Today, more and more countries are paying attention to deepening integration processes with their neighbors. This is especially evident within the regions. There is an increase in the so-called regionalization. Regionalization is a response of countries to external conditions, a potential to strengthen their positions on the global market and address existing intraregional challenges collaboratively.
These processes are also relevant for the countries of Central Asia (CA). At the same time, regionalization in Central Asia is a natural process that results from factors other than economic interests and outside shocks. The countries of the region are based on the identity of culture and history, as well as their interpenetration in the territories of all countries.
Experts of the Institute of Forecasting and Macroeconomic Research (IFMR) under the Ministry of Economic Development and Poverty Reduction of Uzbekistan calculated the level of strengthening of intraregional socio-economic relationships of Central Asian countries based on the Index of Cooperation.
The key findings of the research:
- The index of cooperation of the Central Asian countries amounted to 38.4% in 2021, which is 9.9 percentage points more than in 2017.
- The greatest growth was recorded in mutual investments – 5.6-fold increase.
- The share of intraregional trade turnover in the total trade turnover of the countries of the region has increased by 1.5 times.
- Intraregional tourism accounts for 80% of all tourist destinations preferred by citizens of Central Asian countries.
- The cost of trade between the Central Asian countries is on average 4 times lower than with other trading partners.
- Intra-regional migration accounts for 15.3% of the total number of citizens entering the Central Asian countries for the purpose of work and residence.
As for integration processes and cooperation between countries, first of all, trade turnover between countries or the implementation of joint projects is usually considered. However, all these indicators individually cannot fully reflect the level of intraregional cooperation.
To do this, IFMR calculated the Index of Cooperation in Central Asia. The calculation of this index is based on such indicators as trade turnover, investment flows, the cost of trade, tourist and migration flows. The combined analysis of these indicators allows to assess the degree of socio-economic integration.
The analysis of the index is based on the principle that intraregional cooperation is estimated as the share of mutual processes between the countries of the region in their overall processes. For example, what is the share of trade turnover between the countries of the region in the total turnover of these countries.
The index is calculated in the data for 2017-2021. If there are no data for a certain year for some countries, the latest available data were used.
Thus, the analysis revealed that the value of the Index of Cooperation of the Central Asian countries increased 1.3 times from 28% to 38% during the study period.
The greatest contribution to the growth of the Index value was made by an increase in mutual investments. Thus, the share of investment flows (inflow and outflow) between the countries of the region in the total investment flows of the countries grow by 5.6 times.
The second most important indicator of growth is the increase in the volume of trade turnover. The share of intraregional trade turnover to the total trade turnover of the countries increased by 1.5 times.
The next indicator is the cost of trading. It reflects the level of possible costs (transport, customs, etc.) that an entrepreneur will incur by exporting products to a particular country. Most of these costs are mainly transportation costs.
Thus, the share of intraregional trade value in relation to other trading partners remained unchanged (an increase of 1.04 times). This is due to the fact that the Central Asian region pursues an active policy on the development of transport infrastructure both inside and outside the region – the construction of transport and transit corridors for trade with European and Asian countries.
To date, more than 80% of citizens of Central Asian countries who leave the country for tourist purposes prefer intraregional tourism. This indicates a strong cultural integration, based on a common history and shared values. In this regard, within the framework of the Central Asian Cooperation Index, the share of intraregional tourism in total tourist flows is 83%.
When looking at migratory movements across Central Asian countries, it is worth noting that only 15.3% of people who enter these countries for the purpose of living and working are nationals of these countries. In other words, for citizens of Central Asian countries, the area is not a consideration when deciding where to live or where to look for job.
Thus, while cooperation between Central Asian countries has risen greatly in recent years, it remains insufficient. To increase it, the region’s countries need to take the following measures:
- forging industrial cooperation, which will encourage intraregional investments;
- cooperation of countries based on the existing competitive advantages of industries;
- the increase in trade turnover between countries depends on a qualitative analysis of the export market and an assessment of the competitive advantages of goods and services produced in the country and having the greatest attractiveness in the markets of Central Asian countries;
- in order to further reduce the cost of trade within the region, it is necessary to work out transport corridors that will contribute not only to exports within the Central Asian countries, but also to foreign markets, as well as optimize existing routes;
- There is a great potential in the development of ethnic tourism in Central Asia (travelers visiting their historical homeland). Thus, 89.1% of all arrivals enter Uzbekistan for the purpose of visiting relatives.
Also, the implementation of such strategic documents as the Treaty on Friendship, Good-Neighborliness and Cooperation for the Development of Central Asia in the XXI Century, the Roadmap for the Development of Regional Cooperation for 2022-2024, the Concept of Interaction of Central Asian States within Multilateral Formats and others will further strengthen intraregional socio-economic cooperation.
At the same time, it should be underlined that the major purpose of this collaboration is joint development, solving regional challenges, and enhancing the status of Central Asia on the global arena, as well as improving population welfare and raising the standard of life in the region. ///nCa, 24 January 2023
Link to the original article: https://ifmr.uz/publications/articles-and-abstracts/evaluation_cooperation