Reoriented Trade Flows in Central Asia and Caucasus Amidst External Shocks
CAREC Senior Officials Meeting focused on the impact of external shocks on trade flows in Central Asia and the Caucasus. A comprehensive study covers socio-economic changes in the region, trade flow changes using disaggregated data, and reassessment of transport corridors. The region saw a major increase in both exports and imports, driven by energy prices, with significant trade developments with Russia in 2022.
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Presentation Transcript
Reoriented Trade Flows Reoriented Trade Flows in Central Asia and Caucasus in Central Asia and Caucasus Amidst External Shocks Amidst External Shocks CAREC Senior Officials Meeting 13-14 June 2023 Tbilisi, Georgia
New ADB RETA on the Impact of External Shocks New ADB RETA on the Impact of External Shocks Multiple shocks in 2020-2023 Strong impact on CAREC economies, esp. in the Caucasus and Central Asia Comprehensive study covering: - socio-economic changes in the region (growth performance, prices, migration, financial flows, trade in services, policies etc.), - changes in the trade flows in the region using highly disaggregated data, - re-assessment of transport corridors connecting the region with other parts of the world Timeframe 2023-2024
Major increase in both exports and imports Major increase in both exports and imports In 2022, the economies of the region have recorded all-time high values of merchandize exports and imports Goods, 2022/2021 change, % 80 70 60 50 40 30 20 10 0 -10 AZE PRC GEO KAZ KGZ MON PAK TJK UZB Exports Imports
driven by the growth in energy prices driven by the growth in energy prices Dramatic increase in exports of energy, mostly crude oil, due to price increase by 50%+ Energy imports have grown in all economies, too Energy imports Energy exports 2.0 60 51.8 50 1.5 Billion US$ 40 Billion US$ 34.8 35.3 1.0 30 19.6 20 0.5 10 1.2 0.9 0.0 0 AZE PRC (tln) GEO KAZ KGZ TJK UZB Azerbaijan Kazakhstan Uzbekistan 2021 2022 2021 2022
and exports (re and exports (re- -exports) to the Russian Federation exports) to the Russian Federation Major increase in exports to and imports (mostly energy) from Russia Re-exports, export creation and export destruction as a result of voluntary departure of international companies from the Russian market and sanctions Declining imports of machinery and equipment from Russia Decomposition of the change in exports to Russia Trade in goods with Russia, 2022/2021 change, % 3 500 160 3 000 140 2 500 120 2 000 Million US$ 100 1 500 80 1 000 60 500 40 0 20 -500 0 -1 000 -20 -1 500 AZE PRC GEO KAZ KGZ TJK UZB AZE GEO KAZ KGZ TJK UZB Exports Imports Export creation Export destruction Re-exports Other changes
More on re More on re- -exports The re-export estimates increase from the total of $1.5 billion based on reported CAREC CCA exports to Russia to $23.5 billion if one accounts for unusually high imports reported by CCA, PRC and EU exports CCA Re-exports, 2022 12 000 10 000 8 000 US$ million 6 000 4 000 2 000 0 AZE GEO KAZ KGZ TJK UZB Re-exports based on reported EU exports to CCA Re-exports based on reported CHN exports to CCA Re-exports based on reported CCA imports Re-exports based on reported CCA exports
Policy implications Policy implications The windfall re-export margins might be short-lived Need to improve linkages with major production and trade hubs both in the east and the west via Middle Corridor and other transit routes Need to monitor the ongoing changes in trade More data and analysis here: Asian Development Outlook. April 2023. The Economic Impact of the Russian Invasion of Ukraine on the Caucasus and Central Asia: Short- Term Benefits and Long-Term Challenges. Manila.
