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Growth in Central Asia hinges on creating more jobs with higher wages

Lilia Burunciuc's picture
Also available in: Русский


Jobs and wage growth have been the most important driver of poverty reduction globally, and Central Asia. In Tajikistan, for example, it has cut poverty by about two-thirds since 2003. In Kazakhstan, it accounted for more than three-quarters of income growth over the past decade — even among the poorest 20 percent. The other Central Asian nations have also achieved significant economic growth and poverty reduction in the past two decades due to income growth.

But poverty-reduction rates have slowed. In Kyrgyzstan, they began slowing during the global recession of 2008, as income growth faltered. Poverty reduction in Tajikistan leveled off in 2015, when wage growth slackened and remittances from Tajiks working overseas fell.

In Uzbekistan, more than 90 percent of the poorest households have identified lack of jobs as their most urgent priority. For these families, the prospect of increasing their income is slim, while the likelihood of transmitting poverty to their children is high.

So what should countries in Central Asian do to build on their past achievements and prepare their citizens for the jobs of the future?

Investing today in human capital for a brighter future tomorrow

Lilia Burunciuc's picture
Also available in: Русский
Kids in pre-school, Kyrgyz Republic

A young man sitting next to me on a recent flight from Almaty to Dushanbe told me, “I regret that I did not get a better education. I could have had a better job.” He is one of many Central Asian labor migrants doing low-skilled work in neighboring countries. He continued, “I’m telling my brothers and sisters to study hard if they want to have a better life.”

It was an important reminder about the responsibility we have as a society to ensure that young people like him get the education they deserve.

In light of the technological revolution we are witnessing today, the promise of education is becoming even more important. Emergence of robotics, autonomous transport, artificial intelligence and machine learning will transform the way we live, the way we work, and the skills we will need for work. Some jobs will disappear and some that don’t even exist today will become commonplace. What is certain is that education will be critical to succeed in the new reality.

While Central Asian countries inherited high-levels of adult literacy and education attainment from the Soviet period, the region has since experienced a visible decline in the quality of learning. Students here often lag behind in such basic skills as critical thinking, reasoning, and problem solving.

The high toll of traffic injuries in Central Asia: unacceptable and preventable

Aliya Karakulova's picture
Also available in: Русский

Did you know that in Kazakhstan we live in the country with the deadliest roads? Every year, 3,000 people die on roads in Kazakhstan, and over 30,000 are injured. Imagine if an airplane crashed every month! Would you fly?

We are 11 times more likely to die in a traffic accident in Kazakhstan than in Norway. Indeed, the numbers for road deaths are high in all Central Asian countries.

The High Toll of Traffic Injuries in Central Asia
Source: WHO, 2013


Globally, road traffic injuries are the leading cause of death among people aged between 15 and 29 years. Not cancer, not heart diseases, and not wars.

Life changing injuries and deaths affect countries in terms of health care and economic costs – the annual economic loss of road deaths in Central Asian countries is estimated at around 3-4% of GDP.

But beyond this monetary value, lies a person’s life. 

After the storm: Time to rebuild faster and stronger

Lilia Burunciuc's picture
Also available in: Русский
With every calamity comes an opportunity: to rebound and rebuild stronger than before. The economies of Central Asia faced such an opportunity following the major economic shock they experienced at the end of 2014. The collapse in commodity prices affected not only oil-producing countries – highlighting the narrow production base on which their prosperity rests – but also oil importers, whose growth depends largely on remittance-fueled demand.

All countries in the region experienced significant welfare losses. In 2015-16, the volume of imports declined 15% in both Tajikistan and Uzbekistan, and 25% in Kyrgyzstan – a clear sign that households and firms were constrained.

After the initial shock, however, the economies of Central Asia rebounded. This was thanks to supportive fiscal and monetary policies, namely fiscal expansion and relatively lose monetary policy. Growth has picked-up: for Central Asia, as a whole, it is now projected to reach 4.4% in 2017, against 2.8% the year before. Inflation has returned to manageable levels: in Kazakhstan, it has plummeted down from the double-digit rates seen after the fall in oil prices, confirming that the previous spike was merely a one-time adjustment.

But, have the countries of Central Asia done enough to shift the focus from structural constraints to durable prosperity? According to the recently released Economic Update for Europe and Central Asia, important challenges still lie ahead.

Assessing disaster risk in Europe and Central Asia – what did we learn?

Alanna Simpson's picture
Heavy rains on June 13-14, 2015 caused a 1 million cubic-meter landslide to flow down the Vere River valley and damage the capital city of Tbilisi, Georgia. (Photo via Wikimedia Commons)
Across the Europe and Central Asia region today, policymakers are confronted daily with a wide range of development challenges and decisions, but the potential impacts of adverse natural events and climate change – such as earthquakes or flooding – may not always be first and foremost in their thoughts.

Admittedly, the region does not face the same daunting disaster risks as some other parts of the world – especially in South Asia, East Asia and Latin America – but nevertheless, it is far from immune to the effects of natural hazards – as the past clearly reminds us.

Collaboration is key to food security in Central Asia

Polina Bogomolova's picture
Also available in: Русский


Central Asia is a fascinating region with a diverse natural environment and a rich food culture. A visitor to the region might be surprised, therefore, to discover that access to “sufficient, safe and nutritious food” on a daily basis can be challenging for many people.

A highly agrarian region, with over 40% of the population living in rural areas, Central Asia faces a number of food security challenges – shaped by both traditional and modern food practices. While undernourishment, mostly driven by traditional diet, remains a challenge in countries such as Tajikistan and the Kyrgyz Republic, obesity and over-weight attributed to recent welfare improvements and newly-opened access to a wide variety of non-traditional foodstuffs, have already become a concern in many countries of the region.
 

"Shaken, not stirred"

Joaquin Toro's picture
Also available in: Русский

Since October 29, 2015, Central Asia experienced fifteen earthquakes of moment magnitude 5.0 or greater, which on average amounts to an earthquake every 6 days.  Among these events are two notable ones that occurred on December 7th and 25th of 2015. The first earthquake was a 7.2 magnitude event in Murghob district of Tajikistan.

This was the largest earthquake in the country since the 1949 Khait earthquake and it brought widespread damage throughout the Gorno-Badakhshan Autonomous Region, Tajikistan's largest province located in the Pamir mountains. Losses consisted of 2 fatalities caused by landslides,  multiple injuries, complete or partial destruction of over 650 houses and 15 schools and kindergartens, damages to several health centers and a small hydroelectric power station, and loss of livestock. Estimates suggest that 4,000 people have been displaced and over 124,000 were affected by the earthquake, leaving many people homeless over the harsh winter period.

Why do we need to talk more about risk reduction in Central Asia

Joaquin Toro's picture
Also available in: Русский



Imagine yourself in the last century, walking down one of the streets of a large Central Asian city. You are surrounded by architecture dominated by the Soviet style, with common building types stretching across the blocks. As you walk the streets, suddenly, the ground under your feet starts wobbling and everything around you starts shaking. Buildings, trees, and cars start to shake and you cannot walk any more. Instantly, many structures start to collapse and there is dust and screams everywhere. There is chaos and desperation. An earthquake of magnitude 7+ has hit the city.  This story, a true story, has happened several times in each of the Central Asian countries in the last century.