Central Asian countries today practice a “concentration model” of urbanization, under which population and economic growth are centered in big cities, as the region becomes increasingly cognizant of the need to shift from an agrarian to an industrial-agrarian type of economy. Cities and their agglomerations under this new economic model must act as drivers of growth, but they are having trouble handling the massive influx of people from underdeveloped areas. This economic transition requires better management of urbanization and industrialization processes. Every country in the region, with certain variations, is undergoing profound economic, political and social transformations. In the medium and long term. the success of these processes will depend on industrialization and urbanization which can be managed. The region’s governments are implementing comprehensive programs aimed at stimulating the processing industries and developing cities. However, these policies seldom factor into the regional dimension; they are oriented more toward the country’s internal situation than toward constructing region-wide structures that could integrate specific sectors of national economies. As a result, industrial development programs and projects that are localized within national borders will only have a limited effect.

1. Urbanization in Central Asia:
experience of the transition period
Bakhtiyor Ergashev,
Research Coordinator,
Center for Economic Research
Tashkent, June 12, 2014

2. Research of Urbanization issues:approaches
•From2011CenterforEconomicResearchjointlywithUNESCAPhasimplementedtworesearchprojects:
–Improving Municipal Governance and Urban Infrastructure in Uzbekistan: Problems and the Search for New Mechanisms and Tools (2011/17)
–Urbanization and Industrialization in Central Asia: Looking for solutions to key development problems (2012-2013гг.)
•Thekeypurposeoftheprojects–analysisofmutualinfluenceoftheurbanizationandindustrializationprocessesinUzbekistanandCentralAsiaduringthetransitionperiod.

3. Demographic Trends
•Population of Central Asia will continuously grow reaching 80-84 mlnin 2030-2035
•Major share of the population –around 65% –will constitute people in working age (15-64 years old)
•Share of rural population will prevail until 2030 in most of the countries and in the region as a whole
UNDESAforecasts0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Rural population (thousands)
Urban population (thousands) Urban and rural population in Central Asia in 2025 KazakhstanKyrgyzstan
TajikistanTurkmenistan
Uzbekistan0
10000
20000
30000
40000
50000
60000
70000
80000 195019551960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
20252030 Population aged 15-64 in Central Asian states in 2025 Kazakhstan
KyrgyzstanTajikistan
Turkmenistan
Uzbekistan
Total population
40 744
30 639

4. Limited Land and Water Resources
•CA states succeeded in restoring and increasing food production
•Limited and unequally distributed land and water resources prevent from developing agriculture in extensive way
•Intensive development of agriculture will further limit employment opportunities in rural areas
Calculations based on World Development Indicatorsand UNDESAdata
Climate change impact on rivers flow
Projected reduction of river flow01020
30
40
50
60
70
80
90
Amudarya
Syrdarya
Average annual flow, cubic km
13,7
2,10,76,91,0
11,3
1,7
0,5
5,5
0,8
0
2
4
6
8
10
12
1416KazakhstanKyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
Agricultural land per capita, hectares
2005
2025
0
20
40
60
80
100120140160
1992
1995
1998
2001
2004
2007
2010
Food production index (2004-2006 = 100)
Kazakhstan
Kyrgyz Republic
Tajikistan
TurkmenistanUzbekistan

5. Economic Growth and Its Sustainability (1)
•All CA states managed to recover economic growth in 1990sand increase growth rates in 2000s
•CA states were relatively successful in overcoming effects of the world financial crisis
•Dependence from natural resources decreased, but remains relatively high
–Kazakhstan 27,6 %
–Turkmenistan 43,9%
–Uzbekistan 29,4%
–Kyrgyz Republic 9,2%
–Tajikistan 0,9%
Данные World Development Indicators
0
50
100
150
200
250
1990
1991
1992
1993
1994
1995
199619971998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Total natural resources rents in CA countries, % of GDPKazakhstanTurkmenistanUzbekistan
Kyrgyz Republic
Tajikistan
4,44
2,02
9,58
9,79
10,547,120
2
4
6
8
10
12
World
High income
Upper middle income
Middle income
Lower middle income
Low income
Total natural resources rents by group of countries, % of GDP-15-10
-5
0
5
10
15
20
25
1991
1995
2000
2005
2008
2009
2010
2011GDP growth in 1991-2011, %
Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan

6. Economic Growth and Its Sustainability (2)
•Value added in agriculture decreased in all countries of the region, share of service sector increased, highlighting successes in structural reforms
•However decrease in share of agriculture in GDP with mostly rural population in CA countries is challenging efforts in sustaining and increasing living standards
World Development Indicators
0
5
10
15
20
25
3035
40
45
50
1992
1995
2000
2005
2010
2011
Agriculture, value added (% of GDP)
Kazakhstan
Kyrgyz Republic
Tajikistan
TurkmenistanUzbekistan
0
5
10
15
20
25
30
35
40
1992
1995
2000
2005
2010
2011
Manufacturing, value added (% of GDP)
KazakhstanKyrgyz Republic
Tajikistan
Uzbekistan0
10
20
30
40
50
60
70
80
90
1992
1995
2000
2005
2010
2011
Services, etc., value added (% of GDP)
Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
0
10
20
30
40
50
60
70
1992
1995
2000
2005
2010
2011
Industry, value added (% of GDP)
Kazakhstan
Kyrgyz Republic
TajikistanTurkmenistan
Uzbekistan

7. Urbanization and industrialization in post World War II period
•Period of 1960-1990s characterized by notable urban development and considerable changes in economy and demography. Several Territorial-industrial Complexes(TIC) were established, incl.:
South-Tajik TIC in Tajikistan
Mining and smelting TIC in Navoi
Almalyk-AngrenTIC near Tashkent
Petrochemical complex in Fergana
Kostanayand Pavlodar-EkibastuzTIC
•Up until 1991 framework of territorial distribution of productive forces in Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan was focused on demands of local agrarian economy
•Industrial facilities/capacities were allocated in a way to support export from the region of hydrocarbon and mineral resources, cotton and other raw materials
•Share of resource industries in total industrial production in the region was two fold higher than average in Soviet Union, while share of manufacturing was much lower than average value

8. Urbanization in post World War II period
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1926
19391959
1979
1989
Total Population in Central Asia, thousands
Kazakhstan
Kyrgyzstan
TajikistanTurkmenistan
Uzbekistan
1926
1939
1959
1979
1989
010
20
30
40
50
60
Share of Urban Population in Central Asia, % Kazakhstan
Kyrgyzstan
Tajikistan
TurkmenistanUzbekistan

9. Population growth and urbanization dynamics in Central Asia0
5000
10000
15000
20000
25000
30000
35000
1926
1939
1959
1979
1989
2012
Total Population in Central Asiain 1926-2012, thousand
KazakhstanKyrgyzstan
Tajikistan
TurkmenistanUzbekistan
0
10
20
30
40
50
60
70
1926
1939
1959
1979
1989
2012
Urban Population in Central Asia in 1926-2012, %
Kazakhstan
Kyrgyzstan
TajikistanTurkmenistan
Uzbekistan

10. Population growth and urbanization dynamics in Central Asia
0
10000
20000
30000
40000
50000
60000
70000
0
5
10
15
20
25
30
35
40
45
50
1926
1939
1959
1979
1989
2012
Urbanization in Central Asia in 1926-2012Total population, thousand
Urban population, %

11. Challenges for urbanization policies in CA region during transition
•In majority of CA countries challenges of urbanization are mostly linked with high rates of population growth and rural to urban migration flows.
•These processes are catalyzed by decreasing employment opportunities in rural areas due to limited land and water resources.
•Migrants from rural areas are mostly settled in big cities. However urban infrastructure and employment generation capacities in cities are below the demand for new jobs produced by growing urbanization.
These list can be expanded with such issues like:
•Limited energy generation capacities in the areas with high population density
•Higher costs of transportation, especially for small and medium enterprises from rural areas
•… what else?

12. Outcomes of urbanization processin Central Asia
•Urbanization in CA countries are following different scenarios.
•During last 20 years share of urban population in Uzbekistan increased by 10.2%, in Kazakhstan –by 5%, in Turkmenistan –by 2%.
•At the same time Kyrgyz Republic and Tajikistan experienced decreased in share of urban population –2%and 9%respectively.
•However the common feature for all countries is a continuous outflow of population from rural areas, mostly for the employment purposes. This is particularly the case for Kyrgyz Republic, Tajikistan and Uzbekistan. In the medium term rural to urban migration will shape the major trends in urbanization.

13. Urban population in Central Asia in 2025
1-5 mln
22,23 %
0,5-1 mln
14,71 %
less than 0,5 mln
63,05 % 68134507
19319
0
5000
10000
15000
20000
25000
1-5 mln
0.5-1 mln
less than 0,5 mln

14. Shortcomings in urbanization policies: causes and consequences
CA countries went through a difficult transformations in terns of industrialization and urbanization during last 20 years. Results of such transformations are not always positive:
•Gaps in social and economic development among territories
•Increased rural-urban gaps in living conditions
•Worsened conditions in many small and medium cities
•Signs of de-urbanization and de-industrialization in some countries
•Outdated systems of municipal government and municipal budgets
•Growing pressure on deteriorating urban infrastructure
Causes
•Lack of comprehensive urban development policies in all CA countries:
–As of today non of CA countries adopted a single strategic document outlining priorities and policies for urban development
–Urban development issues are partially covered by different sectoraland regional development programs
•Lack of comprehensive researches on urban development models and policies in CA countries, which could assist in formulating vision for development of cities

15. Scale of economies
Agglomeration vs. Congestion
Transport costs
Transport & communications, Trade barriers
Factor mobility
Labor, capital, etc.
Regional integration to lower transport and communication costs and increase international trade opportunities Rural-urban transformation to improve mobility and increase in density of economic activityTerritorial development to improve market links between leading and lagging regions
CA Spatial Development Drivers

16. Challenges and opportunities for development
CAcountrieshavetogothroughthefollowingstagestobecomeurbanizednations:
1.Targeteddevelopmentofcities–transformationofruraleconomyintourbanone,shiftfromagrariantoindustrialdevelopmentpatternwithparticularfocusonbalanceddevelopmentofterritories
2.Promotingagglomerations–focusingpoliciesonlinkingterritorieswithtransportationandcommunicationsnetworks
3.Establishmentofstrategicsettlementframeworks–increaseofdensityofeconomicactivities,linkingterritoriesandcompressingspace,furtherdevelopmentofcities
Theultimategoalofdevelopmentpoliciesshouldbenotjustsimpleincreaseofurbanpopulation,buttheradicalshiftinspatialdevelopmentoftheregion
Thisrequiresdevelopmentofurbaninfrastructureandincreaseofabsorptioncapacitiesofcities–housing,socialinfrastructure,employmentopportunitiesetc

17. Small and medium cities as the pillarof urbanization
•Promotion of big agglomerations and large industrial enterprises stimulate economic growth, but not necessarily produce multiplying effect in terms of SMEdevelopment and wider employment generation.
–Challenges related with congestion, environment, infrastructure.
•Better links between big cities and small/medium cities create better environment for
–SMEdevelopment and employment generation
–Promotion of small and medium cities and balanced spatial development
•Small and medium cities constitute in Kazakhstan –63 out of 84 cities, in Kyrgyz Republic –20 out of 22, in Tajikistan –15 out of 17, in Turkmenistan –21 out of 25, in Uzbekistan –102 out of 119.
–They house around 1/3 of urban population: in Kazakhstan –25%, in Kyrgyz Republic –39%, in Uzbekistan –35%.
•Small and medium cities are well integrated with urban type settlements and act as a buffer for outflow of workforce from rural areas (around 100 000 annually in Uzbekistan).
•However, not all small and medium cities will survive the spatial transformation.

18. Conclusions
•CA countries pursued policies focused on:
–Creation of equal (to the extent possible) opportunities for people irrespective their place of living
–Effective utilization of natural resources and industrial potential of territories
–Promotion of local self-governance structures
•Outcomes of urbanization in CA countries has the following in common:
–Growing urban population (particularly in small and medium cities)
–Increasing concentration of population, economic activities and social developments in large cities
–Continuous inflow of new residents in cities, expansion of urban areas and growth of agglomerations
–Deterioration of urban infrastructure and worsening environment conditions in cities
•To saddle the urbanization all CA countries will need strong political and economic instruments/institutions to:
–promote urban development (incl. land markets, infrastructure development, investment promotion management etc.)
–Increase effectiveness and efficiency of government policies and interventions

19. Thank you!
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