29 Nov 2021

The Covid-19 Pandemic and the Central Asian economies

Dr. Payám Foroughi
29 Nov 2021

The Covid-19 Pandemic and the Central Asian economies

Dr. Payám Foroughi

According to the World Health Organization (WHO), from the beginning of the coronavirus (COVID-19) pandemic in late 2019 up until early November 2021, there was a cumulative total of over 250 million “confirmed cases” worldwide, from which over 5 million people have died.[1] The real figures on COVID-19 infections and mortalities may be much higher, however.  Aside from the use of vaccines, personal protection equipment (such as masks and gloves), and compliance with social distancing and quarantine protocols, it appears that it is impossible to not be exposed to COVID-19 as “[t]he virus knows no walls, no borders and no seasons”.[2] In mid-April 2020, the International Monetary Fund (IMF) stated that the COVID-19 pandemic had induced a complexity of multiple impacts in many countries worldwide, including a “health crisis”, “financial crisis”, and “collapse in commodity prices”. Alluding to the global financial crisis of 2007-2009, the IMF referred to the potential effects of the pandemic on the globe as “the worst economic downturn since the Great Recession”). The 2020 “Great [COVID-19] Lockdown” hurt the global economy to the extent that it shrank by 3% in that year.[3]

One study, comparing 77 countries from around the globe, found that Central Asian republics topped the list of countries which, knowingly or unknowingly, grossly underreported their COVID-19 infection and mortality rates to the WHO.[4] In early spring 2020, the majority of the five post-Soviet republics in Central Asia took apparently decisive action to counter the spread of COVID-19. Kazakhstan, Uzbekistan, and Kyrgyzstan, to one degree or another, had established COVID-19 mitigation rules. “Borders were closed [to all non-essential travel], cities quarantined, public gatherings banned, and … substantial fines (… [even] criminal charges) [were put in place] for breaking the rules”.[5] The measures, however, had little impact in slowing the spread of the pandemic. In Kyrgyzstan, for example, lack of personal protection practices by the public and weak state enforcement of rules, coupled with lack of availability of vaccines in 2020, meant that the virus spread quickly to a large segment of the population.[6]

Of the five Central Asian states, Tajikistan and Turkmenistan were laggards in taking anti-COVID-19 measures. Authorities in both countries denied that the virus had penetrated their borders – Turkmenistan is still in denial, albeit now being also at the forefront of mass inoculation. Tajikistan initially blamed its “spate of mysterious deaths” – including that of the Head of the Department of Internal Affairs at the (capital city) Dushanbe Prosecutor’s Office – on “tuberculosis, pneumonia, and even swine flu”. Tajik authorities did not acknowledge the existence of COVID-19 infections in their territory till late April 2020, by which time the disease was “rampant” and the health sector “overwhelmed”.[7]

Part of the nonchalant nature of responses to the virus, one author argues, may be due to the idea that traditional Central Asian societies have a “fatalistic” attitude toward death.[8] Among other things, the vast majority of the population in the region has avoided the wearing of masks, while unknown numbers have also relied on unproven, even superstitious, cures for the disease. In Tajikistan, for example, some have relied on the supposed benefits of burning “esfand” (peganum harmala) seeds,[9] while in Kyrgyzstan, the president of the republic along with the health minister promoted a proposed remedy made up of aconite roots (aconitum soongaricum), which a prominent Kyrgyz medical doctor referred to as “the most poisonous” plant in the country and the proposed cure as belonging to “the Middle Ages”[10]; the WHO mission in Kyrgyzstan also “harshly criticized” the idea.[11] Turkmenistan, which all along has denied the existence of any COVID-19 infections on its territory, in turn saw its own solutions to the pandemic proposed, as when President Gurbanguly Berdymuhammedov advocated the consumption of licorice root as a possible cure.[12]

Below are brief reviews of the five Central Asian economies vis-à-vis the COVID-19 pandemic. The list is divided into the “hydrocarbon exporting economies” (Kazakhstan and Turkmenistan), and “remittance-dependent economies” (Kyrgyzstan, Tajikistan and Uzbekistan). Given Russia’s role as both a key trading partner to the region and host to millions of Central Asian migrants, a short discussion of its role is also undertaken. 

Hydrocarbon exporting economies

the hydrocarbon-exporting countries – aka “rentier states”[13] – of Central Asia (Kazakhstan and Turkmenistan), with their “overdependence” on natural gas and oil and “limited [economic] diversification”,[14] have experienced a “double blow” of COVID-19 and “oil price shock” due to the pandemic. The crisis came about during a “wider context of a structural decline in the [global] market for fossil fuels, [partially] driven by a commitment [by many end-users] toward decarbonization”.[15] The global market saw a massive price fall of crude oil in early March 2020 as the COVID-19 outbreak “dent[ed] demand” globally, resulting in a sudden 30% fall in prices – the “steepest drop in decades”.[16] At one point, in April of the same year, the price of U.S. oil even “turned negative”,  a development described by energy equity analyst Stewart Glickman as “off-the-charts wacky”.[17] In early November 2021, however, global demand for oil was reportedly “nearly back to pre-pandemic levels” of 100 million barrels/day, with the price of Brent grade crude rising by 60% over the year and hitting “a three-year high” by late October 2021 (at US$87/barrel). This was mainly due to the dual effects of global recovering demand and “supply restraint” by the Organization of the Petroleum Exporting Countries, OPEC+.[18]

Kazakhstan

With the highest per capita gross domestic product (GDP) among the Central Asian states – reported at US$27,500/person/year on a purchasing power parity (PPP) basis (2019 data)[19] – and central bank reserves of nearly $37 billion (August 2021),[20] Kazakhstan is the best placed Central Asian country in terms of capacity to tackle the economic crisis generated by the COVID-19 pandemic. In January 2020, the Kazakh authorities were the first in the region to test incoming travelers for fever. Though acknowledging the existence and spread of COVID-19, the authorities were also prone to, initially at least, grossly under-reporting the disease. One Kazakh journalist had written that the country had “a long history of manipulating statistics” and urged the government not to dismiss the large cases of illnesses and deaths as being due to “unknown deadly pneumonia”.[21]

In April 2021, the Kazakh government supplemented its annual budget with a US$3 billion “support package” for countering COVID-19 and aiding economic recovery. The increased mitigation measures led to a budget deficit for the year equivalent to 3.5% of GDP (compared to 2.8% in 2020), increasing the government debt equivalent to 25% of GDP. This debt was incurred while the country’s export of gas and oil continued to face a volatile global market, and overreliance on hydrocarbon export earnings will present Kazakhstan with increasing challenges vis-à-vis its avowed objectives of “emissions reduction and low-carbon transition” associated with a potentially green economy. Among other measures, the government set “price caps on … essential food products” and imposed “export quotas on grain” in 2021 to combat excessive inflation on essential products.[22]

COVID-19 or not, doubts have persisted regarding the overall success of Kazakhstan’s economic model. According to Simon Commander and Ruta Prieskienyte, although the Kazakh government has “actively projected market-friendly policies” with the aim of attracting “significant amounts” of foreign direct investment (FDI), the system has failed to “raise mean incomes”, to “radically limit … poverty”, and to adequately promote a “human capital-based growth model”.[23]

Turkmenistan

Turkmenistan has not officially acknowledged the existence of COVID-19 infections and related deaths on its territory and has refused to report most COVID-19-related statistics to the WHO. In March 2020, the authorities had gone so far as to ban the use of the term “coronavirus”, even by medical professionals.[24] This prompted The Financial Times to categorize the country as a member of the “Ostrich Alliance”,[25] while the New York-based Human Rights Watch accused the Turkmen government of “jeopardizing public health by denying an apparent outbreak of the coronavirus”. Still, the government also took some de facto anti-COVID-19 measures. It advised the public, albeit with loose enforcement, to wear masks and abide by social distancing rules to protect themselves against a “pneumonia infection”. It also set out a strict months-long ban on all non-essential international travel in 2020, and also required forced two-week quarantines of individuals with suspicious infections.

By mid-2021, Turkmenistan had made a near-180-degree turnaround in its COVID-19 stance. It is now one of the few countries on Earth to issue a mandate requiring everyone aged 18 and above—save individuals with “medical contraindications to inoculations”—to be vaccinated against COVID-19.[26] Despite continued denials of the existence of COVID-19 cases, Turkmenistan is nonetheless “acting ‘as if’ it has COVID-19 cases”.[27] As of early November 2021, Turkmenistan, as reported to the WHO, had vaccinated 74% of its population with at least one dose. If this statistic were to be relied upon, it would make the country the highest vaccinated in Central Asia and the entire post-Soviet region, and one of the highest vaccinated countries in the world (the highest, at 99%, being the UAE). Among the Caucasus and Central Asian countries, Armenia (20%) and Kyrgyzstan (16%) have reported the lowest reported rates of vaccination.[28]

When it comes to firm economic statistics, Turkmenistan remains a metaphorical black hole in the region, given the dearth of “reliable data of adequate quality”. The World Bank has even temporarily halted the publishing of “economic output, income, or growth data” for the country.[29] What is roughly known is that Turkmenistan has the sixth largest natural gas reserves in the world, and that the sale and export of its natural gas and petroleum account for around 14.5% (2019 data) and 9.6% (2018 data) of its GDP respectively.[30] While as much as 80% of Turkmen natural gas is piped and sold to China, according to the Economist Intelligence Unit (EIU), overall export earnings saw a drastic fall of 42% from an estimated US$10.4 billion in 2019 to $6.2 billion in 2020. However, a combination of rising hydrocarbon prices and increased volumes of exports were expected to lead to a strong rebound of export earnings in 2021 with projected revenues of $11.7 billion. Given the negative effects of the COVID-19 pandemic, the Turkmen economy is estimated to have registered a 0.8% contraction in 2020, while also being expected to register a rebound GDP growth of 2.6% in 2021 and 3.0% in 2022.[31]

Despite their massive oil and gas reserves and revenues acquired over decades, the hydrocarbon exporting states of Turkmenistan and Azerbaijan remain deficient in a number of social sectors, including health and nutrition. Turkmenistan, for example, according to the latest available (2018) UN data, has the highest infant mortality rate – at 36 deaths per 1,000 live births – among the post-communist states of Eastern Europe and the post-Soviet space, while Azerbaijan has the third highest rate at 18 deaths per 1,000 live births.[32] Overall, Turkmenistan’s informal post-Soviet social and economic contract, within which “in exchange for living under an overwhelmingly authoritarian system, the state would provide the citizens with free utilities (natural gas, water and electricity) and generously subsidize other key products”, was seriously undermined by 2019 due to revenue shortages brought about by falling hydrocarbon prices.

Remittance-dependent economies

States wherein “large percentages of their population move to other countries for higher paid work than they would get at home, and then the money earned is sent back home” are known to be remittance-dependent.[33] If the economic migration of Central Asian nationals to Russia were to be categorized as “services” or “foreign trade” – as the late author Carlos Fuentes does in his novel The Crystal Frontier with regards to Mexican migrants to the USA[34] – labor, and not aluminum, gold, cotton, or even natural gas, would be categorized as their primary export.

All of the non-hydrocarbon-exporting economies of Central Asia and the Caucasus stand out as being highly remittance-dependent. For example, in 2013, according to World Bank statistics, Tajikistan registered as the most remittance-dependent economy in the world, as measured by the ratio of total remittances over the country’s annual GDP – a figure of 44% for Tajikistan in that year.[35] The economies of high remittance-dependent countries rely on the economic performance of the countries hosting their citizens as seasonal or permanent migrant workers. Aside from the hydrocarbon-exporting countries of Azerbaijan, Kazakhstan and Turkmenistan, all other countries in Central Asia and the Caucasus are remittance-dependent. Ironically, the now deceased Uzbek President Islam Karimov ridiculed his countrymen in 2013 for their willingness to work as migrant workers in Russia and accused them of being “lazy” for not finding work in Uzbekistan. That year, an estimated 2.7 million Uzbekistani citizens were engaged in various, often backbreaking, occupations primarily in Russia (but also in Kazakhstan) and sent home around US$6.5 billion in remittances to their families[36] – a figure equivalent to 9.3% of Uzbekistan’s GDP in that year.[37]

One study looking at the effects of the COVID-19 pandemic on the wellbeing of households in Tajikistan reported that “the unfavorable effects of the … pandemic were severe”, but “only temporary” and that “households with migrants were more resilient against the pandemic” compared to others. The study claimed that “migration and remittances” served as “a form of insurance” for households with at least one family member working abroad.[38] Under COVID-19 conditions in 2020, the country with the most remittance-dependent economy in the region was Kyrgyzstan, wherein personal remittances sent by Kyrgyzstani migrants working in Russia totaled US$2.4 billion, equivalent to 31.3% of Kyrgyzstan’s GDP. Other remittance-dependent economies in the broader Central Asia-Caucasus region, based on 2020 remittances as a percentage value of their GDP were: Tajikistan ($2.2 billion, equivalent to 26.7% of GDP), Georgia ($2.1 billion, 13.3% of GDP), Uzbekistan ($7 billion, 12.1% of GDP) and Armenia ($1.3 billion, 10.5% of GDP).[39]

Kyrgyzstan

Kyrgyzstan’s economy is highly dependent on gold production, amounting to nearly 10% of its GDP and 40% of all exports[40] along with remittances and foreign aid. The state of emergency imposed for months in 2020 in response to the pandemic led to job losses, reduced remittances, and lower export earnings. Among other sectors badly hurt was the increasingly promising tourism industry, which is thought to have lost as much as 90% of its revenues during the first half of 2020.[41] The continued effects of the COVID-19 pandemic, coupled with political turmoil following the October 2020 parliamentary elections that led to the fall of the government of President Sooronbay Jeenbekov and his replacement by Sadyr Japarov, along with border clashes with neighboring Tajikistan, all contributed additional uncertainties affecting both the politics and economy of the country.

The IMF estimated Kyrgyzstan’s real GDP to have contracted by 8.6% in 2020, making it the worst-performing economy in the greater Eastern Europe and post-Soviet space. The World Bank forecast a rebound of GDP growth of 2.3% in 2021, as a result of higher demand for commodities and export earnings. And while the EIU projected GDP growth of 4.3% for 2022, it also warned that “a weak business environment, widespread corruption and a large informal economy” were expected to impede FDI and negatively affect economic development.[42] According to the World Bank, in addition to inflationary pressures in the first half of 2021, Kyrgyzstan’s trade deficit rose to 41% of GDP (up from 18% the year before), due to a 9% decline in exports, in particular gold, and a strong pull on imports (by 41% year-on-year).[43] The IMF noted that the total “public debt” (combination of domestic and foreign debt) increased by nearly 17% of GDP in 2020, reaching a high of 68%, given a large fiscal deficit for the year (3.3% of GDP in 2020 versus 0.1% in 2019), a shrinking GDP and a weakening exchange rate. [44] In early March 2020, a sharp drop in the exchange rate of the Kyrgyz som against the U.S. dollar had occurred, while the National Bank of the Kyrgyz Republic attempted a “monetary intervention” by selling US$54 million in the local exchange market as a means of forestalling “panic buying” of the dollar. The som depreciated against the dollar by 19% throughout the remainder of 2020, finally stabilizing at S85:US$1.[45]

The “combined health and economic shocks” of 2020 increased the poverty rate among Kyrgyzstanis and impeded access to welfare due to lower incomes, higher food prices, and unemployment. The World Bank estimated the poverty rate to have risen to 14.3% in 2020 from 9.7% in 2019 (based on the threshold of US$3.2 a day, at PPP basis).[46] According to a mid-2020 survey by the World Food Programme, 93% of respondents told of their concerns about high food prices and a reduced consumption of nutritious foods.[47] Also, as reported by the World Bank, the chances of improvement in the poverty rate in 2022 remain slim due to “households continu[ing] to face price increases, health issues, and [negative impacts of the] pandemic”, in addition to expectations that the planned rises in social sector spending “remain insufficient” in support of “poor and vulnerable” households.[48]

According to the World Bank, Kyrgyzstan’s economy, after Tonga and Lebanon, is the third most remittance-dependent – based on value of remittances as a percentage of GDP – in the world. What was surprising during 2020 was that despite an initial sharp fall in remittances due to restrictions imposed by host countries and border closures and restrictions leading to reduced travel by “new and seasonal migrants”, there was a gradual and full recovery of the labor market accompanied by wage rises in the third and fourth quarters of the year; this was particularly in the construction and agriculture sectors in Russia. In the meantime, remittance receiving households in Kyrgyzstan engaged in money saving schemes, such as stopping home improvements and other costly projects utilizing received funds.[49]

Tajikistan

Although the Tajik authorities finally acknowledged the existence of COVID-19 in the country by late April 2020, including reporting mortality rates (albeit undercounted) to the WHO, they began denying the occurrence of any additional deaths as the year drew to a close. In June, a Ministry of Health Care and Social Protection spokesperson blamed what were likely COVID-19 cases and associated deaths on common non-COVID-19 cold, flu and tuberculosis. This apparent “policy of denialism” seemed to signify an attempt to avoid contradicting President Emomali Rahmon’s statement of 26 January 2021 that Tajikistan was “coronavirus free”.[50] In an ironic and tragic twist in July, the virus reportedly took the lives of President Rahmon’s 64-year-old sister and 88-year-old mother-in-law.[51]

The pandemic had a number of negative effects on Tajikistan’s economy, including a major reduction in trade, travel restrictions in and out of the country, and a significant drop in remittances from the estimated 1.5 million Tajikistanis mostly in Russia along with a shrinkage of government revenues. Remittances sent by Tajik migrants in 2019 had reached US$2.6 billion, amounting to “triple the value of all other Tajik exports that year combined”. The temporary effect of the pandemic on migrant workers was unemployment, many of them stranded in Russia under difficult conditions and unable to travel back to Tajikistan. According to the Russian Central Bank, remittances sent back to Tajikistan shrank by 35% to $1.7 billion in 2020.[52]

The economic shock associated with the COVID-19 pandemic, as reported by the IMF, “opened a large and urgent balance of payments financing gap” of $384 million for Tajikistan for the year, while the budget deficit reached an equivalent of 3.3% of the GDP. Although Tajik authorities had reported a real GDP growth of 4.5% in 2020, the World Bank estimated 2% growth, while the Eurasian Development Bank (EDB) in turn estimated an actual 2.8% contraction in the GDP. In all likelihood, the EDB figure is closest to reality, as all other economies (except that of Uzbekistan) among the Eastern European and post-Soviet states recorded economic contractions for 2020 due to the COVID-19 pandemic. For its part, the EIU has described Tajikistan’s official economic data as “limited”, “unreliable” and doubtful in “accuracy”.[53]

Critics claim that regardless of the unreliable figures for GDP growth in Tajikistan, wealth creation and distribution in the country remain heavily skewed, with some 90% of the wealth held by about 5% of the population. Furthermore, analysis of GDP estimates fails to take into consideration that much of the revenue from the sale and export of the country’s main commodities of aluminum, cotton and gold never reach Tajikistan, and instead are deposited in opaque overseas bank accounts owned or controlled by the ruling elite. By May 2020, the IMF warned of the “severe human and economic impact” the pandemic had had on Tajikistan and subsequently approving a loan of US$189 million for “meet[ing] urgent balance of payments and fiscal needs”.[54] One study estimated that 80% of the remittances sent to Tajikistan are spent on food, shelter, and clothing.[55] According to the World Bank, by early 2020, a reported 41% of Tajik households (up from 24% in 2019) had reduced their food intake due to the economic impacts of the pandemic, while 20% of respondents in the country told of their inability to afford health services.[56]

Despite a depressed economy and COVID-19-related problems, Tajikistan has a number of economic opportunities. These include securing closer ties and higher trade volumes with neighboring Uzbekistan, joining the Russia-led Eurasian Economic Union (EAEU), promoting its nascent eco-tourism industry, and seeking financiers to complete the Roghun hydroelectric dam mega project, the completion of which (expected by 2029) could potentially generate large amounts of revenues through the export of electricity to regional neighbors. Nevertheless, a number of serious “entrenched challenges” also remain, including a large national debt (in 2020, equivalent to 51% of GDP),[57] bank failures, corruption, climate change and environmental fragility, ongoing instability in neighboring Afghanistan, and continued uncertainties due to COVID-19.[58] Tajikistan’s economy, therefore, though having made a significant recovery in 2021, remains vulnerable and largely dependent on remittances and the international prices of the country’s main commodities.

Uzbekistan

According to the World Bank estimates for 2020, more than 2 million Uzbek citizens working abroad (about 85% of whom were in Russia as guest workers, permanent residents or dual citizens; and 10% employed in Kazakhstan) sent back about US$7 billion worth of remittances (equivalent to some 12% of GDP) to their home country; a figure that was 18% lower than that in 2019. Like many other countries, Uzbekistan reported its first case of COVID-19 in mid-March 2020, after which the government imposed strict restrictions on movement and on economic and social activity. According to The Economist, in the first half of 2020, the number of households in Uzbekistan from which at least one person was working dropped by 40%. To mitigate the consequences of the pandemic, the Uzbek Government relaxed its fiscal policy to support an economic recovery, with a temporary increase in the fiscal deficit being permitted to accommodate urgent expenditures on health care, poverty reduction and assistance to businesses.

The government also established an anti-crisis fund of US$1.1 billion. As a result, the state budget recorded a relatively large deficit, equivalent to 4.4% of GDP in 2020. The government, in turn, borrowed $375million from the IMF, with the bulk of these funds being spend on health care, such as for vaccines, quarantine costs, and medical employee salaries; social benefits for a higher number of poor households; assistance to affected businesses via interest subsidies; infrastructure projects; a one-off reduction of the social contributions owed by individual entrepreneurs; and deadline extensions on property, land and income taxes. A similar route for expenditures was expected in 2021.[59] The EIU estimated that Uzbekistan’s foreign reserves, as of end 2021, would, at $37.5 billion, be equivalent to 20 months of revenues from imports.[60]

Despite this, strong economic growth was projected for Uzbekistan, at 6.2% in 2021 and 5.6% in 2022 regardless of “uncertainties about the continued impact of further COVID-19 waves on global and domestic economic conditions”. The current account deficit is projected to be 5.9% of GDP in 2021, as capital imports for investment projects recover and gold exports fall from record levels in 2020. FDI was expected to remain subdued in 2021 and projected to only partially recover in 2022. Government expenditures on COVID-19 mitigation efforts were “partially offset by higher tax, mining, and privatization revenues”, resulting in a fiscal deficit of 5.5% GDP in 2021, with the deficit to be financed by borrowing, resulting in a public debt equivalent to nearly 41% of GDP by end 2021.[61]

The Russia connection

There is an old saying that “when the U.S. sneezes, Mexico catches cold”. This implies an overwhelming reliance of the smaller Mexican economy on the wellbeing of the far larger U.S. economy.[62] The status of remittance-dependent economies of Central Asia and Caucasus, in turn, are dependent on the health of the Russian economy. Central Asia is often dependent on “the mercy and political goodwill of Russia”, while also being “exposed to external shocks [that affect] Russia’s [own] economy”.[63] Furthermore, the long-term dependence of Central Asian household economies and the macro-economy on remittances sent from Russia lessens incentives for governments to formulate programs for developing their own domestic economies.

According to the World Bank, Russia’s economic recovery was “set to exceed expectations” in 2021. It was expected that rising oil, gas and other commodity prices would boost Russia’s GDP for the year to 4.3% after a contraction of 2.7% in 2020, though forecasts for 2022-23 are less bullish.[64] In October 2020, Russia recorded an unemployment rate of 6.3%, the highest in eight years. Many of the jobs lost were in manufacturing, construction, retail and hospitality. A rise in poverty rate was also noticed, though this was more palpable in smaller towns and cities compared to major metropolitan centers. As of December 2019, there were 1.6 million migrant workers in Moscow alone, the majority of whom were from Central Asia and the Caucasus and working in construction and services, the sectors of economy most hurt by COVID-19. The work permit fees paid to the state by such workers constitute a substantial proportion of city and municipality budget revenues.[65]

Conclusions

The COVID-19 pandemic may have had far reaching and unexpected consequences for Central Asia. Among the side effects of the quarantine and associated economic hardship, there was, for example, a surge of incidences of gender-based domestic violence and misogyny.[66] On the political front, poverty, income disparity, and the governments’ initial mismanagement of the COVID-19 crisis likely aided the rise to power of President Japarov – a leader whom many observers consider to be a populist – in Kyrgyzstan in October 2020.[67] On the positive side, what the pandemic also revealed was “an enormous surge of comradery and volunteerism”, including “a dozen privately supported ‘pop-up’ hospitals” in gyms, hotels, and restaurants, along with other charitable efforts funded by domestic donations and by funds sent by the Kyrgyzstani diaspora.[68] Similar initiatives were observed in other countries of the region.

By mid-2021, the IMF projected global economic growth for 2021 of 6.0%, and 4.9% for 2022. At the same time, however, the IMF described “vaccine access” as the “principal fault line” that divides the world into countries that “can look forward to further normalization of activity” (largely advanced economies) and those that “will still face resurgent infections and rising COVID death tolls” (primarily the less developed economies). The danger to the global economy remains a “[s]lower-than-anticipated vaccine rollout” that could allow COVID-19 to further “mutate”. There is also the risk of far higher than expected inflationary pressures, leading to excessive tightening of money supply. This could translate into a “double hit to emerging market and developing economies”, including Central Asia, “further widening the fault lines in the global recovery”.[69]

According to leading infectious disease expert Michael Osterholm, as of late 2021, even in countries with relatively high vaccination rates, it is “clear that there’s a lot of human wood out there for this coronavirus forest fire to burn”.[70] What many experts agree upon is that nearly all people on the planet “will be either infected or vaccinated before the pandemic ends”.[71] Low vaccination rates in much of Central Asia and its neighboring regions, particularly in remittance-dependent countries, is disconcerting, as without high coverage, COVID-19 will continue to threaten lives and economic recoveries.

References: 

[1] WHO, “WHO Coronavirus (COVID19) dashboard”, updated 24 September 2021. bit.ly/3ERKRJB

[2] The Washington Post, “Opinion: As long as the pandemic rages around the world, it’s a threat to everyone”, 16 July 2021. wapo.st/3hLW4lD

[3] IMF, “The Great Lockdown: Worst economic downturn since the Great Depression”, IMF Blog, 14 April 2020. bit.ly/3Es0XZs

[4] To investigate the underreporting and undercounting of COVID-19-related mortality, Karlinsky and Kobak compared the government-reported COVID-19 mortality counts to the WHO for 77 countries versus the average death rates of the same countries during 2015-19 (while taking into account exceptional causes of mortality, such as war). They determined, among other things, that Kyrgyzstan had likely underreported its COVID-19 deaths by a factor of 4.9, Kazakhstan by 5.3, Uzbekistan 13 and Tajikistan by 100(Ariel Karlinsky and Dmitry Kobak, “Tracing excess mortality across countries during the COVID-19 pandemic with the World Mortality Dataset”, eLife, 30 June 2021. elifesciences.org/articles/69336).

[5] Sophie Ibbotson, “COVID-19: Approaches, outlooks, and power dynamics in Central Asia”,Asian Affairs, 2020, p. 2.

[6] ADB and UNDP, “COVID-19 in the Kyrgyz Republic: Socioeconomic and vulnerability impact assessment and policy response”, 13 August 2020. bit.ly/39oNbcO

[7] Sophie Ibbotson, “COVID-19: Approaches, outlooks, and power dynamics in Central Asia”,Asian Affairs, 2020, p. 2.

[8] Andrea Schmitz, “Someone else’s virus”, Stiftung Wiessanshaft und Politik, 27 March 2020. bit.ly/3u9UoqN

[9] Ibid.

[10] Reuters, “Kyrgyz health minister promotes herbal COVID19 cure; expert says it’s poisonous”, 16 April 2021. reut.rs/3AJyPzx

[11] Radio Free Europe (RFE), “Facebook removes Kyrgyz president’s post promoting toxic root to fight COVID”, 19 April 2021. bit.ly/3zBuOvX

[12] RFE, “Turkmen president suggests that licorice might hold the answer to curing COVID-19”, 31 December 2020. bit.ly/3ENAEy9

[13] A “rentier state” is one which “derives a substantial part of its revenue from foreign sources and under the form of rent”, i.e. “income derived from selling goods and services at prices well above their production costs” (Hazem Belbawi and Giacomo Luciani, eds., The Rentier State, London: Croom Helm, 1987, p. 11).

[14] World Bank, “Competition and firm recovery post-COVID-19—Europe and Central Asia economic update”, Fall 2021, p. 107. bit.ly/3mj5mrC

[15] OECD, “The impact of the Coronavirus (COVID19) and the global oil price shock on the fiscal position of oil-exporting developing countries”, 30 September 2020. bit.ly/3u1t79V

[16] The New York Times, “When an oil price war meets Coronavirus fears, markets get punched in the face”, 9 March 2020. nyti.ms/3ke3a3d

[17] Negative prices meant that “oil producers [were] paying buyers to take the commodity off their hands over fears that storage capacity could run out [later in the year]”. Given the COVID-19-induced oil glut and corresponding lowered global demand, oil companies “resorted to renting tankers to store the surplus supply”, thus “forc[ing] the price of US oil into negative territory” (Andrew Walker, “U.S. oil prices turn negative as demand dries up”, BBC, 21 April 2021. bbc.in/3qnHi9k).

[18] Scott Disavino, “Oil rises on higher demand forecasts, tight supplies”, Reuters, 9 November 2021. reut.rs/3kHa7tZ

[19] The 2019 per capita GDP of other countries in region are: Russia US$28,000, Turkmenistan $15,000, Uzbekistan $7,350, Kyrgyzstan $5,200, and Tajikistan $3,650(World Bank, “Data: GDP per capita, (current international $)”, accessed 15 November 2021.bit.ly/3cvsnlz).

[20] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 107.

[21] Sophie Ibbotson, “COVID-19: Approaches, outlooks, and power dynamics in Central Asia”,Asian Affairs, 2020, p. 4.

[22] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 107.

[23] Simon Commander and Ruta Prieskienyte, “The political economy of Kazakhstan: A case of good economics, bad politics?”, IZA DP No. 14554, IZA Institute of Labor Economies, 43 pp. ftp.iza.org/dp14554.pdf

[24] Pál Dunay, Payám Foroughi, and Galina Kolodzinskaia, “The COVID-19 Pandemic in Eastern Europe, Russia and Central Asia”, in Eastern Europe, Russia and Central Asia 2021, D. Heaney, ed. (pp. 3-10), 2020, London: Routledge. bit.ly/3uackl3

[25] Quoted in Ibbotson, “COVID-19: Approaches, outlooks, and power dynamics …”,op. cit., p. 3.

[26] Reuters, “Turkmenistan makes COVID-19 vaccination mandatory”, 7 July 2021. reut.rs/3cbTSQS

[27] Luca Anceschi, quoted in Vijay Shankar Balakrishnan, “COVID-19 response in Central Asia”, The Lancet Microbe 1 (7), 2020.

[28] At the same time, as of early-November 2021, the percentage of populations of Russia, Central Asia and Caucasus countries vaccinated against COVID-19 with at least one shot (from highest to lowest rates of vaccination) were: Turkmenistan at 74%, Azerbaijan 50%, Kazakhstan 46%, Uzbekistan 45%, Russia 41%, Georgia and Tajikistan 29%, Armenia 20%, and Kyrgyzstan 16% (Josh Holder, “Tracing coronavirus vaccinations around the world”, The New York Times, 12 November 2021. nyti.ms/3ia4aEj).

[29] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 22.

[30] World Bank, “Data: Natural gas rents (% of GDP)” and “Oil rents (% of GDP)”, accessed 15 November 2021. data.worldbank.org/indicator

[31] EIU, “Turkmenistan: Country Report, 2nd quarter 2021”, 29 pp., forecast closing date: 12 April 2021.

[32] The remaining high infant mortality rates among the countries of Eastern Europe and post-Soviet world also belong to states of Central Asia and Caucasus: Tajikistan (30 deaths per 1,000 live births), Kyrgyzstan and Uzbekistan (16 deaths), Armenia (11), Kazakhstan and Georgia (9) (World Bank, “Data: Morality rate, infant (per 1,000 live births)”, accessed 3 November 2021. bit.ly/3qQnNGy).

[33] Evan Burns, “The fate of remittance dependent economies in a global pandemic”, Global Policy, 8 March 2021. bit.ly/3my6bNe

[34] Carlos Fuentes, The Crystal Frontier, San Diego: Harvest Book/Harcourt Brace, 1997.

[35] During 2013, a total amount of US$3.7 billion worth of “personal remittances” was sent to Tajikistan by its population employed as migrant workers (primarily in Russia where nearly 90% of an estimated 1.5 million Tajik migrants work)—a figure equivalent to a ratio of 44% relative to Tajikistan’s GDP for the year (World Bank, “Data: Personal remittances, received (current US$)”, accessed 30 October 2021. bit.ly/3kH7Ezy).

[36] Payám Foroughi and Galina Kolodzinskaia, “Uzbekistan: Economy,” in Eastern Europe, Russia and Central Asia 2021, Dominic Heaney (ed.), 2020, London: Routledge, p. 568.bit.ly/3q6FIbQ

[37] World Bank, “Data: Personal remittances, received (% of GDP) – Uzbekistan”, accessed 22 November 2021. bit.ly/3kUQdf6

[38] Satoshi Shimisutani and Eiji Yamada, “Resilience against the pandemic: The impact of COVID-19 on migration and household welfare in Tajikistan”, Plos One, 20 September 2021. bit.ly/3CPl1EJ

[39] World Bank, “Data: Personal remittances, received (current US$)” and “Data: Personal remittances, received (% of GDP)”, accessed 30 October 2021.bit.ly/3ow6c4d and bit.ly/2YQqhJy

[40] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 111.

[41] ADB and UNDP, “COVID-19 in the Kyrgyz Republic: Socioeconomic and vulnerability impact assessment and policy response”, 13 August 2020. bit.ly/39oNbcO

[42] Quoted in Payám Foroughi and Aida Aidarova, “Kyrgyzstan: Economy”, in Eastern Europe, Russia and Central Asia 2022, Dominic Heaney, ed., London: Routledge, p. 252.

[43] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 111.

[44] IMF, “Kyrgyz Republic: 2021 Article IV Consultation-Press Release; and Staff Report”, 2 August 2021.

bit.ly/30MUQAu

[45] Julian Bruley and Iliias Mamadiiarov, “Kyrgyzstan: Socioeconomic consequences of the COVID-19 crisis”, Central Asia Program, George Washington University, 10 November 2020. bit.ly/3mUzbyM

[46] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 111.

[47] ADB and UNDP, “COVID-19 in the Kyrgyz Republic: Socioeconomic and vulnerability impact assessment and policy response”, 13 August 2020. bit.ly/39oNbcO

[48] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 107.

[49] Catherine E. De Vries et al. “COVID and reverse remittances: When families sent money to support relatives abroad.” LSE Business Review Blog, 3 June 2021. bit.ly/3BsbyBK

[50] Payám Foroughi “Tajikistan: History and Economy”, in Eastern Europe, Russia and Central Asia 2022, Dominic Heaney, ed., London: Routledge (draft).

[51] Robin Dixon, “After the president’s sister died of covid, her sons beat up the country’s top health official”, The Washington Post, 27 July 2021. wapo.st/3kEboSu

[52] Kamila Ibragimova, “Tajik labor migration to Russia hits historic high, officially”, Eurasianet, 2 November 2021. bit.ly/3q7ksCV

[53] Quoted in Foroughi “Tajikistan: History and Economy”, op. cit.

[54] Ibid.

[55] Savannah Algu, “Remittances to Tajikistan and COVID-19”, The Borgen Project, 19 August 2021. bit.ly/3ACOHUI

[56] Rachel Schilke, “Tajikistan’s response to COVID-19”, The Borgen Project, 15 July 2021. bit.ly/3nZsPzj

[57] IMF, “Tajikistan: Staff concluding statement of the 2021 Article IV mission”, 5 November 2021. bit.ly/3cDdq0F

[58] Foroughi, “Tajikistan: History and Economy”, op. cit.

[59] Payám Foroughi, “Uzbekistan: History and Economy”, in Eastern Europe, Russia and Central Asia 2022, Dominic Heaney, ed., London: Routledge, pp. 542-559.

[60] EIU, “Uzbekistan: Country Report”, generated on 15 June 2021, 48 pp.

[61] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 134.

[62] Elizabeth Malkin, “When the U.S. sneezes, Mexico catches cold”, The New York Times, 30 December 2008.

nyti.ms/3wgZlil

[63] Algu, “Remittances to Tajikistan and COVID-19”, … op. cit.

[64] World Bank, “Competition and firm recovery post-COVID-19 …”, op. cit., p. 124.

[65] Coulter Layden, “Impact of COVID-19 on poverty in Russia”, The Borgen Project, 18 August 2021. bit.ly/3krWZsh

[66] Julian Bruley and Iliias Mamadiiarov, “Kyrgyzstan: Socioeconomic consequences of the COVID-19 crisis”, Central Asia Program, George Washington University, 10 November 2020. bit.ly/3mUzbyM

[67] Payám Foroughi, Aida Aidarova, and Galina Kolodzinskaia, “Kyrgyzstan: History”, in Eastern Europe, Russia and Central Asia 2022, Dominic Heaney, ed., London: Routledge, pp. 241-251.

[68] World Bank, “One year later in the Kyrgyz Republic’s battle against COVID-19”, 17 March 2021. bit.ly/3zBs2Xx

[69] IMF, “World Economic Outlook update: Fault lines widen in the global recovery”, July 2021, p. 9. bit.ly/30QjmkD

[70] Quoted in Justine Coleman, “Pandemic frustrations zero in on unvaccinated Americans”, The Hill, 16 September 2021. bit.ly/3Gxn6az

[71] Michelle Fay Cortez, “Here’s what the next six months of the pandemic will bring”, Bloomberg, 13 September 2021. bloom.bg/3ibaPOD

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