Tashkent, Uzbekistan (UzDaily.com) – On  20 January 2023, Astana hosted an expert meeting “Central Asia-2030: Images of the Future”. Speaking at the event, First Deputy Director of the Institute for Strategic and Regional Studies under the President of the Republic of Uzbekistan (ISMI) Akramjon Nematov outlined a number of important areas that contribute to the full development of regional cooperation.

Firstly, the representative of the ISMI noted, it is necessary to ensure the full functioning of the free trade regime, support the cross-border movement of goods, services and capital by eliminating unnecessary bureaucratic processes, and harmonize the regulatory framework in the field of customs, logistics services, export-import operations. Intra-regional trade accounts for less than 10% of the total trade of the CA countries. Although growth over the past five years has been 3%, this is the lowest rate in the world. In developed regional communities, mutual trade accounts for a significant share. This indicator in the EU exceeds 63.2%, ASEAN - 70%, NAFTA - 40.9%, East Asia -57.5%.

At the same time, he pointed out, states are highly dependent on imports, which account for more than 45% of US$167 billion. Particularly noticeable is the dependence on food imports, which reaches 50%. In the context of rising energy prices and transport costs, this caused food prices to rise by 14% last year.

In this regard, secondly, the ISMI representative stressed, it is important to create a space for industrial localization and import substitution in Central Asia. “Using the competitive advantages and complementarity of economies, we can produce high-quality products and replace expensive imports from third countries, moreover, enter their markets with highly processed products,” Akramjon Nematov believes.

Today, from 40% to 60% are exports of several types of raw materials - hydrocarbons, gold, copperand , aluminum. Moreover, the trade turnover of the Central Asian countries is concentrated in the markets of several countries, primarily China and the Russian Federation, which account for more than 40% of the foreign trade of the countries of the region. This makes the Central Asian states vulnerable to lower prices for raw materials and external shock factors, which greatly affects the economy and investment attractiveness of the region. In this regard, the diversification of production and exports is important.

Thirdly, according to the First Deputy Director of ISMI, the key condition for the development of trade and production, access to foreign markets is the development of transport infrastructure, transport and logistics services; simplification and harmonization of trade procedures, maintaining competition in transport and logistics.

Due to higher transport costs, the GDP of landlocked countries grows 1.5% slower and trade is 30% less than the GDP and trade of landlocked countries. High transport costs are also caused by the lack of transport networks, the high cost and poor quality of transport and logistics services in the region, and the difficulty of moving across borders.

As a result, Akramjon Nematov noted, the cost of transport and logistics in the cost of exported goods reaches up to 60%. At the same time, disruptions in supply chains and rising energy prices have led to their imitation by another 20-40%.

In this regard, the representative of the ISMI believes that in order to increase the transport, transit and logistics potential, it is necessary to accelerate the creation of the Regional Council for Transport and Communication Interconnection and Infrastructure Projects of the Central Asian Countries. Its task should be to coordinate cooperation on the development of transport infrastructure. This is the organization of branched networks, transport and logistics centers and dry ports, increasing the capacity of border crossing points, harmonizing trade, transit and border crossing procedures, digitalization of transportation and documentation.

Fourth, another important area of regional cooperation, the expert is convinced, should be the development of the energy sector. Today, almost all sectors of the economy depend on energy resources and the demand for them is steadily growing.

At the same time, Akramjon Nematov noted, “especially today we feel the energy crisis, when oil and gas prices have increased 2-3 times, which, coupled with problems in global logistics, provokes an increase in inflation, which exceeded 12% in the region, causing a decline in demand for products, production volumes and rising unemployment.

Moreover, the energy systems of the states of the region are overly dependent on one type of resource, which limits the full energy security of each country.

Meanwhile, due to the lack of interaction in this direction, the high physical and moral depreciation of energy capacities, which on average is about 70-80%, the slow development of renewable energy sources, we cannot effectively use the potential and reduce the risks of power system failures, which negatively affects economic cooperation. .

However, the ISMI representative emphasized that there are necessary conditions for solving problems in the energy sector in the region. In particular, Central Asia has a high potential and sufficient reserves of energy resources, occupying a leading position in the world. Kazakhstan has oil and coal, Turkmenistan and Uzbekistan have gas, Tajikistan and Kyrgyzstan have significant water and energy resources. That is, the region has the opportunity to complement the energy markets of countries.

So, he pointed out, in order to solve the identified problems, it is important to intensify the activities of the Coordinating Electric Power Council of Central Asia, to pursue a coordinated policy in the energy sector.

“At the same time, the creation of a capacious unified transport and energy space will make it possible to turn the region into a production and technology hub, to enter third markets with high value-added products,” Akramjon Nematov summed up.