Tashkent, Uzbekistan (UzDaily.com) -- On 2 June 2023, the Second Central Asia-European Union Summit was held in Cholpon-Ata (Kyrgyzstan) to discuss ways to further develop a constructive dialogue and expand practical interaction between the states of the region and EU.

It should be noted that today the European Union is one of the most important economic partners of the countries of Central Asia, which accounts for more than a third of the total volume of foreign trade in the region. Economic indicators are rapidly improving as a result of the active development of trade, economic and investment ties.

On the eve of the Summit, on 18-19 May, the Second Economic Forum "European Union - Central Asia" was held in Astana, where promising areas of cooperation based on the transformation of the economies of the Central Asian countries were considered.

The forum participants noted that the key areas of interaction are: improving the business environment, developing trade and strengthening transport connectivity, as well as the transition to a green and digital economy.

In particular, the EU plans to invest more than US$40 million in the region’s digital infrastructure. This should help reduce the digital divide and provide inclusive digital services by increasing broadband penetration in Central Asia.

This is one of the promising areas of economic cooperation between Central Asia and the European Union, which indicates mutual interest and successful cooperation between the parties.

Nevertheless, there is a huge potential for further development and expansion of mutually beneficial and promising cooperation.

In this regard, during the Summit, the President of the Republic of Uzbekistan Shavkat Mirziyoyev announced a number of priority areas that reflect the desire to further strengthen economic partnership.

In particular, interest was noted in expanding trade relations by extending the GSP + regime. At the same time, the importance of creating a network of modern laboratories and centers for standardization and certification in Central Asia in order to support exporting enterprises was emphasized.

Cooperation in this area will increase the competitiveness of products, as a network of modern laboratories and centers for standardization and certification will support local exporters, providing them with access to proven quality standards and certification, which will increase the confidence of European partners and facilitate access to international markets. This, in turn, will stimulate the active participation of Central Asian enterprises in foreign trade activities, strengthening the region’s position in the global economy.

Great importance was attached to the need for the joint development of the transport and communication interconnectedness of Central Asia and Europe. In this regard, the main attention was focused on the development of the Trans-Caspian transit corridor.

UNCTAD estimates that the landlocked countries of Central Asia spend, on average, nearly twice as much of their export earnings on transport and insurance services as the average for developing countries.

In this regard, the development of the Trans-Caspian transit corridor will reduce the cost and time for the delivery of goods to European markets, which will help increase the gross product and stimulate economic growth in the region.

Moreover, the Head of State touched upon investment and technological partnership with the possibility of holding industrial and technological exhibitions within the framework of the economic forum "Central Asia - European Union".

The purpose of this initiative is to attract new partners and investors by demonstrating the potential of local enterprises. Through such exhibitions, the parties can scale their business networks and initiate the implementation of new joint projects, which as a result will enable the countries of the region to have access to new technologies, markets and opportunities for economic growth and competitiveness.

Along with this, the key factor in economic interaction is the development of digital interconnectivity, which should contribute to an increase in the gross domestic product and exports of the countries of the region to the EU markets.

In this case, the main driver of development will be e-commerce, which will open up new opportunities for local businesses to expand their customer base and actively participate in global trade through digital platforms.

According to World Bank studies, a 10% increase in broadband penetration will add about 1% to economic growth in Central Asia, and a 1% increase in Internet access will lead to a 4.3% increase in exports.

Undoubtedly, the initiatives put forward by the President of Uzbekistan to deepen economic cooperation will help increase the competitiveness of the economies of the countries of the region. The initiatives open up new opportunities for the development of trade, investment, technology and innovation between Central Asia and the European Union, as well as their integration into regional and global value chains.

Bakhtiyorov Nurmuhammad, Leading Researcher, International Institute of Central Asia