The OECD, together with the EU, and the governments of Afghanistan, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan, held a webinar on 10 June 2020. The event was an opportunity to discuss COVID-19 related challenges in Central Asia, allowing policy-makers across the region to learn from the experiences of their peers and of OECD members – from taxation and monetary policy to employment and education measures – and to chart a more co-ordinated course towards recovery.
The webinar was opened by Mr Andreas Schaal, Director of OECD Global Relations and H.E. Ambassador Peter Burian, EU Special Representative for Central Asia. They welcomed the joint work with the governments of the region, stressing the importance of continued dialogue to collect experience and provide recommendations for planning a sustainable and strong recovery.
Mr Arnault Prêtet (OECD) presented the highlights of an OECD regional note analysing the scope of the crisis in Central Asia. COVID-19 has put healthcare and social security systems under strain. In turn, containment measures have severely hit national economies, particularly small and medium-sized enterprises (SMEs), while the deterioration in external circumstances has exacerbated national fiscal pressures due to falling trade and remittances. The currently observed adverse effects on economic growth, employment, and public finances are likely to endure beyond the initial phase of the health crisis, and reinforce the need for a strong private sector-led recovery. OECD experiences were shared in this regard.
The ministerial discussion offered an opportunity to exchange views and experiences of the different measures implemented by the seven Central Asian governments to support their national economies. Mr Sanjar Mukanbetov, Minister of Economy of Kyrgyzstan, focused on digital solutions – for instance cashless payments - his government has promoted to support the private sector, also discussing current limitations and future opportunities. Mr Damdin Tsogtbaatar, Minister of Foreign Affairs of Mongolia, shared his government’s experience in creating an employment scheme to support wages and jobs and called for enhanced regional co-ordination tor trade and economic recovery. Mr Ajmal Ahmady, Governor of the Central Bank of Afghanistan, and former Minister of Industry and Commerce, discussed support measures provided to firms, especially in the informal sector. Mr Ashurboi Solekhzoda, First Vice Minister of Economic Development and Trade of Tajikistan, discussed support policies for job creation, in particular for returning migrants, in the light of the severe impact of border closures and falling labour remittances on its economy. Mr Mukhammetgeldy Serdarov, Deputy Minister of Finance and Economy of Turkmenistan, presented the measures his government is implementing to support exports, investors, and profit repatriation, given the country’s exposure to deterioration in external economic conditions. Mr Shukhrat Vafaev, Deputy Minister of Investments and Foreign Trade of Uzbekistan, introduced the adjustment to investment policies induced by the crisis, to maintain investment in large infrastructure projects in ICT, energy, transport and social services, and prevent back-tracking on recent reforms. Finally, Mr Zhaslan Madiyev, Vice-Minister of National Economy of Kazakhstan, discussed his country’s use of credit guarantees and soft loans to support firm’s liquidity during the lockdown.
During the open discussion, participants could directly exchange with ministers on various issues related to the resumption of activity across the region. In one such exchange, Deputy Minister Vafaev (Uzbekistan) and Minister Tsogtbaatar responded to questions on deconfinement and the lifting of restrictions for investors. Ms Olga Savran, Head of the OECD’s Anti-Corruption Network for Eastern Europe and Central Asia, took the opportunity to discuss the work being done by the OECD to help governments counter corruption in procurement and support measures related to anti-crisis measures.
The session was concluded with an instant poll, with participants being asked to reflect on challenges stemming from the crisis, the way forward in supporting firms during recovery, the potential impact on medium and long-term policy priorities, and the key barriers to successful implementation of immediate anti-crisis measures. Wage subsidies and tax and social security payment deferrals were thought to be the most effective policy instrument for firm support, while limited capacity of the public administration remains the biggest challenges for effective delivery. Finally, connectivity - in particular digitalisation and e-commerce - and regional value chains appeared to be the most promising avenues for business resilience and competitiveness.
Ms Olga Algayerova, Executive Secretary of UNECE, concluded the discussion, emphasising the relevance of UN and OECD work on these topics, in particular trade connectivity and resilience, with a focus on the greening of Central Asian economies.
Moving forward, the OECD confirmed its readiness, with EU support, to pursue successful co-operation with the seven countries of the OECD Central Asia Initiative. Joint work will cover support for recovery planning, and continued support for longer-term reforms, including on the legal environment for business.