The COVID-19 pandemic continues to affect the economies of Central Asia. Regional growth stalled in early 2020. Trade continues to be severely hampered by supply- and demand-side problems, consumption and investment fall, and inequality is likely to widen across the region, with women, migrant and informal workers, and all rural residents being significantly affected.
As of autumn 2020, the economic impact of the crisis in the region has been more severe than the public health impact, as morbidity and mortality rates in Central Asia have been lower than those observed in some OECD countries. Official figures suggest that cases and deaths across the region remain relatively low, and apart from a limited number of dangerous outbreaks in June and July, strict quarantine measures appear to have stopped the spread of the virus, as is the case in many OECD countries, or the situation elsewhere in the region. Only Kyrgyzstan reported a significant number of new infections in the five weeks to the end of October, with daily new case numbers resuming a worrying upward trend. In terms of deaths per million population, only Kyrgyzstan (42ndnd) among the 50 worst-affected countries in the world, followed by Kazakhstan (61stsv), Afghanistan (86Day) and Uzbekistan (109Day)(Center for Economic Development, 2020 ).
The public health situation remains uncertain. Health systems in Central Asia have long suffered from underfunding and corruption, limited spare capacity, and large regional disparities in quality and access. As Central Asian households account for one of the highest out-of-pocket healthcare expenditures in the world, deteriorating public health conditions can quickly create enormous administrative and budgetary pressures as poverty increases in the region.(World Bank, 2019)(World Bank, 2020)... At the same time, the problem of managing the return of migrants from high-risk countries such as Russia and Iran may create additional pressure, even if the country's public health situation shows signs of normalizing.
In stark contrast to much of Central Asia's relatively successful containment of the virus, the pandemic's economic impact on the region has been profound -- in fact, the economic hit was evident even before the region reported its first COVID-19 case up. The region relies heavily on growth drivers such as migrant remittances and commodity exports, so border closures and a slowdown in international demand have already weighed heavily on the current growth outlook in February. At the same time, relatively homogeneous production and export patterns in some countries, limited private sector size, employment gaps and high levels of informality will make it difficult to respond to the crisis, especially given the pressure it puts on public finances.
The COVID-19 pandemic and the resulting economic crisis are the third major exogenous shock to hit Central Asia in more than a decade. Experience from previous crises suggests that the economic shadow of COVID-19 in Central Asia will last long and may continue to undermine the region's prosperity long after the pandemic itself subsides. This is partly due to the diminished effectiveness of many of the region's key growth drivers, exacerbated by failure to address long-standing obstacles to more inclusive and sustainable growth. The purpose of this newsletter is therefore to provide an overview of the actions taken by Central Asian governments during the current crisis phase, while looking ahead to the main challenges they are expected to face as they plan their recovery from the crisis.
COVID-19 in Central Asia: The economic impact
The region's economy will shrink by an average of 1.7 percent this year, according to the latest forecasts, a figure that masks wide disparities across Central Asia, from a contraction of 12.6 percent in Kyrgyzstan to growth of 1.8 percent in Turkmenistan, according to official data.(World Bank, 2020) (MMF, 2020).Growth is likely to remain subdued despite the resumption of domestic economic activity, as evidenced by a gradual increase in transit and job mobility since around July, when the government began easing many quarantine restrictions (Chart 2). Economic forecasts predict a significant recovery in 2021, but growth could slow sharply with new waves of infections and shutdowns.
Given the trade dependence of Central Asian economies, their near-term prospects depend largely on global trends. In the baseline scenario, the OECD currently assumes a 4.5% decline in global GDP in 2020. All G20 economies except China are expected to contract this year, with GDP contracting by 10% in the hardest-hit countries. Globally, as many as 90 million people could be pushed into extreme poverty this year alone, a 14% increase in one year. There may be more in 2021. The base case forecasts global growth of around 5% next year, with global GDP at the end of 2021 at the same level as at the end of 2019: given pre-crisis trends, this implies a loss of 7.5%. 8% of global GDP (equivalent to the economies of France and Germany). In a negative scenario, losses can be as high as 13%. The continued slowdown in trade and global demand will hit Central Asian economies as they rely on trade activity (especially agriculture, mining and tourism), although China's strength could give them a major boost.
In addition, downside risks to the global outlook point to a slow and uncertain recovery(OECD, 2020 )Even now, momentum appears to have stalled in many countries, and confidence remains weak amid a resurgence of the virus in developed markets. While China has recovered fairly well so far, its outlook is also weighed down by global factors, as the Central Asian nation is likely to feel the impact of lower labor demand from Russia and lower global demand for the region's key exports.
The domestic private sector is still too small and too fragile to be an engine of growth. Indeed, the damaging effects of the current crisis threaten to slow their progress even further. With trade receipts and remittances an important component of supporting domestic consumption, employment and investment, the near-term outlook is bleak. For example, in Kyrgyzstan, where remittances account for nearly a third of GDP, inflows fell 62% in April at the peak of Russia’s first quarantine(National Bank of Kyrgyzstan, 2020).While remittances have since recovered (albeit continuing to fall by 7% year-to-date), the sharp and sudden drop has once again highlighted the country's fragile external position. First figures from Russia show similar declines in Tajikistan and Uzbekistan(Central Bank of Russia, 2020).
Trade data for many countries paint a similar picture. For example, exports from Uzbekistan and Kazakhstan fell by 22% and 13% respectively in the first half of the year, with the fall in global oil prices and the implementation of OPEC+ production cuts exacerbating the impact of COVID-19 on Kazakhstan(Uzbekistan State Statistics Committee, 2020;Natural Gas Trade, 2020;S&P Global, 2020)The impact of lower external demand is particularly painful for economies with limited supplies of export products and a limited range of trading partners. For example, in Turkmenistan, where more than 90 percent of exports are hydrocarbons, a 27 percent drop in exports to China could cause more immediate pressure than Uzbekistan's 44 percent drop, since more than 80 percent of Turkmenistan's exports are The flow went to China to China compared to 20% in Uzbekistan (Figure 3).
The human costs of a recession across Central Asia will be profound, requiring harsh and targeted policy interventions to support people and businesses. Of the 2.4 million people estimated by the World Bank to be impoverished in Europe and Central Asia in 2020, 58 percent (approximately 1.4 million) live in Central Asia(World Bank, 2020)Where and to what extent these pressures will manifest will depend largely on the composition, level of informality and urbanization of each country's labor market. In countries such as Kyrgyzstan and Kazakhstan, where services account for two-thirds of employment, the impact of quarantine measures and reduced retail spending has the potential to have a severe impact on the labor market(International Labor Organization, 2020).As all countries in the region are already facing tighter fiscal constraints, Central Asian governments must ensure that policy interventions reach particularly vulnerable groups, including low-income earners, youth, and women (Box 1), taking into account additional risks and burden.
box 1Socioeconomic Burden of COVID-19 on Women
So far, the socioeconomic costs of COVID-19 on women have declined substantially. While death rates are higher among men in Central Asia, women are feeling the secondary effects of the pandemic, with increased domestic violence, reduced employment, increased unpaid care work and worse working conditions.
Industries with a high proportion of women (textiles, accommodation and gastronomy) have been hit particularly hard, while possibilities for childcare outside the home are considerably limited. As a result, female employment rates have dropped dramatically. Women face greater loss of paid hours and more unemployment due to COVID-19: 26% of women in Kazakhstan reported unemployment compared to 22% of men. Several national surveys confirm that women-run businesses are disproportionately affected: in Afghanistan, more women entrepreneurs closed down than men, while in Kyrgyzstan a higher proportion of women-run MSMEs (72%) report Unable to repay their debt operating loans compared to male-dominated MSMEs (61%).
Another risk posed by COVID-19 to women in Central Asia is Can further strengthen the domestic cost care,This further limits their ability to do paid work. In Kyrgyzstan and Kazakhstan, 80 percent of women reported an increase in housework, compared with 58 percent of men. Women are also disproportionately affected by the decline in remittances. In Kyrgyzstan, 88 percent of women reported receiving fewer remittances compared to 47 percent of men.
source:(Giuliano, 2020;United Nations, 2020;UNIDO, 2020;ADB and UNDP, 2020).
The distributional impact of the pandemic may also have an important spatial dimension. A further slowdown in trade and global demand is expected to hit rural economies particularly hard, as they rely more heavily on tradable activities such as agriculture, mining and tourism. This has clear implications for regional policy and the urban-rural divide. Furthermore, while infection risks are lower in rural areas, healthcare and social infrastructure are also poorer, and rural residents in Central Asia often cannot work remotely(OECD, 2020).Furthermore, the quality of infrastructure (especially digital) and access to online learning and digital skills tends to be poor. The cost of Internet access and mobile broadband is quite high relative to income in most of Central Asia(OECD, 2020).Another key point is that the potential for telecommuting varies by skill level—in other words, one form of inequality exacerbates another. Cross-regional skills gaps and digital divides (in terms of skills and access) are not new challenges for Central Asia, but they are now more relevant than ever. Most countries need to invest more in the quality of online learning.
Political Reaction in Central Asia
Policy responses to COVID-19 vary widely across the region, largely reflecting i) governments' assessments of the health situation and ii) their fiscal capacity (Table 1).
The first group of countries (Kazakhstan, Mongolia and Uzbekistan) responded swiftly to the crisis by imposing strict lockdown measures, closing borders and consolidating massive aid packages. As the crisis deepened, they introduced additional sanitary and fiscal measures, which were then phased out over the summer. Another group of countries (Afghanistan, Kyrgyzstan) recognized the situation earlier but reacted later, partly because of public capacity and slower, more complex political processes. The scope for the response is limited by tight fiscal space, rapidly deteriorating public finances, and increased demand for emergency international assistance. A third group of countries (Tajikistan, Turkmenistan) reported few or no COVID-19 cases and initially designed limited, targeted policies that were then gradually expanded over time.
In terms of international movement restrictions, only Afghanistan has fully reopened its borders to civilian traffic; travel to Turkmenistan and Mongolia is almost completely closed, and travel to Kazakhstan, Kyrgyzstan and Tajikistan is only allowed for certain nationalities under strict quarantine conditions proceed next(IATA, 2020).
Table 1.Political responses vary widely across Central Asia
financialand othersMeasures (for companies)
include credit terms
Note: Afghanistan (AFG), Kazakhstan (KZ), Kyrgyzstan (KG), Mongolia (MG), Tajikistan (TAJ), Turkmenistan (TURK) and Uzbekistan (UZB)
Yes: comprehensive national plan and measures; Limited: limited set of measures and restrictions on scale or scope; No: hardly any political reaction observed.
Contents: OECD analysis (2020).
Second wave of closures may be more localized than first
Central Asian governments, like many OECD and non-OECD countries, may be forced to reimpose strict containment measures to prevent a second wave of infections. Since the summer, Central Asian governments have indicated that the policy response to contain the possibility of a second wave of infections will follow a more localized and targeted approach taken by some countries, focusing on keeping certain sectors of the economy open and maximizing to protect the most vulnerable in their societies and to ensure that these measures address local risks and needs.
For example, in Kazakhstan, the government and local authorities tightened regional restrictions in response to local epidemics and implemented targeted restrictions on specific socio-demographic groups, restricting the movement of people over 65 in several cities. Also in Kyrgyzstan, new internal travel restrictions for the Batken region came into effect in late September, requiring PCR testing of travelers entering the country via the region from Uzbekistan and Tajikistan, while the government delegated the decision to close schools to local authority.
Experience over the past few months has shown that while government responses may be better suited to local circumstances, new coordination challenges are needed at both national and international levels to ensure that containment decision-making is coordinated and that both central and local agencies have the necessary measures in place , capabilities and resources to meet the challenges of a rapidly changing situation.
The Road to Recovery: Key Economic Challenges Ahead
Many of the economic and social challenges that Central Asia will face in the next year or two will be similar to those in OECD countries. How should the government maintain corporate liquidity? How can I support workers and families? How can policymakers ensure trade remains open? At the same time, many challenges are exacerbated by long-term structural problems in the region's economies and labor markets—prime examples being the risk of falling public debt, severe budgetary constraints, and massive labor migration.
To achieve a more sustainable economic recovery, Central Asian governments must address five structural challenges exacerbated by the COVID-19 pandemic: strengthening connectivity, shifting to a more private-sector-oriented growth model, improving labor market functioning and productivity, improved development conditions, migration and efficient use of remittances, and enhanced public debt and financial management.
1.Regional cooperation and connectivity are necessary for sustained trade and growth
Due to their relatively small and in most cases rather monolithic economies, Central Asian economies rely heavily on foreign trade. The region's trade-to-GDP ratio averages 65 percent, above the OECD average of 58 percent.(World Bank, 2020), although its inland location entails higher shipping costs. The global health crisis has already had a serious impact on trade in the region, both in terms of demand impacts and logistical disruptions: freight volumes (measured in tonne kilometers) are expected to be 53% lower in 2020 than last year.(ITF, 2020).
One of the consequences of the decline in world trade is the impact on freight-related CO2 emissions, reminiscent of the sustainability challenges that governments in the region are grappling with related to the expansion of freight in Central Asia. In Russia and Central Asia, freight-related CO2 emissions are projected to drop by 54% as freight volumes decline, a much larger drop than expected in the rest of the world (Figure 4).(ITF, 2020)In fact, Central Asia is one of the only regions surveyed by the International Transport Forum where projected freight-related CO2 reductions exceed projected freight-only reductions. The decline in volumes and emissions points to a number of trade challenges critical to the region's long-term sustainability, including the volatility and environmentally damaging consequences of resource extraction and processing, distance from major global demand centers, and infrastructure Sustainability planning is insufficient.
Central Asia's remoteness will only further reduce the region's competitiveness for exporters amid deteriorating external conditions. Infrastructure bottlenecks, political barriers and lack of trade facilitation keep the country remote. Better policies, including better interagency collaboration and automation, can help reduce costs, reduce transit times and support recovery, significantly improving connectivity without costly new investments in physical infrastructure. Indeed, the COVID-19 crisis has shown that Central Asian governments are capable of being flexible in trade policy when conditions call for it, and the improvement over the past six months should show how trade facilitation can help all countries in the region.
For example, when the pandemic first hit Central Asia, Kazakhstan introduced a green corridor for much-needed medical supplies and food, downgraded its risk management level from red to yellow, and implemented a series of tariff and tax deferrals. Its regional neighbors have done the same. In Kyrgyzstan, the government has delayed some trade-related tariff and tax payments. In Uzbekistan, the government opened a call center to help traders with their problems and took the opportunity to expand the digitization of customs and trade procedures. The measures represent a concerted effort by regional policymakers to keep trade flowing. As the region begins to reopen, borders must reopen in a coordinated manner, and policymakers must come together to agree on how best to restore the flow of goods and people to pre-coronavirus conditions. level. If these recent experiences can be extended to a range of new post-crisis activities, increased coordination and cooperation among regional governments in 2020 could herald a recovery for the region.
the way forward
How, then, have recent targeted improvements in trade facilitation helped Central Asia's broader recovery efforts? To some extent, improving interregional connectivity, especially “soft” measures such as harmonizing border procedures, may have significant positive spillover effects on many regional development priorities. Indeed, in a region where countries significantly lag behind the OECD average on OECD trade facilitation indicators, addressing the factors that make Central Asia's borders economically "thick" would be continued improvement in connectivity and thus its competitiveness key to its strength; here the focus is on strengthening cooperation between customs authorities, enhancing enforcement of customs procedures and expanding digitization. Likewise, the crisis has reaffirmed the importance of intraregional cooperation on infrastructure and cargo management to keep vital trade flows flowing - a recent OECD and ITF reportImproving Freight and Connectivity in Central AsiaHighlights, among other things, the potential for establishing a regional logistics observatory, which could provide insight into how regional governments can formalize the cooperative improvements achieved in recent months(OECD and ITF, 2019).
A key example of how better connectivity can have a significant (albeit indirect) impact on the region's recovery is in attracting foreign investment, a goal of all governments in the region. For market-oriented FDI, individual Central Asian economies may be too small to be considered in a depressed world economy, but overall, Central Asian markets are very important, mainly due to lack of internal coherence and connectivity. hindered. This logic also applies to many other sectors where the region as a whole has a comparative advantage and thrives, such as tourism. A positive outcome of a difficult 2020 may be a greater willingness to accept that healthy regional cooperation need not exclude targeted strategic economic cooperation.
2.The revival of economic growth requires further support for enterprises and long-term reform of the business environment
The COVID-19 pandemic has had a huge negative impact on business activity, exacerbated by shutdowns and hygiene restrictions, resulting in lost sales, store closures, supply chain disruptions, lack of mobility and layoffs. Uncertainty over the trajectory of the pandemic and prospects for economic recovery continues to dampen investment and confidence. According to surveys by local chambers of commerce and business associations, between 60% and 80% of businesses in most of Central Asia and OECD member countries have been severely affected by the crisis. The impact of the crisis on the private sector, especially small and medium-sized enterprises that are less resilient to shocks, requires government support.
During the period of the strictest restrictions, the government formulated a package of support measures for SMEs and entrepreneurs, including fiscal and tax measures, simplified administrative procedures and requirements, suspension of audits and inspections, etc. The political response has focused on emergency financial assistance programs such as, for example, dedicated loan portfolios, loan guarantees and earmarked funds for SMEs and entrepreneurs to the extent budgetary leeway allows. Tax and social security exemptions have been granted and, in some cases, deferrals of utility and rent payments. Support for SMEs and entrepreneurs is provided mainly through SME agencies, including DAMU in Kazakhstan and new SME agencies in Uzbekistan and Mongolia.
Governments in the region are also taking steps to accelerate the already-undergoing digitization of public services and tax administration, help businesses connect to e-commerce platforms, and create new services such as cash transfers and the issuance of e-city transport permits. .For example, Kyrgyzstan has also implemented digital initiatives, bringing more than 80 government services onlinedistorted; brokenIt is proposed that Mongolia speed up the construction of the e-Mongolia platform, and Uzbekistan speed up online shopping in one place.
the way forward
As the threat and impact of COVID-19 in Central Asia is expected to persist and some countries will be hit by a second wave, governments should continue and refocus their business support plans. To contain the pandemic, restrictions such as social distancing, limited working hours and number of customers, and mandatory sanitation have been maintained. Additionally, companies need ongoing support to reopen and increase activity. Emergency financial aid should be phased out, where it has ended, with a clear timeline to help businesses anticipate and adapt. Continued support for the hardest-hit sectors may be required: for example, tax deferrals and financial programs, especially in transportation, hotels, food services and tourism, could be extended until recovery occurs. Governments can also further support the digitization of businesses by assisting businesses in their transition from brick-and-mortar to online commerce, providing training programs for managers and entrepreneurs, funding digital projects through vouchers and grants, and facilitating relationships between key digital service providers Transformation and other smaller businesses have helped them increase their digital usage.
OECD member countries have broad national programs and packages of measures to support liquidity and business survival that have not been interrupted after the initial shutdown. While some of these measures have been tapered, others have been expanded to help businesses reopen and strengthen their operations, focusing on the worst-affected sectors. France, for example, expanded measures and added new funds to support targeted companies in the recovery phase. entertainmentrecovery planThese include digitization support, additional loan and grant guarantees, export vouchers, new tax breaks and payment deferrals to industrial companies and the hardest-hit sectors. All mechanisms are implemented on a single online business platform and transactions are conducted through the government or Bpifrance, the French public bank for SMEs. Governments in OECD countries such as Italy, Japan and South Korea support digitization with advice and training, free access to the services of major IT companies or subsidies for online companies. In the longer term, better digital connectivity and competition from large retailers will also be needed.
Business associations have played a key role during the COVID-19 outbreak and can continue to help inform and address business needs during the recovery period. They should be included in consultations to help businesses recover. They can provide data through surveys and business roundtables, help identify actions with the greatest impact, and recommend additional actions. They can also encourage government support and increase business awareness and access to existing policies.
In the longer term, Central Asian countries need to implement long-awaited structural economic reforms, improve the legal environment for business, and shift to a more private-sector-oriented growth model. SOE management reforms will help reduce distortions from state intervention(OECD, 2018). Improving the availability of skills relevant to the labor market, especially by improving the access and quality of training programmes, will help to close the skills gap. Key issues facing businesses in the legal environment include simplification of rules for SMEs, taxation, dispute resolution and competition. Above all, the government must close the gap between themin Lawrequire andStrictly speakingImplement and increase anti-corruption efforts(OECD, in preparation ;OECD, 2020).This requires better legislation, digitization and enforcement skills, as well as sustainable cooperation with companies and international partners.
3.Employment support policies need to be adapted to support workers and allow workers to redeploy to vital and sustainable sectors
In Central Asia, as in OECD countries, once the first economic effects of the COVID-19 pandemic were felt, governments responded quickly, providing immediate support to businesses and workers (and limiting job losses)(OECD, 2020).Some countries use direct transfers to entrepreneurs and workers, while others have implemented job retention schemes, such as Mongolia’s private employment grant scheme(OECD, 2020)In late spring, as COVID-19 numbers showed signs of improving, most Central Asian countries began easing restrictions to ease the pressure on struggling families and employers. Restrictions were reimposed over the summer after cases rose again; these, in turn, affect employment. The support measures have softened the impact on the labor market, but they have not been able to prevent rising unemployment. Unemployment in Kazakhstan rose from 4.8% in 2019 to more than 5% in the summer and could reach 6.1% by the end of the year. In Uzbekistan, the government reported an increase of more than 6 percentage points from pre-crisis levels, reaching 13.2 percent in the summer.
OECD governments seek to help workers in the short term while supporting sustainable jobs to accelerate the reallocation of jobs to high-performing firms and sectors. The government has used a variety of tools during the shutdown, including support for part-time training, wage subsidies and the development of a short-term work scheme (STW), complemented by continued job subsidies and increased monitoring of the correct use of short-time work support (Figure 5) .(OECD, 2020;OECD, 2020).At the same time, job retention schemes were largely phased out, reducing coverage and access, and using clear timelines and adjustment criteria to reduce uncertainty. However, they have been extended to specific sectors, and even after the lifting of the strictest prohibitive measures, activities are still restricted by law.
Self-employed and informal workers carry a heavy burden in Central Asia, where most economies are characterized by a high degree of economic informality – especially informal employment, but in some cases also commercial informality sex(OECD, 2020). The region's initial public support measures expanded a generous social safety net and benefits in kind for the most vulnerable. In the longer term, efforts to address informality could be based on temporarily extending sick leave or unemployment benefits for non-standard workers to strengthen their social protection. Most importantly, they require governments to address structural labor market issues, including barriers to entry for young people. Employment Incentives and Labor Law Compliance(OECD, 2020;OECD, 2020;OECD, 2017).
the way forward
Active labor market policies (ALMPs) in Central Asia should focus on supporting workers rather than employment. This requires targeting sectors where unemployment has risen the most and providing workers with income (wages or unemployment benefits in case of layoffs), employment (or partial employment) and training to avoid loss of human capital. This will enable workers and families in transition to earn income again while working or studying. This could help accelerate the reallocation of skilled labor to proven or critical sectors as the economic recovery begins.
Moreover, to sustain a longer-term economic recovery, governments must undertake deep reforms to boost employment levels, improve labor productivity, and make labor markets more inclusive. Strengthening active employment policies would include better job matching, improved public employment services, more training opportunities, more effective safety nets and income support, and improved employment incentives, especially for youth and women. More flexible labor laws can help improve employment opportunities for young, female and older workers, for example by promoting unfair dismissal legislation, industry restrictions and retirement, combined with adequate income support and active employment policies, and by enacting fixed-term contract legislation. Especially in economies with relatively high levels of informality, overly restrictive labor regulations can perpetuate labor market dualism, favoring "insiders" whose contracts are tightly protected, while leaving others vulnerable . A more flexible framework - cheaper for employers but more consistently applied - could help encourage more formal job creation. Better compliance with labor laws can also lead to better social protection and formal employment. Kazakhstan, for example, amended its labor law and introduced an employment plan that provides for increased ALMPS(OECD, 2017).
4.Long-term growth will depend on sustainable debt and revenue management
Before the pandemic, debt levels in Central Asian economies were considered largely adequate and sustainable. However, the crisis has required a costly fiscal response, and the region's public finances have been hit particularly hard on the revenue front due to sharp declines in commodity prices and remittances. Currency weighed on heightened expectations of further downside risks(OECD, 2020). While weaker exchange rates can provide some relief and increase the domestic value of export earnings, they can also increase debt burdens and reduce an economy's overall purchasing power. Debt ratios in the region have risen in 2020, and the overall cost to public finances has not yet been fully reflected in the latest figures (Figures 6 and 7).
Public debt is projected to increase further in subsequent years, reducing fiscal space and raising the risk of debt crises in some countries. The surge reflects new borrowing to finance the recovery, contracting GDP and currency depreciation - although the current low global interest rate environment makes borrowing costs less vulnerable to rising debt(EBWE, 2020;OECD, 2020)Tajikistan, and Kyrgyzstan in particular, face a significant risk of a debt crisis as both countries meet the terms of a G20 "debt repayment moratorium" on all official bilateral creditors until the end of 2020, agreed on April 15.(OECD, 2020).Tajikistan and Kyrgyzstan have specifically demanded such write-offs from China, the largest single creditor(Eurasian Network, 2020).
However, debt sustainability in Central Asia should also be viewed as a matter of government revenue management and exposure to limited creditors. The crisis has drastically reduced government revenues across the region. While tax revenue and GDP trends move in tandem, tax revenue tends to fall faster than GDP when growth is constrained or negative(Belinga, 2014).In particular, value-added tax (VAT), which accounts for an average of 33.6% of household income in Central Asia (compared to 21.2% in OECD countries), has a disproportionately large impact on government revenues, mainly due to exports reducing remittances for domestic consumption income(OECD, 2020).Furthermore, persistently low/volatile oil and commodity prices will continue to have a significant impact on the incomes of Central Asian economies. This pushed the general government balance of payments across the region into negative territory (Chart 8).(World Bank, 2020).
The risk of a debt crisis in Kyrgyzstan and Tajikistan is high due to increasing reliance on short-term, expensive, and partially financed credit. Much of this secured debt is off-budget, increasing the risk of unsustainability and debt problems as such instruments are more difficult to restructure and adversely affect the ability to service future debt and obtain concessional financing.(OECD, 2020;OECD, 2020;Mihari, 2020;Imam, 2019). In addition, the debt of Tajikistan and Kyrgyzstan is particularly exposed to China. Faced with increasingly difficult repayments on loans to finance infrastructure projects, China may decide to use resource liens, as it has done in sub-Saharan Africa. In fact, although China is a signatory of the G20 agreement, it has not yet agreed to the debt relief requirements proposed by various countries. In addition, the exact amount and terms of China's debt, including official bilateral loans and alternative loans through state-owned enterprises, remain unclear. If China does not forgive the debt of Tajikistan and Kyrgyzstan, the tax revenue and ability of the two countries to repay other outstanding loans will be further weakened(OECD, 2020;Eurasian Network, 2020;Center for Global Development, 2018).
the way forward
Looking ahead, the current response to the crisis should lead to long-term debt and growth sustainability and require new approaches to resource mobilization and management, with a focus on taxation and public financial management. This requires creating fiscal space, reducing the risks of debt sustainability, corruption and illicit financial flows, and further diversifying the economy. The quality and governance of PFM also need to be improved in areas such as results orientation, multi-annual budgeting and budget transparency.(OECD, 2018).
In addition to the necessary diversification of external financing, broadening the tax base, improving tax compliance, addressing inefficient tax breaks, shifting tax structures to policy areas that are least harmful to growth, and digitizing tax administration should be the focus of current tax reform . Broadening the tax base, especially for Personal Income Tax (PIT), Social Security Contributions (SSO) and VAT, can help meet financial needs and enhance their sustainability by moving away from volatile revenue streams. A better understanding of key taxes and tax incentives can help improve their design and implementation, emphasizing consistency and thus improving tax efficiency. The first measures in Central Asia are likely to include the introduction of uniform year-end tax returns across all countries, further simplification and digitization of the SME tax regime, and reform of the social security system to support social security, protecting systems that have come under particular stress in the crisis(OECD, 2020;OECD, in preparation ). Most countries have tax deferrals, which have proven useful in the context of COVID-19 and need to be reassessed and phased out in the medium term. Furthermore, the region should join international tax cooperation efforts to promote the use of international standards and tools, such as the OECD/G20 Base Erosion and Profit Shifting Framework, to effectively tax cross-border activities and offshore assets(OECD, 2020;OECD, 2020).
5.Better conditions for migrants and use of their remittances can support growth
The lack of quality jobs in much of Central Asia continues to drive massive labor migration, especially to Russia and Kazakhstan. Immigration eases the pressure on labor markets from the rapid expansion of labor in countries of origin, and migrant remittances are an important source of income for governments and households. In previous crises, large numbers of migrant workers served as an economic and social buffer for Central Asian economies, notably Kyrgyzstan and Tajikistan.
This year, however, the combination of supply and demand barriers to labor migration created by COVID-19 has reversed this historical pattern, at the expense of migrants, their families and society, and posed many challenges for governments. In the early stages of the crisis, border closures and disruptions to economic activity prevented migrants from going abroad to work, reducing opportunities in foreign markets that many had already entered, and stifling employment opportunities for those who remained in their countries of origin. For those who remain in Russia, the social and economic impact is severe, underscoring the particularly high vulnerability of migrants compared with formally employed residents. A survey of Central Asian immigrants in Russia found that 40% of respondents had lost their jobs and 75% had been placed on unpaid leave, compared with 23% and 48% of the local population, respectively.(Gurevich and Kolesnikov, 2020).At the same time, poor living conditions, reduced access to health care and high levels of informality expose those who remain abroad to greater health risks and economic insecurity, as more than 90% of immigrants are estimated to work in informal jobs(Rocheva 和 Varshaver, 2017).
For migrants trying to return home, the detention measures present some additional challenges. In a survey of Tajik immigrants in Russia, some 46 percent said they would not be able to return to Tajikistan, while 80 percent remained in Tajikistan but were prevented from returning to Russia. Border closures have created a host of social and organizational challenges as thousands of migrants are stranded at border crossings, mostly in makeshift camps(Gershkovich, 2020)Every day more and more migrants arrive in makeshift camps, although their return overland to Tajikistan, Kyrgyzstan and Uzbekistan depends on the occasional transit permit issued by Kazakhstan. The situation also creates difficulties for their families, who remain at home and continue to depend on transfers from migrants who remain or lose their jobs.
One of the most immediate consequences of labor migration has been a sharp decline in remittances. For governments and households, remittance income, especially from Russia, has been key to sustaining consumption, with remittances flowing into Central Asia accounting for about 15% of the region’s GDP in 2019 and almost 10% of the GDP of Kyrgyzstan and Tajikistan. one third. Kyrgyzstan, the only Central Asian country to release monthly data for 2020, showed in its first figures that remittances to Kyrgyzstan fell sharply after Russia’s initial shutdown, with an annual drop of as much as 60% in April alone (Figure 9). Although remittance inflows recovered in the third quarter as Russia reopened, data from the Russian Central Bank showed that remittance inflows remained well below 2019 levels, with similar average remittance inflows. In a region where household savings are low, this has the potential to have significant immediate impacts on many of Central Asia's most vulnerable populations. The World Bank estimates that out of a combined 2.6 million vulnerable people in Europe and Central Asia, an additional 1.4 million could be impoverished in Central Asia (at $3.20 a day and purchasing power parity).
Difficult labor markets and limited fiscal space for direct public support to families mean that the situation is equally complex for migrants who may return or remain in their countries of origin, voluntarily or involuntarily. So far, migrant workers have received little economic and social support upon their return, and stigma and lack of skills have prevented their reintegration into the local formal labor market. Early projections predict a 10-20% increase in the active labor force in Central Asia if international migration flows are disrupted. The fact that only 32 percent of former Tajik immigrants were able to find work in their home country this year shows the challenges facing this vulnerable group. Returning migrants are also adding pressure to already overwhelmed local health systems. Migrant workers are unevenly distributed across regions of their countries of origin, as they tend to come from poorer and more remote areas. For example, it was estimated that some 66 percent of labor migration from Kyrgyzstan to Russia in 2014 came from the Osh, Baktyn and Zalalabad regions, which account for only 41 percent of the country’s population. In Tajikistan, more than 45,000 people moved inland for economic reasons in 2018, but nearly half of them were in the Khatlon region alone. It points to local strains, the importance of which will only become clear in the coming months, especially in places struggling with underfunded health and social infrastructure.
the way forward
Governments in the region need to find ways to support migrant workers, both abroad and returning. Many immigrants need immediate income support, as well as access to health care and housing. Governments in countries where migrants are temporarily detained can reduce stress and hardship by promoting legal stay for migrants and calling for regional dialogue, as well as reducing the risk of migrants taking informal and high-risk jobs. For example, Russia has extended the validity of all work permits until December 2020. This is an important step, but the region's response will require coordination and shared responsibility. Also simplifies the complex and expensive immigration patent process in the long run(Rocheva 和 Varshaver, 2017)
The COVID-19 pandemic has also demonstrated the resilience of remittances and migration, requiring long-term responses to the problems and opportunities presented by seasonal migration flows. Governments also need to consider how best to use these volatile remittance flows to create domestic jobs and private sector growth. The OECD Principles for Financial Literacy can be used to build robust national financial literacy strategies for current and potential migrants and their families, helping them to use remittances effectively and use formal financial channels. Despite reservations about the fiscal sustainability of universal social assistance, the experience of many Latin American countries has shown that this approach is indeed a less costly and more efficient way of supporting informal workers. Policymakers in Central Asia could benefit from observing these experiences and assessing their applicability to the local context(Arnold, Garda i González-Pandiella, 2020)Governments should also provide returning migrants with education and training programmes, especially entrepreneurship programmes, to increase local job opportunities, as has been done in Moldova.
Context: Country Impacts and Responses
Economic Effects.Since July 2020, Afghanistan has slowly but surely advanced the process of lifting the blockade, reopening schools, borders, and domestic and international traffic. However, the quarantine process and falling supply and demand have put the Afghan economy in a bind. GDP is expected to decline by between 5% and 7.4% in 2020 due to lower industrial and service sector production and a sharp drop in domestic income. The budget deficit is expected to rise to 4 percent of GDP, with development partners pledging to cover half of the deficit. The Afghan Chamber of Commerce reported a 65% year-on-year drop in exports between April and July, noting that the private sector is struggling to stay afloat as the impact of COVID-19 coincides with the deteriorating security situation. A World Bank survey found that 30% of small businesses have closed, and 88% of small businesses reported a drop in sales. The country faced a decline in the Human Development Index (HDI) for the first time since 1990. Government estimates show that 90 percent of the population lives below the poverty line, which is linked to falling incomes, high unemployment (about 53 percent) and rising food prices. Nearly one-third of the country's population has been infected with COVID-19, research by the Ministry of Health has found. Additionally, an estimated 350,000 returning migrants and ongoing armed conflict continue to displace people across the country, making compliance with COVID-19 precautions difficult.
Economic support measuresDuring the quarantine, the government focused on supporting the country's growing vulnerable population with a bread distribution program that reportedly reached as much as 90% of the population. With the easing of restrictions and ongoing peace talks with the Taliban, the government has shifted its priorities to stabilizing the economy. The president proposed a foundation, a mechanism to exempt corporations from tax penalties, and a ban on leasing state property. So far, government support for businesses has been limited and a stimulus package for businesses is being discussed. Government support includes short-term employment schemes and additional storage capacity to allow those unable to export to store their goods. To offset limited government support, development partners including the European Union and the World Bank have stepped in with targeted commercial support.
Economic Effects.The crisis caused by COVID-19 has hit Kazakhstan both on the consumption side due to national and global quarantines and on the income side due to the sharp drop in oil prices. Overall, between January and August 2020, GDP is expected to contract by 3%, investment by 5.2%, and inflation higher due to supply disruptions and currency debasement. The unemployment rate rose 0.2% to 5% in July and is expected to rise above 6% by the end of 2020, according to official statistics. If a modest recovery in growth is expected in 2021, Kazakhstan's economy remains vulnerable to further deterioration in the health situation, which would severely affect business activity and employment(World Bank, 2020;OECD, 2020).
Economysupport measures.The Kazakh government quickly responded to the pandemic with a $10 billion (4.4 trillion tenge, about 9% of GDP) anti-crisis package to strengthen social safety nets and businesses, especially SMEs support(OECD, 2020). Kazakhstan began easing lockdown restrictions in May and introduced new support and recovery measures. The joint government-SNB action plan includes a package of additional support measures, including taxation, digitization, public-private partnerships (PPPs) and investment regulatory environment reforms. In the summer, the "Comprehensive Economic Growth Recovery Plan" was drafted, which envisages expanded business financing and concessional loans, and expanded employment roadmap. With a second wave threatening the country, a new medium-term growth agenda was put forward, and the creation of a Supreme Reform Council and Strategic Planning and Reform Agency led by the President was announced in September. The country is now introducing a series of new containment measures at the regional level, including quarantines and restrictions on movement.
According to official statistics, the previous support projects have led to the employment of more than 750,000 people, and directly supported about 4.6 million people with income. Since September, banks have provided 160 billion tenge ($386 million) in concessional loans to SMEs, and more than 1.6 million people and 11,000 SMEs have received loan deferrals (approximately 360 billion tenge or $870 million). More than 270,000 companies and self-employed people benefit from tax incentives(World Bank, 2020).During the COVID-19 crisis, the DAMU Fund alone has supported more than 7,000 entrepreneurial projects with a total value of 566 billion tenge ($1.3 billion).
economic effect.COVID-19 had an immediate and severe impact on the economy, with GDP contracting by 5.9% year-on-year between January and July, the sharpest decline in Central Asia over the same period(World Bank, 2020)Economic activity remains subdued despite the easing of restrictions, with workplace activity down 30% so far this year and retail activity down 20%. The smaller trade deficit masks the deterioration in Kyrgyzstan's external position. In addition to a slight increase in gold exports, trade fell sharply, with foreign trade down 22% in the first half, while exports to China fell 33%. Tourism in Kyrgyzstan has all but disappeared (down 90%) during the pandemic. Meanwhile, imports in the first seven months fell by more than 50% to just $825 million compared with the same period in 2019. Domestic tax and duty revenues have fallen sharply due to lower trade and commodity prices, lower domestic consumption, and the impact of movement restrictions imposed to limit the spread of the virus. By mid-May, the Treasury forecast a 20% drop in revenue this year, which, combined with higher spending on health and social assistance, pushed the budget deficit to 7.4% of GDP from 0.3% in the first half of 2020. While the drop in remittances was less dramatic than initially feared, inflows were down 13% year-on-year, which will affect household finances and increase the risk of many falling into poverty. The return of migrant workers and a drop in domestic workers have led to a rise in unemployment, which is expected to rise by 21% in a worst-case scenario. The World Bank predicts that the poverty rate will rise by 5.8 percentage points in 2020. The country's path to recovery also depends on political stability. Street protests in early October led to the cancellation of the October 4 general election, a change of government and the resignation of the president. The prospect of a new parliament and presidential elections adds to the uncertainty.
support measures.after adoptionNew Economic Freedom ActIn April, the government set up an anti-crisis fund, which included measures to improve the business environment, among other things. It provides tax incentives for export-oriented SMEs and temporary tax and debt relief for all companies. The poor and disadvantaged groups in society depend to a large extent on monthly payments from social funds. In response to price increases affecting particularly vulnerable households, the Government intends to regulate coal prices. Bank Negara, which has remained sensitive during the crisis, is now facilitating adjustments in the financial system by selling foreign exchange reserves and buying locally produced gold. The government has also mobilized foreign aid to prop up the country's deteriorating fiscal position and restructure debt repayments. For example, the World Bank provides emergency financing to as many as 65,000 small and medium-sized enterprises. Other development partners have provided support, but an uneven shift in power in October has also strained relations with donors, adding to economic pressure and uncertainty about debt relief and budget support.
economic effect.GDP is expected to contract by about 2.4% this year, in stark contrast to the pre-COVID growth forecast of 5.4%. Mongolia remains heavily dependent on commodity exports, and COVID-19 has further reduced commodity prices and foreign demand, which had fallen before the outbreak. In the first half of the year, mining exports to China, Mongolia's main export destination, fell by about one-third year-on-year, although China's recovery is clearly good news for Mongolia. Strict containment measures have effectively limited the number of cases to around 300, but at the cost of business, liquidity and business waste, especially for local businesses. According to the Mongolian Chamber of Commerce and Industry, more than two-thirds of businesses have been affected by the outbreak. Falling incomes and the scale of the policy response contributed to a further deterioration in public and external debt, which were already 72% and 220% of GDP, respectively, before the pandemic. Although external debt is mostly denominated in foreign currencies, most of it is long-term. However, the need for external financing is substantial.
support measures.The government's political response to COVID-19 has been swift and steady, closing borders and imposing strict lockdown and hygiene measures. A national package of seven key measures, ranging from job-boosting schemes to tax exemptions, has been implemented at an early stage. It was subsequently supplemented by other socio-economic and sectoral policies and laws. Health capacity has been increased, including through the establishment of field hospitals. In September, the government drafted aNational Action Plan 2020-21Support economic recovery and medium-term development. Electronic Mongolia digital programming has also been accelerated. The Bank of Mongolia also played a key role, cutting interest rates from 11% to 9% and supporting liquidity and lending to businesses. While most restrictions are gradually being lifted, the country remains on high alert and takes action before the end of the yearadvertise ad hoc, has opted for containment measures, such as closing two border crossings with Russia at the end of October.
economic effect.The global health crisis has severely affected some of Tajikistan's main economic engines. Real GDP growth is expected to slow to 1.6% in 2020 from just under 7% in 2019. The main impact on the country's economy has been a disruption to trade, a reduction in migrant remittances and a consequent drop in domestic consumption, as well as lower commodity prices for many of the country's main exports. One of the immediate consequences of the economic slowdown is that much of the progress made in reducing the national poverty rate, which fell to 26.3 percent in 2019, may be reversed. In 2020, the World Food Program estimates that some 47 percent of Tajiks live on less than $1.33 a day, and a third of the population is undernourished. The pandemic's disruptive impact on supply chains and businesses has sent food prices soaring, creating dire conditions for many families in what is already the region's poorest country per capita.
The impact on the country's labor market is also significant. A large informal sector (only 13% of the workforce was formally employed in the private sector in 2017) and large numbers of migrant workers working abroad add to the challenges of managing support to those most in need, while increasing pressure on local labor markets . Given the high rate of informality, it is disappointing, if not even surprising, that the World Bank calculates that only 5% of households received government support in August 2020.(World Bank, 2020)Remittance inflows generated by the estimated 500,000 Tajik migrants working in Russia in 2019 accounted for about a third of GDP; inflows in March 2020 were 50% lower than in March 2019.
A sharp reduction in remittance payments would not only lead to lower levels of consumption and growth, but could also have serious implications for the country's current account balance. Even more worrying is the fact that the decline could put a strain on the most vulnerable at a time when they are most at risk -- two in five households restricted themselves during the peak of the pandemic, according to the World Bank. their food consumption. The deteriorating economic situation could have a significant impact on public finances. Public debt is projected to increase from 45.2 percent of GDP in 2019 to 51 percent in 2020, with the budget deficit widening to 2.3 percent of GDP. Despite these constraints, the government has pushed ahead with promises of increases in public sector wages and pensions, although a projected 10% inflation rate in 2020 is likely to more than offset those increases.
A level of support.Although the government was belatedly aware of the threat the pandemic posed to the country's economy, it has now introduced several measures to support the private sector and households. The government continued to implement an action plan to reduce the impact of external risks on the economy. So far, funding programs have focused on ensuring food security and price stability of basic commodities, as well as ensuring timely delivery of social assistance and support to vulnerable groups. At the same time, the government provided a number of non-monetary support measures to the private sector and households, including a series of tax breaks for small and medium-sized enterprises, deferring non-tax audits of companies, and attracting international financial support to financial institutions. The government has also delayed some planned changes, including higher utility tariffs, while ordering commercial banks to restructure loans and waive penalties for non-payment.
Economic Effects.The government has reported no cases of COVID-19 in the country. However, a heavy reliance on trade combined with Turkmenistan's small private sector and consequently small domestic tax base mean that the economy is extremely vulnerable to deterioration in external conditions. The sharp fall in demand and the value of the country’s main export, natural gas, has had a profound effect: real GDP growth will slow to 1.8% in 2020 from 6.3% in 2019, according to official figures. A large government presence in the economy could lead to misallocation of increasingly scarce resources, which could pose particular risks to the private sector's contribution to recovery, growth, and employment.(EBWE, 2019).With natural gas accounting for more than 90% of exports and China accounting for 80% of trade, any decline in Chinese demand would have immediate and severe impacts on public finances and weaken the government's ability to engage and implement necessary long-term policies. Long-term market-adjusted export-oriented investment. Preliminary data from China showed natural gas imports from Turkmenistan fell 27% in the first eight months of 2020, marking a sharp drop in the government's trade revenue. While China's apparent recovery is clearly good news for Turkmenistan, the road to recovery will remain difficult and pose significant downside risks.
political answer.Despite the government's claim that there are no cases of COVID-19 in the country, many containment measures restricting the movement of people and goods were implemented in early summer and have been in effect since October 2020. All land transport between these areas has been halted as the conditions for lifting such restrictions are unclear to the government. While all international travel to Turkmenistan remains banned except for return flights, domestic air services continue to operate, albeit at reduced capacity. As air travel is now the only way to travel domestically across regions, airfares have reportedly increased 15-fold.
The government has taken several measures to mitigate the economic impact of COVID-19. However, many of these measures will add to persistent concerns about currency controls and convertibility at a time when the international investment climate is becoming increasingly important to the long-term recovery. All companies are required to sell 100 percent of their foreign exchange earnings to a stabilization fund, first set up in 2008 and held by the central bank. By presidential decree, all foreign profits must be repatriated to companies at the overvalued official exchange rate, which means real profits are substantially reduced. On May 8, the President delivered a speech saying that the current crisis of public finances may be worse than those of 2008 and 2014-15, and that the state budget and state-owned enterprise budgets are being revised.(Turkmenistan Portal, 2020). He directed all deputy prime ministers to draw up austerity plans. Early signs of pay cuts for workers at many state-owned enterprises suggest these budget revisions will be implemented immediately and the cost of the crisis will be passed on to workers. These shortcomings will negatively impact the government's ability to deal with the immediate impact of COVID-19 and its ability to address the long-term structural problems of the Turkmen economy.
Economic EffectsGrowth in early 2020 slipped to near zero for the first time in more than 20 years as investment fell 12.8% in the first half and poverty rose. The unemployment rate rose from 9.4% to 15% in the first two quarters of 2020. Still, higher production and gold prices, as well as a resilient agricultural sector, tempered the decline in industry and services. Meanwhile, new lockdowns since the summer have slowed the recovery in employment and business activity, reducing prospects for a quick recovery in 2021.(World Bank, 2020;OECD, 2020)In early September, the government revised its 2020 growth forecast to 2.2% from 5.5%, although the IMF and World Bank remained underwhelming, predicting growth of 0.7% and 0.6%, respectively.
support measures. The government responded quickly and appropriately to the shock to the economy. A EUR 10 trillion (EUR 950 million or 1.5% of GDP) anti-crisis fund was established to meet immediate social needs and support business and employment. Overall, about 2.5% of GDP has been spent since February, implying a cumulative 17% increase in social benefits and a cumulative 10% increase in the minimum wage.(OECD, 2020)Uzbekistan has reimposed quarantine measures and health restrictions following an early shutdown in May and a resurgence of the pandemic. Additional support measures were enacted over the summer, in particular the expansion of the measures developed under the first package and the expansion of the unconditional household income support measures. The economic sector received 2.3 trillion euros in tax stimulus as of July and $6.1 billion was spent by the end of August, mainly through anti-crisis funds to support the economy and people's income, official data showed. In early September, the government adopted a comprehensive post-crisis plan for 2020-21 focused on restoring investment and economic activity and creating the conditions for further economic reforms. The plan will be implemented in two phases, focusing on stabilization and recovery by the end of 2020, before starting structural reforms in 2021.(Vlada Uzbekistan, 2020).
In Central Asia, as in OECD countries, governments moved rapidly to provide immediate support to firms and workers (and to limit unemployment) as soon as the first economic effects of the COVID-19 pandemic were felt (OECD, 2020).Which country had the best response to the pandemic? ›
|Country||Deaths per million people|
To further the U.S. priorities in Central Asia, USAID/Central Asia identified five priority areas for regional support: energy, trade, transboundary water and environmental management, countering violent extremism, and combating trafficking in persons.What is the US relationship with Central Asia? ›
The United States' strategic interests in Central Asia include supporting the sovereignty, independence, and territorial integrity of the five Central Asian countries of Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.What are 2 historical events that shaped the culture of Central Asia? ›
Fourth-third centuries B.C.: Kyrgyz tribes invade northern China. 329 B.C.: Alexander the Great captures Maracanda (Samarqand) in conquest of southern Central Asia from Persian Achamenid Empire. First century A.D.: Han Dynasty of China trades with Soghdians and Bactrians of Central Asia.What country did COVID hit the hardest? ›
When we took an initial look at total COVID-19 deaths, our Institute for Health Metrics and Evaluation forecast showed that the countries with the largest epidemics since February 2020 include India, the United States, Brazil, Russia, and Mexico.Why did people in Central Asia respond? ›
Answer: The people in Central Asia responded enthusiastically to the February 1917, Revolution because it freed them from the oppression of the Tsar's reign so that they were masters of their land again. They expected to regain their autonomy.Why was Central Asia so important? ›
"It is not an exaggeration to say that from 800 to 1100 A.D., the Central Asian region was the hub of world culture, contributing significantly to the core civilizations of Europe, the Middle East, and Asia, including China and India," said S.Why did Russia take Central Asia? ›
There are a number of reasons why the Russians wanted to move southward into Central Asia. First, there was an economic reason, that is, to create markets for Russian goods. This motive became even more acute in 1860s as a result of the U.S. Civil War, when the south was isolated and cotton was in short supply.Is Central Asia a part of NATO? ›
In the Caucasus, NATO works with Armenia, Azerbaijan and Georgia which are effectively the South Caucasus; and in Central Asia: Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan.
The United States has bilateral relations with many countries in the Indo-Pacific. The U.S. also has treaty allies – Japan, South Korea, the Philippines, Australia and Thailand.Who is the US treaty ally in Asia? ›
In 1951, the U.S. and Japan signed Treaty of San Francisco and Security Treaty Between the United States and Japan, subsequently revised as Treaty of Mutual Cooperation and Security between the United States and Japan in 1960, relations since then have been excellent.What language do they speak in Central Asia? ›
The five big ethnic groups in Central Asia are the Uzbek, Kazakh, Tajik, Turkmen, and Kyrgyz. Linguistically all of these groups, with the exception of the Tajiks whose language is more similar to modern-day Persian, speak languages that are from Turkic language family and resemble Turkish.What environmental problem has caused widespread health problems in Central Asia? ›
The loss of the Aral Sea in central Asia is an ecological disaster. Toxic chemicals in the exposed sea bed have caused widespread health problems.Who were the first humans in Central Asia? ›
The first human groups to emerge at the dawn of history that are identifiable by name rather than by their artifacts are the Cimmerians and the Scythians, both located in the western half of Central Asia as reported by the Greeks.Which country lost most lives to COVID? ›
|Characteristic||Number of deaths|
Covid: The man who tested positive for Covid 43 times
Dave, 72, is a driving instructor and musician who's spent the last 10 months with an active coronavirus infection, visiting hospital seven times. His immune system was vulnerable to the virus after a leukaemia diagnosis and chemotherapy treatment.
About half of American adults surveyed say they have been infected with COVID-19 at some point, with 35% saying they have tested positive for COVID-19 before.What happened to Central Asia after the fall of the Soviet Union? ›
With the collapse of the Soviet Union in 1991, five Central Asian countries gained independence — Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan.Who all conquered Central Asia? ›
By the 19th century, Central Asia was completely taken over by Russia. In 1868, the Russians moved into Tashkent and made the city their capital in Central Asia. China moved into the region of Xinjiang even earlier in 1760s.
People of Central Asia were confused about the real nature of government therefore the people of Central Asia responded differently to Russian Revolution.What are 3 characteristics of Central Asia? ›
Central Asia is a landlocked region that receives little rainfall. Two large desert regions are located at the region's core. Vast grasslands called steppes dominate the northern sector. High mountains to the east provide a border between Central Asia and China.What is Central Asia summary? ›
Central Asia is a region in the Asian continent that extends from the mountains of western China to the shores of the Caspian Sea. Pakistan and Iran create the southern border of the region, and Russia's vast expanse is to the north.What is the most advanced country in Central Asia? ›
Answer and Explanation: The landlocked country of Kazakhstan is the most developed country economic wise in Central Asia.What are the 8 countries in Central Asia? ›
The Central Asia region (CA) comprises the countries of Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. It is a diverse region with a mix of upper middle and low income countries with major strategic importance due to their geographic location and natural resource endowments.What impact did Soviet rule have on Central Asia? ›
After World War II the Soviet Union rapidly industrialized Kazakhstan and started prospecting for oil in the whole of Soviet Central Asia. Oil was found in Uzbekistan and both oil and gas were found in Turkmenistan. These fuel supplies would prove invaluable to the region over the coming years.Is China in Central Asia? ›
In terms of the economic influence of big powers, China is viewed as one of the key economic players in Central Asia, especially after Beijing launched its grand development strategy known as the Belt and Road Initiative (BRI) in 2013.What 5 countries are not in NATO? ›
- Bosnia and Herzegovina.
Tashkent, Uzbek Toshkent, capital of Uzbekistan and the largest city in Central Asia. Tashkent lies in the northeastern part of the country.Is Taiwan a US ally? ›
The U.S. Department of State, in its U.S. Relations With Taiwan fact sheet, states "[T]he United States and Taiwan enjoy a robust unofficial relationship.
WASHINGTON (AP) — The U.S. is expanding it military presence in Asia, in a string of moves aimed at countering Beijing and reassuring Indo-Pacific allies that America will stand with them against threats from China and North Korea. The U.S. actions stretch from Japan to the Solomon Islands.Is Japan a US ally? ›
Japan and the United States are strong allies sharing fundamental values and strategic interests, with the Japan-U.S. Security Arrangements at the core.
France has long been celebrated as America's oldest ally, going back to 1778 when the French monarchy recognized the independence of the United States. It provided military and economic assistance during the American Revolutionary War which was crucial to the American victory.Is India a major non NATO ally of us? ›
This allowed India to buy more advanced and sensitive technologies that is on par with that of US' closest allies and partners. The US has four "foundational agreements" that it signs with India.Who are the main US allies outside NATO? ›
Currently 18 countries are designated as MNNAs under 22 U.S.C. §2321k and 10 U.S.C. §2350a : Argentina, Australia, Bahrain, Brazil, Colombia, Egypt, Israel, Japan, Jordan, Kuwait, Morocco, New Zealand, Pakistan, the Philippines, Qatar, South Korea, Thailand, and Tunisia.Is Russian still spoken in Central Asia? ›
Russian has remained an official language in independent Russia, Belarus, Kazakhstan, and Kyrgyzstan, and is still commonly used as a lingua franca in Ukraine, the Caucasus, Central Asia, and to a lesser extent in the Baltic states and Israel.What is the hardest language to speak in Asia? ›
The most difficult Asian language (and sometimes viewed as the most difficult language) is the same language that is spoken most in the world; Mandarin Chinese.
1. Singapore. Singapore is popularly known as one of the Asian countries that speak English very fluently. With 66.82, Singapore's English Proficiency Index (EPI) indicates that a sizable portion of the population is proficient in utilizing the English language.What is the most serious environmental problem in Central Asia? ›
The list of issues includes how to battle Central Asia's climate crisis and its inherited ecological disasters: intense air pollution, deforestation, nuclear contamination and the ecological disaster that is the disappearing Aral Sea.Why is Central Asia so polluted? ›
Central Asian cities overwhelmingly rely on fossil fuel-based heating systems to provide heat and light to homes. But globally, they are not alone in this respect. During Soviet times, the heaviest air pollution was in smaller cities where heavy industry was concentrated.
The five largest ethnic groups in Central Asia are, in descending order of size, the Uzbek, Kazakh, Tajik, Turkmen, and Kyrgyz.What is the oldest human race in Asia? ›
China. The earliest traces of early humans, Homo erectus, in East Asia have been found in China. Fossilized remains of Yuanmou Man were found in Yunnan province in southwest China and have been dated to 1.7 Ma. Stone tools from the Nihewan Basin of the Hebei province in northern China are 1.66 million years old.Who was the first person on earth? ›
Adam is the name given in Genesis 1-5 to the first human. Beyond its use as the name of the first man, adam is also used in the Bible as a pronoun, individually as "a human" and in a collective sense as "mankind".What is the main culture in Central Asia? ›
Islamic culture is huge, since every Central Asian country is mostly Muslim. Uzbekistan, Tajikistan, and Turkmenistan are all 90% Muslim, and Kyrgyzstan and Kazakhstan aren't far behind.What is the US goal in China? ›
Our competitive approach to the PRC has two objectives: first, to improve the resiliency of our institutions, alliances, and partnerships to prevail against the challenges the PRC presents; and second, to compel Beijing to cease or reduce actions harmful to the United States' vital, national interests and those of our ...What is the US pivot to Asia strategy? ›
Additional focus was placed on the region with the Obama administration's 2012 "Pivot to East Asia" regional strategy, whose key areas of actions are: "strengthening bilateral security alliances; deepening our working relationships with emerging powers, including with China; engaging with regional multilateral ...What was the goal of US imperialism in South East Asia? ›
It chose to stabilize U.S.– China relations along the lines that U.S. business interests preferred. Economic expansion, strategic extension, and missionary democracy are the three main driving forces of the U.S. imperialist enterprise that made its dramatic entrance in 1898.What is the US strategic policy towards South Asia? ›
U.S. foreign policy in South Asia is firmly founded on the President's belief in expanding freedom -- for individuals as well as nations -- on promoting economic prosperity and an ongoing search for peace. Nowhere is this more the case than in South Asia, where democracy has both taken root and proven elusive.Will China beat USA in economy? ›
There is still much work to be done to propel China to the top of the world's economy, but it is certainly possible that the Chinese economy can surpass the power of the US by 2050. It may also be too early to make definitive projections of China's future.Does US rely on China? ›
China has the third largest share in U.S.–World Trade following Mexico and Canada. In 2021, 8.6% of total U.S. exports of $1.8 trillion to the World were exported to China and 17.9% of total U.S. Imports of $2.8 trillion were imported from China.
China emerged at the top of the worldwide list, accounting for almost one-third of the increase. China's wealth jumped to $120 trillion in 2020 from just $7 trillion in 2000. This marks a jump of $113 trillion in 20 years, helping the nation surpass the United States in terms of net worth.What is US strategy in Taiwan? ›
We oppose any unilateral changes to the status quo from either side; we do not support Taiwan independence; and we expect cross-Strait differences to be resolved by peaceful means. We continue to have an abiding interest in peace and stability across the Taiwan Strait.What does the US export to Asia? ›
Cotton, soybeans, soybean meal, and tree nuts remain the primary U.S. exports to South Asia.What is the US strategy for a free and open Indo-Pacific? ›
Following the release of the Indo-Pacific Strategy in February 2022, the United States, in coordination with allies and partners, has taken historic strides to advance our common vision for an Indo-Pacific region that is free and open, connected, prosperous, secure, and resilient.What is the most important reason the United States expanded its territory in Asia in the late 1800s? ›
The appeal of profits to be earned from the China trade served as the initial impetus to motivate U.S. citizens and officials to enter into the Pacific region.What are five main reasons why the US got involved in imperialism? ›
- Economic. The Industrial Revolution stimulated the hunt for colonies. ...
- Political. Every country wanted national hegemony – that is, to be the No. ...
- Military. Every imperialist country was worried about its own national security: The competition among imperialist powers was vicious. ...
- Cultural. ...
It is the top contributor of manpower to UN peacekeeping missions, and is an active player in regional and international organizations. It is a voice of moderation among developing countries, in the Islamic world and in South Asia.What did the US do in Asia to help prevent the spread of communism in the 1950s? ›
In September of 1954, the United States, France, Great Britain, New Zealand, Australia, the Philippines, Thailand and Pakistan formed the Southeast Asia Treaty Organization, or SEATO. The purpose of the organization was to prevent communism from gaining ground in the region.Which country has an important strategic position in South Asia? ›
India occupies an important strategic position in South Asia.Who are the US Treaty Allies in Southeast Asia? ›
- Deepening our five regional treaty alliances with Australia, Japan, the Republic of Korea (ROK), the Philippines, and Thailand.
- Strengthening relationships with leading regional partners, including India, Indonesia, Malaysia, Mongolia, New Zealand, Singapore, Taiwan, Vietnam, and the Pacific Islands.