Bishkek Conference discusses Central Asia and Caucasus

By Anthony Williams
@ebrdtony

A high-level conference hosted by the International Monetary Fund (IMF), the Swiss State Secretariat for Economic Affairs (SECO), the European Bank for Reconstruction and Development (EBRD), and the National Bank of the Kyrgyz Republic (NBKR) in Bishkek during May 19-20, assessed the experience and lessons of the transition of the past two decades and the key challenges and priorities going forward. The conference focused on what has been achieved, what remains outstanding, and the macroeconomic and structural reform policies needed to foster high, sustainable, diversified and inclusive growth in the region.

Speakers and participants noted the significant achievements of the past 20 years, including high growth, a sharp reduction of inflation, and building of essential institutions for policy development and management. However, they noted that significant challenges remain, including heavy reliance on natural resources and remittances, volatile inflation, high dollarization, substantial social and infrastructure needs, and still-weak transparency and accountability. CCA countries should address these challenges and aim to become dynamic and diversified emerging market economies over the next decade. Reforms should target a breakthrough in the business environment—overcoming vested interests—and much greater regional and global integration.

The conference brought together senior officials of CCA governments and central banks, including the Kyrgyz Republic, staff and senior management of the sponsoring agencies, and representatives from Estonia, the Eurasian Economic Community, the EU, Japan, Moldova, the Netherlands, Poland, Turkey, Ukraine, the UN, the US, and the World Bank. Speakers included IMF Deputy Managing Director Min Zhu, NBKR Governor Zina Asankojoeva, and Professor Gérard Roland of the University of California. John Odling-Smee and Johannes Linn, former IMF and World Bank directors for the CCA region, also addressed the group. The conference closed with a ceremony marking the 20th anniversary of the introduction of the Kyrgyz som. NBKR Governor Asankojeova stated that “the Kyrgyz authorities are very pleased to have hosted so many regional partners and colleagues. We have had excellent discussions on ways to further strengthen our policy frameworks and institutions to deliver strong growth, inflation, and social outcomes going forward.”

IMF DMD Min Zhu said, “The IMF has been pleased to support the transition of the past two decades. Going forward, we urge the CCA countries to build on their achievements, particularly in the macroeconomic area, and to be bold in creating the conditions for sustained, diversified, private-sector led growth.”

Swiss State Secretary for Economic Affairs, Marie-Gabrielle Ineichen-Fleisch, told the conference that "Accompanying the transition journey of our CCA partner countries is a priority for Switzerland. The IMF and the EBRD are important partners for the Swiss State Secretariat for Economic Affairs in providing technical assistance. This TA is geared towards enhancing macroeconomic and financial stability, strengthening economic institutions and addressing structural challenges that are conducive for private sector development and economic diversification."

EBRD Chief Economist Erik Berglöf noted that, CCA countries have enjoyed high growth, backed by commodity exports, stronger fiscal and monetary frameworks and early-stage transition reforms aimed at creating space for the private sector. To sustain the growth momentum, it will be important to further strengthen market-supporting institutions across all sectors – in the corporate sector, infrastructure, energy and finance and making further advances in the area of competition policy and its consistent implementation. These actions, together with improved cross-border infrastructure and greater regional economic cooperation and linkages, will help promote and diversify exports. This should make growth more inclusive and broad-based, benefiting populations at large.”