LONDON (TCA) — Increasing discrepancies between a growing avalanche of economic forecasts by more and more institutional lenders and sideliners for the wider Central Asian region have revived the debate on criteria used in macroeconomic assessments. Sharing a border with the world’s most dangerous troublemaker Afghanistan can hardly be considered a comfortable thought. Yet, Tajikistan, Uzbekistan and Turkmenistan (Kyrgyzstan has no direct frontier with Afghanistan but its southernmost areas are only a short distance away from it) have shown economic performance over the last couple of years that even among so-called emerging economies looks exemplary.
Even though Kazakhstan (see Kazakhstan: forecast and realities in economic development) is the region’s largest economy in sheer size and its only oil and grain exporter of significance, it ranks low in terms of economic growth (4.2 per cent on-year in the first half of 2017) as compared with its peers to the south, all of whom are net oil and grain importers. This is all the more remarkable for the fact that the other four Central Asian post-Soviet republics have no natural resources to speak of available for export and have to dwell on other economic activity instead.
Picking the fruits
According to data provided recently by the Moscow-based Interstate Statistics Committee of the Commonwealth of Independent States which unites all former Soviet republics except the three Baltic states and Georgia, Uzbekistan tops the ranks with 7.8 per cent GDP increase year-on-year over the first half of this year, followed by Kyrgyzstan with 6.4 per cent and Tajikistan with 6 per cent. Though data on Turkmenistan only concern the first quarter (6.2 per cent on-year), it can safely be assumed that the results over the first six months are in the same order. In terms of industrial output valuation, Kyrgyzstan tops the list with a spectacular-looking 31.6 per cent on-year, followed by Tajikistan with 21.3, and Uzbekistan with 6 per cent, while for Turkmenistan no data are given.
The figures strongly contradict the doom and gloom trumpeted by many an international institutional lender and those singing along their tune in chorus. Among the former is, next to the International Monetary Fund and the World Bank, the Asian Development Bank, while the numerous sideliners include an online outlet called Focus Economics which largely bases its assessments on those forwarded by the institutional lenders.
Concerning Uzbekistan, Central Asia’s most populated country and its second-largest economy, both observers remain a bit closer to the trends that can be read in the figures over the first half of this year. “Growth is projected at 7.0% in 2017 and 7.3% in 2018, with some improvement in the current account. Currency depreciation and government spending are forecast to raise inflation to 9.5% in 2017 and 10.0% in 2018,” the ADB opines. “Economic reforms should strengthen the economy and its ability to create jobs, putting it on a more sustainable growth trajectory. Focus Economics panelists foresee GDP growing 6.4% in 2017, which is unchanged from last month’s forecast. In 2018, the panel sees the economy expanding 6.5%,” Focus Economics adds.
Further east, the crystal ball gazers see even thicker clouds packing. “Tajikistan's growth is forecast to moderate to 4.8% in 2017 and expected to recover to 5.5% in 2018,” in the ADB’s words. “Strong public investment enabled growth to reach 6.9% despite weak remittances, low private investment, and other shortfalls. Troubled banks and continued weak remittances are projected to moderate growth to 4.8% in 2017 despite better performance in the Russian Federation and other regional partners, followed by recovery to 5.5% in 2018.”
Finally, Turkmenistan gets under the eyeglass. “Growth is projected to return to 6.5% in 2017 and accelerate to 7.0% in 2018, with some rise in inflation and a narrower current account deficit as prices for hydrocarbons improve,” the ADB forecasts. “Vast public support should drive growth this year, but the country’s outlook is closely tied to oil price movements. Analysts expect GDP to expand 6.1% in 2017, which is unchanged from last month’s forecast. In 2018, the panel sees growth accelerating to 6.2%,” Focus Economics tunes in.
The “economic reform” repeatedly hammered on by supranational lenders and their acolytes go all but unanimously back to the old Smithonian “Wealth of Nations” assumption: when the rich get richer, the poor get less poor. To steer that mechanism and protect societies from excessive abuses, an “invisible hand” was supposed to be at work. Few tend to admit these days that as long as it remains invisible, there is plenty of reasons to question so-called experts’ tendentious observations given their discrepancies with realities on the ground.
The picture of Central Asia’s economic development is among the perfect examples showing that only a breakthrough can cause a change in fundamentals. The example of China demonstrates that no “revolutions” are needed for that – except for velvet revolutions aiming at changing structures rather than face galleries. This is what the likes of the ADB and the IMF and their western sponsors seem to fear most: a removal of domestic and transnational debt burdens and other liabilities. As long as that does not happen, rich may get a bit richer in Central Asia, but for the poor little is due to change.