Nikolai Podguzov, EDB Chairman, highlights the main economic risks facing Central Asian countries at the ADFIAP forum
Almaty, 15 May 2023. During his presentation at the ADFIAP forum, Nikolai Podguzov, Chairman of the Eurasian Development Bank’s (EDB) Management Board, emphasised four key challenges facing Central Asian countries. These are the lack of access to the sea; insufficient coordination in the water and energy complex; and the impact of climate change.
The forum has convened 240 CEOs from banks, investment funds, and development institutions representing 40 member countries of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP). The plenary session discussed the role of investment in driving sustainable growth in Central Asian countries, including Kazakhstan.
“The lack of access to the sea constrains the trade and economic potential of Central Asia. Due to high transportation costs, the GDP of landlocked countries is growing on average 20% slower than it could,” said Nikolai Podguzov. He called on global businesses to step up concerted action to mitigate these risks.
To address this issue, the EDB Chairman proposed an expansion of the region’s transport infrastructure in all directions. “New rail routes and container traffic could foster more effective integration into global supply chains and reduce transport costs. For this reason, Central Asia still needs foreign investment in this sector,” he added.
According to the presentation, the Eurasian transport network is currently expanding with the construction of new railways and highways. Caspian seaports, airports, transport and logistics hubs, and border crossings have been built. “Over the past decade, the number of container trains between China and Europe has increased more than 200-fold,” Nikolai Podguzov highlighted.
However, the dynamic development of regional and foreign trade still requires simplification of customs and border procedures.
Furthermore, Central Asia faces one of the world’s lowest levels of water use efficiency. The average water use efficiency here is estimated at US $2.5 per cubic metre, significantly below the global average of US $19.01.
“Rapid population growth, urbanisation, and agricultural and industrial development require more water. The Bank’s stance is that Central Asia should adopt a collective approach to water management in the region. According to the EDB’s estimates (that correspond to those of the World Bank and other institutions), addressing current shortcomings through cooperation could boost regional GDP by an additional 1.5% per year,” he said.
Nikolai Podguzov also raised concerns about the threats posed by climate change. Central Asian countries are among the most vulnerable areas globally in this regard. “Water stress is high and is expected to increase 2.8 times in certain areas of Central Asia by 2040. Moreover, the region will experience higher temperature increases compared to the global average. This can lead to accelerated glacier melting, reduced snow cover, greater desertification, land degradation and salinisation, biodiversity loss, and increased deforestation,” he stressed.
In conclusion, Nikolai Podguzov highlighted that the EDB’s current five-year strategy, effective since 2022, positions the Bank as the number one financial institution in Eurasia, promoting sustainable development and ESG projects in Kazakhstan and Central Asian countries.
Additional Information:
The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) was established in 1976. ADFIAP is a major international business association comprising 90 member institutions in 39 countries, including non-regional members such as Canada, Germany, and France. Its mission is to promote sustainable economic, environmental, and social development and growth in the region.
The EDB has been a member of ADFIAP since 2022. The Bank’s charter capital totals US $7 billion. The EDB’s portfolio mainly consists of projects with an integration effect in transport infrastructure, digitalisation, green energy, agriculture, industry, and machinery. Its operations are guided by the UN Sustainable Development Goals and ESG principles.
The event’s global communications partner is the Anadolu Agency, with media partners including BNE IntelliNews, Cronos Asia, FINANCEkaz, Kapital.kz, Kazakhstan today, Kursiv.media, LSM.kz, Tazabek, TRT, Delovoy Kazakhstan, the MIR TV channel, and the Khabar 24 TV channel.
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