COVID-19: NEW CHALLENGES FOR CENTRAL ASIA

Abstract

In 2020, Central Asian countries faced new challenges that are bound to have a huge impact on the development of the region. The coronavirus (COVID-19) epidemic has posed the region’s countries with the need to find mechanisms for adapting the economy and social sphere to the new reality. Despite the difficulties, regional states were able to respond quickly enough to the pandemic and tried to minimize the economic and social consequences. Application of quarantine measures and various restrictions, i.e., border closures and the termination of transport links have yielded positive results. These measures have reduced the incidence of sickness and mortality in all countries. At the same time, they encountered a decline in key macroeconomic indicators. Inflation rate, tumbling GDP and rising unemployment were observed in all Central Asian states. The pandemic has negatively impacted bilateral and multilateral relations of the Central Asian countries. The level of trade and economic relations was lowered, the volume of transported goods decreased. The countries of Central Asia were forced to structure their foreign policy in a new way, which factors in the complicated economic situation in each of the states. Specifically, one of the new trends is the active use of multilateral and bilateral mechanisms of interaction with nonregional states. Despite the steps taken, the countries of the region managed to stabilize the economic situation for a short time. By the fall of 2020, the epidemiological situation remained problematic in the countries of Central Asia. This forced them to develop new measures to support specific sectors of the economy and preserve social and economic stability. The countries did not rule out the introduction of new restrictions and the development of additional economic support measures for the essential sectors of the economy. The slowdown in economic growth in 2020 and the lack of prerequisites for the improvement of the situation do not allow us to expect changes in the region in 2021. The Central Asian states may face a further drop in production volumes, increased unemployment, decreased domestic demand, and inflation. Economic problems in each of the Central Asian countries will negatively affect the geopolitical situation and serve as an obstacle for multilateral interaction of the Central Asian states. Finally, there is still no clear understanding of the impact of the coronavirus on the economies of Central Asia. There are also no calculations that would show how effective the measures taken in the fight against COVID-19 were, and most importantly, it is unclear what resources may be required if the epidemic continues.