a % of Total 4.7 Central lai Asia Exports to World Intra- Central Asia Imports 3.01 Total Central Asia Imports Intra- Central Asia Imports as a % of Total 5.6 Central Asia Imports to World (Values in billion US $) Potential for Intra- Central Asia Trade X / M Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Year Kaz Kyr Taj Turk Uzb
15 LLDCs in Central Asia are in the process of integration into global economy (via WTO) or ASIA (via PTAs) Most PTAs are with each other or neighboring g countries FDI inflows linked to extractive industries rather than to export diversification
16 NCA WTO list of members and accession dates Armenia 5 February 2003 Georgia 14 June 2000 Kyrgyzstan ygy 20 December 1998 Russia 22 August 2012 Tajikistan 2 March 2013 Observers Azerbaijan Kazakhstan Uzbekistan Neither members or observers Turkmenistan
17 Market access through preferential trade agreements and other arrangements Economy Number of Agreements Notified under all Agreements under Notified under GATT Art XXIV agreements in force negotiations Enabling Clause or GATS Art V Not notified Armenia (2003)* Azerbaijan Kazakhstan Kyrgyzstan (1998)* Tajikistan Turkmenistan Uzbekistan Note: * = WTO members
18 Assistance within SPECA For the LLDCs in Central Asia, the SPECA Project Working Group on Transport and Border-Crossing (PWG-TBC) has been providing valuable support for transportt infrastructure t development since its launch in To date 17 sessions of this working group have been organized under the leadership of Kazakhstan with the assistance of ESCAP and the Economic Commission for Europe (ECE) Secretariats, which has emerged as an effective platform for cooperation among the countries. ti These intergovernmental agreements and cooperation mechanisms have created the necessary institutional platform for a coordinated and rationale planning of regional infrastructures. 18 th session of the PWG TBC is planned to be held on 4 5 April in 18 th session of the PWG-TBC is planned to be held on 4-5 April in Almaty, Kazakhsta.
19 Trade and transit facilitation National Simplify behind-the-border import and export procedures (e.g. single window) Participate actively in the negotiations of regional transit High trade agreements costs, Accede to global conventions/agreements such as WTO cumbersome GATT, UNECE TIR Convention, etc. trade Regional procedures and lack of Effectively conclude and implement transit and transport appropriate agreements regional transit Improve coordination & harmonization of procedures regimes across the borders and Admit vehicles liability insurance among relevant countries Establish regional guarantee system Simplify the accession procedures to international conventions/agreements & provide technical assistance
20 Regional and South South Cooperation The intra-central Asia exports/imports as a proportion of total Central Asian exports/imports t to the world have been rather low - at 4.7% and 5.6% respectively in Regional integration is a complex process much influenced by the particularities of the each individual country, hard to approach by universal rules or political scenario. By exchanging the Asian development experiences and South-South cooperation, it is possible to speed up the process of socio-economic growth and integrate South-South cooperation in the region. Afghanistan, being a landlocked country, needs access to regional and international markets for development. The increased stability has opened new opportunities for the country to become a land bridge connecting Central and South Asia. ENCA implements a project on strengthened economic ties, reduced trade and transport barriers, increased joint activities between entrepreneurs of Afghanistan, Central Asia and Russia resulted in increased trade, local production and employment.
21 Potential for Intra-Central Asia and Central-South Asia Trade Integration X to / M from VALUE (US$ BN) % CHANGE OVER 2010 YEAR CENTRAL ASIA -CENTRAL ASIA Central Asia's Exports to Central Asia CENTRAL ASIA -SOUTH ASIA Central Asia'ss Exports to South Asia South Asia's Exports to Central Asia CENTRAL ASIA -CENTRAL ASIA and CENTRAL ASIA - SOUTH ASIA Central lasia's Trade with Central and South thasia Combined Notes: Central Asia Export to Central Asia 2010 Billion $ 2.35 Central Asia Exports to South Asia 2010 Billion $ 0.94 South Asia's Exports to Central Asia 2010 Billion $ 0.32 Central Asia's Trade with Central and South Asia Combined 2010 Billion $ 3.61
22 Looking Forward There are significant barriers to trade and investment integration in Central Asia related to trade policy, connectivity, infrastructure etc. a) Market access: Trade-related Barriers: The more significant trade barriers pertaining to trade policy in the CARs include a complex tariff schedule and relatively high tariffs; escalation of tariffs; frequent and unpredictable changes in the tariff schedule; high implicit tariffs in the form of taxes that are levied on imported goods. Trade Facilitation and Procedural Bottlenecks: Trade facilitating customs procedures and rules are at differing levels of evolution in the CARs and they lack harmonization across countries, acting as a major bottleneck for intra- and extraregional trade linkages. These not only include customs valuation and definitional issues but also procedural delays, complex documentation and inefficient clearances. Accession to WTO: A lack of WTO membership for the four non-member LLDC states, except Kyrgyzstan, Armenia and Tajikistan is a big constraint on trade flows as WTO-consistency in various rules makes trade regimes more harmonized and streamlined.
23 Looking Forward (con t) a) Connectivity: Other significant ifi barriers to trade in Central Asia are highh transportt costs and long and unpredictable transport times for international shipments to and from the CARs. This is not only because of the landlocked and remote location of the CARs and their difficult topography, but also due to deficiencies of their transport networks, high costs and low quality of transport and logistics services in the region, and difficulties with movements of goods and transport equipment across borders and through the territories of the CARs and neighboring countries. a) Productive capacity development: The NCA LLDCs could be divided into three groups. Group 1. Energy exporters (Kazakhstan, Azerbaijan, and Turkmenistan) Group 2. Armenia, Kyrgyzstan and Tajikistan are financed, to a considerable extent, by remittances from labor migrants and with the support of diasporas. Group 3. Uzbekistan has a diversified structure of exports and a considerable share of products with a relatively high level of processing, while they still have considerable raw materials exports.
24 Intergovernmental Agreement on the Asian Highway Network Definitive signature(s), Ratification, Acceptance(A), Approval(AA), Participant Signature Accession(a) Armenia 26 Apr Jun 2005 Azerbaijan 28 Apr May 2005 Georgia 26 Apr Dec 2005 AA Kazakhstan 26 Apr Nov 2007 AA Kyrgyzstan 26 Apr Aug 2006 Russian Federation 27 Apr 2004 s Tajikistan 26 Apr Apr 2006 Uzbekistan 26 Apr 2004 s
25 Intergovernmental Agreement on the Trans-Asian Railway Network Approval(AA), Acceptance(A), Participant Signature Accession(a), Ratification Armenia 10 Nov 2006 Azerbaijan 10 Nov 2006 Georgia 18 Dec May 2009 AA Kazakhstan 10 Nov 2006 Russian Federation 10 Nov Jan 2008 A Tajikistan 10 Nov Feb 2008 AA Uzbekistan 10 Nov Jul 2009
26 Thank You
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