trade, migration, and human development in central asia
DESCRIPTION
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.TRANSCRIPT
1
Trade, migration, and human development in Central Asia
Ben Slay
Team leader, poverty reductionUNDP Regional Bureau for Europe and CIS
Dushanbe, 23 April 2014
Why this paper?
• Economic integration is becoming a priority issue in many Central Asian countriesWТО Eurasian integrationМigration and remittances
• Human development perspectives are sometimes lacking in these debatesImpact on vulnerable households?Ecological consequences?
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?
Growth in export volumes lags in Central Asia (except for Kazakhstan)
Azerbaijan
Qatar
Kazakh
stan
China
Mongolia
Georgia
IndiaLib
ya
Belarus
Turkey
Russia
Armenia
Ukraine
Moldova
Uzbekis
tan
Kyrgyzs
tan
Tajikis
tan
Turkmenist
an
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
Central Asia’s exports grew thanks to rising prices . . . What happens when they fall?
0
100
200
300
400
500
600
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).
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.
Big exporters can cover high trading costs, but small traders can not
Small trader from Batken
Imported equipment at the Kumtor mining complex
Commodity composition of Central Asian exports: Capital-, resource-intensive
Kazakh
stan
Kyrgyzs
tan
Tajikis
tan
Turkmenist
an
Uzbekis
tan0%
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.
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
1.11.4
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
. . . And ecological consequences
Aral Sea, 1989-2008
Source: Wikipedia
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
Development finance—Do remittances matter more than ODA?
Tajikistan Armenia Kyrgyzstan Georgia Kosovo*
8.4
3.83.0
2.21.8
Ratio of remittance inflows to ODA receipts (2011)
World Bank, IMF, OECD data; UNDP calculations. * As per UNSC resolution 1244 (1999).
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.
Remittances and poverty reduction: Tajikistan
2009 2010 2011 201230%
35%
40%
45%
50%
Poverty rateRemittances/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
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
