On December 1, the CAREC Institute, represented by Deputy Director Two Dr. Iskandar Abdullaev, contributed to the discussions on Strategies for Developing Asia’s Future during a virtual event dedicated to the celebration of the 25th anniversary of the Asian Development Bank Institute (ADBI). The meeting highlighted the ADBI’s knowledge contribution and discussed next steps to help the Asian Development Bank (ADB) developing member countries apply innovative approaches to advance post-pandemic resilience in addressing sustainability challenges and accelerating socioeconomic transition. The event was attended by representatives of the governments of the ADB member countries, experts from think tanks, universities, international organizations and the media.
Dr. Abdullaev spoke about critical economic development issues in the CAREC region and provided policy recommendations in response to current challenges based on the CAREC Institute’s recent research report “Post-Pandemic Framework for a Green, Sustainable and Inclusive Recovery-Background Report”. While a trade war among the major economies was casting a shadow on global economic prospects in 2018, the COVID-19 pandemic wreaked havoc, leaving behind a trail of human tragedy, and widespread economic losses had a disproportionate impact on already marginalized population groups, overburdened health systems, increased fiscal gaps owing to massive response packages, rising debt levels, the fragmentation of global and regional value chains, and skyrocketing shipping costs. Science has delivered on its promise by developing and delivering vaccines in record time. The pandemic receded, and a quick economic recovery was afoot in 2021.
However, in 2022, a major geopolitical conflict in Europe shocked the world, exacerbating the structural damage caused by the pandemic to the global economy. Global energy prices have risen sharply, and food prices have reached unprecedented levels, exacerbating food insecurity and current account deficits for net food importers. Developed countries scrambled to secure their energy and food supplies while containing inflation through monetary policies that further complicated issues for developing countries, which faced widening current account deficits with shrinking windows for borrowing. The new crisis is exacerbating poverty due to food and fuel prices, which can lead to political and social upheavals. In addition to these problems, climate change remains an overarching challenge as most countries find it increasingly difficult to achieve the Sustainable Development Goals.
Therefore, achieving a growth trajectory within a supportive macro-economic framework in an environmentally sustainable way, with due consideration for distribution supporting equitable human development, has become a defining challenge for public policy makers today. “Fortunately, there are bright spots on the bleak horizon. Over the past decades, strong growth allowed the CAREC region to substantially narrow the national income gap with developed countries, but progress has slowed, and new sources of productivity need to be found. The major source for productivity growth, sustainability, and green transition is digitalization and, more generally, innovation and advanced technologies. Foreign trade and foreign direct investments also play a critical role in increasing productivity, securing needed products and services. It is necessary to continue policies focused on adaptation to climate change, strengthening food security, and promoting energy transformation. Inclusion remains as a fundamental requirement for smooth socio-economic change. And most importantly, regional cooperation is essential to address emerging challenges and should be strengthened to achieve shared regional prosperity,” said Dr. Abdullaev.