WB: in 2020, agriculture can become a stabilizing factor for the economies of Central Asia


WB: in 2020, agriculture can become a stabilizing factor for the economies of Central Asia

06/03/2020

A decrease in demand for fruits and vegetables from Central Asia in Russia is expected, where the economic crisis affected the purchasing power of the population.

The COVID-19 pandemic did not significantly destabilize global food markets. However, its consequences pose a certain threat to food security, agriculture and agricultural exports in Central Asia.

This conclusion was shared by World Bank’s leading economist on agriculture issues Sergiy Zorya during an online briefing for regional media and the expert community, Avesta.Tj reports citing the WB office in Tashkent.

The crisis provoked by the coronavirus pandemic, in contrast to the global food crisis of 2008-2009, has not yet significantly affected international food markets. This is due to the presence of large world grain reserves, as well as stable prices for basic food products, due to the fact that a small number of countries have limited food exports (16 countries as of May 2020 against 33 in 2008).

In Central Asia, the above trends allowed mitigating the negative consequences for food security and agriculture, whose share in the GDP of each country varies: in Kazakhstan – 4.4%, Kyrgyzstan – 11.6%, Tajikistan – 19.2%, Turkmenistan – 20, 0% and Uzbekistan – 28.8%. In the medium term (up to 6 months), a decline in domestic food consumption is expected as a result of an economic recession, a decrease in remittances of labor migrants to their families and a devaluation of national currencies in the countries of the region. In addition, a decrease in demand for fruits and vegetables from Central Asia in Russia (its main sales market) is expected, where the economic crisis affected the purchasing power of the population. There will also be difficulties in repaying loans from local agricultural producers whose activities have suffered from the introduction of quarantine restrictions.

See also: Creation of the Ukraine-Asia trading house will help Ukraine restore export to Central Asia

In the context of the pandemic, the countries of Central Asia took urgent measures to strengthen food security and support the agri-food sector. In particular, the regional governments activated state food reserves and began to increase their reserves, established administrative control over food prices, reduced their cost due to export restrictions and lower tariffs on imported food products. At the same time, the authorities accelerated the removal of restrictions on the transportation of agricultural products and the movement of workers in the industry, and also granted a delay to farmers and agricultural enterprises for paying loans and other benefits that stimulate their activities.

“In 2020, agriculture can become one of the main stabilizing factors and a growth driver for the economies of Central Asia. Moreover, it is able to provide more jobs than any other industry, ”said Sergius Zorya.

The expert emphasized that after the pandemic, governments need to focus on restoring agricultural trade in Central Asia, improving regional cooperation in the field of sanitary and phytosanitary safety, managing state food reserves, and increasing investments in veterinary services and digitalization of the agri-food sector.

Over the past two months, the World Bank has provided emergency funding in the amount of more than $ 370 million to Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan to strengthen national health systems, support economies and provide social protection for vulnerable groups.

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