Central Asia - Geopolitics News
Central Asia - Geopolitics News
Regional Cooperation in Trade, Transport and Transit to Benefit Central Asia, says ADB Report
MANILA, PHILIPPINES - ADB - April 28/06 - The Central Asian republics (CARs) would reap considerable benefits from accession to the World Trade Organization
(WTO) and regional cooperation in trade policy within the multilateral framework, combined with greater regional cooperation in transport and customs transit, a new ADB report says.
The report, which is part of ADB’s study on Central Asia regional cooperation in trade, transport, and transit, aims to inform policymakers and contribute to the ongoing dialogue on regional economic cooperation in Central Asia.
It seeks to show how Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan - five member countries of the Central Asia Regional Economic Cooperation
(CAREC) Program referred to in the report as CARs - can increase the gains from participation in international trade through regional cooperation in trade policy, transport, and customs transit.
While the CARs have been able to expand trade considerably in recent years, they currently derive relatively little benefits from, and pay relatively high costs for, participation in international trade.
This is because their exports are dominated by a handful of primary commodities, they take very limited part in global production networks and related trade in manufactured products, and their trade is concentrated in a small number of countries.
The report blames the presence of numerous trade barriers related to trade policy, transport, and transit systems in the
CARs, in their trading partners, and in transit countries for constraining the growth of trade in the
CARs, skewing the structure of their exports towards primary commodities, and limiting their trade with countries in East and South Asia and Western Europe.
“Regional cooperation in trade policy, transport, and customs transit can help the CARs lower these trade barriers, increase the gains from participation in international trade, and reduce the associated costs,” the report says.
However, the report adds that regional cooperation in trade policy in the form of preferential trade liberalization under regional trade agreements is unlikely to do so in itself, mainly due to poor design and lack of implementation.
“Therefore, the CARs need to prioritize accession to the WTO and pursue regional cooperation in trade policy within the multilateral framework. To fully realize the benefits of WTO membership, they also need to improve regional cooperation in transport and customs transit.”
The report argues that increased regional cooperation in transport and customs transit would help the CARs reduce transport costs and make transport times shorter and more predictable for international shipments. This would in turn help the CARs expand trade, participate more in global production networks, and diversify trade in terms of both geographical distribution and commodity composition.
Quantitative estimates [or simulation results] presented in the report suggest that, if the estimated reductions in transport costs that would result from increased regional cooperation in transport and customs transit occurred in 2006, the cumulative increase in the Kyrgyz Republic’s real GDP in 2006-2015 would be US$2.1 billion (at 2002 prices) greater or 112.3% (relative to 2005) higher than in the baseline (“no-change”) scenario.
ADB and Uzbekistan Discuss Action Plan for Regional Cooperation in Central Asia
TASHKENT, UZBEKISTAN (15 June 2006) - ADB - Uzbekistan Government officials and ADB representatives today discussed in a workshop a draft Comprehensive Action Plan (CAP) to deepen regional cooperation in Central Asia.
The workshop is the first of a series in the Central Asian Regional Economic Cooperation
(CAREC) Program member-countries aimed at gaining guidance from the governments of participating countries on the goals, objectives, expected outputs, priority investments and initiatives, and performance indicators that should serve as a medium-term framework for
CAREC.
"Only through coordinated actions and shared vision for the region can Central Asia again become a strategic crossroad, linking People's Republic of China
(PRC), Russia, Europe, India, and the Middle East," says Donneth Walton, Officer in Charge of ADB's Uzbekistan Resident Mission, who chaired the workshop.
The workshop was co-chaired by Mr. M. Askarov, Acting Head of the United Information-Analytical Department on Economy and Foreign Economic Relations of the Cabinet of Ministers of Uzbekistan, and Mr. D. Husband, Senior Advisor of the CAREC Program. Senior officials from the ministries of finance, economy, foreign economic relations, investments and trade, State Customs Committee, state energy company
Uzbekenergo, oil and gas company Uzbekneftegaz, and representatives of the Chamber of Commerce and Industry participated in the workshop.
The participants noted the importance of finalizing the CAP, which is expected to be approved at the 5th Ministerial Conference on CAREC in October 2006 in
Urumqi, Xinjiang Uygur Autonomous Region, PRC. It will be a strategic framework, upon which the priorities for regional cooperation and the proper sequencing of initiatives will be decided.
The participants also reviewed the current status of the CAREC Program and discussed the regional cooperation goals and objectives of the Government of Uzbekistan and key expected outputs from regional cooperation in the priority sectors. They also discussed issues related to private sector involvement, improved access to the regional and world markets, and possible inclusion of new sectors in the CAREC Program, including tourism, human development, agriculture, and environment.
The workshop follows the Fourth Ministerial Conference of CAREC, which took place on 5-6 November 2005 in
Bishkek, Kyrgyz Republic, and the Senior Officials Meeting (SOM) in Urumqi, on 10-11 April 2006.
The CAREC Program is an alliance comprising eight countries-Afghanistan, Azerbaijan,
PRC, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan-and six multilateral institutions
(MIs): ADB, European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme and World Bank.
CAREC aims to promote economic growth and raise living standards by encouraging regional economic cooperation. The Program has concentrated on financing infrastructure projects and improving the region's policy environment in the priority areas of transport, energy, trade policy and trade facilitation. The combined assistance of the MIs for these sectors is expected to exceed $1.45 billion during 2006-2008.
Uzbekistan joined ADB in 1995. Cumulative lending to the country now stands at $914.7 million for 19 loans. ADB has also approved grants to Uzbekistan totaling $32 million.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 65 members - 47 from the region. In 2005, it approved loans and grants for projects totaling $6.95 billion, and technical assistance amounting to $198.8 million.
Wealth Transfer:
ADB Plans to Tap Carbon Market Potential for Development Projects
By Graham Dwyer
ADB - Jun 26/06 - THE GLOBAL carbon market is expected to become a US$100 billion business over the next few years, buoyed by recent scientific findings on climate change, the entry into force of the Kyoto Protocol, and the EU Emissions Trading Scheme.
Industrial groups in the European Union and Japan among others continue to require carbon credits in order to balance out financial risks and penalties resulting from their greenhouse gas emission levels. In the EU alone these penalties will amount to €100 per tonne of carbon dioxide-equivalent during 2008-2012.
They can buy carbon offsets from other sources – often in developing countries, who reduce emissions by more than the necessary amount. This trading system ensures emissions reductions are achieved at the lowest economic cost.
However, despite the obvious benefits of bringing buyers and sellers together in the carbon market, there are significant financing – as well as technical – gaps in the development cycle.
For development projects, whether public or private sector funded, investment plans require long term and at times structured financing. Such projects are often major carbon credit suppliers. Yet this potential market is a long way from reaching its potential. If captured, carbon sales could yield important additional income and even convert economically marginal projects into highly attractive ones.
The carbon market itself could be enhanced if the financing plans of projects with greenhouse gas reduction potential were to be supported by special trust funds, with their financing secured against the carbon credits that will be generated by the projects. This would also reduce the capital outlay expected from sponsors, strengthen financial viability, and be good for the environment.
“ADB believes that the financing gaps in the carbon market can be met through the establishment and management of a dedicated carbon cofinancing fund,” says Bindu
Lohani, Director General of ADB's Regional and Sustainable Development Department.
“The cofinancing scheme would make available funds up front through securitization of future carbon credits, thus reducing capital outlays required from sponsors.”
Therefore, as part of a new focus on clean energy and environment, ADB is proposing to set up a Carbon Market Initiative
(CMI). The fund would provide developing countries with access to additional financing and technical support for promoting energy efficiency and renewable energy projects that are eligible under the Clean Development Mechanism of the Kyoto Protocol.
CMI, which was introduced during ADB's Clean Energy Week activities last week, would have three main components:
An Asia-Pacific Carbon Fund to provide the upfront financing for purchases of future carbon credits generated by eligible projects
A credit marketing facility to assist project developers and sponsors attain the best available market price and/or sales conditions for carbon credits
A technical support facility to assist with project screening, feasibility studies, documentation, monitoring, and certification of carbon credits.
CMI would support projects in the areas of methane capture and utilization, energy efficiency, and renewable energy, for example small hydropower projects, landfill gas utilization, and biomass energy. ADB has a portfolio of projects in such areas with a capacity to generate more than 50 million tones of carbon dioxide-equivalent to 2012.
The result would be lower budget commitments and additional expertise and financing for project development on the part of developers and sponsors. Meanwhile, buyers of carbon credits would benefit from reduced credit delivery risk, reduced Kyoto compliance costs, and participation in projects with high development impacts.
“CMI presents a unique opportunity for all stakeholders to address two critical global issues confronting today's and future generations – energy security and climate change,” adds Mr.
Lohani, who is also Special Advisor to the ADB President on Clean Energy and Environment.
Consultations are ongoing with potential partners with the aim of launching CMI next year.
India to be Invited to Join
Gas Pipeline Project
from Turkmenistan to South Asia
ISLAMABAD, PAKISTAN (24 February 2003) - Asian Development Bank - India is to be invited to join an
ADB-backed (ADB = ASIAN DEVELOPMENT BANK) US$2.5 billion pipeline project to transport gas from Turkmenistan to Afghanistan and South Asia.
The Fourth Meeting of the Steering Committee for the Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project, held in Islamabad on Saturday, decided to jointly request that India join the project as a major purchaser of the gas and also possibly as an investor.
The planned 1,700 km pipeline would be capable of transporting up to 20 billion cubic meters of natural gas annually from the Dauledtabad fields in southeast Turkmenistan to consumers in energy-deficit economies of South Asia.
ADB, which acts as the lead development partner for the project, as well as the Secretariat for the Committee, recently approved a technical assistance (TA) grant for US$1 million to design the pipeline project.
The TA will provide a framework agreement for the participating countries to carry out construction, operations, and gas sales.
It will include route surveys, basic design of the pipeline project, cost estimates, schedule, financial analyses, and environment and social impact assessments.
In addition to the TA, ADB is conducting gas market studies.
Preliminary estimates suggest the gas pipeline would cost up to $2.5 billion and take about four years to design and build after the necessary country approvals.
Previous attempts to develop a gas transmission pipeline over the last decade floundered due to political uncertainties.
"This is a pioneering project that has great potential for promoting stability and improving living standards in South and Central Asia," says Seethapathy
Chander, an ADB Principal Project Engineer.
"ADB is an active development partner in the project, helping to mobilize necessary technical and financial resources."
The Steering Committee, which was set up in May 2002, has decided the project should be constructed and operated by a consortium of international oil companies and national companies.
The pipeline consortium will transport the gas, but not own it. Therefore, gas sale and purchase agreements will be developed between Turkmenistan and the buyers of the gas in South Asia. A gas transportation agreement will also be developed.
"We believe that consumers will find the gas prices very competitive compared with present prices," Mr. Chander adds.
The fourth Steering Committee meeting was attended by ministers for industry and energy from Afghanistan, Turkmenistan, and Pakistan, as well as senior ADB staff.
During the meeting, ADB made presentations on:
An alternative route for the pipeline for detailed examination by the feasibility consultants
A preliminary risk analysis and possible mitigation measures to enhance the commercial attractiveness of the project
The principles for the competitive selection of private sector companies that will lead the consortium for implementing the Project
The prequalification process for shortlisting such firms.
ADB is due to host the next meeting of the Steering Committee in Manila on 8-9 April.