Energy Production and Transportation; Transport Economics Policy & Planning; Economic Theory & Research; Banks & Banking Reform; Trade and Regional Integration
Europe and Central Asia
Summary: This paper lays out the big issues that affect regional cooperation and development in the wider Central Asia region, and analyzes in greater detail areas where there appear to be good prospects for progress in the short run. The paper develops a framework for approaching regional cooperation in the wider Central Asia region, based on identifying and analyzing critical linkages among sectors, and explicitly recognizing political obstacles and the corresponding need for political incentives to make progress. Modest, "win-win" initiatives will help build trust and momentum for tackling the more difficult areas, but there may also be opportunities for "bold strokes" to augment, and change the distribution of benefits sufficiently to leverage more substantial progress. The paper notes that progress in regional cooperation has been limited to date, largely on account of political obstacles related to geopolitical rivalries but also due to an inability to agree over the distribution of the potential benefits from cooperation between, and within countries. It then provides a thematic overview of critical clusters of issues including the nexus of: a) border security issues with narcotics, trade facilitation, and people movements; b) transport infrastructure and trade, and transport facilitation; c) irrigation water issues with narcotics, and people movements; and, d) electricity (hydropower), and water issues. Practical short-run recommendations are put forward that take political incentives into consideration.
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