ECO National Focal Points Meeting Effect of Global crisis on ECO region and Short- Medium-Long Term implications February 15, 2010 Antalya, Turkey

Outline Short Term Implications GDP growth BOP dynamics Unemployment Medium Term Implications Long Term Implications

Short Term Implications Contracting region and slowing economies Reduced export revenues Reduced import expenses Elevated unemployment rates

ECO Annual GDP growth rate, %

Economy - Level & Growth Rates Size of the Economy (%) GDP Growth Rates (2009) ECO Vs Developed Economies ECO Vs Developing Regions

Baltic Dry Index

ECO Exports and Ratio to GDP

ECO Imports and Ratio to GDP

Trade and Current Account Balance

Reserves in months of imports

ECO Unemployment rate, %

Medium Term Implications Sub-trend growth rates Recovery in export revenues and import expenses Export revenues to remain below pre-crisis levels Unemployment rates to recover slowly and remain above pre-crisis levels

Unemployment rate, %

Long Term Implications Lagging Human capital formation- no major attempt to increase level of education and training of workers which results in lower productivity compared to other regions Low global competitiveness – no ECO country is in the top 50 countries for global competitiveness. Non-diversified exports which mostly consist of commodities (oil, minerals) and low technology products (textile, leather products). [Turkey is the only exception] Infrastructure challenges —7 out of 10 countries are landlocked countries, poor roads and port facilities. Limited economic integration within the region (only 7% of trade conducted within the region comparable figure for EU is around 70%)..

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