Full Report - Subregional Office for East and North-East Asia - escap

ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2013
regard. For example, the Central Asia-China gas
pipeline, the first pipeline to bring natural gas from
the subregion to China, was jointly developed by
Kazakhstan, Turkmenistan and Uzbekistan together
with China. The proposed trans-Afghanistan pipeline,
which will connect Turkmenistan with India though
Afghanistan and Pakistan, is another example of a
project to be implemented in coming years. Further
cooperation among the economies of the subregion
could lead to the creation of transnational transport
infrastructure, and the elimination of barriers and
obstacles to the movement of goods and services
could further accelerate development of these
countries (Farra, 2012).
Food security is another challenge, as some
economies in the subregion face relatively high
levels of poverty and are vulnerable to swings in
food prices due to high shares of food items in
household expenditure. Poor weather in late 2012
in areas producing wheat and maize became the
main cause of reduced harvests and consequent
food price spikes all over the subregion. To counter
these threats, Governments need to strengthen social
safety nets to ensure household food security; lower
domestic food prices through short-run trade policy
measures or administrative action; and enhance
longer-term food supply.
Sustained economic growth has brought about
a reduction in unemployment in the subregion,
although there are some marked differences in the
performance of labour markets across countries.
The unemployment rate reached historical lows
in the Russian Federation, as job growth was
accompanied by a shrinking population in the
economically active age groups. The economy of
Kazakhstan continued to generate employment at
a pace just in line with the growth of the labour
force. For low-income countries, unemployment rates
are high but migration and remittances remained
a channel to alleviate labour market tensions and
support domestic demand.
Labour migration is another key concern of policymakers
in the subregion (see box 2.2). The generalized
economic slowdown could force many sectors
employing migrant workers to a standstill, and
potentially risk a rise in anti-immigrant sentiment.
Policymakers in the subregion should be aware
that migrant workers not only support their home
countries through remittances but also play a key
role in providing the labour needed in host countries,
especially those countries with labour shortages, such
as Kazakhstan and the Russian Federation. In the
medium to long term, it is essential to strengthen
social safety nets for migrant workers, generate
employment opportunities at home and formulate
regionally coordinated migration policies and laws.
The recent accession of the Russian Federation
to the World Trade Organization (WTO) will have
little immediate impact on the subregion, as most
of the tariff cuts effectively will not come into
force in the near term although they may generate
additional positive growth impulses in the long term. 4
Box 2.2. Recognizing economic contributions of migrant workers to host countries
Several economies in North and Central Asia are highly reliant on remittance inflows of workers from other economies in
the subregion, such as Kazakhstan and the Russian Federation. The economic and social contributions of migrant workers are
typically well recognized in source countries. Remittances are found to be countercyclical and play an important role in sustaining
domestic demand in source countries. Remittances are also an important source of foreign exchange, vitally needed for essential
imports and for development activities. At the household level, remittances contribute to poverty reduction and human capital
formation as well as to safety nets. In Tajikistan, workers’ remittances account for nearly a half of GDP, the highest proportion
of remittances to GDP in the world. In other countries in the subregion, the value of such contributions is similar: remittances
account for 29% of Kyrgyzstan’s GDP; and about 10% each of GDP of Armenia and Georgia (see figure A).
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