IFPRI CA NEWS DIGEST (MAY 13 – MAY 19, 2014)
News and Analyses
Kazakh grain stock is decreasing faster in 2014 than in 2013 (Russian)
(Kazakh-Zerno, 19 May 2014) The article highlights relatively fast decreasing grain stocks in Kazakhstan in 2014. The average monthly decrease of the grain stock is 23.4% higher in 2014. The national grain stock decreased from about 13.7 million tons to 8.28 million tons with the first five months of 2014 and stands 14.2% lower than the national stock in May, 2013. Considering 1.4% increase in the population size, and sight increase of the livestock sector, analysts believe that grain exports and processing of grain commodities for export should be driving force behind such sharp decline in the national grain stock.
Unemployment rate in Kyrgyzstan amounts to 8.4 percent in I quarter of 2014
(24 News Agency, 13 May 2014) The unemployment rate in Kyrgyzstan in the first quarter of 2014 was 8.4%, according to official statistics. Over 40% of the officially unemployed are youth.
Target social protection in Tajikistan to where it is needed
(ADB Blog, 16 May, 2014) This blog post uses Tajikistan as a case study of how fiscal constraints and weak institutions undermine targeting of poor households for social protection programs. Tajik national social protection fund spends mainly on three public transfer programs: old-age pension, disabled pension, and survivor’s pension. Because of weak targeting, only 43% of poor households in Tajikistan receive cash from the government (the remaining 57% are left out), and yet 33% of non-poor households receive cash from the government.
Tajikistan, China discuss cooperation in agriculture
(ECNS, 15 May, 2014) China and Tajikistan are discussing bilateral cooperation to support agriculture in Tajikistan, with a focus on cattle breeding and technology transfer for horticulture, as well as improvements in other points on the value chain such as processing and storage.
China and Turkmenistan to Develop Strategic Partnership (Link 2)
(CCTV, Eurasia Net May 13, 2014) On the heels of the opening of a major Chinese-built gas producing plant in the country’s east, Turkmen president Gurbanguly Berdymuhamedov flew to Beijing on a widely-publicized three-day visit. Berdymuhamedov and Chinese president Xi Jinping agreed to form a strategic partnership to expand on the countries’ already flourishing energy ties to include other areas such as agriculture, healthcare, and infrastructure. As a result of this agreement and similar ones signed with Kyrgyzstan and Tajikistan in 2013, China now has formed “strategic partnerships” with all five Central Asian countries. Agriculture currently plays a minor role in Turkmen-Chinese bilateral trade. Agricultural and food products represented approximately 1 percent of Chinese imports into Turkmenistan, while natural gas comprised 99.03% of all Turkmen exports to China.
Kyrgyzstan and China sign 7 documents
(24.kg, 19 May 2014) Kyrgyz President Almazbek Atambayev visited China and governments signed 7 documents including joint declaration on strengthening the strategic partnership. The signing ceremony was held in Shanghai on May 18.
Uzbekistan’s President Leaves for China
(UzA, 19 May 2014) President of Uzbekistan Islam Karimov left to China on May 19 to take part in the session of the fourth summit of the Conference on Interaction and Confidence Building Measures in Asia. Islam Karimov and President of the PRC Xi Jinping are to hold a bilateral meeting in Shanghai on 20th May. During the anticipated talks the two heads of state are to discuss in detail the priority target tasks of the strategic partnership. Uzbekistan is the fourth country in Central Asia visiting Chinese counterparts this week. Earlier, Tajik Prime Minister and Presidents of Turkmenistan and Kyrgyzstan paid official visits.
Kyrgyz Bazaars Feel the Squeeze of the Customs Union
(24kg via Radio Free Europe May 16, 2014) Kyrgyz citizens are divided over the country’s potential accession to the Russia-led Customs Union. Small traders, such as the vendors working in Kyrgyzstan’s large bazaars, have reported sharp decreases in business in 2014 after Kazakh authorities introduced limits on hand-carried goods allowed across the border. Damira Doolotalieva, the chairwoman of Kyrgyzstan’s largest bazaar Dordoi, claimed that Kazakhstan purchased 70 percent of the market’s goods in 2013. The drop-off in trade is placing merchants under financial distress, which in turn is fueling calls for the Kyrgyz government to join the Customs Union. On the other hand, some warn that joining the trade regime could have a negative effect on vendors specializing in the re-export of goods, which economic analyst Azamat Akeleev could be potentially labeled contraband under Customs Union rules. One-fourth of Kyrgyz exports in 2011 were destined for Russia and Kazakhstan, with horticultural, animal, and other food products comprising a major share (See figures below).
Sanctions against Russia and how they affect migrant workers
(UzNews.net, 12 May 2014) This article touches on the implications of economic sanctions against Russia for its Central Asian neighbors, particularly those that depend on remittance income from migrants in Russia. It notes that in addition to economic consequences if migrant laborers are affected, millions of workers returning home without work could also create political turmoil in Central Asia.
(Foreign Affairs, 12 May, 2014) This article offers analysis of the problems for enlarging Customs Union and furthering Eurasian integration led by Russia against the backdrop of economic relations in Central Asia and broader Eurasia. “The diminishing commitment of former Soviet Union countries to regional integration is a little noticed but critical side effect of Western sanctions on Russia. Russia remains the economic linchpin of the region, and costs imposed on the country are trickling down to Belarus, Kazakhstan, and beyond. In turn, post-Soviet leaders have started to reevaluate the wisdom of further integration with Russia. Sanctions may not stop Russia’s destabilization of Ukraine, but Western policymakers should embrace them for another reason: because they can put a nail in the coffin of the project that started the Ukraine crisis to begin with -- Eurasian integration.”
Publications
Slowdown in Russia can be a drag on growth in Central Asia
(EBRD 14 May 2014) “The EBRD’s latest economic report predicts growth in the transition region of just 1.4 percent in 2014, a sharp reduction from the rate of 2.7 per cent forecast in January. A modest upturn of 1.9 per cent in 2015 is possible, but only achievable if the crisis does not escalate. A Russian downturn is likely to constrain growth in Central Asia though the region on average will see good growth driven by major natural resource projects. EBRD Lead Economist for Central Asia, Agris Preimanis, says: “Most of the countries in Central Asia showed strong economic growth in 2013; however, the slowdown in Russia is expected to be a drag on growth in Central Asia in 2014. The weakening of remittance flows, as well as exports (to a lesser degree), are expected to be a factor. Any further escalation of the Russia-Ukraine crisis poses significant downside risk to growth and would put downward pressure on currencies in the Central Asian region.’”
(Pavlova, V.N., Varchevaa, S.E., Bokushevab, R., and P. Calanca, Ecological Modeling, Vol. 277, 2014)
Abstract: Spring wheat is the principal crop in the steppe zone of Russia and Kazakhstan, but wheat productivity levels are currently low and susceptible to weather and climate anomalies. Water scarcity during the growing season represents a major stress factor and is expected to negatively affect wheat production in the future as well. In this paper we present a simple mechanistic model for assessing the impact of climate variability on spring wheat productivity in the steppe zone of Russia and Kazakhstan. The novel aspect of the model development is represented by the adoption of an adaptive approach for the formulation of growth partitioning. In spite of simplifying assumptions the model is shown to satisfactorily reproduce yield levels observed both at the local scale under controlled conditions as well as at the regional scale. The model is able to capture a significant percentage of the observed year-to-year variability of wheat yields. Results of the model application indicate that, for the steppe zone of Russia and Kazakhstan, seasonal water shortage is likely to cause yield deficits of 20–25%, with deficits of up to 40% in extreme years, and an increase in the coefficient of variation of yields.
Regional migration report: Russia and Central Asia
(Di Bartolomeo, A., Makaryan, Sh., and A. Weiner (eds.), European University Institute, 2014)
Abstract: Since the collapse of the Soviet Union, the Russian Federation has become one of the most important destinations for immigration in the world. It is also a very particular case of a destination country in which two types of flows have shaped the character of immigration. Massive waves of Russians returning to their ancestral (or actual) motherland from other republics dominated throughout the 1990s, diminishing in 2000s. At the same time, the growing Russian economy started to attract immigrant workers from other parts of the post-Soviet space, especially from less developed central Asian countries, namely Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Nowadays, they are the main working migrant group, whose presence is contested on cultural grounds. The Eurasian migration system is thus a central theme for migration research in the region. This report proposes a deep comparative analysis of the place of Russia and Kazakhstan (Russia’s emerging economic rival) in the Eurasian migration system. The analysis is accompanied by an analysis of data collection in Russia and the development of Russia’s migration policy.
Growth Maximizing Tax Rate for Uzbekistan
(Abdullaev, B. and Konya, L., Applied Econometrics and International Development, Vol.14 (01), 2014)
Abstract: Over the past two decades of transition from centrally planned economy to market economy Uzbekistan has experienced major structural changes. During this period the objectives of the tax policy were directed towards modernizing the tax system, increasing efficiency and reducing the tax burden on the economy. As a result, the tax revenue-to-GDP ratio decreased from 32.3 percent in 1992 to 22 percent in 2011. While in the early years of independence economic growth was negative, considerable economic expansion has been observed since 2000. In this paper, we investigate the relationship of economic growth and tax revenues in Uzbekistan using quarterly data from 1996 to 2011. The results suggest that the Uzbek government has reached growth maximizing tax rate by reducing tax burden on the economy and further tax cuts will be counterproductive. Moreover, tax policy reform should be directed to address intrinsic issues of the tax system as well as raising direct taxes and lowering indirect taxes.
Macroeconomic Results of 20 Years of Transformation in CIS Countries: The Role of Investments (in Russian)
(Golovnin, M. and Ushkalova, D., Journal of the New Economic Association, Vol. 21, 2014)
Abstract: The last 20 years or more of economic transition in CIS countries led to different results for different countries. Leader countries by economic dynamics (Turkmenistan, Armenia, Azerbaijan, Uzbekistan, Belarus and Kazakhstan) surpassed global economic growth rate for the period 1992- 2012. The main factor of their success was achievement of high investment/GDP ratio, which allowed for acceleration of economic growth on separate time periods.
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