How Central Asia to escape from trade isolation? Policy Targeted Scenarios by CGE Modeling

It has been 30 years since Central Asian '-stan' countries, namely, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan declared their independence in 1991. The Republics have chosen various transition paths from centrally planned to the market-based economic system. Today, it is time to assess their transition journey. The research found that the protectionist policy by Central Asian governors, on top of the land-locked geographical environment, made trade costly. Consequently, economic development slows down, unemployment increases, and poverty rate extremes. Eventually, the isolated region (relatively, excluding Kazakhstan) is imprisoned in a low-income trap and framed into a vicious circle. As a solution for tackling high-trade costs in the region, the research utilizes the GTAP CGE economic modeling to draw policy-targeted scenarios. The study summarizes that tariff reduction/elimination and trade facilitation policies flourish the region by bringing significant economic welfare, robust GDP growth, sizable job creation, and considerable poverty reduction. The trade facilitation scenarios impact the region's economy much more positively than do tariff liberalization scenarios.