The EDB proposes to focus on Central Asia’s significant potential for sustainable development at a United Nations’ event

19 July 2023

New York, 19 July 2023. Central Asian countries are directing their economic policies towards transitioning from existing growth strategies, which rely on commodity and labour exports, to structural economic reforms that support sustainable development. Vladimir Pereboev, Head of Division at the Centre for Integration Studies, which is part of the Eurasian Development Bank’s (EDB) Research Directorate, stated this at the Eurasian Economic Commission’s (EEC) side event on the sidelines of the United Nations Economic and Social Council (ECOSOC) High-Level Political Forum on Sustainable Development.

Over the past two decades, Central Asia's aggregate GDP, according to EDB estimates, has grown more than eight-fold in nominal terms and four-fold in real terms, reaching US $397 billion. The region’s population has increased by a factor of 1.4 since 2000, reaching 79 million, with recent annual growth rates of 2%. The United Nations projects an average annual population growth of 1.1% in the region up to 2040.

Central Asia is one of the regions most vulnerable to climate change, with its food, water, and energy resources particularly susceptible to climate challenges. The temperatures in Central Asia are rising faster than the global average, resulting in glacier melting in the local mountains, which has already led to the loss of almost 30% of their area over the past 50 years. This can lead to reduced river flows and pose risks to agriculture and food security in the region. Soil drying can decrease yields by 30 to 50%.

Effective water management is crucial for the region’s agro-industrial development and food security. Central Asian countries continue to face water scarcity and are classified as water-stressed countries on an international scale. The lack of regional economic cooperation, including the underdeveloped water-energy nexus, could lead Central Asian countries to approach water-scarcity status by 2050.

“The water and energy complex in Central Asia is facing insufficient coordination and significant economic losses. Experts estimate that the annual economic damage and unrealised economic benefits amount to US $4.5 billion or 1.5% of the region’s GDP,” Vladimir Pereboev emphasised.

Given the limited investment appeal and low profitability of water and energy projects in Central Asia for private and foreign investors, multilateral development banks (MDBs) are an important source of finance needed to implement state development projects. As of the end of 2021, the EDB estimated that there were 104 projects in the pipeline totalling US $10.2 billion. At that time, the combined portfolio of the EDB, the Eurasian Fund for Stabilization and Development, the European Investment Bank (EIB), and the Asian Infrastructure Investment Bank (AIIB) amounted to US $1.2 billion (11.5%).

“Central Asia’s water and energy infrastructure requires substantial investments. According to EDB estimates, the total identified investment proposals in the energy segment of the region’s water and energy complex exceed US $52.8 billion,” Vladimir Pereboev added.

He also highlighted that partnerships in addressing the region’s structural challenges would help to most effectively unlock its economic potential and create opportunities for sustainable development.

As an observer in the UN General Assembly, the EDB regularly participates in UN events and maintains ongoing cooperation with its agencies.

Additional Information:

The Eurasian Development Bank (EDB) is an international financial institution investing in Eurasia. For more than 17 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals US $7 billion. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles.

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