IMF: Caucasus, Central Asian countries lag behind in export diversification

The countries of the Caucasus and Central Asia lag behind global averages in the level of commodity export diversification, Senior Economist of the IMF's Middle East and Central Asia Department Florian Misch said at the presentation of the fund's regional economic outlook for the Middle East and Central Asia held in Uzbekistan, Report informs.

According to him, in terms of import volumes, the geography of trading partners, and the variety of imported products, the region generally corresponds to global trends. However, significant vulnerabilities remain in the export sector, associated with a high concentration of supplies in a limited number of commodity items.

"The region is essentially on par with the rest of the world in the geography of export and import markets, as well as in the range of imported goods. However, it lags behind in the diversity of exported products. In other words, the commodity structure of the region's exports remains relatively concentrated," Misch noted.

The IMF representative explained that to assess the degree of diversification, the fund's experts use an index ranging from 0 to 1: a value of 1 corresponds to full diversification, and 0 to full export concentration.

According to the fund's analysis, the lowest level of export basket diversification is characteristic of the region's countries specializing in oil exports. States that import hydrocarbons demonstrate somewhat better results, but in most cases also fail to reach global averages.

At the same time, over the past 20 years, no significant progress in export diversification has been observed in most countries of the Caucasus and Central Asia. Moreover, in some states, the situation has worsened: the commodity structure of exports has become even more concentrated over time.