Daily Times

Coronavirus catastrophe has posed a global fatal challenge. National and international governance is subject to acid test. Besides direct impact on health, the fallout has social, economic and political consequences. Central Asian Republics comprising Kazakhstan, Turkmenistan, Tajikistan, Kirghizstan and Uzbekistan are also confronting COVID-19 menace with the available state capacity. Let us have a country-wise insight on how these states are handling the pandemic along with its economic impact.

Kazakhstan: In the early March, Kazakh President Tokayevcancelled Woman Day celebration and Nauroz festivities in the interest of public health. Even the Victory Day parade is also cancelled. The government of Kazakhstan took COVID-19 threat very seriously and adopted sound measures including closure of non-essential business, limiting travel, distant education, remote work and enforcement of effective quarantines. Income loss financial relief of KZT 42500 is being disbursed to the deserving citizens.

In April, coronavirus spread to every region of Kazakhstan with high number of cases in Almaty and Nur Sultan. The situation was further aggravated with the oil crisis caused by global demand collapse and the nasty price war between Russia and Saudi Arabian. It brought around 20% devaluation of Tenge. As the virus is spreading more to the rural areas, the wide contrast in the healthcare facilities between the urban and rural communities is proving a real challenge to detect and care the patients. So far, 1546 confirmed cases of coronavirus have been reported with 17 deaths.

Asian Development Bank predicts that the Kazakh economy, which was growing rapidly before the outbreak of the pandemic from 4.1% in 2018 to 4.5% in 2019, would fall in 2020 due to curtailed oil export earnings and COVID-19.

Uzbekistan: After being at lower international ranking on corruption, governance and human rights under the regime of Islam Karimove, Uzbekistan is fortunate to have President Shavkat Mirziyoyev during the COVID-19 crisis. On detecting first case in mid-March, the government took prompt action and enforced emergency. Currently, there are 1405 confirmed cases of coronavirus. Country borders and schools are closed. Strict restrictions are imposed on movements within the cities. However, for ensuring intra-region transit of aid and supplies, freight traffic has been allowed to continue. Updates on the virus are conveyed to the citizens publically. Heavy lockdown rules are in place, employees are mostly working remotely while emergency services and grocery outlets are operational. In order to sustain the prices of goods and services, the currency market has been subjected to tight state control. Main sectors of Uzbekistan affected by the pandemic are tourism, transport, trade, restaurants and educational institutions. An Anti-Crisis Fund of 10 trillion Som (USD 1.05 billion) has been established to assist the distressed entrepreneurs, companies and the job losing citizens. Interest and tax relief measures have been introduced. Exporting farmers are also likely to be liberated from notorious cotton slavery prevailing in Uzbekistan.

However, ADB forecasts a decline in Uzbekistan’s economic growth to 4.7% in year 2020 owing to negative effects of coronavirus and the lower foreign exchange earnings from natural gas and copper.

Kyrgyzstan: On the spread of COVID-19, the scheduled closure of Kyrgyz-Chinese shared border, during Chinese New Year in late January, had to be prolonged. Bishkek started screening the arrivals at its borders quite early and the citizens repatriated from China were quarantined. Other reasonable measures taken up by the Kyrgyz authorities included lockdowns, non-essential business closures and curfews by the mid of March. The pandemic was seriously viewed and public updates on the virus aremade. Till date, 489 confirmed cases have been detected.

Asian Development Bank predicts that the Kazakh economy, which was growing rapidly before the outbreak of the pandemic from 4.1% in 2018 to 4.5% in 2019, would fall in 2020 due to curtailed oil export earnings and COVID-19.

Not being a wealthy sate, COVID-19 threat means a lot to the Kyrgyzstan. It is miserable to the daily wagers and their dependent families. Closure of borders results in loss of job in Russia and adjoining countries.Sharp drop in tourism has taken place. Besides general emergency in the country, a critical emergency in certain areas has been enforced.Central bank has deferred the loan repayments. SMEs are backbone of the Kyrgyz economy, since 250 million citizens are employed there. Many business concerns are closed resulting in decreasing tax collections and production. Though the cargo traffic has not been stopped completely, international trade has suffered badly. Loss of custom and tax payments for 2020 has been estimated to be 28 billion Som (USD 329.8 million).The government has resorted to the international donors and negotiations are going on with World Bank, ADB, EBRD and UN. IMF has already announced USD 120.9 million to Kyrgyzstan.

Despite this, the experts of Asian Development Bank estimate that Kyrgyz economy would grow at 4% in the current year. But the economic growth would come down, if the pandemic level worsens.

Tajikistan: Surprisingly, the government of Tajikistan has not taken into cognizance the pandemic hazard, as officially no coronavirus case has been confirmed. No government order was made to close non-essential businesses. Crowds gathered in late March to celebrate Nauroz.The country has already low level of private investment due to weaker business climate. However, the borders are closed and air traffic stands suspended. Website of Tajik Health Ministry cites some 7000 locals and foreignersarriving Tajikistan being quarantined by the government out of which 4000 have been released. COVID-19 diagnostic kit has also been reported not to be found in the country.

ADB observes that loss of jobs for Tajiks working in Russia means low remittances that would diminish economic growth from 5.5% in 2020 to 5% in 2021.

Turkmenistan: President Gurbanguly Berdimuhamedov thinks there is an invisible foe that cannot be cured. The country has not acknowledged the presence of any cases of coronavirus, though all borders are closed and all flights are cancelled. Markets and offices are fumigated but eateries are open, mass events continue and none wears mask. Citizens are forbidden to talk about ‘Corona’. So, unlike the world, life is normal.

The only profitable business is gas and Ashgabat primarily depend on one customer i.e. China. Consequent upon the decreased goods manufacturing in China because of slowed down global demand, China would require lesser gas from Turkmenistan. ADB projects deceleration in economic growth of Turkmenistan, from 6% in 2020 to 5.8% in 2021

In nutshell, varying degree of response measures by individual Central Asian states to the outbreak of global COVID-19 would determine precaution and prudence only because the global economic giants are already knocked down. Report of Asian Development Bank reflects that the economic development of Central Asian countries would sharply decline as no human prediction is possible about the span of the epidemic. But it is clear that oil price decline, reduced production, halt of tourism and shrinking home remittances would certainly affect the relevant economies.

The writer is Country Manager of a Pakistani bank in Kazakhstan, with interest in Central Asian studies. He can be reached out at rafeeq_kz @yahoo.com.