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Central Asia Regional Economic Cooperation (CAREC)
Program
CAREC Secretariat
Asian Development Bank
9 March 2011
1
• Overview of CAREC
• Sectoral overview: Transport and Trade facilitation
• Sectoral overview: Energy
• Other Initiatives
• CAREC Program in 2010-2011
Scope of Presentation
2
Overview of CAREC
3
• Partnership
− Member Countries: AFG, AZE, PRC, KAZ, KGZ, MON, PAK, TAJ, TKM, UZB
− Multilateral Institution (MI) Partners: ADB, IMF, WB, EBRD, IsDB, UNDP
− Informal arrangement but a serious commitment by all
− Strong MI collaboration, but ownership by countries
• Action-oriented and Pragmatic approach
− Based on clear strategies and action plans− Covers both hard and soft aspects of
cooperation− Invests in transport, energy, and trade
facilitation− Promotes capacity development and networking
What is CAREC?
4
Good Neighbors, Good Partners, Good Prospects
Vision
Goal
Development through cooperation, leading to
accelerated economic growth and poverty reduction
5
CAREC Strategies and Action Plans
• CAREC Comprehensive Action Plan
− Endorsed in 2006 at the 5th
CAREC Ministerial Conference (MC) in PRC
• Transport and Trade Facilitation Strategy and Action Plan
− Strategy endorsed in 2007 at the 6th
MC in TAJ & Action Plan in 2008 at 7th
MC in AZE
• Trade Policy Strategic Action Plan
− Endorsed in 2008 at 7th
MC in AZE
• Energy Strategy and Action Plan
− Strategy endorsed in 2008 at the 7th
MC in AZE & Action Plan in 2009 at 8th
MC in MON
6
Approved CAREC-related Projects (as of Feb 2011; in US$
million)
7
Funding Source
Sector ADB EBRD IsDB WB GovtsOther
s Total
Transport
3,480 615
625
4,039
2,584
741
12,084
Trade Facilitation
48
-
14
107
49
1
219
Energy
1,028 348
247
286
386
448
2,743
Total
4,556 963
886
4,431
3,019
1,189
15,046
Overall Institutional Framework (OIF)
OIF supports:
• Broad-based dialogue and consensus building
• Identification and prioritization of regional cooperation initiatives
• Mobilization of financial and technical resources
8
Overall Institutional Framework (OIF)
• Ministerial Conference (MC)
− Provides overall guidance to the CAREC Program and determines policy and strategic directions and goals.
• Senior Officials’ Meeting (SOM)
− Ensure the effective implementation of the policy decisions made by the Ministerial Conference.
− Its main responsibilities include:
(i) reviewing and articulating issues that emerge from the operational level and making relevant
recommendations to the Ministers
(ii) preparing for the Ministerial Conference
• Sector Committees
− Lead the program in four priority areas, Transport, Trade Facilitation, Trade Policy and Energy
− These committees feed their outputs to the SOM and the MC.
• CAREC Secretariat - ADB
9
Role of NFPs and Sector Focal Points
• National Focal Points (NFPs)
Ensure effective coordination (i) among concerned agencies and other interested parties
in matters related to regional economic cooperation; and (ii) between the government and
the CAREC secretariat.
• Sector Focal Points
Act as focal points for the relevant sector works in the CAREC Program in close
coordination with the NFPs and other concerned parties in the countries.
10
11
CAREC Results Framework
DESIRED LONG-TERM IMPACT OF CAREC PROGRAM
'Accelerated economic growth and poverty reduction'
DESIRED LONG-TERM IMPACT OF CAREC PROGRAM
'Accelerated economic growth and poverty reduction'
Level 1: CAREC COUNTRIES' DEVELOPMENT OUTCOMESLevel 1: CAREC COUNTRIES' DEVELOPMENT OUTCOMES
Level 2: CAREC PRIORITY SECTOR
OUTPUTS
Level 2: CAREC PRIORITY SECTOR
OUTPUTS
Level 3: OPERATIONAL AND ORGANIZATIONAL EFECTIVENESSLevel 3: OPERATIONAL AND ORGANIZATIONAL EFECTIVENESS
Aggregated data for macro-level indicators in:
• Poverty Reduction
• GDP, Trade and Business Environment
Aggregated data for sectoral level indicators in:
• Transport Sector •Trade Policy Sector
• Trade Facilitation Sector •Energy Sector
Aggregated data for input level indicators in:
• Operations Growth •Knowledge Management
•Finance Mobilization
Central Asia Regional Economic Results Framework
Results Framework Schedule
MINISTERIAL CONFERENCE
SENIOR OFFICIALS’
MEETING (SPRING)
31 January
Data Submission
Sector Coordinating Committees and CAREC Secretariat identify mechanisms to address
the actions, and update work plans.
SENIOR OFFICIALS’
MEETING (FALL)
CAREC RESULTS FRAMEWORK
Quarter 1
Quarter 2Quarter 3
Quarter 4
Sectoral OverviewTransport and Trade
Facilitation
13
East Asia Middle East
1995 = $57 billion
2008 = $454 billion
EU South Asia
1995 = $34 billion
2008 =$117 billion
East Asia EU
1995 = $244 billion
2008 = $795 billion
CAREC—A Silk Route to Markets
Transport and Trade Facilitation: Strategic Priorities
• Upgrade the 6 transport corridors
1. Europe – East Asia Corridor 4. Russian Federation – East
Asia
2. Mediterranean – East Asia 5. East Asia – Middle East and South
Asia
3. Russian Federation – Middle 6. Europe – Middle East and
East and South Asia South Asia
• Develop safe, people-friendly transport systems
• Ensure efficient movement of goods and people
−simplify and harmonize regulations that govern cross- border trade
15
16
Heading
17
• Text• Text
HeadingEurope-East Asia Corridor
18
• Text• Text
HeadingMediterranean-East Asia Corridor
19
• Text• Text
HeadingRussia-Middle East-South Asia
Corridor
20
• Text• Text
HeadingRussia-East Asia Corridor
21
• Text• Text
HeadingEast Asia-Middle East, South Asia Corridor
22
• Text• Text
HeadingEurope-Middle East, South Asia Corridor
• Improved the corridor network
−Embarked on 65 projects worth over USD10 billion
−32% of road and rail corridors completed (as of 10/2010)
• Promoted customs cooperation and transit
− Capacity building and investments on customs reforms
− Customs modernization, adoption of risk management and post-entry audit, and joint
customs control started
− Safe packet systems in KAZ and KGZ in place
− Cross-border transport agreement signed by KGZ and TAJ for CAREC Corridor 5
• Carried out integrated trade facilitation
− Regional association of freight forwarders established
− Corridor performance being monitored and measured
− Single window systems being adopted
Key Achievements in TTF
23
• Key elements
− Enables and makes easy international road transport along CAREC corridor
o Allows entry of vehicles registered in the other country
o Mutually recognizes driving licenses, transport operators’ license, and third-party motor
vehicle liability insurance
o Exempts goods, vehicles and containers in transit from customs formalities
− Harmonizes design and construction standards of roads, bridges, road signs and signals,
and road safety and border crossing infrastructure and equipment
− Facilitates border crossing formalities
o Promotes one-stop, single-window clearance; advance exchange of information; risk
management/post-entry audit
o Synchronizes border crossing point operating hours
o Harmonizes cross-border trade documents
Cross-Border Transport Agreement
24
• Accelerate infrastructure investment
• Improve border infrastructure and facilities
− Hard and soft aspects of border crossing points improvement
• Promote Cross Border Transport Agreement
− Accession by other CAREC Countries
− Follow-up activities for effective implementation
• Develop capacities
− Establishment of efficient management systems and associated capacity building
− framework to rationalize sustainable skills development
Future Directions of TTF (1)
25
• Maintain momentum of new institutions
− National Joint Committees, CAREC Federation of Carrier and Forwarder Associations
• Address new areas
− Sanitary/phyto-sanitary inspection;
− Movement of people (particularly business people)
• Optimize use of Corridor Performance Measurement and Monitoring (CPMM)
results
− corridor analyses plus country level & project analyses
− targeted work plan to tackle weakest link on corridors and worst bottlenecks at border crossing
points
Future Directions of TTF (2)
26
Sectoral OverviewEnergy
27
28
5,400
5
2
68
82
2,700
5
5
2,610
1,674
16,000
580
507
0
2,851
24,100
590
514
2,678
4,607
Kazakhstan
The Kyrgyz
TajikistanTurkmenistan
Uzbekistan
Coal MTOE
Gas MTOE
Crude Oil MTOE
Legend
27
163
317
2
15
Hydro Potential TWh/year
Source: World Bank
Republic
Republic
CAREC Energy Sector Strategy
Long-Term Vision• Ensure energy security• Enhance economic growth through energy trade
Strategic Elements• Domestic and cross-border investments• Capacity Building and Knowledge Sharing• Policy measures
Strategic Dimensions - 5 Energy Corridors• Cooperation opportunities within Central Asia, Central
Asia-PRC, Central Asia-South Asia, Central-Asia-Russia, & Central Asia-EU
Azerbaijan
Uzbekistan
Kazakhstan
Turkmenistan
Electricity
Electricity
Oil and Gas
Tajikistan
Kyrgyzstan
Strategic Dimensions
Coal
Coal
Afghanistan
PRC
31
Energy Sector Action Plan (2010-2013)
Regional
Institutions
Energy Sector Coordinating
Committee (ESCC)
Regional power dispatch center
(CDC)
Rich Energy
Resources
Oil, Gas, Water, Wind, Coal
Extensive reserves and
renewables
Diversity of resources
Uneven distribution across
countries
Export
Opportunities
South Asia
China
EU
Russia
Energy Water Linkages
CAREC
Energy security and efficiency, affordability
RES
OU
RC
ES
AC
TIO
NS
RES
ULT
S
Priority:
- Central Asia
- Electricity
Energy Demand/
Supply Balance
and Infrastructure
Regional Dispatch
and Regulatory Development
Approved October 2009
• Action Plan Objective
To promote regional trade by optimizing integrated transmission and generation expansion
• Why?
Uneven energy demand/supply balance
Infrastructure constraints (generation, transmission, distribution)
• How
Investment: Promote infrastructure investment
Capacity development & knowledge sharing:
Conduct thematic capacity development program
Policy measures:
Develop Regional Power Master Plan for 4 Central Asian countries + Afghanistan based on a diagnostic study
• Progress
Several investment projects completed and on going
Diagnostic study completed in 2010
Regional Master Plan to be delivered for the 10th
CAREC MC
Pillar 1: Energy Demand/Supply Balance
and Infrastructure Constraints
32
33
Ongoing
ProposedAfghanistan
Tajikistan
Regional Power
Transmission
• Action Plan Objective
To maximize the benefits of unified operation of the Central Asia Power System
• Why?
Substantial decline in regional energy trade
Ensure reliable power supply
Enable optimal utilization through balanced dispatch and regulatory
• How?
Investment: Phase investments based on diagnostic study
Capacity development & knowledge sharing:
Strengthen CDC and national load dispatch centers and support for regulators
Policy measures:
Develop an institutional platform and framework for regional power trade
• Progress
Diagnostic study completed in 2010
Next steps to be identified by the ESCC
Pillar 2: Regional Dispatch and Regulatory Development
34
• Action Plan Objective
To Strengthen cooperation by integrating energy and water analysis
• Why?
Transboundary water management
Need for integrating energy and water analysis
• How
Investment: Identify consensus projects to improve the rational and effective use of energy and water
Capacity development & knowledge sharing:
Enhance integrated energy-water models, analytical tools, and shared databases
Policy measures:
Strengthen Central Asian institutions to lead the dialogue and analysis on rational use of energy-water resources
• Progress
Initial consultations have been done in 2010
Detailed TORs for energy-water analytical and institutional framework to be developed in 2011
Pillar 3: Energy-Water Linkages
35
• Proceed to next steps in work plan
− Complete Regional Power Sector Master Plan (Pillar 1)
− Identify priority activities in coordination with USAID and implement short term actions
(Pillar 2)
− Prepare detailed terms of reference for energy-water analytical and institutional
frameworks (Pillar 3)
• Develop the rolling project pipeline
• Conduct Capacity Building Program
• Action plans focusing on other energy corridors to be considered in the
medium term
• Nominate and confirm alternate Focal Points
Future Directions
36
Other Initiatives
37
Trade Policy Strategic Action Plan
(TPSAP)
• Strategic goals
− More open economies
− WTO membership for all countries
− Capacity development and knowledge transfer of trade and trade policy issues
• Operational strategy
− Broad-based reduction in trade barriers, increased transparency, and simplification of
trade regulations
− Provide practical assistance to non-WTO members to build capacity and transfer
knowledge
− Capacity building and knowledge transfer activities
38
Key Achievements in 2010• WTO accession training
−Seminars by countries
−Seminars by World Bank
−Analytical note
• Monitoring TPSAP implementation
−Questionnaire formulated
−Some progress but more efforts needed:
▪ Simplification of trade tax regime
▪ Reduction of tariffs
−Trade Liberalization Index 2009: most 2010 targets met
• Institutional impediments to trade
−Analytical study completed
−Recommendations:
▪ Simplify procedures for import and export
▪ Improve general business environment
▪ Deepen financial system
−Next steps:
▪ Countries’ specific agendas to be monitored by TPCC
39
Future Directions
• WTO accession
− Impact of trade agreements and customs union
− Knowledge sharing training program
− Round Table on progress and impediments at next TPCC meeting
• Monitoring TPSAP implementation
− Submit responses by end-February 2011
− Trade Liberalization Index for 2010
• Institutional impediments to trade
− Country-specific plans by end-February 2011
40
CAREC Institute (CI)
• Mission
− Enhance the quality of regional cooperation by generating world-class knowledge
resources in the priority areas of transport and trade facilitation, energy and trade
policy.
• Structure
− Initially “virtual”
• Main outputs
− Professional development and training
− Research program
− Outreach program
− CAREC Program Results Framework
41
CI Progress Report• Key Developments:
Capacity Building: Leadership Dev’t Initiative (LDI); training/knowledge sharing for priority and Tier 2 sectors
Research: sector studies; research programs; issue-specific studies
Outreach: website; seminars
• Work plan for late 2010 - 2011: CAREC 10-Year Commemorative Study (Part
2) Preparation of CI work plan for 2012-2014,
etc
• Align with priority sectors’ needs, themes and projects
• Focus on in-depth and practical training • Adopt guidelines/mechanisms for
research programs: selection of participants; peer/external review etc.
• Target audience-message interface to communicate CAREC themes more effectively
CI Performance Assessment Review: Activity-level
Recommendations
• Strengthen interface between CI, sector coordinating committees and in-country teams
• Strengthen interface with other partner multilateral and local institutions
• Enhance CAREC Secretariat functions• Adopt quick response mechanisms• Institutionalize post-program evaluation
CI Performance Assessment Review: Broader-level
Recommendations
CAREC Program in 2010-2011
45
Achievements in 2010
• Sector-related progress (mentioned earlier)
• Completed part 1 of 10-year commemorative study – 10 year stock-take of
CAREC’s progress
• Completed first Development Effectiveness Review
• Planned and agreed on 10-year anniversary activities
• Organized SOMs and 9th
MC
• Convened first-ever CAREC Ministerial Retreat
46
2011 CAREC Deliverables
• Part 2 of 10-year commemorative study (“CAREC 2020”)
• Development Partners’ Meeting (DPM)
• CAREC video
• Signing of agreements
• SOMs and 10th
MC
• Sector Committee Meetings
• External relations plan
• Results framework and Development Effectiveness Review
47
CAREC 2020
• Strategic framework for CAREC for 2011-2020
• Vision and goal same as the Comprehensive Action Plan
o Good neighbors, good partners, good prospects
o Development through economic cooperation
• Focus on implementing projects in priority sectors
• Develop a medium-term rolling pipeline
• Strengthen country ownership and institutional arrangements
• Mobilize increased resources
• Monitor results
48
Indicative Calendar of Core Activities Activity Indicative Date(s)
Energy Sector Coordinating Committee (ESCC) Subcommittee Meetings
March-April 2011
Third Executive Leadership Development Program under CAREC Institute
28 March-2 April 2011
1st Subregional Workshop (Azerbaijan, Afghanistan, Turkmenistan, Uzbekistan)
19-20 April 2011
2nd Subregional Workshop (Kazakhstan, Kyrgyz Republic, Tajikistan) 25-26 April 2011
Transport Sector Coordinating Committee (TSCC) Meeting 27-28 April 2011
ESCC Meeting 10-12 May 2011
3rd Subregional Workshop (PRC, Mongolia, Pakistan) 17-18 May 2011
Trade Policy Coordinating Committee (TPCC) Meeting 7-8 June 2011
Midterm Senior Officials’ Meeting (SOM) 7-8 June 2011
Meetings of TSCC, ESCC, and/or CCC August-September 2011
Consultations with MI partners and other development partners on the Development Partners’ Meeting
June-October 2011
10th CAREC Ministerial Conference and 10-year Commemorative Activities
Early November 2011
49
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