Sanjay Gupta: Can Science and God Coexist?
Faith and science may often seem at odds with one another, but renowned geneticist and former NIH director, Dr. Francis Collins, says that he sees…
Thought Leader: Sanjay Gupta
Experts share insights into navigating challenges facing Central Asia and the world
Rising economic fragmentation
Economic fragmentation, driven by geopolitical tensions and shifting alliances, is another critical challenge facing the world and Central Asia.
Krishna Kumar, Executive Vice President of Research at the National Opinion Research Center (NORC) at the University of Chicago, spoke about the growing inflation and its impact on countries’ fiscal policy worldwide.
Before that, he said the world witnessed a new economic order, nothing like it had seen before.
“The share of China in the global economy reached 18 percent in 2021,” said Kumar, noting that this is a sign of a new economic power: China.
According to the World Bank, China’s $18 trillion economy accounts for under 18 percent of global GDP.
“Today, China capitalizes more on internal resources, focusing on robotics, artificial intelligence, and computer technologies. This is happening within China itself, driven by geopolitical considerations like competition between China and the United States,” he said.
In fact, according to the latest report released by the Asian Development Bank on December 13, higher-than-expected growth in China and India drove the economic forecast for developing economies in Asia and the Pacific up to 4.9 percent this year, compared to the previous estimate of 4.7 percent in September. The outlook for the next year remains unchanged at 4.8 percent.
In the case of China, the economy is expected to expand by 5.2 percent this year, up from the earlier forecast of 4.9 percent. This adjustment is attributed to the positive impact of household consumption and public investment, which bolstered growth in the third quarter.
Emerging economies, however, continue to write their own rules. Notably, such economies are doing a better job of combatting inflation than developed economies. “Poland, Hungary, and the Czech Republic observe a reduction in inflation,” he added.
Kumar also noted the growth of globalization has been overestimated. During the economic slowdown, economies, especially developed ones, tend to import less, but most importantly, use protectionist measures.
Opportunity for Kazakhstan
Evan Feigenbaum, Vice President for Studies at the Carnegie Endowment for International Peace, said such a grim outlook of rising fragmentation and geopolitical turbulence could be an opportunity for Kazakhstan, particularly taking into account its ambitious economic development plans.
“There is a transition in the world from a world that many people thought was about economic opportunity and economic integration toward a world that increasingly is about security, fragmentation, and conflict among countries. Number one, that has big implications for Kazakhstan, which has big ambitions for economic development,” said the expert.
For Kazakhstan, an opportunity lies in attracting companies leaving Russia to base their operations and offices in Kazakhstan.
“Second example, there’s a lot of turbulence between the United States and China. And that meant that China is looking to improve its relationships with countries worldwide, including in Central Asia. But for China, countries like Kazakhstan have mainly been transit countries; there is a lot of talk about high-speed rail and infrastructure projects. But for Kazakhstan’s own development, it’s important to extract more of the value added and have China leave investment in Kazakhstan that creates more jobs and opportunities for people in Kazakhstan,” he said.
According to the Kazakh Ministry of National Economy, since 2005, the gross inflow of Chinese investments into Kazakhstan has amounted to $23.2 billion, placing China in the fourth position in the list of major investors in the country’s economy after the Netherlands, the United States, and Switzerland.
“Kazakhstan will have difficult choices to make because if, for example, you buy a Western technology or a Chinese technology, those countries export their indigenous standards, and your economy will run off that standard. Navigating that turbulence is going to be very difficult as well. But I think my central message is out of the turbulence, if you get your economic and investment choices right, there can be considerable opportunities notwithstanding the risks,” said Feigenbaum.
Future of Central Asia
Johannes Linn, Nonresident Senior Fellow in the Center for Sustainable Development at the Brookings Institution, said the central message is that regional cooperation among Central Asian countries is critical.
“What happened over those 20 years is a significant expansion of land-based routes between Europe and China and Central Asia benefitting greatly from this interconnectedness,” said Linn.
He also expects Afghanistan to start integrating closer with Central Asia.
According to Ashok Sajjanhar, President of the Institute of Global Studies and Former Ambassador of India to Kazakhstan, Central Asia has been “under the radar” in the past 30 years since countries gained independence. Recent developments increased that attention.
“I think the most important change that has brought the profile of Central Asia into much greater focus has been the Russia-Ukraine conflict,” he said.
“Simultaneously, we have seen sanctions imposed on import of gas and oil from Russia. That increased the importance of fossil fuels in Kazakhstan, Uzbekistan, and Turkmenistan. There has been much greater conversation about how these fossil fuels and energy can be transported to Europe from Central Asia that stopped receiving energy resources from Russia,” said Sajjanhar.
The situation in Afghanistan remains a focal point of concern, impacting both Central Asia and the broader international community, and raises concerns about the resurgence of extremism and the potential for regional instability.
Climate change
Climate change has emerged as a global crisis, and Central Asia is not immune to its effects. The region is experiencing rising temperatures, changing precipitation patterns, and increased frequency of extreme weather events.
According to Rae Kwon Chung, Nobel Peace Prize winner in 2007 and member of the Intergovernmental Panel on Climate Change (IPCC), Central Asia is particularly vulnerable to the impacts of climate change, with water scarcity being a significant concern.
“Central Asia is now expected to suffer the most severe climate disaster because the expected temperature rise will be quite high in Central Asia, Middle East and North Africa. These are the regions where the impact of climate change will be the hardest, including Kazakhstan. Kazakhstan also faces a very serious risk of the danger of climate change. It is something Kazakhstan has to be prepared and ready for and should also make a contribution to reduce the impact of climate change,” said the expert.
The melting glaciers in the high mountains directly threaten the region’s water supply, affecting agriculture, energy production, and overall economic stability.
According to the 2022 report prepared by the Kazakh government, the Global Environmental Facility, and the United Nations Development Programme (UNDP), temperatures continue rising in Kazakhstan. A comparison of long-term average ambient temperature values for two consecutive periods of 1961-1990 and 1991-2020 indicates that the country’s average annual temperature has increased by 0.9 degrees Celsius.
Heat waves are becoming increasingly frequent in Central Asia. For instance, in 2020, temperatures soared to a new record high, surpassing the established climate standard of 1.92 degrees Celsius. This reached the previous record set in 2013, which had an indicator of 1.89 degrees Celsius.
The expert noted that there is a misperception that the world should focus on the production side in addressing the impact of climate change.
“We have to accept that not only production is the issue but also consumption needs to be on the agenda as well,” he said.
Another misperception is that climate mitigation kills economic growth.
“In fact, many of the examples of China, for example, the electric car industry, shows that investing in mitigation can propel new economic opportunity for growth and jobs,” he said.
He also stressed that not only governments but also people themselves are responsible for mitigation.
Relevant and recent posts
Marc Short on what to expect from DOGE in relation to next year’s legislative agenda
Marc Short comments on what to expect from DOGE in relation to next year’s legislative agenda for CNBC. Looking for a great keynote or public…
Thought Leader: Marc Short
Marc Short on whether Musk has permanently changed how congressional communication functions
In this video, Marc Short joins CNBC to discuss whether Musk and Twitter have permanently changed how congressional communication functions and what to expect for…
Thought Leader: Marc Short
