Developing Infrastructure in Central Asia: Impacts and Financing Mechanisms

Greater infrastructure development could give Central Asian economies a critical boost by enhancing growth, poverty eradication, climate change mitigation, and recovery from the impacts of the novel coronavirus disease (COVID-19). However, growing constraints on the use of public funds will require financing solutions and new funding sources to tackle the region’s infrastructure investment gap. Effective infrastructure projects can induce positive spillover effects on economic growth, employment, and trade. The extent of these effects depends on a range of factors, such as the quality of infrastructure, interconnectivity, population density, income, financing access, and education. This volume examines infrastructure projects’ spillover effects on tax revenue, production, income, and trade in seven Central Asia Regional Economic Cooperation countries – Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Pakistan, the People’s Republic of China, and Tajikistan – and measures the magnitude of these effects on regional economic performance. The volume’s analyses show that infrastructure projects have positive spillover effects in both the short and medium terms. These important findings can inform and encourage innovative financing methods and help regulatory bodies formulate measures to promote or compensate for the effects of infrastructure provision.