Central Asia extends from the Caspian Sea to China. It shares a line with Russia on the north, whereas Iran, Afghanistan, and China are bounded on the south. The region comprises of previous Soviet republics, including Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Turkmenistan.
Additionally, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan have shown impressive growth since the region is diverse and a mix of upper and low-income countries. However, the region holds significant importance due to its geographic location and natural source attributes. This geographical significance presents excellent business opportunities in the region. Firms like https://www.cag.world offer valuable insights and consultation in this regard. To know in detail what the Central Asia region has to offer, continue reading ahead.
Center of Asia
Over the era of 500 years, from 750 A.D. to 1250 A.D., the region of Central Asia has produced some of the world’s finest minds. Besides, its workshop has delivered exquisite goods, acknowledged and traded across Europe and Asia. During this era, Central Asia enjoyed being the center of the Silk Road.
However, in the middle of the 18th century, the region was ceased to ‘center of Asia,’ and the route was no longer extended to major trade roads. Additionally, at the end of the British Domain in 1947, and the Soviet Union in 1991, the division of Central Asia was eliminated.
Nevertheless, after independence in 1991, the Central Asian Region ought to follow several economic development strategies. They already acquire competitive strengths, which include the vicinity of a huge number of markets, plentiful natural resources, educated populations, etc.
All of these have helped Central Asia Region to achieve considerable results that have enhanced the population’s standard of living. Additionally, with the upsurge in Chinese and Indian economics, the region of Central Asia now stands between Asian and European markets. However, this books for two-thirds of the population, two-thirds of GDP, and more than two-thirds of global trade.
The Central Asia Region obtains a nine-fold increase in GDP per capita since the 1990s for certain countries. It has delivered average progress of 5.5 percent in 2017, according to a report by Organization for Economic Cooperation and Development.
The pace of economic growth in the region is quite slow. Besides, the resource-driven and slow economies have brought Central Asia to light, towards significant systemic risks. The region is highly dependable on volatile fossil fuel and possessions prices. Additionally, they are susceptible to a fluctuation that weakens the global economy.
The Central Region shares boundaries with significant economic giants, including China, Russia, and European Union. They are essential strategic and economic partners with deep interconnections. Besides, they might leave Central Asia liable to changes in domestic, foreign, and security policies. For instance, the instability of the Russian economy after the war in Donbas, invasion of Crimea, and oil prices crash in 2014 and 2016- considerably affected the region on multiple levels.
Business Activities In Central Asia Region
Despite observing successful outcomes, the region is still far from comprehending its full potential. Therefore, in order to accomplish this, the Central Asia region is advised to adopt proactive strategies.
Additionally, according to Asian Development Bank estimates, the countries included in Central Asia might invest up to $33 billion in the development of groundwork within 2030. This will be carried out to balance the upsurge of domestic and international demands.
All factors, including economic outputs, increasing population with a surge in energy needs, and prompt urbanization, etc. requires hard infrastructure. After identifying the compulsion of filling the infrastructure gap, the regions of Central Asia, alongside encouragement from Beijing, have introduced ‘Myriad projects.’
The Myriad projects aim to provide enhanced geographic connectivity and overcome economic deficiency with the help of transportation, telecommunication, and energy projects.
Other than this, a project titled ‘Ready4 Trade Central Asia’ has been launched. It has joined hands with forces such as the European Union and ITC. The project aims to contribute towards the overall sustainable and complete development of the constituency by heightening intra-regional and international trade.
The beneficiaries of the project include governments, small and medium-sized enterprises (in particular, enterprises led by women), and business support organizations. The project is carried out in five countries, funded by the EU, and executed by ITC.
Additionally, it was introduced in January 2020 and will last for four years. The first phase, the inception phase already completed in June 2020. And, the implementation phase has begun from July 2020. The project priorities are listed as follows:
- It aims to address regulatory and procedural concerns for international trade.
- It enhances SME’s capabilities to act in accordance with cross-border requirements.
- It upsurges the readiness of Central Asia countries. In particular, this includes enterprises led by a woman to conduct e-commerce within the cross border.
- It improves chances for women-led companies to participate in international trade.
Apart from the above project, International Leadership Training offers courses on Transitional Trade and Sustainability Management. The technical experts and managers from Central Asia obtain training in the area of technical expertise. They cultivate transfer projects, which experts implement within their organizations after returning to their countries. 32 business managers from Uzbek, Kyrgyz, and Tajik companies participated in the program in Germany.
In conclusion, suitable policy responses were made by Central Asia after the global crisis. However, IMF recommends that these countries obtain more measures such as allowing rate exchange flexibility. It preserves competitiveness and improves the country’s revenue. Additionally, it progresses towards social safety nets to safeguard the rights of the poor and imposing tighter banks. It lessens up the finance system vulnerabilities and sector risk.