Remarks by Mathias Cormann, Secretary-General, OECD
13 December 2023
Prime Minister [Denys] Shmyhal, Dear Denys,
Deputy Prime Minister [Nicu] Popescu,
Deputy Prime Minister [Dumitru] Alaiba,
Deputy Chairman [Edil] Baisalov,
Ministers, Ambassadors
Distinguished guests, colleagues, friends all,
A very warm welcome to OECD Eurasia Week 2023.
This is the first time we are convening in person since the pandemic.
In the wake of several recent shocks, a one in a one-hundred-year pandemic, followed by the ongoing impact of Russia’s continuing illegal war of aggression against Ukraine - the Eurasia region has shown remarkable economic resilience.
Economic growth across the South Caucasus economies reached 7% last year and over 4% across Central Asian economies.
For this year we have projected a moderation in the level of growth across the region, though we expect a rebound in growth in Ukraine and Moldova.
The region’s very significant natural resource base of oil, natural gas and metals as well as its strategic location linking supply chains in Europe and Asia is what has underpinned its economic resilience.
Over this past year trade has increased, with a 20% growth in freight through the port of Baku in Azerbaijan and a similar increase in cargo and container transport through Georgia.
Policymakers in Kazakhstan, Azerbaijan, Georgia, and Türkiye have developed a road map to further develop this transit corridor, by modernising infrastructure and limiting administrative bottlenecks at border crossings.
While growth in the region has been consistent, convergence with advanced economies has stalled.
The region’s average GDP per capita reached 30% of the OECD average a decade ago in 2013, but remains at the same level today.
And the region will continue to be affected by the expected mild slowdown in global growth ahead.
The OECD projects global growth to reach 2.9% in 2023, slowing to 2.7% in 2024, and picking up to 3.0% in 2025. Even at 3% global growth is low by historical standards.
To get growth, development and convergence with advanced economies back on track, the region needs to make further progress with its structural reform agenda:
• Attracting new investment and improving productivity by improving the business environment;
• Enhancing regional integration through high quality infrastructure and better connectivity, while also improving the climate resilience of Eurasian countries, and
• Accelerating and expanding the adoption of digital technologies.
Further alignment with international standards, including OECD instruments, would help support these efforts.
Eurasia is a key region for our global engagement at the OECD.
We will continue to step up our engagement with partners across the Eurasian region.
In June of this year, together with Prime Minister Shmyhal, we launched our Country Programme for Ukraine.
It will support Ukraine’s reconstruction, recovery and reform agenda in areas ranging from good governance and anticorruption, to education, to environment, and competitiveness.
It will also help advance Ukraine’s EU and OECD accession aspirations.
Today we will also be signing a Memorandum of Understanding to boost cooperation with Moldova, to enable Moldova to benefit from our unique expertise across all relevant areas of public policy and to help facilitate Moldova’s increased adherence to OECD standards.
Looking ahead, the OECD is committed to enhancing and deepening its support for the region.
First, by helping countries attracting further investment.
Infrastructure investment in Central Asia will need an extra EUR 20 billion to absorb the projected 40% growth in trade transiting through the region by 2030.
To provide a supportive environment for this investment, our Foreign Direct Investment Regulatory Restrictiveness Index can help governments in the region cut unnecessary red tape and other barriers to foreign investment projects, alongside our report to be launched today - “Progress in Improving the Legal Environment for Business and Investment in Central Asia”.
We will also help ensure small and medium-sized enterprises in the region can fully participate in the opportunities offered by growing trading links, including by supporting policies aimed at improving access to finance and business skills for these businesses.
Second, by supporting connectivity and the expansion of high-quality infrastructure through our work on public procurement and climate change adaptation.
Tomorrow, we are launching our joint report with the International Transport Forum on “Realising the Potential of the Middle Corridor” with recommendations for enhanced connectivity of the Trans-Caspian International Transport Route.
And since 2017, we have worked with the region on trade and transport enhancement, using tools like the International Transport Forum’s Global Freight Model, the OECD’s Trade Facilitation Indicators and our Infrastructure Governance Indicators, to help identify reform priorities, for example simplifying and digitalising customs procedures.
This work has contributed to the substantial improvements in regulatory frameworks for trade facilitation. Over the past five years the largest reform packages were passed by Uzbekistan, Kazakhstan and Tajikistan, respectively improving their assessments by the OECD’s Trade Facilitation Indicators of 20% to 15%.
We will also support effective planning and use of funds and ensure integrity safeguards in public infrastructure projects through continued public governance reforms in Ukraine, Kazakhstan and Uzbekistan.
In this we will leverage the OECD Public Procurement Toolbox and our Principles for Public Governance of Public-Private Partnerships, which provide best practice guidance for effective procurement systems, from sound budgeting, to financial management, to competitive procurement and services delivery.
They also provide a concrete framework to ensure that partnerships with the private sector represent value for money for the public sector.
To help ensure infrastructure projects also support sustainability objectives, we will encourage the region’s engagement in our Inclusive Forum on Carbon Mitigation Approaches – an initiative designed to help optimise the global impact of emissions reduction efforts around the world through better data and information sharing, evidence-based mutual learning and inclusive multilateral dialogue.
Kazakhstan and Türkiye have already become two of its 58 members.
While several other Eurasian countries - including Georgia, Ukraine and Uzbekistan - participated actively in the Forum’s meetings. And we very much welcome the engagement of other partners from the region.
Third, by helping countries in the region optimise the benefits of the digital transformation and better manage the associated risks.
Our support in technology adoption and addressing digital divides, including through the OECD’s multifaceted “Going Digital Toolkit” and our framework to assess and promote digital skills for SMEs, including through the “SME Policy Index: Eastern Partner Countries 2024” will help promote private-sector adoption of digital tools, improve the digital offering of government services and boost even access across regional and social groups.
Towards this, we will build on recent progress in the region, most recently in response to the COVID-19 pandemic.
Considerable efforts have gone into digitalising public services, with Ukraine’s Diia app, for example, allowing citizens and firms to access government services and interact with state bodies, and it has played a vital role since February 2022.
More broadly, the OECD Recommendation on Broadband Connectivity has informed recent policies to expand connectivity in Ukraine, Armenia and Georgia.
In closing, there is much the OECD and the Eurasia region can do together.
From competition to public administration.
From reinforcing institutions to supporting entrepreneurship.
From investment promotion to public finance management.
While the structural challenges are significant, the OECD has the tools to support you on this reform journey.
We are looking forward to deepening our valuable cooperation.
Thank you.