Experts from the Russian Analytical Credit Rating Agency (ACRA) say Central Asia’s countries face various challenges, including global warming and aging energy infrastructure.
“Some challenges, such as global warming, rising inequality, and demographic changes, align with global trends,” states the Agency’s report titled Between East and West.
Other challenges are specific to the region, including water crises, aging water and energy infrastructure, and the lack of access to global maritime trade routes.
Climate change
ACRA experts note that approximately one million people in the region are affected annually by floods and two million by earthquakes.
“GDP losses from these natural disasters are estimated at $9 billion annually. The frequency of disasters will increase with global warming. Rising temperatures will reduce water resources, cause droughts, increase the number of heatwave days, and shrink agricultural land,” they predict.
Achieving sustainable development goals and adopting "green" technologies could help address these challenges, the authors suggest.
Water and energy crisis
Water and energy issues remain a significant challenge for the region.
“The region’s geographical features make water one of the key issues. Increasing demand for water will be driven by population growth, rapid urbanization, and the needs of agriculture and industry. Water availability is limited by climate factors (glacier melting, rising temperatures) and inefficient use, partly due to aging water infrastructure requiring modernization,” the report states.
Other challenges
Developing transport infrastructure is another critical issue since all Central Asian countries lack access to global maritime routes.
“According to a UN report, landlocked developing countries lag 20% behind coastal developing countries in terms of development. Developing road and rail networks, reducing bureaucratic barriers, and building logistics hubs would promote trade both within the region and beyond,” the report emphasizes.
Additionally, the region experiences periodic border conflicts, mainly due to territorial disputes and enclaves. These conflicts typically have no immediate economic impact but could worsen economic marginalization, reduce investment attractiveness, undermine integration efforts, and weaken the region’s transit and trade potential in the event of escalation.
The region's proximity to Afghanistan also heightens tensions.
“The threat of terrorist attacks, refugee influx, rising crime, and the need to strengthen border security are just some of the challenges stemming from the regime change in Afghanistan in 2021,” the report notes.
Addressing these challenges, ACRA experts conclude, requires joint efforts from all regional countries, support from international organizations, and collaboration with major partner nations.
