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Trade (and migration) issues in Central Asia
Ben Slay
Senior advisorUNDP Regional Bureau for Europe and CIS
Geneva, 7 May 20151
Why this research?
• Economic integration is becoming a priority issue in many Central Asian countries
WТО membershipKyrgyzstan, Tajikistan
Russia, China, India
Eurasian integration
Мigration and remittances
• Human development perspectives are sometimes lacking
Vulnerability?
Ecological consequences?
Central Asia’s exports grew thanks to rising prices . . . What happens when they fall?
0
100
200
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500
600
19
99
20
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20
01
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Metals
Energy
Cotton
UNDP calculations, based on IMF commodity price data. (Forecasts begin in 2015).
Global commodity prices (annual
averages)
Peak
High trading costs slow growth in export volumes
Landlockedeconomies
Ranking in World Bank’s “Trading Across Borders” category (Costs of doing business)
Armenia 116th
Moldova 149th
Belarus 150th
Kyrgyz Republic 184th
Kazakhstan 186th
Tajikistan 188th
Uzbekistan 189th
Out of 189 countries, total (2013). Turkmenistan was not ranked.
Big exporters can cover high cross-border trading costs—but small traders can’t
Small trader from Batken
Imported equipment at the Kumtor mining complex
Examples from Kyrgyzstan
High trading costs: Obstacles to regional cooperation
28%
13%
3% 3%
8%
22%
10%
2%
16%2001 2012
UNDP calculations, on the basis of ITC data.
• Shares of intra-regional trade in trade turnover: low and falling
• Only Uzbekistan shows growth in share of trade with other Central Asian countries
Shares of trade turnover with other Central Asian countries
Commodity composition of Central Asian exports: Capital-, resource-intensive
0%
20%
40%
60%
80%
100%Other
Petrochemicals
Light industry
Other farm products
Machinery
Cotton
Metals and minerals
Energy
UNDP calculations, based on 2012 ITC data.
This trade pattern has socio-economic consequences
• It limits output, employment growth in labour-intensive sectors
– Light industry
– Wholesale, retail trade
– Tourism
• These are also sectors with high shares of female employment Kazakhstan Kyrgyz Republic
1.11.4
1.9
3.6
Trade
Tourism
UNDP calculations, based on 2012 data from national statistical office web sites.
Ratio of sectoral share in total female employment to sectoral share in total
male employment
. . . And ecological consequences
Aral Sea, 1989-2008
Source: Wikipedia
Migration, remittances, and development
• World’s most remittance-dependent economies are in Central Asia
• Remittances completely finance Tajikistan’s merchandise trade deficit
– They cover 50-75% of the merchandise trade deficit in Kyrgyzstan
• Labour markets in Tajikistan, Kyrgyzstan are de facto deeply integrated with Russia (Kazakhstan)UNDP calculations, based on 2013 IMF, World Bank data.
Tajikistan
Kyrgyzstan
Nepal
Moldova
Armenia
Lesotho
Samoa
Haiti
Liberia
El Salvador
47%
32%
27%
25%
23%
23%
22%
20%
20%
17%
Remittance inflows/GDP
Remittances reduce poverty (data from Kyrgyzstan)
11
2010 2011 2012 2013
34%
37%38%
37%
40%
43%
45%44%
With remittances
Without remittances61%
58%56%
45%
38%
34%
23%20%
47%49%
41%
32%
Without remittances
With remittances
Source: Kyrgyzstat.
2013 data
Development finance—Do remittances matter more than ODA?
7.8% 7.5%
4.5% 4.2% 4.1%
3.0% 2.8% 2.7%
ODA/GNI (2013)
12
10.9
7.5
5.34.2
3.5 3.3 3.02.1
Remittances/ODA (2013)
* As per UNSC resolution 1244 (1999).World Bank, OECD data; UNDP calculations.
To make the most of its integration opportunities, Central Asia needs:
• Lower trading costs
– Better transport infrastructure
– Better border management
• Investments in the productivity of small producers, traders—for poverty reduction
• More strategic management of:– Migration flows– Remittances
• Policies to align trade, integration with sustainable development principles
Thank you very much!
http://www.kg.undp.org/content/kyrgyzstan/en/home/presscenter/pressreleases/2014/04/08/undp-presented-a-human-development-paper-on-trade-in-central-asia.html
