From Landlocked to Linked in CAREC

7/28/2019 From Landlocked to Linked in CAREC

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From Landlocked to Linked InThe Central Asia Regional Economic

Cooperation Program

Central Asia Regional Economic Cooperation Program


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From Landlocked to Linked InThe Central Asia Regional Economic

Cooperation Program

Central Asia Regional Economic Cooperation Program


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2012 Asian Development Bank.

All rights reserved. Published 2012.

Printed in the Philippines.

ISBN 978-971-561-906-6

Cataloging-in-Publication Data

Asian Development Bank.

From landlocked to linked in : Te Central Asia Regional Economic Cooperation Program

Mandaluyong City, Philippines: Asian Development Bank, 2012.

1. Central and West Asia. 2. Regional Cooperation. I. Asian Development Bank.

Te views expressed in this publication are those o the authors and do not necessarily refect the views and policies o the Asian Development

Bank (ADB) or its Board o Governors or the governments they represent.

ADB does not guarantee the accuracy o the data included in this publication and accepts no responsibility or any consequence o their use.

By making any designation o or reerence to a particular territory or geographic area, or by using the term country in this document, ADB

does not intend to make any judgments as to the legal or other status o any territory or area.

ADB encourages printing or copying inormation exclusively or personal and noncommercial use with proper acknowledgment

o ADB. Users are restricted rom reselling, redistributing, or creating derivative works or commercial purposes without the express, written

consent o ADB.

In this publication, $ reers to US dollars.

CAREC Secretariat

Central and West Asia Department

Asian Development Bank

6 ADB Avenue, Mandaluyong City

1550 Metro Manila, Philippines

el: +63 2 632 5478

Fax: +63 2 636 2387

[email protected]


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Contents

Figures iv

Abbreviations iv

CAREC Program 1

Program Strategies and Achievements 6

Governing Structure 16

CAREC imeline 18


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iv

Abbreviations

CAREC Central Asia Regional Economic Cooperation

CFCFA CAREC Federation o Carrier and Forwarder Associations

km kilometer

PRC Peoples Republic o China

WO World rade Organization

Figures

Figure 1: Volume o Approved CAREC-Related Projects, by Sector, Cumulative since 2001 3

Figure 2: Loans and Grants: Amount by Source, 2001 to 2011 3

Figure 3: Number o Approved CAREC-Related Projects, Cumulative since 2001 4


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1

CAREC Program

Te Central Asia Regional Economic Cooperation

(CAREC) Program is a partnership o 10 countries

supported by six multilateral institutions. Tey are

working together to promote development, trade,

and commerce throughout the Eurasian landmass.

Increasing integration between the Peoples

Republic o China (PRC) and Japan to the east,

the Russian Federation to the north, and India and

Pakistan to the south, is leading to unprecedented

opportunities or Central Asian countries to grow.

CAREC is helping make that growth happen by

acilitating regional transport, trade, and energy

inrastructure, as well as by coordinating trade policy.

From 2001 to 2011, the program invested more

than $17 billion in regional inrastructure and

initiatives to promote connectivity and trade, helping

the mostly landlocked countries reach out to globalmarkets. Te deepening regional trade links are

also opening up previously unexploited resources,

including huge energy resources.

Inrastructure rollout has increased the mobility

o people and goods, and laid the oundation or

ongoing improvements in living standards o

300 million people across Central Asias

vast geography.

CAREC employs a simple rating system to

monitor outputs in our priority sectors, building a

comprehensive picture o how projects and activities

are changing lives. Results on the ground are compared

with stated annual targetssuch as kilometers o

roads and railways built, energy transmission lines

laid, or improvements in development indicatorsand

show clearly where the program is on track or alling

short o goals and objectives. ransparent monitoring

and identication o issues and challenges through

an annual eectiveness review make it possible or

CAREC to correct its course i needed, and maximize

the programs impact.

Te spirit o trust and condence that hasemerged ater more than a decade o shared action

by good neighbors and partners is resulting in better

prospects or all.

Te Asian Development Bank (ADB) has served

as the CAREC Secretariat since 2001.

Good neighbors, good partners, good prospects


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2

From Landlocked to Linked In: The Central Asia Regional Economic Cooperation Program

The CAREC countries

Afghanistan

Azerbaijan

PeoplesRepublicofChina

Kazakhstan

KyrgyzRepublic

Mongolia

Pakistan

Tajikistan

Turkmenistan

Uzbekistan

The CAREC multilateralinstitution partners

AsianDevelopmentBank

EuropeanBankforReconstruction

andDevelopment

InternationalMonetaryFund

IslamicDevelopmentBank

UnitedNationsDevelopmentProgramme

WorldBank

Increased Investment,Wider-Ranging Actions

From a modest start just over a decade ago,

CAREC has evolved into a comprehensive program

o practical, results-based regional projects and

policy initiatives that are crucial to trade andsustainable development.

Te number and value o CAREC projects

including loans, grants, and technical assistance

have grown rom 6 projects worth $247 million

in 2001 to more than 120 projects worth over

$17 bill ion in 2011.

Ater rst ocusing on investment in transport,

the program has gradually expanded to embrace

wider-ranging strategies or tackling trade, trade

policy, and energy challenges. By recognizing the

scale o opportunities to break down barriers and

share resources, CAREC has harnessed the power oregional cooperation, helping build a global uture.

Sharing Knowledge and Experience

Key to overall success is the CAREC Institute,

which works hand in hand with the groups

and committees responsible or guiding and

implementing the program in each priority

area. Established in 2006, the institute is a hubor building knowledge networks and sharing

experience, enhancing the strategic and technical

advice that the six multilateral institution partners

provide to ensure that investments achieve the best

possible results.

Regional cooperation is a powerul planning tool

or countries to get national projects with regional

benets o the ground. CAREC is deepening that

collective engagement, which will be more and

more important in dealing with the challenges o an

increasingly integrated global economy.

See CARECs aa performace sapshot: The Development Effectiveness Reviewwww.carecprogram.org/index.php?page=carec-development-effectiveness-review


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3

CAREC Program

Figure 1: Volume of Approved CAREC-Related Projects, by Sector, Cumulative since 2001

16,000

14,173

12,374

10,542

6,073

3,846

2,531

87490 490

163 196 247 247

3,2763,073

1,7681,414

2006

Transport

Source: CAREC Program Portfolio.

Trade FacilitationEnergy

2007 2008 2009 2010 2011

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Volume($million)

0

CAREC = Central Asia Regional Economic Cooperation.

149

Read the CAREC 2020 Strategic Frameworkwww.carecprogram.org/index.php?page=carec2020-strategic-framework

Figure 2: Loans and Grants: Amount by Source, 2001 to 2011


Source: CAREC Program Portfolio, including all multilateral institution par tners.

Asian

Development Bank

$5,938 million

34%

Other CAREC

Multilateral Institutions

$7,112 million

40%

CAREC Country

Governments

$3,815 million

22%

Other Cofinanciers

$834 million

4%


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4


0

150

100

50

2006 2007 2008 2009 2010 2011

2936

4762

7185

67

8

10

11

11

66

14

19

25

26

Transport Trade Facilitation Energy

Number

Figure 3: Number of Approved CAREC-Related Projects, Cumulative since 2001


Source: CAREC Program Portfolio, including all multilateral institution partners.

CAREC 2020:Focus, Action, Results

CAREC 2020 is the strategic ramework or the

programs second decade. It aims to turn landlocked

nations into land-linked economies. o achieve

its two distinct objectives o expanding trade and

improving competitiveness, the strategy employs

ocused, action-oriented, and results-driven regional

projects and initiatives centered on transport,

trade acilitation, trade policy, energy, and thedevelopment o economic corridors.

Ever closer partnerships between CAREC

and national implementation agencies, along with

eorts to increase private sector participation, have

strengthened the results orientation o the program,

which emphasizes st rong country ownership,

pragmatic approaches, and mutual accountability.

ransport, trade acilitation, trade policy, and

energy became the our priority areas or cooperation

in 2006. Te benets are already clear, with people

and goods moving more reely through their

own and neighboring countries. Increased trade

is also creating opportunities that are raising

living standards.

ransport inrastructure has received the

lions share o targeted nancing since the 2007

introduction o six CAREC road and rail corridors.

Tis over 83,800-kilometer (km) transport network

connects markets in the north o the PRC with

Azerbaijan in the Caucasusproviding access to

Europeand also stretches rom Kazakhstan to

Pakistans warm-water ports and beyond.

But better transport links alone are not enough

to realize the CAREC vision. Countries are working

together to move people, goods, and vehicles across


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5

CAREC Program

borders aster, and more efciently and cheaply.

Tey are securing the energy needed to grow

their economies by developing inrastructure and

embarking on ambitious plans or mutually benecial

trade in electricity. Regional cooperation is also

expanding commercial opportunities by simpliying

and liberalizing trading regimes, breaking down

policy barriers that were put in place by new nations

that ormed when the Soviet Union collapsed

2 decades ago.


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6

Program Strategies and Achievements

Transport

Te plan to link Central Asia to global markets has

already led to the construction o more than 7,000 km

o quality road and rail links between key cities andtowns, also connecting innumerable communities

along routes that oten trace the ancient Silk Road.

More than $14 billion had been invested rom

2001 to 2011 in 85 CAREC-related transport

projects along the six CAREC corridor routes, where

the potential or economic development and returns

is greatest. At the end o 2011, 63 o the projects

were ongoing.

Priority inrastructure work along the six

corridors is now ocused on the construction

and upgrade o roads and rail lines. Te aim is

to create a seamless transport network by 2017.As o September 2012, about 3,970 kilometers

(km) o roads along the six corridors (51%

o the total regional road network) had been

constructed, including about 396 km o built or

upgraded expressways or national highways and

the ajikistans DushanbeKyrgyz Border Road

Rehabilitation, Phase II; 3,400 km (44%) were

ongoing; and the rest (5%) were planned or 2013


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7

Section Title

CENTRAL

ASIA

REGIONA

LECONOMIC

COOPERATION

CORRIDO

RS


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8


The Way to Go

The rebuil t and upgraded CAREC roads have improved living standards. The Third Road Rehabilitation Project, connecting

Corridors 1, 2, and 3, has cut journey times between the Kyrgy z Republic capital, Bishkek, and the southern city of Osh

the countr ys second largestby as much as a third. The number of households using motorized transpor t has also doubled.

Tangible progress was already evident in 2006, with 20% more people able to commute to work than in 2004.

Gains were also achieved by improving the main road corridor for Azerbaijans non-oil trade, and by strengthening its

national road organization. The Azerbaijan Highway Project rebuilt or upgraded 94 km of road between Ganja and Gazakh,

which forms part of Corridor 2. Travel times were reduced by 33% along the ShamkirGazakh section of the highway, and

14,000 people beneted from improvements to local roads. The resulting fall in transport costs has led to increased freight

and passenger trafc.

Similar outcomes were reported for Tajikistans Road Rehabilitation Project (connecting Corridors 3 and 5), with a 25%

30% increase in private travel and freight trafc. Better roads have also led to less damage and lower costs for consumers.

In 2006, a 20% growth in small businesses in the project area was also reported.

The building of the rst railway in Afghanistan, a 75 km single-line track between Hairatan, on the bust ling Uzbekis tanborder, and Mazar-e-SharifAfghanistans second largest citypresents a vivid example of what cooperation between

neighbors in CAREC can achieve. The project is the rst phase of a larger rail network planned for Afghanistan, including

links to the city of Herat and to Tajikistan and Pakistan, adding capacity to Corridors 3 and 6, and opening up alternative

trade routes. Meanwhile, reconstruction of Afghanistans ring road is creat ing easier access to southern markets.

CAREC = Central Asia Regional Economic Cooperation, km = kilometer.

Source: ADB. 2009. Validation Report. Kyrgyz Republic: Third Rehabilitation Project. Manila; ADB. 2010. Performance

Evaluation Report. Kyrgyz Republic: Road Rehabilitation Project, Second Road Rehabilitation Project, and Third

Rehabilitation Project. Manila; CAREC. 2010. Development Effectiveness Review: Building the Baseline 2009. Manila: ADB.

or beyond. About 3,190 km o railways (44% o the

total) had been completed, including Aghanistans

rst railway and the Peoples Republic o Chinas

JiningZhangjiakou railway; 2,500 km (34%) were

ongoing; and the rest (22%) were planned or 2013

or beyond. Five aviation, three port, three logistics

center, and our trade acilitation projects were

also ongoing.

Further measures are being undertaken to

overcome the nonphysical barriers to the cross-

border movement o goods, vehicles, and people.

Tese include making cross-border transportoperations more efcient by eliminating bottlenecks

such as laws, regulations, administration, and

paperwork. A bilateral agreement between the

Kyrgyz Republic and ajikistan, or example, was

ratied by the two countries in 2011 to acilitate

transport along their road sections in Corridor 5.

Other corridor-based agreements will ollow

throughout the region.

Governments are

eliminating laws,

regulations, administration,

and paperwork that hinder

cross-border transport

Tese changes wil l help transorm transport

corridors into economic corridors. An economic

corridor is a geographic area centered on a transport

artery that oers concentrated commercial activities,

with opportunities or business, tourism, and other

socioeconomic activities. A pilot study was launched

in June 2012 to look into ways to develop economic

corridors in the CAREC region.


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Among the key challenges or the uture o

transport in Central Asia is the need to identiy

new inrastructure opportunities and nd unding

or a well-planned road maintenance program.

Nonphysical barriers need to be lowered as

quickly as possible to maximize the benets o

inrastructure investments. Under CAREC 2020,

trade and transport acilitation are prerequisites or

transorming the six corridors rom transport routes

into corridors that provide economic opportunitiesacross all the nations they span.

Key Trasport ad Trade Faciitatio Goas

100% of corridors improved by 2017

Increase transit trade volume via the CAREC

corridors to 5% of trade with Europe and East Asia

by 2017, from less than 1% (about 34 million tons)

in 2005

Increase intraregional trade volume by 50% by2017, from the 2005 level (about 32 million tons)

Halve the time required for border crossings alongthe CAREC corridors by 2012, and by a further 30%

by 2017, as compared with 2007

CAREC = Central Asia Regional Economic Cooperation

Source: CAREC Transport and Trade Facilitation Strategy.

www.carecprogram.org/uploads/docs/CAREC-Transport-

TradeFacilitation-Strategy.pdf

See CAREC Trasport Projects i detaiwww.carecprogram.org/index.php?page=transport-projects

About 3,970 km roads built or upgraded(51% of the planned total), and 3,400 km

ongoing as of September 2012

About 3,190 km of railway linescompleted (44% of the planned total)

and 2,500 km (34%) ongoing as of

September 2012

A cross-border transport agreement ratiedbetween the Kyrgyz Republic and Tajikistan for

CAREC Corridor 5

A total of 1,022 km of expressways ornational highways built or upgraded in 2011

comparable with both 2009 and 2010

exceeding the 880 km target for the year

79% of the total length of CAREC corridors(24,000 km) classied as being in good

condition by the end of 2011, beating theend-of-2012 target of 75%

Trasport Rests

Nonphysical barriers

need to be lowered as

quickly as possible to

maximize the benets of

infrastructure investments


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10


Trade Facilitation

Te CAREC countries have made great strides in

moving people, goods, and vehicles aster across

borders and at least cost. Without the strong push

that has been undertaken or customs reorm and

modernization to remove bottlenecks at crossing

points, the eectiveness o transport corridors would

be severely diminished.

Under the 2008 CAREC ransport and rade

Facilitation Strategy, simplied regulations and

automated procedures or harmonizing customs

procedures are steadily being put in place, with

inormation on time and cost savings shared between

government agencies, road carriers, and reight

associations every step o the way.

Standard international customs codes are beingadopted, and improvements to inrastructure at

border crossing points are being introduced alongside

eective risk-management systems, which are

shortening ormerly lengthy customs procedures.

Joint customs control is the rst step toward

single-window controls that will eventually al low

traders to lodge inormation with a single body to

ulll al l import- and export-related regulatory

requirements throughout a transnational journey on

a CAREC corridor. All countries, at varying paces,

are moving orward on this.

Pilot projects using bilingual, harmonizedcargo maniests have been conducted at the

PRCKazakhstan border since 2007, and at the

PRCMongolia border since 2009, with highly

positive results. Customs clearance time has been

reduced by about 35% on average, and data accuracy

has improved. Te scope o such pilot projects is

thereore being expanded.

Simplied regulations andautomated procedures

for harmonizing customs

procedures are steadily

being put in place

Data and inormation gathered by truckers in

the CAREC Federation o Carrier and Forwarder

Associations (CFCFA), which was ormed in 2009,

throw useul light on where and why trade

blockages occur. CFCFAs 18 partners reported

that customs clearance, border security, transport

inspections, and phytosanitaryplant healthandhealth and/or quarantine inspections were the most

requent causes o delay. A regional investment

project is being prepared to solve the problem

by improving inrastructure at border crossing

points and developing regionally linked single-

window acil ities.


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Continued monitoring o time-release gures

and timecostdistance data gathered under the

Corridor Perormance Measurement and Monitoring

(CPMM) initiative is helping integrate customs

measures with the eorts o government agencies

and publicprivate partnerships. Te aim is to

develop efcient trade logistics services with reliable,

well-maintained inrastructure.

Recognition is growing that the key to success

is the participation in national bodies o private

logistics and reight-orwarding associations, as well

as government agencies in charge o transport, trade,

and border-crossing activities. Seminars, workshops,

and technical training sessions on priority areas or

customs and trade acilitation have been held to

increase the proessionalism, efciency, and quality

o CAREC road carriers, reight orwarders, andlogistics companies. Customs ofcials in specialist

areas, such as the automation o customs procedures,

and customs intelligence, have also participated.

Customs administrations are changing: once

oriented toward control, they are now beginning to

acilitate compliance. By building good international

highways, simpliying the procedures or one-stop

customs clearance, and developing an efcient

logistics industry, CAREC partners are helping

businesses save time and money, and making them

competitive with the rest o the world.

Kow more abot CFCFA ad corridor performace measremet ad moitorig restswww.cfcfa.net

Access the CAREC trade faciitatio portfoiowww.carecprogram.org/index.php?page=trade-facilitation-projects

Joint customs control between the PRCand Mongolia pilot-tested

Customs processes being automated in mostCAREC countries

Corridor performance in terms of travel timeand costs being measured and monitored

CAREC Federation of Carrier and ForwarderAssociations (CFCFA) has 18 member

associations active throughout the region

$247 million mobilized by CAREC since 2002for 11 projects to support growth in trade,

with four of the projects ongoing at the end

of 2011

Clearing times at border crossing points in2011 down 9% compared with 2010, to an

average of just under 8 hours

Transit costs at borders in 2011 down 16%year-on-year to an average of $156

The fastest crossings in 2011 achievedalong Corridor 3, with an average clearing

time of 5 hours and 30 minutes; shor test

average time of 6 minutes recorded at

Istaravshan, Tajikistan

Trade Faciitatio Rests


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Energy

Central Asias rich ossil-uel reserves and water

resources make the region one o the worlds most

important energy centers. CARECs projects andinitiatives oer regional and national approaches to

unlocking these resources, which are essential to

overcome current uneven distribution and seasonal

variations in supplies.

Te vision or the sector is to ensure energy

security, efciency, and economic growth across the

region by stimulating trade in power supplies. Te

program has mobilized nearly $3.3 billion since 2001

or 26 projects, most o them aimed at expanding

bilateral electricity trade and improving the regional

power network. At the end o 2011, 19 o the

projects were ongoing.Achievements include increased generation

capacity, modernization o power systems,

knowledge sharing, and the adoption o key policy

measures such as a regional power sector master

plan, and eorts to promote a region-wide power

grid (perhaps oering as much as $1.5 billion in

savings over 3 years).

Te potential o regional cooperation to

change peoples lives can be seen in cross-border

energy trades. Over 100 megawatts o power rom

Uzbekistan, or example, is being supplied to Kabul,

the capital o Aghanistan, providing many o thecitys 4 million people and its industries with a

continuous electricity supply or the rst time in

decades. o achieve this, more than 1,300 electricity

pylons were constructed across some o the most

challenging terrain in the world.

ransmission lines stretching 2,000 km have

been completed as a direct output o CAREC-

related projects. An estimated 1,200 km o high-

voltage overhead transmission lines will be insta lled

or upgraded over 20122015, with CARECs results

ramework tracking this goal and reporting progress.

Improvements in energy efciency and

regional connectivity are results expected rom

the alimarjan power plant, 440 km southwest

o ashkent, the capital o Uzbekistan, where

Uzbekenergo, the state-run power utility, is building

Central Asias rst 820-megawatt combined

cycle gas turbine power plant. It is expected to be

completed by 2015 with CAREC support.

The vision for the sector is

to ensure energy security,

efciency, and economic

growth across the region

Te CAREC Energy Action Plan, agreed

in 2009, emphasizes the expansion o integrated

generation and transmission inrastructure to meet

power needs and promote new resources. Energy

cooperation is being driven by the presence o

attractive markets in the PRC, Pakistan, India, and


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Kow more abot the CAREC eergy projects portfoiowww.carecprogram.org/index.php?page=energy-projects

Regioa Power Master Pa

A master plan has been developed to overcome the

infrastructure constraints on trade in electricit y. The

goal is to end a common problem in which one part of

the region has more energy than it needs while others

are in short supply. The plan aims to share the supply

of power between Kazakhstan, the Kyrgyz Republic,

Tajikistan, Uzbekistanthe Central Asian power

systemand Afghanistan. It also aims to integrate

the expansion of generat ion and transmission of

power, while promoting regulations and policies that

support its trade.

Source: CAREC. 2012. Development Effectiveness

Review 2011: CAREC 2020Focus, Action, Results.

Manila: ADB; S. Grunwald, L. Oprea, and R. Epping.

2012. Central Asia Regional Economic Cooperation -CAREC: Power Sector Regional Master Plan.

2,000 km of transmission lines installed orupgraded, with just over half that distancecompleted in 2011 under three projects

Central Asia Power Master Planstudy completed

Power Sector Regional Master Plan quarterlyreports issued

Generation and transmission needs, andopportunities identied in Kazakhstan,

the Kyrgyz Republic, Tajikistan,

and Uzbekistan

Computer software to develop powerinvestment strategies reviewed and ways of

optimizing carbon nance opportunities in

emerging carbon markets examined

Eergy Rests

Over 100 megawatts of

power from Uzbekistan

supply Kabuls 4 million

people and its industries

with continuous electricity

for the rst time in decades

In accordance with CARECs strategic vision,

this energy plan will establish the oundations or

energy security over the next decade through

regional cooperation, exploiting the potential or

intraregional trade, while promoting more efcient,

renewable energy.

CARECs multilateral institutions are

conducting studies on energy supply and demand,

along with the regional regulatory environment.

Iran, along with new opportunities or oil and gas to

be routed to the European Union through urkey,

Georgia, and the Russian Federation.


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14


Trade Policy

rade is critical to all CAREC economies. As they

are mostly landlocked nations rich in resources

natural or otherwisetheir ability to efcientlyinteract with world markets is critical to achieving

sustainable economic growth.

Trough the rade Policy Strategic Action Plan,

CAREC seeks to boost trade by helping countries take

concrete steps to dismantle policy barriers and achieve

World rade Organization (WO) membership.

Te action plan aims to simpliy and libera lize

national trade regimes within a reasonable

timerame, improving the investment climate

across Central Asia. Specic initiatives include

uniormly applying value-added and excise taxes on

domestically produced and imported goods, cuttingtaris, and reducing quantitative restrictions on

exports and imports.

CAREC is also helping government ofcials

build skills and stay up-to-date on international best

practices in trade policy. raining and inormation

exchanges improve the institutional environment

or policies that increase intra- and inter-regional

trade volumes.

Regional knowledge orums and joint

monitoring o the implementation o the rade

Policy Strategic Action Plan play their part in

moving CAREC toward goals and targets. Tese arestrictly monitored through a composite indicator

the CAREC rade Liberalization Index (LI).

Te LI is based on a questionnaire designed by

the programs rade Policy Coordinating Committee

(PCC) and the International Monetary Fund,

tracking CAREC countries progress over 2009

2013 in reducing or eliminating specic quantitative

restrictions and taris, and in simpliying trade

tax regimes.

Measres of Opeess

Based on data received from CAREC countries, the

average value of the Trade Liberalization Index for

reporting countries increased from 5.5 in 2010 to

12.8 by the end of 2011, exceeding the target of

10.0. Afghanistan, Azerbaijan, Kazakhstan, the Kyrgyz

Republic, and Tajikistan reached or exceeded the 2011

target, and Uzbekis tan was sufcient ly close to be

considered as having reached it as well.

The index for the Kyrgy z Republic was 23, making it the

rst country to reach the end-of-2012 target ahead

of time.


Source: CAREC. 2012. Development Effectiveness

Review 2011: CAREC 2020Focus, Action, Results.

Manila: ADB.

Training and information

exchanges improve the

institutional environment

for policies


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15


CAREC analysis o the Customs Union that

Kazakhstan joined in 2010 suggests the arrangement

may have a positive long-term impact due to service

trade liberalization and investments, improved

market access, and lower nontari barriers.

Te WO Accession Knowledge Sharing

Program has been launched, jointly sponsored

by ADB and the World Bank, to support trade

liberalization. Te rst three WO training

seminars took place in March, May, and July 2012.

Monitored results in the institutional

environment or trade show that many CAREC

countries have achieved progress in recent years, but

with considerable variations in institutional quality.

As policy actions and reorms in trade policy

concentrate on building knowledge and capacityas

opposed to high-cost inrastructure in other prioritysectorsCAREC is supporting greater openness

and competition.

Read abot CAREC trade poicy stdieswww.carecprogram.org/index.php?page=trade-policy-studies

Kow more abot trade poicy-reated evetswww.carecprogram.org/index.php?page=trade-policy-related-events

Structured long-term approach taken totraining and sharing of experience for World

Trade Organization (WTO) accession

Trade liberalization and insti tutional qualityindexes created

Customs Union of Belarus, Kazakhstan,and the Russian Federation analyzed

Trade liberalization targets exceeded in 2011by Afghanistan, Azerbaijan, Kazakhstan,

the Kyrgyz Republic, and Tajikistan

An institutional quality index being developedto better monitor improvements in the trade

policy environment

Trade Poicy Rests


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16

Governing Structure

A Network for Cooperation

In 2011, CAREC celebrated its rst decade as

one o the most successul regional cooperation

programs in Asia. CAREC 2020 will be the roadmap or expanding trade and increasing global

competitiveness through the second decade o

regional cooperation.

Buttressing CAREC 2020 is a rolling list

o priority investments and technical assistance

projects or 20112020. CAREC has identied the

remaining necessary projects to be implemented

through 2017 and beyond to complete upgrading o

the six CAREC corridors.

Under CAREC 2020, countries own the

projects and integrate them into their national

development plans. o raise needed resources,existing partnerships with multilateral institutions

will be strengthened and broadened to include

bilateral donor agencies and the private sector.

Allied to the institutional set up, the CAREC

Institute plays a vital role in stimulating cooperation,

as well as providing an analytical underpinning or

the program. A virtual hub or training and web-

based inormation on transport, trade, and energy,

the institute helps build knowledge networks so

that all involved, rom national agencies to privatepartners, can share and learn rom their experiences,

and apply international best practices in all

CAREC initiatives.

Te institute also coordinates inormation

sharing in secondary areas o mutual interest to

CAREC partnersthe regional public goods

that impact all countries, including communicable

disease control, disaster risk management, and

climate change.

Under the 2020 strategy, the CAREC Institute

will be reenergized to support the priority sectors

as well as second-tier areas such as communicabledisease control, disaster risk management, and

climate change proong, among others.

CARECs sector coordinating committees

will continue to closely monitor the progress o

projects, and senior ofcials will assess CARECs


22/26

17

development eectiveness annually, using the

CAREC results ramework. Te ramework will

be improved by introducing indicators or CAREC

2020s strategic objectives o trade expansion and

InSTITuTIOnAl FRAMEWORKRegioa Ecoomic Cooperatio Program

i Cetra Asia

Miisteria Coferece (MC)

natioa Foca Poits(nFPs)

Transport SectorCoordinatingCommittee

(TSCC)

CustomsCooperationCommittee

(CCC)

Trade PolicyCoordinatingCommittee

(TPCC)

Energy SectorCoordinatingCommittee

(ESCC)

Senior Ofcials

Meetig (SOM)

ADB CAREC uit:

CAREC Secretariat

Mtiatera

Istittios

Work in each priority sector is led by a sector coordinating committee consisting of representatives from CAREC countries

and multilateral institutions. The coordinating committees provide their outputs to senior ofcials meetings, which assess

opportunities from a regional perspective and determine options for the programs direction.

An annual minister ial conference provides overall guidance and set s policy and strategic directions and goals.

Each CAREC country has appointed a senior government ofcial as a CAREC national focal point to ensure ef fective

coordination between government agencies and private organizations in matters related to regional economic cooperation.

ADB is the programs secretar iat.

improved competitiveness to help strengthen the link

between CARECs sector outputs and its envisaged

impactsto revitalize economies and improve the

quality o lie or all.

Source: CAREC. CAREC 2020: A Strategic Framework for the Central Asia Regional Economic Cooperation Program 20112020.

Manila: Asian Development Bank, 2012. www.carecprogram.org/uploads/docs/CAREC-Publications/2012/CAREC-2020-Strategic-

Framework.pdf


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18

Technicalassistance topromote regionaleconomiccooperation inCentral Asia isapproved

1996

1997

The first regional technical

assistance for Central Asiagives prominence to projectsthat increase trade andcooperation between thePeoples Republic of Chinas(PRC) Xinjiang Uygur

Autonomous Region,Kazakhstan, the KyrgyzRepublic, and Uzbekistan

2001

The first CAREC

Senior OfficialsMeeting is held inManila, Philippines

Tajikistan joinsthe regionalcooperationgroup

1998

The Central AsiaRegional EconomicCooperation(CAREC) Secretariatis established at the

Asian DevelopmentBank

2000

CONSENSUS ON GUIDINGPRINCIPLESThe First Ministerial

Conference is held in Manila,Philippines, and agrees onthe guiding principle ofcooperation; targets stabilityand prosperity; andadvocates a practicalapproach, delivering result-oriented projects

CAREC establishes itsoverall institutionalframework: flexible, informal,and project-oriented

Sector coordinating

committees, senior officials,and ministers guideinvestment in transport, trade,and energy

The Customs CooperationCommittee is formed

2002

2003

CARECs sixmultilateral institutionpartners commit tosupport the program

Azerbaijan andMongolia join CARECat the SecondMinisterial Conferencein Tashkent, Uzbekistan

In 2006, the programs41 projects have a combined

value of $3.2 billion, yieldingmeasurable results

In 2001, six CAREC-related projectshave a combined value of $247 million

CAREC Timeline

19962011


24/26

19

Tajikistan and the KyrgyzRepublic sign the CAREC-supported Cross Border

Transport Agreement

Pakistan and Turkmenistanjoin the CAREC partnership

CAREC launches its annualperformance monitoringdevelopment effectivenessreview process

The CFCFA holds its firstmeeting

The second CARECBusiness DevelopmentForum is held in Urumqi,PRC

The first Ministerial Retreatis held at the NinthMinisterial Conference inCebu, Philippines

2010

CAREC adopts theComprehensive Action Planand calls for sector strategiesand action plans to guide

cooperation in transport, tradefacilitation, energy, and tradepolicy

The plan calls for theformation of a virtual CARECInstitute to improvecooperation through capacitybuilding, research, andoutreach

The first BusinessDevelopment Forum bringsbusiness leaders and policymakers together to find ways

of reducing impediments toregional cooperation anddevelopment

The Fifth MinisterialConference is held in Urumqi,PRC

2006

The Inner Mongolia AutonomousRegion of the PRC is broughtinto the CAREC partnership

Six transport corridors becomeCARECs flagship initiative forspurring economic development

The Trade Policy StrategicAction Plan is endorsed to helpmember economies open andliberalize trade regimes andsupport accession to the WTO

The Strategy for RegionalCooperation in the EnergySector of CAREC Countriesbreaks ground as the first

strategic framework for energyamong Central Asian nations

The CAREC Institute work planfor 20092011 is endorsed at theSeventh Ministerial Conference,held in Baku, Azerbaijan

2008

The TransportSector CoordinatingCommittee and theTrade PolicyCoordinatingCommittee areformed

The private sector isencouraged toparticipate inCAREC at the ThirdMinisterialConference in

Astana, Kazakhstan

2004

2009

Private companies establishthe CAREC Federation ofCarrier and Forwarder

Associations (CFCFA)

The CAREC CorridorsPerformance Measurementand Monitoring Program islaunched to track movementalong the corridors and acrossborders

The Energy Action PlanFramework and CARECProgram Results Frameworkare endorsed

The first CAREC PartnershipForum is held

www.carecinstitute.orggoeslivea virtual hub forinformation sharing andresearch collaboration

The Eighth MinisterialConference is held inUlaanbaatar, Mongolia

2007

The Transport andTrade FacilitationStrategy is endorsed atthe Sixth CARECMinisterial Conference inDushanbe, Tajikistan.

The CAREC InstituteProspectus is endorsed,creating a mechanism toaddress second-tierareas (communicabledisease control,environmental issues,and businessdevelopment); as well as

capacity building andresearch

2005

The CAREC MembersElectricity RegulatorsForum holds its firstmeeting, promoting moreefficient production anduse of domestic energy

Afghanistan becomesCARECs eighth memberat the Fourth MinisterialConference in Bishkek,Kyrgyz Republic

The Energy SectorCoordinating Committeeis formed

By 2011, more than 120 CAREC-related projects representedinvestments of over $17 billion

2011

CAREC 2020, thestrategic framework forexpanding trade andimprovingcompetitivenessbeyond Eurasia, isendorsed by ministers

The Tenth MinisterialConference, in Baku,

Azerbaijan, highlightsachievements ofCARECs first decade

The CARECDevelopment Partners

Forum is held


25/26


26/26

CAREC Secretariat

Central and West Asia DepartmentAsian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, PhilippinesTel: +63 2 632 5478Fax: +63 2 636 2387info@carecprogram org P i t d i th Phili i

The Central Asia Regional Economic Cooperation (CAREC) Program is a practical, projects-based, and results-oriented partnership that promotes and facilitates regional cooperationin transport, trade, and energy. CAREC comprises 10 countries: Afghanistan, Azerbaijan, thePeoples Republic of China, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan,Turkmenistan, and Uzbekistan. Six multilateral institutions support the work of the CARECmember countries: the Asian Development Bank (ADB), European Bank for Reconstruction

and Development, International Monetary Fund, Islamic Development Bank, United NationsDevelopment Programme, and World Bank. ADB serves as the CAREC Secretariat.

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