Central Asian Regional Risk Assessment

1. Central Asian Regional Risk Assessment United Nations Development Programme Regional Bureau for Europe and CIS (on behalf of the international community) (November 2008)

2. Central Asia’s development challenges • Sustainable water, energy, land use issues • Poverty reduction, improving welfare of millions of vulnerable individuals • Energy, water, food insecurities underscored, especially in Tajikistan, by: • Harsh winter of 2007-08 • Spring, summer drought, global food price increases • “Compound crisis”

3. Why the assessment? Lessons from winter 2008 • Government, international community: • Were not prepared to respond quickly • Did not have the right mix of humanitarian, development programming • Needed—better: • Preparedness (early warning) • Coordination • Approach to humanitarian/development programming nexus

4. Risk factors do not bode well for winter 2008-09 • Drought in spring/summer 2008, especially in: • Southern eastern regions of Central Asia • Ferghana Valley • Aral Sea delta • Potential regional links: • Kyrgyzstan: “Compound crisis” now apparent • Kazakhstan: • Global financial crisis hits remittances • Drought in South Kazakhstan • Uzbekistan: Energy sales/trans-shipments? • Rising world energy, food prices, boost inflation • Concerns about socio-economic vulnerabilities

5. International community’s response • Representatives of international community met in Almaty, 21-22 July • Decisions to: • Develop an integrated assessment of possible regional “compound crisis” • Improve international agency communication and coordination • Support governments in developing appropriate responses (short-, long-term)

6. Bad news: Water levels in Syr-Darya basin . . . Source: “Situation Analysis” (World Bank, Almaty, July 2008)

7. . . . Are well below normal 2008 data, relative to monthly averages from 1991-2007. Source: SIC-ICWC, provided by Water Agency of Japan; UNDP calculations

8. And at Nurek in the Amu-Darya basin . . . Source: www.unece.org/env/water/publications/assessment/aral.pdf

9. . . . It’s the same story 2008 data, relative to monthly averages from 1991-2007. Source: SIC-ICWC, provided by Water Agency of Japan; UNDP calculations

10. “Electric shock” stops industrial growth Volume of industrial output Electric power generation, January-September 2008 * Kumtor production not included ** January – September 2008 data Source: National statistical offices

11. Bad news: Inflation accelerates Average annual consumer price inflation rates (2008 data are for first three quarters). Source: CIS Statistical Office

12. Bad news: Kazakhstan’s outgoing remittances down Wages and transfers paid out to other CIS countries, in millions, first-half data. Sources: National Bank of Kazakhstan, UNDP estimates.

13. Bad news: Food insecurity is growing • Tajikistan: 2.2 million food insecure • 34% of rural population • 37% of urban population • 800,000 severely food insecure, requiring immediate support • Kyrgyzstan: Nearly 1 million vulnerable • Sources: • Tajikistan: WFP, FAO, UNICEF Joint Food Security Assessment (May, July 2008) • Kyrgyzstan: UN Winter Preparedness Response Plan (October 2008)

14. . . . With declines in 2008-09 wheat crop predicted Tajikistan is particularly vulnerable Global food prices may now be falling . . . . . . But they are still high in Central Asia What happens if the drought continues? Low reservoir water levels today can affect irrigated agriculture in future USDA forecasts for 2008-09 wheat crops, over 2007-2008. Source: http://www.pecad.fas.usda.gov

15. Food prices may be falling globally . . . Source: http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/

16. . . . But not in Tajikistan (Data from UNDP-Tajikistan) Source: UNDP-Tajikistan

17. Fortunately, there’s also some good news GDP, agriculture growth continue Remittance inflows from Russia continue Governments are responding Fuel procurement, stockpiling Energy sector rehabilitation Focus on vulnerable groups

18. Good news: Remittances from Russia still strong . . . Wages and transfers paid out to other CIS countries, in millions, first-half data. Source: Central Bank of Russia.

19. . . . As are remittance inflows in Central Asia Wages and transfers received, in millions, first-half data. Sources: National Bank of Kyrgyzstan; IMF.

20. Good news: Output growth holds in 2008 • GDP grows through first three quarters • Expansion of acreage planted boosts agricultural production • Shift away from cotton • Increasing remittances raise incomes, spending, construction • Will this continue? • Do Russian, Kazakhstani financial crises threaten remittances? • Will drought affect 2009 harvest? Sources: National Statistical Offices

21. Good news from Bishkek Summit (10 October) Central Asian heads of state meet at CIS October summit: “Parties reach consensus on all issues raised at the meeting, which covered hydro-energy support, fuel resources supply, water accumulation in the Toktogul and Nurek reservoir" — Kyrgyzstani Foreign Minister Karabaev

22. Initial conclusions: Threat “Compound crisis” phenomena: Have spread from Tajikistan to Kyrgyzstan Are in both the Syr-Darya, Amu-Darya basins Macroeconomic stability, growth in Kyrgyzstan, Tajikistan largely supported by remittances Remittances from Kazakhstan have already dropped What will happen with remittances from Russia? Coordinated, effective responses needed from governments, international community

23. Country responses: Energy sector

24. Country responses: Other areas

25. Central Asia seems ready for winter, assuming: • Aid needs in appeals are met • An “average” winter • The CIS presidents’ Bishkek summit renewed commitment to regional cooperation holds • No significant macroeconomic shocks

26. Are we ready for surprises? Probably not . . . • Memories of last winter may promote cooperation and alertness . . . • . . . True systems are not in place, in such areas as: • Early warning systems • Incorporating “compound crisis” risks into disaster risk management mechanisms • Adapting humanitarian response procedures to “compound crisis” specifics • Better management of the humanitarian-development programme nexus would help

27. Toward an early warning system that works • Many early warning systems are used in Central Asia, but none integrate entirety of issues/institutions Water levels  Energy production  Agricultural production, prices  Macroeconomic, fiscal, balance-of-payments  constraints Vulnerable population conditions  RESPONSE

28. Better disaster risk management mechanisms • Probabilities of a natural disaster need to be calculated, updated • Doing so and preparing appropriate responses requires complex information outside usual DRM mechanisms domain • Fuel as an emergency good complicates procedural issues

29. Revisiting the development-humanitarian nexus

30. Way forward • Bridging gaps, building synergies along: • Development/humanitarian nexus • Short-term/long-term continuum • More specifically: • Enhanced inter-agency communications • Toward a common early warning system? • Agency expert collocation in Almaty • UNDP will outpost economist, disaster risk specialist in coming months • Revisit JCSS, UNDAF processes in terfms of development/humanitarian nexus

31. Timetable, next steps First draft available for consultations next week 3 December: UN, partner agency meeting (Geneva) Mid- /late-December: Report finalisation January—Launches to: Raise awareness Mobilise resources for: UN appeals in Tajikistan, Kyrgyzstan Other, related initiatives

32. Thank you very much! Бoльшoe Cпacибo! Rakhmat!