Trade, migration, and human
development in Central Asia
Ben Slay
Team leader, poverty reduction
UNDP Regional Bureau for E...
Why this paper?
• Economic integration is
becoming a priority issue in
many Central Asian countries
WТО
Eurasian integra...
Trade, capital accumulation, and
human development
• Trade can help countries accumulate economic capital, by:
– Attractin...
Growth in export volumes lags in Central
Asia (except for Kazakhstan)
24%
22%
21%
19% 19%
18% 18% 18%
17%
15% 15%
14% 14% ...
Central Asia’s exports grew thanks to rising
prices . . . What happens when they fall?
0
100
200
300
400
500
600
1999
2000...
High trading costs slow export
growth in Central Asia
Landlocked
economies
Ranking in World Bank’s “Trading Across
Borders...
Big exporters can cover high trading costs,
but small traders can not
Small trader
from Batken
Imported equipment at the
K...
Commodity composition of Central Asian
exports: Capital-, resource-intensive
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
O...
This trade pattern has
socio-economic consequences
• It limits
output, employment
growth in labour-
intensive sectors
– Li...
. . . And ecological consequences
Aral
Sea, 1989-
2008
Migration, remittances,
and development
• World’s most remittance-
dependent economies are
in Central Asia
• Remittances c...
Development finance—Do
remittances matter more than ODA?
Tajikistan Armenia Kyrgyzstan Georgia Kosovo*
8.4
3.8
3.0
2.2
1.8...
Remittances and poverty
reduction: Kyrgyz Republic
2010 2011 2012
34%
37%
38%
40%
43%
45%
W/ remittances W/out remittances...
Remittances and poverty
reduction: Tajikistan
30%
35%
40%
45%
50%
2009 2010 2011 2012
Poverty rate
Remittances/GDP
• Tajik...
To make the most of its integration
opportunities, Central Asia needs:
• Lower trading costs
– Better transport infrastruc...
Thank you
very much!
ben.slay@undp.org
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Trade, migration, and human development in Central Asia

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Central Asia’s current trade mix limits output and employment growth, and has detrimental environmental consequences. Promoting the right kind of trade and economic integration can lead to higher levels of employment and human development. View this presentation to learn what Central Asia can do to make the most of its integration opportunities.

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Trade, migration, and human development in Central Asia

  1. 1. Trade, migration, and human development in Central Asia Ben Slay Team leader, poverty reduction UNDP Regional Bureau for Europe and CIS Dushanbe, 23 April 2014 1
  2. 2. Why this paper? • Economic integration is becoming a priority issue in many Central Asian countries WТО Eurasian integration Мigration and remittances • Human development perspectives are sometimes lacking in these debates Impact on vulnerable households? Ecological consequences?
  3. 3. Trade, capital accumulation, and human development • Trade can help countries accumulate economic capital, by: – Attracting foreign investment – Acquiring modern technologies • What about human capital? – Are gains from trade reinvested in education and health? – Does migration lead to brain drain, or brain gain? • What about social capital? – Does migration put excessive strains on families, communities? – By which policy measures re-migrants’ acquired social capital could employed for domestic development? • What about natural capital? – Does trade-related resource extraction place intolerable burdens on ecosystems? – Are non-renewable resources managed wisely?
  4. 4. Growth in export volumes lags in Central Asia (except for Kazakhstan) 24% 22% 21% 19% 19% 18% 18% 18% 17% 15% 15% 14% 14% 14% 13% 12% 5% 3% Annual average growth in merchandise exports, 2000-2012 UNDP calculations, based on UN Statistical Division data
  5. 5. Central Asia’s exports grew thanks to rising prices . . . What happens when they fall? 0 100 200 300 400 500 600 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Metals Energy Cotton Food 0 20 40 60 80 100 120 Metals Energy Cotton UNDP calculations, based on IMF commodity price data. (Forecasts begin in 2013).
  6. 6. High trading costs slow export growth in Central Asia Landlocked economies Ranking in World Bank’s “Trading Across Borders” category (Costs of doing business) Armenia 116th Moldova 149th Belarus 150th Kyrgyz Republic 184th Kazakhstan 186th Tajikistan 188th Uzbekistan 189th Out of 189 countries, total (2013). Turkmenistan was not ranked.
  7. 7. Big exporters can cover high trading costs, but small traders can not Small trader from Batken Imported equipment at the Kumtor mining complex
  8. 8. Commodity composition of Central Asian exports: Capital-, resource-intensive 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Other Petrochemicals Light industry Other farm products Machinery Cotton Metals and minerals Energy UNDP calculations, based on 2012 ITC data.
  9. 9. This trade pattern has socio-economic consequences • It limits output, employment growth in labour- intensive sectors – Light industry – Wholesale, retail trade – Tourism • These are also sectors with high shares of female employment Kazakhstan Kyrgyz Republic 1.1 1.4 1.9 3.6 Trade Tourism UNDP calculations, based on 2012 data from national statistical office web sites. Ratio of sectoral share in total female employment to sectoral share in total male employment
  10. 10. . . . And ecological consequences Aral Sea, 1989- 2008
  11. 11. Migration, remittances, and development • World’s most remittance- dependent economies are in Central Asia • Remittances completely finance Tajikistan’s merchandise trade deficit – They cover 50-75% of the merchandise trade deficit in Kyrgyzstan • Labour markets in Tajikistan, Kyrgyzstan are de facto deeply integrated with Russia (KazakhstanUNDP calculations, based on 2013 IMF, World Bank data. Tajikistan Kyrgyz Rep. Nepal Moldova Armenia Lesotho Samoa Haiti Liberia El Salvador 47% 32% 27% 25% 23% 23% 22% 20% 20% 17% Remittance inflows/GDP
  12. 12. Development finance—Do remittances matter more than ODA? Tajikistan Armenia Kyrgyzstan Georgia Kosovo* 8.4 3.8 3.0 2.2 1.8 Ratio of remittance inflows to ODA receipts (2011) World Bank, IMF, OECD data; UNDP calculations. * As per UNSC resolution 1244 (1999).
  13. 13. Remittances and poverty reduction: Kyrgyz Republic 2010 2011 2012 34% 37% 38% 40% 43% 45% W/ remittances W/out remittances Income poverty rates 2010 2011 2012 26% 28% 31% Remittances/GDP IMF, World Bank data; UNDP calculations. Source: National Statistical Committee, Kyrgyz Republic.
  14. 14. Remittances and poverty reduction: Tajikistan 30% 35% 40% 45% 50% 2009 2010 2011 2012 Poverty rate Remittances/GDP • Tajikistan’s national data do not give “before and after remittances” poverty rates . . . • . . . But growing remittances are widely seen as reducing poverty here as well Sources: Tajik Stat; UNDP calculations based on IMF, World Bank data
  15. 15. To make the most of its integration opportunities, Central Asia needs: • Lower trading costs – Better transport infrastructure – Modernization of border management • Investments in the productivity of small producers, traders—for poverty reduction • More strategic management of: – Migration flows – Remittances • Policies to align trade, integration with sustainable development principles
  16. 16. Thank you very much! ben.slay@undp.org

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