COVID-19 Presents Fresh Challenges to a Struggling Central Asia

Responding to coronavirus has amplified the disparities between the five Central Asia countries. But no winners will emerge, as the real economic and social challenges remain ahead.

Expert comment Published 5 June 2020 Updated 15 September 2020 2 minute READ
Boys ride scooters during International Children's Day (June 1) at the central Ala-Too Square in Bishkek, Kyrgyzstan. Photo by VYACHESLAV OSELEDKO/AFP via Getty Images.

Boys ride scooters during International Children’s Day (June 1) at the central Ala-Too Square in Bishkek, Kyrgyzstan. Photo by VYACHESLAV OSELEDKO/AFP via Getty Images.

Truth has been a casualty of the pandemic globally and the various Central Asian governments’ responses to the pandemic reflect both how far and how little their leaderships have progressed from the Chernobyl mentality of concealing the truth during the latter days of the Soviet Union.

The Kazakh government has shown relative transparency in communicating with citizens about virus data, even if the actual death toll is likely to be higher than reported. Uzbekistan’s seemingly much lower cases rates than in Kazakhstan and rapidly flattening curve, weeks before its neighbour, suggest that it has been less transparent, while its compliant media fails to hold it accountable.

As befits a country that surpassed North Korea in ranking bottom of the Reporters Without Borders 2019 World Press Freedom Index, the Turkmen government is punitively restricting reporting and discussion of COVID-19. To date it claims it has no cases despite some independent reporting to the contrary.

The Tajik government lost ground in containing the virus by only feeling obliged to admit to its first case on April 30, the eve of a World Health Organization visit. Unlike its neighbours, it has not yet provided detailed breakdowns of the epidemiological situation and observers are sceptical about its claimed recovery rate. Meanwhile, the Kyrgyz government undertook strict measures to contain the virus, and has been open about the case numbers but there has been a lack of communication from senior levels of government.

Economies to contract then recover

Assessing the full economic impact on the region of the dual crisis brought on by the coronavirus pandemic and the collapse of energy prices is difficult, as it is unclear how long the pandemic will continue and where energy prices will eventually settle. But, according to the EBRD, the Central Asian economies are expected to contract by an average of 1.2% this year with a rebound of 5.8% in 2021.

Although these GDP figures seem manageable, the joint crises have hit during a period of prolonged socio-economic hardship for the populations regionally. Kazakhstan and Uzbekistan are providing stimulus to their economies, but the other three are not.

In Kazakhstan, the government announced a minimum of KZT 5.9 trillion ($13.4 billion) of support measures for the population but there is a finite grace period for debts and tax deferrals. In Turkmenistan, the pandemic magnified existing structural challenges faced by its economic model with closed borders with Iran leading to shortages of food and other basic goods.

Turkmenistan’s economic crisis was already visible before coronavirus, and weakened demand and low energy prices will add to the population’s long-standing woes. Uzbekistan is protected by its diversified economy, export markets, and low debt, but the economic slowdown and return of hundreds of thousands of migrants, who will go from contributing to the economy to draining it, damage the chances of the economy outpacing demographic growth.

But the future is bleakest for the two poorest countries in the region. Kyrgyzstan and Tajikistan, reliant on remittances for more than 30% of their GDP growth, are facing severe reductions from emigrants working in Russia and Kazakhstan. They are also experiencing significant economic losses because of the joint supply and demand shock domestically, caused by COVID-19.

Both countries also have limited fiscal space and significant debt which limits their ability to alleviate the situation for their populations. Tajikistan was already suffering from high malnutrition rates, particularly among children, before the onset of COVID-19.

Pockets of rare civil unrest are already evident in Kazakhstan, Tajikistan and even Turkmenistan. Once lockdown finishes and government-mandated grace periods on debt and utility payments end, the venting of more frustration is expected, potentially leading to the postponement of elections in Kyrgyzstan and possibly Kazakhstan.

Respected leaders are needed to navigate these countries through the next challenging phase, but all Central Asia’s heads of state lack legitimacy. President Berdimuhamedow’s contradictory approach to the virus – closing the country’s borders and imposing restrictions on internal movements, but then holding mass events such as Turkmenistan’s first ever Victory Day celebration – illustrates his inability to govern responsibly.

President Kassym-Zhomart Tokayev is trying to cement his authority on a Kazakhstan system still dominated by former president Nursultan Nazarbayev, and recent political reforms central to his programme have so far disappointed. In Uzbekistan, media reporting remains heavily censored, and President Mirziyoyev is in danger of ending his honeymoon period deep in his first term as the going gets tough.

Coronavirus is presenting significant challenges to economic development and reform agendas across the region, given shrinking resources and growing economic pains. Although Mirziyoyev’s policy change following the closed era of his predecessor Islam Karimov, has allowed Central Asian engagement on the pandemic, in the longer term the pandemic will deal a tangible blow to improving regional cooperation with a rise in protectionism.

Economic decline could also realign foreign policy priorities of Central Asian governments depending on the ability of China, Russia and other major players to extend financial and economic support. In any scenario, the current health and economic crises will define the future of the region for the next few years, with the most important issues and challenges relying heavily on the willingness of the people to accept whatever cards their governments are able to deal to them.