The CAREC Program and the CAREC Institute jointly organized a conference “Trade Facilitation in CAREC: A 10-year CPMM Perspective” on August 17, 2022. The conference’s purpose was to present research findings that identify significant trade facilitation and development initiatives in CAREC countries, with evidence from the CAREC Corridor Performance Measurement and Monitoring (CPMM) data.
The conference brought together leading researchers, experts, policy makers, and representatives of international organizations to discuss the implications of research and policy related to CAREC’s transport and trade facilitation, and how CPMM data and results can be used to support policy development in the region.
During the first session of the conference, Dr.Zulfia Karimova, the Principal Regional Cooperation Specialist of the ADB, and Mr. Max Ee, the ADB Consultant, presented the results of the new CPMM study “Trade Facilitation in CAREC: A 10-year CPMM Perspective” providing an in-depth empirical analysis of the data and information about current impediments to regional trade that require change. The study marks the ten years of implementation of the CPMM mechanism and highlights its importance in influencing investment decisions and evaluating the impact of policy implementation.
The CAREC Institute presented a case of a successful advocacy campaign with the Government of Pakistan based on the CPMM findings. The CAREC Program and the CAREC Institute jointly initiated a policy dialogue process with national stakeholders in 2020, bringing the CPMM research evidence into national policies. Country-specific CPMM policy briefs have been prepared by the CAREC Institute and addressed to national policy makers, providing information on the current situation of regional trade cargo and recommendations for improvement. Through policy briefs, the CAREC Institute engages in two-way communication with national governments when the latter take necessary policy action based on CPMM results. The Government of Pakistan provided a considerate response to the CPMM policy brief in 2020 with information on the rapid and effective steps undertaken to address the bottlenecks, which resulted in a significant improvement in border crossing.
In the second session, chaired by Dr. Iskandar Abdullaev, the Deputy Director Two of the CAREC Institute, the preliminary results of the five research projects by independent researchers were presented. The independent studies employ the CPMM database on different topics such as trade, regional cooperation and integration, and global value chains. Dr. Abdullaev stated that all five studies bring new knowledge and modern research approaches to using the CPMM data for policy formulation in the region and deepening academic research in relevant areas.
Dr. Ghulam Samad, the Senior Research Specialist of the CAREC Institute, presented a study on “Geographical Proximity and Trade Impact in the CAREC Region,” which uses CPMM data for 165 regions across the CAREC region. The study finds that the recently implemented electronic Sanitary and Phytosanitary certifications had a positive impact on the trade facilitation in the CAREC region. It also finds that the regional trade agreements and free trade agreements facilitate trade among CAREC countries. The study recommends implementing digitalization initiatives at border crossing points and promoting a regional trade agreement for CAREC to accelerate trade flows and volumes.
Dr. Alfinura Sharafeyeva’s “Analysis of the Impact of Trade Costs on Exports of Final and Intermediate Goods at the Sectoral Level in Post-Soviet Central Asia and the CAREC region” estimates the impact of trade costs on exports in Central Asia based on a structural gravity model. The author finds that the export of perishable agricultural products is more sensitive to higher trade costs than other commodity groups. She suggests considering a diversified approach with budget allocations in trade facilitation programs to increase CAREC countries’ potential gains from trade.
Dr. Kamalbek Karymshakov presented an empirical study on “Trade Facilitation, Infrastructure and International Trade in Central Asian Countries,” which examines the impact of infrastructure and trade facilitation on international trade in Central Asian countries – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The results of the study show a significant positive impact of infrastructure on the import volume. This relationship is non-linear, suggesting that infrastructure development promotes the import of goods over time. The study also finds that the speed of movement along the CAREC corridors strongly influences Central Asian countries’ imports. The study recommends complementing the infrastructure development with joint trade facilitation measures among CAREC member countries.
Mrs. Dorothea Ramizo presented the study “Non-tariff Measures and Time and Costs at Border Crossing Points of Perishable Goods: Impact on CAREC Intra-Regional Trade,” which finds that not only the length of time and cost of clearing goods at the border have a negative impact on intraregional trade, but also the behind-the-border measures. She highlighted the importance of structural reforms in trade facilitation, such as bolstering the capability and capacity of sanitary and phytosanitary laboratories and modernizing regulations to meet international standards.
Dr. Kijin Kim presented the study “The Effects of Lockdowns on Time to Clear Goods at the Border of the CAREC Countries During the COVID-19 Pandemic”, which finds that the 1-point increase of the COVID-19 stringency index in CAREC countries increases the outbound time by 0.7 percent by the initial month of implementation and increases the inbound time by 0.5 percent up to the 5th month after implementation.
The outbound border crossing points are more affected by stringency measures imposed than those in the inbound border crossing points. However, the outbound border crossing points are more resilient to the changes in the stringency measures as the impact only lasts for a month.
The CAREC Program and the CAREC Institute remain committed to their country members in providing an independent assessment of the regional trade situation, and a new series of CPMM research papers and country-specific policy briefs will be produced for national governments based on the new CPMM report this year.