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ASSESSING THE POTENTIAL OF TRADE ALONG THE PROPOSED SHYMKENT–TASHKENT–KHUJAND ECONOMIC CORRIDOR DECEMBER 2020 FORJANUARY ENDORSEMENT 2021 ASSESSING THE POTENTIAL OF TRADE ALONG THE PROPOSED SHYMKENT–TASHKENT–KHUJAND ECONOMIC CORRIDOR JANUARY 2021 Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) © 2021 Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines Tel +63 2 8632 4444; Fax +63 2 8636 2444 www.adb.org Some rights reserved. Published in 2021. ISBN 978-92-9262-625-9 (print); 978-92-9262-626-6 (electronic); 978-92-9262-627-3 (ebook) Publication Stock No. TCS200413-2 DOI: http://dx.doi.org/10.22617/TCS200413-2 The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB in preference to others of a similar nature that are not mentioned. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) https://creativecommons.org/licenses/by/3.0/igo/. By using the content of this publication, you agree to be bound by the terms of this license. For attribution, translations, adaptations, and permissions, please read the provisions and terms of use at https://www.adb.org/terms-use#openaccess. This CC license does not apply to non-ADB copyright materials in this publication. If the material is attributed to another source, please contact the copyright owner or publisher of that source for permission to reproduce it. ADB cannot be held liable for any claims that arise as a result of your use of the material. Please contact [email protected] if you have questions or comments with respect to content, or if you wish to obtain copyright permission for your intended use that does not fall within these terms, or for permission to use the ADB logo. Corrigenda to ADB publications may be found at http://www.adb.org/publications/corrigenda. Note: In this publication, “$” refers to United States dollar, “SUM” refers to sum, and “T” refers to tenge. Cover design by Principe Nicdao. On the cover: Features representing main sectors and areas (transport connectivity, agriculture value chain, sanitary and phytosanitary measures, tourism) for the Shymkent-Tashkent-Khujand Economic Corridor development (photos from the ADB Photo Library). Printed on recycled paper Contents Tables and Figures ...........................................................................................................................iv Abbreviations ...................................................................................................................................v Acknowledgments...........................................................................................................................vi 1. Introduction ............................................................................................................................. 1 2. Current Situation and Trends in Trade ................................................................................. 2 2.1. Kazakhstan ............................................................................................................................................. 2 2.1.1. Trade in Goods ........................................................................................................................ 2 2.1.2. Trade in Services ..................................................................................................................... 2 2.2. Tajikistan................................................................................................................................................. 5 2.2.1. Trade in Goods ........................................................................................................................ 5 2.2.2. Trade in Services ..................................................................................................................... 7 2.3 Uzbekistan ............................................................................................................................................. 8 2.3.1. Trade in Goods ........................................................................................................................ 8 2.3.2. Trade in Services ...................................................................................................................10 2.4. Trade between Kazakhstan, Tajikistan, and Uzbekistan .............................................................11 2.5. Trade within the Shymkent–Tashkent–Khujand Economic Corridor Region ..........................12 2.6. Informal Trade in the Countries of the Region ..............................................................................17 2.7. Transit Trade along the the Shymkent–Tashkent–Khujand Economic Corridor .....................18 2.8. Trade Outcome Indicators ................................................................................................................18 3. Trade Regime in Kazakhstan, Tajikistan, and Uzbekistan ...............................................22 4. Barriers for Trade in the Shymkent–Tashkent–Khujand Economic Corridor Region ..25 5. Potential for Trade in the Shymkent–Tashkent–Khujand Economic Corridor .............30 6. Conclusions and Policy Recommendations .......................................................................33 Appendix: Methodological Notes ...............................................................................................34 References ......................................................................................................................................40 Tables and Figures Tables 1 Intra-Shymkent–Tashkent–Khujand Economic Corridor Trade. .14 2 Trade Costs ..............................................................................25 3 Shymkent–Tashkent–Khujand Economic Corridor—Selected Corridor Performance Measurement and Monitoring Indicators .................................................27 4 Kazakhstan, Tajikistan, and Uzbekistan—Merchandise Trade. 31 5 Intra-the Shymkent–Tashkent–Khujand Economic Corridor Merchandise Trade ..........32 A1 Estimation of the Value of Merchandise Trade Transiting via the Shymkent–Tashkent– Khujand Economic Corridor Region, 2018 ................................................35 A2 Trade Complementarity Index and Trade Intensity Index Values, 2018 ....................37 A3 Selected Revealed Comparative Advantage Index Values for Kazakhstan and Uzbekistan, 2018. .37 Figures 1 Kazakhstan—Merchandise Trade .............................................................3 2 Kazakhstan—Trade in Services ................................................................4 3 Tajikistan—Merchandise Trade ...............................................................6 4 Tajikistan—Trade in Services ..................................................................7 5 Uzbekistan—Merchandise Trade .............................................................9 6 Uzbekistan—Trade in Services ...............................................................10 7 Kazakhstan, Tajikistan, and Uzbekistan—Total Merchandise Trade ..........................11 8 Kazakhstan, Tajikistan, and Uzbekistan—Structure of Trade, 2018 ..........................12 9 Shymkent–Tashkent–Khujand Economic Corridor Cities and Oblasts—Volume of Trade ....13 10 Shymkent–Tashkent–Khujand Economic Corridor Cities and Oblasts—Direction of Trade ..14 11 Shymkent–Tashkent–Khujand Economic Corridor Cities and Oblasts—Composition of Exports ....................................................................................15 12 Shymkent–Tashkent–Khujand Economic Corridor—Product Structure of Trade, 2018 ......16 13 Shymkent–Tashkent–Khujand Economic Corridor—Evidence Suggesting Existence of Informal Trade ............................................................................17 14 Kazakhstan, Tajikistan, and Uzbekistan—Product Space .....................................20 15 Corridor Performance Measurement and Monitoring Indicators .............................27 Abbreviations ADB Asian Development Bank BCP border crossing point CAREC Central Asia Regional Economic Cooperation CIS Commonwealth of Independent States CPMM Corridor Performance Measurement and Monitoring CWRC Regional Cooperation and Operations Coordination Division of the Central and West Asia Department EAEU Eurasian Economic Union EU European Union FTA free trade area GDP gross domestic product MFN most favored nation TCI trade complementarity index RCAI revealed comparative advantage index STKEC Shymkent–Tashkent–Khujand Economic Corridor UN United Nations US United States WB World Bank WTO World Trade Organization Acknowledgments his study was undertaken on behalf of the Central Asia Regional Economic Cooperation (CAREC) Secretariat of the Asian Development Bank (ADB) under the ADB technical assistance (TA) 9630: TAssessing Economic Corridor Development Potential among Kazakhstan,
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