Tashkent, Uzbekistan (UzDaily.com) -- A virtual conference “Interaction between Central and South Asia: why it is important in the region and beyond”, organized by the Embassy of the Republic of Uzbekistan in Belgium in cooperation with the media portal "EURACTIV", was held today.

The event was dedicated to the upcoming international conference “Central and South Asia: Regional Connectivity. Challenges and Opportunities”, which will be held on the initiative of the President of Uzbekistan Shavkat Mirziyoyev on 15-16 July in Tashkent.

The purpose of the event was to bring to the European political-diplomatic, expert-analytical, business circles and the media the initiative promoted by Uzbekistan on the development of cooperation and strengthening interaction between Central and South Asia.

The event was attended by the director of the Center for Economic Research and Reforms (CERR) O. Khakimov, who presented the results of the CERR analysis to assess the unrealized potential of mutual trade between the countries of Central and South Asia.

In his speech, the director of CERR dwelled on the possibilities of realizing the untapped trade potential between the countries of the two regions.

At the end of 2020, the total trade between Central Asian countries and South Asian countries amounted to US$4.4 billion. or 3.2% of their total foreign trade turnover (US$142.6 billion).

The largest shares in the trade between Central Asian countries and South Asian countries are occupied by Kazakhstan (52.8%), Uzbekistan (31.2%) and Turkmenistan (10.4%).

According to the report of the international consulting campaign BCG "Investing in Central Asia: one region, many opportunities" ("Investments in Central Asia: one region, many opportunities") from 2018, the potential of Central Asia to attract foreign direct investment over the next 10 years is estimated in the amount of up to US$170 billion, including US$40-70 billion in non-resource industries.

At the same time, a comparative analysis of the structure of exports of CA countries and the structure of imports of South Asian countries showed that, in terms of coinciding commodity items, imports of South Asian countries amount to almost US$560 billion.

“Of course, this does not mean that the countries of Central Asia can replace the specified volume of imports of the countries of South Asia, but it shows the presence of a large untapped potential in mutual trade,” the CERR director noted.

He gave the example of South Asian countries, which imported chemical fertilizers for US$8.6 billion in 2019, including India for US$7.2 billion, Bangladesh for US$749.2 million, Pakistan for US$606, US$0 million

At the same time, the CA countries exported chemical fertilizers to the foreign market for US$384.3 million, of which only US$32.3 million = were exported to the countries of South Asia. In particular, Uzbekistan in 2019 exported mineral fertilizers for US$135.9 million, of which only US$24.9 million to the countries of South Asia, mainly to Afghanistan for US$24.1 million, to India by US$0.4 million and Sri Lanka by US$0.3 million.

CERR analysis showed that there is also an unrealized potential for increasing the export of food products by CA countries, in particular wheat, fruits, vegetables, mainly legumes, and nuts.

“All Central Asian countries are interested in expanding economic cooperation with South Asian countries, especially with Afghanistan, India and Pakistan,” Obid Khakimov said.

According to calculations, the largest export volumes of CA countries fall on Afghanistan, due to its geographical proximity, as well as the presence of transport infrastructure, created in recent years with the participation of Uzbekistan and international financial organizations.

He also said that Uzbekistan plans to bring the annual volume of mutual trade with Afghanistan to US$2 billion by 2023, as well as conclude a "Preferential Trade Agreement" with it.

In turn, the European side noted that the experience of the European Union in interconnection and building communications may be of particular interest for the countries of Central and South Asia. The experts identified 5 main stages, in particular, globalization, the way out of self-isolation, development requires trade, stability and cooperation.

Speaking about the prospects for cooperation between the countries of Central and South Asia, the CERR director listed the main directions, among them: laying of new transport corridors providing access of the Central Asian countries to the southern seaports, cooperation in the energy sector (export of electricity, natural gas, oil products), encouraging mutual investments as well as the expansion and diversification of foreign trade.

At the same time, he noted that Central and South Asia are connected on the border with Afghanistan, which plays the role of a kind of bridge between the two regions.

In this regard, Obid Khakimov stressed that "the stabilization of the situation in Afghanistan will expand the possibilities for building up trade, economic and investment ties, strengthening transport and communication interaction between the countries of Central and South Asia."