Central Asia

The CAREC Programme: what is it and what are its goals

Raluca Şancariuc

The Central Asia Regional Economic Cooperation Program (CAREC) was founded in 2001 with the aim of supporting the development of states in this region by encouraging cooperation between them. The Program involves implementing applied, results-oriented regional projects focused on poverty reduction and economic growth, while it also facilitates policy initiatives.

CAREC includes 11 states:
• The Islamic Republic of Afghanistan,
• The Republic of Azerbaijan,
• People’s Republic of China,
• Georgia,
• The Republic of Kazakhstan,
• Kyrgyz Republic,
• Mongolia,
• The Islamic Republic of Pakistan,
• The Republic of Tajikistan,
• Turkmenistan,
• The Republic of Uzbekistan

and, since 2003, it is supported by 6 international institutions:
• The Asian Development Bank,
• The European Bank for Reconstruction and Development,
• The International Monetary Fund,
• The Islamic Development Bank,
• The United Nations Development Program,
• The World Bank,

which facilitate financing regional investment projects and offer consultancy during project implementation.

Until now, the Program mobilized investment cumulating more than USD 30 billion, 273 projects being already implemented while 132 are currently on-going. Investments focused mostly on transport sector (211 projects), but also on energy (87 projects), or trade sector (68 projects), some of the projects addressing multiple sectors simultaneously. The Projects were financed from grants (68 projects), loans from international partners (136 projects), or they were technical assistance projects. Most of them were regional projects (73 projects), but when it comes to those implemented in only one country, Afghanistan benefitted from the greatest number of projects (58 projects), followed by Tajikistan (55 projects) and Kyrgyzstan (49 projects). In general, these investment projects led to an increased energy security and energy trade, more developed regional multimode transport networks, and greater freedom of movement for commodities and people in the region.

One of CAREC’s main objectives is building six transport and cooperation economic corridors in the region, with a total length of 24,000 km. Starting from trade flows that already exist in Central Asia, these corridors will contribute to a better interconnectivity between countries in the region and will facilitate the mobility of goods and people:

• Corridor 1: Europe – East Asia: Kazakhstan, the Kyrgyz Republic, and Xinjiang Uygur Autonomous Region in China
• Corridor 2: Mediterranean – East Asia: Afghanistan, Azerbaijan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan, and Xinjiang Uygur Autonomous Region in China
• Corridor 3: Russian Federation – Middle East and South Asia: Afghanistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan
• Corridor 4: Russian Federation – Est Asia: Inner Mongolia Autonomous Region, Mongolia, and Xinjiang Uygur Autonomous Region in China
• Corridor 5: East Asia – Middle East and South Asia: Afghanistan, the Kyrgyz Republic, Pakistan, Tajikistan, and Xinjiang Uygur Autonomous Region in China
• Corridor 6: Europe – Middle East and South Asia: Afghanistan, Kazakhstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan

The six CAREC corridors

carec
Source: http://www.carecprogram.org

Until now, more than USD 24 billion was invested in over 100 transport projects along the six corridors, as follows:

Corridor Number of projects Total investment

(billion USD)

1 23 6.9
2 36 6.8
3 30 2.6
4 7 0.6
5 24 2.8
6 25 5.3

Source: http://www.carecprogram.org and authors’ computations

CAREC projects implemented between 2001 and 2020 are governed by the CAREC 2020 framework, designed around the idea of cooperation for development, which encourages trade expansion and an increase in competitiveness as the main sources of prosperity and economic progress. At the 16th CAREC Ministerial Conference organized in October 2017 in Dushanbe, Tajikistan’s capital city, a new framework was adopted, namely CAREC 2030: Connecting the Region for Shared and Sustainable Development, following a consultation process organized during the first half of 2017. The Asian Development Bank already dedicated USD 5 billion for financing projects under CAREC 2030.

CAREC 2030 represents a benchmark for CAREC in the next 13 years, built around the following principles:
• Alignment with national strategies and support for the Conference of Parties (COP21);
• Expanding operational priorities selectively;
• Deepening political dialogue between states based on CAREC’s ability to deliver quality knowledge services;
• Integrating the role of the private sector and civil society;
• Building an open, inclusive CAREC platform.

CAREC 2030 focuses on five operational clusters:
1) Economic and financial stability – through macroeconomic policy coordination and information exchanges between countries in banking and capital markets sectors;
2) Trade, tourism, and economic corridors – by preparing states in the region for World Trade Organization (WTO) membership, or helping them fulfil their WTO member obligations for those who were already accepted, and also through customs simplification and harmonization, development of logistic centres, promotion of e-commerce, supporting the region’s untapped touristic potential through investment in promotion activities, relaxation of visa regimes, joint development of tourist products, investment in transport, energy and IT&C infrastructure, along with the promotion of public policies that attract private investment;
3) Infrastructure and connectivity – through a better integration and interconnection of energy markets and transport infrastructure (especially railways), increased road safety and development of regional transport corridors;
4) Agriculture and water – by supporting the alignment of sanitary measures with international standards, improved management of water resources, especially those used for irrigations in agriculture, but also by supporting trans-boundary animal disease control;
5) Human development – by introducing joint degree programs, facilitating student exchanges and research collaborations, mutual recognition of qualifications and diplomas, development of a regional labour market information system, and prevention of trans-border transmission of human diseases.

The expected results of CAREC 2030 were, until now, defined only generally, as to date there is no set of specific indicators this framework aims to accomplish. Working groups and commissions of CAREC will define in the near future such a set of indicators for each cluster and sector, while progress towards achieving proposed objectives will be assessed every three years.

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