On 10 December 2020, our Chief Economist Dr. Hans Holzhacker was invited to present at a webinar titled “Post COVID-19: The Changing Structure of National Economies in Eurasia and Caucasus – Building Back Better” organized by Astana International Financial Centre (AIFC).
The webinar explored post-COVID-19 recovery efforts and the challenges ahead for the Caucasus and Central Asia, the threat of economic scarring, fiscal challenges and financial stability concerns as well as potential policy priorities to build a stronger recovery.
The event was hosted by Marc Uzan, Executive Director of Reinventing Bretton Woods Committee, with Jacob Frenkel, Economist and the Chairman of JP Morgan Chase International, as a moderator, followed by presentations by Koba Gvenetadze, Governor of the Central Bank of Georgia; Assel Zhanassova, Deputy Minister of Trade and Integration of Kazakhstan; Baur Bektemirov, member of the Management Board of AIFC Authority; Christopher Weafer, Chief Executive of Macro-Advisory Ltd.; Sylvain Broyer, Chief Economist of S&P Global Rating; Werner Liepach, Director General of ADB; and other lead economists, private sector, and government representatives.
“There is a saying that honey is sweet but the bee stings,” said Jacob Frenkel, “we need to figure out how to enjoy honey without been stung… avoid declaring premature victory on the pandemic and focus on long term goals… We live in a complicated time… not only the world has changed, but central banking has changed.”
In his speech, Mr. Gvenetadze noted that they have learnt during the pandemic to always take unpopular measures which contribute to macro stability of the country. Mr. Weafer talked about two key conditions for investors: economic predictability and political stability. He further mentioned that there is a lot of appetite for renewable energy investment. Sylvain Broyer of S&P Global Rating called on states to be more Schumpeterian to pursue the process of industrial change to renovate their economic structures from within. He continued that while the PRC plans to decarbonize its economy by 30-40%, it would be beneficial for the Caucasus and Central Asia to promote busines environment to attract Belt and Road Initiative (BRI) investment and accommodate some production of the PRC.
Dr. Holzhacker of the CAREC Institute spoke about increase in application of new technologies, digital divide, supply chain reorganization, CAREC Regional Integration Index (CRII), and the trade distance concept which he elaborated in his June 2020 economic brief. He suggested CAREC countries to focus more on digitalization, economic diversification, greening, decarbonization, and trade in services.