THEALMATY–BISHKEK ECONOMIC CORRIDOR

The –Bishkek Economic Corridor (ABEC) is the pilot economic corridor Second under the Regional Economic Jun ABEC Border Cooperation (CAREC) program. The May Subcommittee Crossings: Meeting (Almaty, motivation for ABEC is that Almaty and Apr ) No. who crossed Workshop Bishkek can achieve far more together than Mar Kazakhstan (KAZ)– either can achieve alone. The two cities on Border Kyrgyz Republic Feb Crossing Point are only 240 kilometers apart with relatively modernization (KGZ) border: around high economic density concentrated in Jan 2018 30,000 per day First (Astana, services in the cities and agriculture in Dec (2016) ABEC Kazakhstan) their hinterlands. Both Kazakhstan and Nov Subcommittee the Kyrgyz Republic have acceded to Meeting Trade: Oct the and World (Bishkek, exports in Sep Kyrgyz) Joint Trade Organization. CAREC corridors Consultative $ millions Aug KAZKGZ: 503 and Belt and Road Initiative routes cross Subcommittee ABEC. The historic Silk Route, mountain Jul Meeting (Astana, KGZKAZ: 295 Kazakhstan) (2017, UN ranges, and lake -Kul underline the Jun KAZ–KGZ potential for tourism. But trade, especially Intergovernmental Comtrade) May in agricultural goods and services, between Council at Prime the two countries is below potential and the Apr Minister level agreed region does not yet benefit from being one Mar to form ABEC Agriculture Subcommittee 4th Joint economic space. Feb Working Group Exports in Jan 2017 (JWG4): Investment $ millions ABEC aims to shorten economic distance Dec Framework KAZKGZ: 38.1 cereals, between the two cities. This means finalized (Almaty, 0.1 vegetables, 2.6 dairy reducing travel times; creating one Nov Kazakhstan) KGZKAZ: competitive market for health, education, Oct 6.5 live animals, and tourism services; and aggregate Sep JWG3: 28.5 dairy (2017, Sector studies agricultural produce in wholesale markets Aug UN Comtrade) to exploit the sector’s export potential— reviewed, study Jul tour on urban planning following the slogan: act local and think and management, Jun global. For example, in agriculture, the partnership with Tourism: challenge is to create sufficient scale to May UNWTO (Madrid, international overcome distance and trade barriers. Apr Spain) arrivals Inadequate scale increases unit costs of JWG2: ICT Mar applications in KAZ: 21% from KGZ transportation, certification, branding, and Feb Economic Corridor KGZ: 56% from KAZ processing of agricultural goods. In the Development explored; (2016, UNWTO) health sector, for example, tertiary hospitals Jan 2016 IT sector, disaster risk and laboratories do not need to offer the Dec management identified (Bangalore, India) full range of services on both sides of the Nov Education: border for the small domestic markets, but No. of instead, services could be coordinated and Oct universities further specialized across ABEC. Sep JWG1: Almaty: 40 Aug Urban planning, Bishkek: 33 agriculture and food Health: In support to the implementation of ABEC, Jul (2016) No. of security, health and the Asian Development Bank approved a Jun education services, tertiary hospitals knowledge support technical assistance for tourism, and trade and May Almaty: 45 $1.75 million in 2017. Current initiatives are logistics infrastructure Bishkek: 28 the preparation of national master plans for Apr identified (Bangkok, ICT: (2016) modern wholesale markets in Kazakhstan Mar Thailand) internet and the Kyrgyz Republic, preparing the Feb penetration modernization of some border crossing ABCI KAZ: 75% Jan 2015 Memorandum procedures and infrastructure, identifying of Understanding KGZ: 35% Dec the skill gap in the tourism sector, and between Almaty and (2016, World conducting a prefeasibility study for Nov Bishkek signed Bank) regional medical reference laboratories in 2014 (Bishkek, Kyrgyz the corridor. Republic) What has been achieved so far Way Forward under ABEC? • ADB is processing an investment project to create modern Sector Analysis and policy dialog to develop an wholesale markets in ABEC. innovative concept. Under the guidance of a joint working • ADB is committed to support ABEC through its technical group, representing the governments of Kazakhstan assistance grant and through preparing investment and the Kyrgyz Republic, ADB has produced analytical projects and advising on related reforms to create regional reports identifying potential investments and reforms to i) increase the scale of the agribusiness sector through benefits. cross-border value chains; ii) coordinate and specialize • With ADB’s support for ABEC, both countries can reap the tertiary health and education services; iii) address common benefits of the Eurasian Economic Union and progress urban challenges; iv) jointly mitigate risks of disasters on regional cooperation and integration. This will require both countries are exposed to; v) improve the transport increased ownership of both countries and strong connections across the border; and vi) develop regional involvement of ADB. tourism products along the historic .

Increased government engagement and ownership. In 2016, both countries have agreed to oversee ABEC’s Economic Corridor Development implementation through the Intergovernmental Council, under CAREC 2030 Strategy which is chaired by the two Prime Ministers. The Council created the ABEC Subcommittee, a regular official meeting CAREC 2030 strategy has identified economic corridor development of the two national governments, regional governments, as one of its operational clusters, that will also support trade and and private sector representatives, which is co-chaired by tourism. Economic corridors can boost regional competitiveness, the Kazakh and Kyrgyz CAREC National Focal Points. through improved logistics infrastructure, lowered production costs of both goods and services, and enabling policies and investments Identification of investment priorities. On 25 September for agglomeration effects. Sustainable urbanization in the context of 2017, the first Subcommittee meeting in Bishkek decided to corridor development requires resilient infrastructure and connectivity, prioritize the following projects: ties to a globalizing economy, human capital, and openness to trade • Agriculture: Setting-up cross-border agricultural value- in services, including tourism and higher education. In addition, border chains through agricultural wholesale markets and crossing points should facilitate free movements of people and goods. collections centers, product certification, and traceability. CAREC 2030 can assist its members develop urban strategies from • Tourism: Almaty—Issyk-Kul road construction as PPP toll a regional corridor perspective through integrated linkages involving road and establishing regional tourist products infrastructure, and knowledge and technology that will enable the • Transport: Modernizing border-crossing points and production of both goods and services to move up the value chain. implementing direct bus service between the two cities CAREC can also facilitate exchanges of services between the cities and airports. A workshop was held on 21 May 2018. and surrounding regions, on education, training, health, agriculture, • Social Sectors: Establishing a regional reference logistics, tourism, city planning, and the environment. laboratory for communicable diseases and addressing Source: ADB. 2017. CAREC 2030 Connecting the Region for Shared and skill gaps related to agriculture and tourism. Sustainable Development. Manila.

THE ALMATY–BISHKEK ECONOMIC CORRIDOR

Balqash

Balkhash Lake

Karatal River Alakol Lake

Sarqan

Taldyqorghan

Chu River River Kapshagay Yining Reservoir

Shu Almaty

Taraz Bishkek Kulan Tokmok

Balykchy Karakol Shymkent Issyk-Kul lake 5,600 m MOUNTAINS 150 m

0 km 150 km 300 km

Source: http://www.diva-gis.org/