Regional, National Aid for Trade Need Assessments in Central Asia and Caucasus

14 Mar 2011
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The Aid for Trade Regional Review represents a summary of the findings of the national Aid for Trade Needs Assessment (Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan). The Regional Review has been compiled by Daniel Ivarsson, lead author of the publication.

 

While exhibiting significant differences, these countries face a number of common trade and human development challenges. Several of these challenges have been highlighted or aggravated by the recent economic crisis. Trade, in particular, has declined owing to lower demand in key markets, lower commodity prices, a drop in remittances and other foreign inflows, and trade finance difficulties. Countries in the region have taken short-term measures to deal with the challenges mentioned, but the longer-term development of the region would benefit from concerted actions to increase trade in a way that contributes to human development.

 

Aid for Trade (AfT) aims to help developing countries reap the benefits of existing and future market access opportunities, and to ensure that the benefits of trade development are felt by the vulnerable segments of the population. So far, however, apart from Afghanistan, the SPECA countries have attracted only a modest share of donors’ AfT resources. Some possible ways for addressing this shortcoming are provided by the AfT roadmap for SPECA countries.

 

Under this initiative, a series of national needs assessments have been carried out in the SPECA countries. These assessments identify a set of policy recommendations and technical assistance needs aimed at improving the contribution of trade to human development. This regional review sums up and consolidates the findings and proposals from the national needs assessments, discusses national and regional priorities, and provides a background for further AfT interventions in the region.

 

The regional review reveals considerable untapped potential for trade diversification and trade development both within the region and with the rest of the world. The main obstacles for developing this potential include a number of institutional impediments to trade, and the unfavourable geography of the countries.

 

In the short term, trade development opportunities should be exploited through targeted development of specific sectors with recognised export potential, combined with measures for raising quality standards and improving input efficiency. Sectors that have received attention in several or most of the SPECA countries are: fruit and vegetables, meat and dairy products, other agro-processing and food industry, textiles and clothing, leather and footwear, and services.

 

In the medium and long term, harmonised trade policies, trade facilitation, institutional and regulatory development, continued product and market diversification, and improvement of business conditions would allow new sectors and enterprises to develop in response to future shifts in local and international demand, thus sustainably contributing to human development.

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