Economic future of Central Asia viewed by "Bigger" Asia

It is quite easy to explain: despite the Eurasian character of Kazakhstan, despite the participation of the regional republics in the economic and transport schemes of the former USSR and its growing although quite slowly integration with Europe, this region was and remains a part of Asia.

And taking into consideration the growth of Chinese and Indian economies, these Eastern and South-Eastern directions of our foreign political and economic activities is going to be growing.

Therefore it is absolutely logical that the Asian Development Bank carries out systematic researches of the economic future of Kazakhstan and Central Asia (according to their method they include into this region apart from Kazakhstan and four post-Soviet republics also Azerbaijan.)

The results of one such result, "Central Asia in 2015," have been presented this week in Almaty.

The first thing that is observed there is that the GDP has grown in all these countries since 1997. True, Kazakhstan has been placed only on the fourth out of six positions, but, knowing the situation in the region from inside, one would not feel unhappy about it.

Turkmenistan has been recognised as the country leading in the GDP growth (more than 20% in 2002-2004,) which obviously makes one cautious about this estimation. Many experts know full well how special are the statistic calculations in our neighbour country. Also people knowing real processes in the region, can't avoid doubting the statement that the poverty level has the fastest reduction rate in Kyrgyzstan and Tajikistan (although serious successes of Kazakhstan in this process have been marked.)

However, the ADB does confirm our leadership in other, more tangible areas. Thus, on the industrial export per head, Kazakhstan has by far outdone all countries of the region (the bank estimations are based on statistics of 2003, the ADB does not have any newer information, but they do reflect current tendencies.)

In Kazakhstan it is 142.1 USD, while in Turkmenistan following it - 46.9. "The GDP per head is almost doubling in Kazakhstan," - the research says.

In general, if one looks at their conclusions, the Kazakhstan's leadership in all basic directions then the development becomes obvious. But how does the ADB see the future?

The main thing to begin with is that the bank experts are inclined to regard prospects of this region in the same chain in which they analyse today. If there is something not very principled, at least, it contradicts the view dominating in Kazakhstan.

As it is well-known, we don't pay too much attention to our neighbours when we estimate our own economic development. It is justified if we see the degree of difference in the reforms, in the development of basic areas of the economy. Perhaps it's not always right, if we remember that certain integrating efforts on the regional level are unavoidable, that the domestic market of Kazakhstan is objectively narrow, and that it is really necessary to get an access to the foreign, regional market in order to develop our own processing industry. The Asian Bank's opinion can be discussed, but the fact is that it does pay attention to our region.

According to the ADB forecasts, in the next three years the speed of the economic growth in the Central Asian countries will reach 9% per annum, which can be reached also with support of the valuable resources of Central Asia, from which the document mentions oil, gas, cotton, and gold.

It is quite easy to note that they are all present to some extent in Kazakhstan, while in the oil sector our republic is leading in the region. Thus, the reserve of the short term growth is practically guaranteed. What's next?

It is a very complicated task - to define the future of a region for the nearest ten years, the ADB experts observe. A lot will depend on prices at the world markets, especially for the Central Asian countries exporting raw materials - Kazakhstan, Azerbaijan, Uzbekistan, and Turkmenistan.

And although they don't think that it is highly possible that prices abruptly fall, they don't rule it out (there are two fastest growing world economies - China and India in Big Asia.)

But anyway, the ADB experts consider that the main factor for the development of the region is the domestic one, that is, the policy of economic reforms, under which, first of all, a coordinated accession to the WTO is meant, as well as measures to increase the competitiveness of their own processing industries, development of the transport infrastructure, and development of co-operation on the regional level.

The experts outline three possible scenarios, from forced reforms to their very slow development. In the case that the reforms are bad it is suggested that in both Kazakhstan and the rest of the region living off the oil & gas export, the GDP will fall 1% and more, the energy losses will hardly be compensated.

But this variant is not unavoidable, the report notes that "most likely the future course of the economic development of the Central Asian countries will be characterised by a combination of moderate political reforms, leaps in the regional co-operation, and a virtual absence of a policy of increasing competitiveness of the industrial ventures."

That is, a medium option. And it makes the following question even more relevant for Kazakhstan: how strong should be our integration with our Southern neighbours if it is really unavoidable?