February 15, 2010 Antalya, Turkey

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

2. Outline • Short Term Implications GDP growth BOP dynamics Unemployment • Medium Term Implications • Long Term Implications

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

4. ECO Annual GDP growth rate, %

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

7. Baltic Dry Index

8. ECO Exports and Ratio to GDP

9. ECO Imports and Ratio to GDP

10. Trade and Current Account Balance

11. Reserves in months of imports

12. ECO Unemployment rate, %

13. 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

14. Unemployment rate, %

15. 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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