North and Central Asian economies can revitalize themselves by moving closer to Asia
Challenged by the eurozone troubles and unstable international commodity prices, North and Central Asian economies can shockproof and sustain their growth, making it broad-based, by diversifying production and markets, the United Nations advised top economic policymakers from the subregion here today.
The commodities and labour export-driven economies, seeking to regain their high levels of pre-global economic crisis growth and make this sustainable, inclusive and resilient, can benefit from closer trade and investment links with the rest of Asia, said the Bangkok-based United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
Finance ministers, central bank governors and other high-level policy makers from Armenia, Azerbaijan, Georgia, Kyrgyzstan, Kazakhstan, Russian Federation, Tajikistan, Turkmenistan and Uzbekistan are taking part in the 27-28 August High-level policy dialogue “Macroeconomic Policies for Sustainable and Resilient Growth in North and Central Asia” organized by ESCAP and hosted by the National Bank of Kazakhstan. About 100 participants representing diverse stakeholders are present.
In his keynote address to the policy dialogue, the Governor of the National Bank of Kazakhstan, Grigoriy Marchenko, underlined the importance of balanced and inclusive growth for the region. “The economic development of Central Asian countries would depend on their ability to sustain balanced and inclusive growth.”
“Ensuring that growth is inclusive and jobs-rich will be key to helping North and Central Asian countries move from the stage of ‘transition’ to ‘transformation’,” Aynul Hasan, Chief, Development Policy Section of the ESCAP Macroeconomic and Policy and Development Division told the dialogue, adding: “Faster economic diversification and enhancing trade and investment linkages with rapidly growing markets in Asia will also be important.”
“In addressing various challenges faced by the countries of North and Central Asia, it is important to take a fresh look at the relationship between growth and stability, the role of the State and the market, how the macroeconomic policy could contribute to inclusive and sustainable development as well as enhanced regional cooperation,“ noted the Head of ESCAP’s North and Central Asia Office, Mr. Nikolay Pomoshchnikov in his opening statement.
The Almaty dialogue, following similar dialogues in Bangladesh, Bhutan, Cambodia, Fiji, Indonesia and the Philippines, is part of a series of ESCAP consultations in the wake of the global economic crisis. This dialogue is reviewing challenges to growth, stability, diversification and jobs, and examining how macroeconomic policy tools can be used to promote sustainable, resilient and inclusive growth in North and Central Asia.
The dialogue is also an opportunity for North and Central Asian policymakers to explore challenges and opportunities in regional infrastructure development, economic diversification, and cooperation with the rest of Asia, including in the context of enhancing the productive capacity and connectivity of Landlocked Developing Countries (LLDCs).
Robust economic growth in North and Central Asia in the decade preceding the global economic crisis was mainly driven by high demand and prices of primary commodities with relatively limited positive spillover effects to the overall economy. But as Nodar Khaduri, Minister of Finance of Georgia, emphasized, following the global financial crisis economic growth was affected by volatility in commodity prices and the ongoing recession in Europe, a major trading partner for the region.
With a high concentration of oil, gas, metal and mineral products in total exports over the past decade, economic diversification is a priority for North and Central Asia. In this regard the region should seek closer trade and investment ties with other Asia-Pacific regions, especially East and North-East Asia and South and South-West Asia, according to ESCAP.
There is also a need for enhanced focus on making growth inclusive and equitable. “In particular, in the current global economic environment of weak external demand, addressing income inequality and creating productive employment opportunities could boost the purchasing power of low-income households and thereby overall domestic demand,” says an ESCAP background paper for the dialogue.