Expert: launch of trade and economic hubs to speed up delivery of goods across CA

It will also enhance synergistic effect rather than competition between countries.
Фото: 22.07.2022 744

President Kassym-Jomart Tokayev took part in the Consultative Meeting of the Heads of State of Central Asia. During the meeting, the President put forward several important proposals. Among them: strengthening transport and economic cooperation in the region, creating a network of cross-border trade and economic hubs.

According to Aidar Kurmashev, Head of the Department of International and Geo-Economic Studies of KazISS under the President of the Republic of Kazakhstan, strengthening the economic cooperation of the Central Asian countries is a logical response to the challenges that have arisen before the republics in the matter of ensuring food security.

- In your opinion, is this meeting a search for alternative options for economic cooperation outside the EAEU?

"The current geo-economic situation seriously affects the economy of many countries of the world. Issues of foreign economic and trade relations are experiencing a period of stagnation. In this regard, measures are required to intensify domestic economic activity, stimulate the development of the main points of growth. This is especially true for ensuring food security in the context of climate change. Given that much of Central Asia has a dry climate with infrequent rainfall, rising temperatures evaporate water from the soil and increase the risk of drought. There has been an expansion of desert regions, where the increase in average annual temperatures is ahead of the global level. As a result, there is a general annual loss of GDP. In recent years, due to drought in Central Asia, there has been a shortage of irrigation water, for this reason, the area under cultivation of water-intensive crops and livestock is decreasing. Therefore, the economic cooperation of the Central Asian countries in all possible areas is, first of all, a response to the challenges of ensuring food security."

During the meeting, the President noted that it is important to strengthen cooperation between the Central Asian countries in the transport sector and strengthen economic ties between the Central Asian countries. What can this cooperation give to the economy of Kazakhstan in the context of the crisis? After all, the market of Central Asian countries is not large 60-70 million.

"The realization of the transport and communication potential of Central Asia faces a number of obstacles, both objective and subjective. This can be traced, first of all, in intraregional transport communications, namely in the limited railway communications. The main problems of the existing road infrastructure are its low quality and, as a result, low capacity. Therefore, the proposal of the President of Kazakhstan to strengthen cooperation between the countries of Central Asia in the transport sector and expand economic ties is aimed at solving existing problems in this area. Given the volume of domestic exports, the market of 60-70 million people can have a significant role. As world experience shows, states, on the contrary, avoid integration with excessively large markets, since their companies cannot ensure the production of a sufficient volume of products to sign contracts with retail chains. Therefore, Kazakhstan also needs to take into account the capabilities of domestic exporters and disclose markets in their accordance."

The President proposed to launch a network of cross-border trade and economic hubs between the Central Asian countries. How effective will this measure be?

"To date, there is a lack of efficiency in the logistics of delivery and transit of goods through the countries of Central Asia. In this regard, the launch of a network of cross-border trade and economic hubs designed to serve as reference points of the Unified Commodity Distribution System of the Central Asian countries will accelerate the process of cargo delivery. The element of the "cooperative" format for creating such hubs, first of all, enhances the synergistic effect, and not competition between countries. Therefore, the implementation of this project will be considered a serious progress in the development of the infrastructure component of trade communications," Aidar Kurmashev said.