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Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan and Uzbekistan have recorded impressive economic growth rates since 2000, driven mainly by the export of commodities and labour. However, the end of the commodity super-cycle and the economic slowdown that followed have highlighted the risks inherent in this reliance on minerals exports and remittances, as well as the challenges to be overcome to achieve more stable and inclusive growth.
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Central Asia has registered impressive economic growth since the turn of the millennium. The aggregate gross domestic product (GDP) of Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan, Turkmenistan and Uzbekistan grew at an average annual rate of 7% during 2000-16, despite a sharp slowdown following the drop in global commodity prices in 2014-15. Labour productivity growth averaged almost 5% and poverty rates halved.
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This chapter analyses the major drivers of economic growth in Central Asia since 2000, notably commodities exports and migrant remittances, and their effects, such as the dependence on a few commodities and on labour migration. It also offers an overview of the challenges ahead to further diversify the Central Asian economies, in particular those related to public governance, connectivity and the business environment. It then highlights the major business environment issues that are the focus of the next chapters.
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This chapter explores the demand- and supply-side issues relating to access to finance for firms in Central Asia, ranging from stringent collateral requirements to high interest rates and limited financial literacy. The OECD has helped several countries in the region to enhance access to finance for private businesses, including Mongolia, Kyrgyzstan and Tajikistan. The findings from this work suggest that Central Asian governments could enhance data collection on small and medium-sized enterprises (SMEs), further improve public financial instruments via greater involvement of the banking sector, and implement financial literacy strategies for SMEs.
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This chapter focuses on business internationalisation strategies for countries in Central Asia. The OECD has provided policy recommendations in Uzbekistan, Kyrgyzstan and Tajikistan, aiming to improve export and investment promotion policies and strengthen the internationalisation of SMEs. The OECD’s work suggests that Central Asian governments should formulate clear value propositions, improve export promotion and monitor the impact of policies, whilst ensuring a continuous public-private dialogue.
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This chapter provides an overview of skills challenges facing the private sector in Central Asia. Vocational education and training (VET) can play a crucial role in responding to the needs of the labour market and of the economy. Employers must be involved in VET policy making to ensure it provides the right mix of skills. The OECD has helped design VET instruments in Kazakhstan and Kyrgyzstan. These two case studies suggest a need to strengthen firms’ involvement in public-private dialogue on skills, and to support the implementation of key VET instruments for small and medium-sized enterprises.
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