1. How are Tajikistan, Kyrgyzstan coping with the crisis? Ben Slay Senior economist UNDP Bureau for Europe and CIS 20 July 2009

2. Presentation outline n Focus on: –Tajikistan, Kyrgyzstan –Interactions of water, energy, food insecurities; impact of global crisis n Why this focus? –TAJ, KYR: Focus of international attention in Central Asia –KAZ not so affected by water, energy, food insecurities –Inadequate data for UZB, TUK n Key questions: What’s gotten better, worse?

3. Best news: Drought may be over in Amu-Darya basin... 2009 monthly water volume averages, compared to averages for same month during 1991-2008. Source: ICWC-SIC, UNDP calculations. “Dead level”

4. ... And for much of the Syr-Darya as well 2009 monthly water volume averages, compared to averages for same month during 1991-2008. Source: ICWC-SIC, UNDP calculations.

5. Helping power production, consumption to recover (TAJ) Change relative to the same month in 2008. Source: State Statistical Committee, UNDP calculations.

6. BUT: Toktogul, other Syr- Darya reservoirs—still “dry” 2009 monthly water volume averages, compared to averages for same month during 1991-2008. Source: ICWC-SIC, UNDP calculations.

7. ... So improvements in Kyrgyzstan are less robust Change relative to the same month in 2008. Source: State Statistical Committee, UNDP calculations.

8. What hasn’t changed? Industrial recession n Decline in industrial production has accelerated in 2009 n “Electric shock”  “collapsing demand” n Two key questions: –Whither GDP, living standards in 2009? –What happens to electricity supplies when industry picks up? * Kumtor production not included National statistical office data. 2009 figures are through April (KYR), May (TAJ).

9. Food prices have likewise stayed high... n Food security remains an issue n Will domestic food prices fall before rising world food prices remove “window of opportunity”? n Why haven’t food prices fallen? –Weaker currencies –Rigidities in food, domestic trade sectors? 20082009 FAO data, UNDP calculations

10. ... While remittances have collapsed Sources: National Banks of Russia, Tajikistan, Kyrgyzstan; IMF. UNDP calculations. Quarterly growth in remittances (year-on-year)

11. Conclusions (I): “Vulnerability scorecard” Water security Energy security Food security Remit- tances Other Tajikistan+++ No real change? - Industrial recession, weak exchange rate ( - ) Kyrgyzstan+?+? No real change? - Industrial recession, weak exchange rate ( - )

12. Conclusions (II): Causes for concern continue n Favorable economic growth trends coming to an end –Most obvious in remittance flows –GDP is falling in Russia, Kazakhstan n Food security remains a major concern –Will domestic food prices fall before rising world food prices remove “window of opportunity”? n Difficult reforms are still required to address longer-term water, energy issues n Needed: –Focus on immediate, short-term solutions –Better links between development, humanitarian responses

13. Best hopes for short-term int’l community response 1) Expanding early recovery programming (to better address vulnerabilities) 2) Early warning (risk monitoring), for better risk management 3) Better coordination

14. Thank you very much! Бoльшoe Cпacибo!