CAREC Experience and Future Challenges and Opportunities

C.C. Yu

Country DirectorTajikistan Resident MissionAsian Development Bank

What is CAREC? Partnership

– 10 countries and 6 MIs, each with clear roles– Working together to promote regional economic

development and the mutual benefits of regional cooperation

– Strong MI collaboration, but leadership by countries– ADB is CAREC Secretariat

Action and results oriented

– Based on clear strategy and action plan– Invest in transport, energy, and trade facilitation– Promote capacity development and networking

Investment and trade barriers to growth and development

- Poor legal and regulatory environment presenting high transactions costs for business and trade

- Major gaps and decays in the transport infrastructure (roads, rails, airports)

- Poor border facilities and cumbersome and costly trade procedures (among the highest trading costs in the world)

- Weak management of substantial regional energy resources

Challenges in CAREC region

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CAREC 2020: Focus, Action, Results

Strategic objectives

- Expanded trade

- Improved competitiveness

Operational priorities

- Transport, energy, trade

- CAREC Institute, economic corridors

Partnership to harness economic opportunities- proximity to sizable European markets- proximity to the buoyant markets of Asia- at the hub of a rapidly integrating Eurasian

super-continental economic space

CAREC Key Areas: Priorities & Opportunities

Aims for boosting intra-regional trade by forging and implementing agreements to facilitate cross border and transit movements of goods, and through customs reform and modernization.

Transport Program

Aims for greater physical connectivity through infrastructure investments across CAREC road and rail networks and at border-crossing points.

Trade Facilitation Program

Trade Policy Program

Assists member countries in taking advantage of the opportunities afforded by membership in WTO through studies and knowledge sharing on trade policy reform, and supporting capacity building initiatives.

Energy Program

Improves energy security and energy efficiency through investing in developing energy resources in the region and infrastructure for energy trade

CAREC Key Areas continued…

CAREC Key Areas continued…

Second-Tier Areas

- Communicable disease and control- Agriculture- Disaster risk management- Climate change adaptation and mitigation

CAREC Institute- CAREC is establishing a physical base for CI to expand

analytical work to better address challenges and pursue opportunities for the program

- Provides training and of web-based information in transport, trade, and energy to help CAREC members learn from each other and share experience in regional cooperation.

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ADB 7,505

WB 5,639

CAREC governments 4,279

EBRD 1,602

IsDB 1,302

Non-CAREC Cofinanciers 909

CAREC-Related Loan and Grant Investments 2001-2012, by Financing Source (in million $)

Total$21.3 billion

CAREC investments and results by sector

Transport

More than $17 billion had been invested since 2001 to 85 CAREC related transport projects along the 6 corridor routes.

Corridors 1,2 and 3 have cut journey by as much as 33%

Better roads increased private and freight travel; less damage and lower costs for consumers

CAREC investments and results by sector

Trade Facilitation

$247 million of CAREC-related trade facilitation projects have been and are being implemented.

Modest improvement in boarder crossing time based on Corridor Performance Measurement and Monitoring (CPMM) Survey

Trade Policy

Structured long term approach for training and sharing of experiences for WTO accession and post-accession reforms

Ongoing accession of CAREC countries to WTO: Tajikistan on 2 March 2013, Afghanistan and Kazakhstan expected in 2013.

CAREC’s non-WTO member countries learn experiences through CAREC Institute’s capacity building efforts

CAREC investments and results by sector

Energy

Mobilized around $3.37 billion since 2001 for 26 projects for expanding bilateral power trade and improving regional power network.

More than 2,300 km of transmission lines built, and bringing reliable electricity to people and businesses.

CAREC investments and results by sector

Wuhan Action Plan (Investment Prospects)

COUNTRY Total Investment (mln $)

Financed Required Financing

AFG 1,452 927 525AZE 2,324 809 1,515KAZ 4,791 1,459 3,332KGZ 819 120 699MON 2,497 45 2,452PAK 5,426 316 5,110TAJ 1,146 482 664TKM 654 - 654UZB 3,408 3241 167

TOTAL 22,518 7,399 15,118

TransportA total of 68 priority investment projects amounting to almost $23 billion, with about $15 billion worth of funding requirement.

Trade Facilitation

Priority projects

- Regional Improvement of Border Services (RIBS) 2 - ($15.5 mln)

- Regional Improvement of Corridor Efficiency (RICE) – ($17 mln)

- Regional Upgrade of SPS Measures for Trade (RUST) – ($18 mln)

Regional Technical Assistance

- Aligning customs procedures with best practice

- Coordinated border management

- Regional investment project preparation

- Assistance on SPS

- Regional transit

- Regional interoperability of national SWs

- PPP modality for multi-modal transport

Wuhan Action Plan (Investment Prospects)