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Urbanization in Central Asia:
experience of the transition period
Bakhtiyor Ergashev,
Research Coordinator, Center for Economic Research
Tashkent, June 12, 2014
Research of Urbanization issues: approaches
• From 2011 Center for Economic Research jointly with UNESCAP has implemented two research projects :
– Improving Municipal Governance and Urban Infrastructure in Uzbekistan: Problems and the Search for New Mechanisms and Tools (2011/17)
– Urbanization and Industrialization in Central Asia: Looking for solutions to key development problems (2012-2013гг.)
• The key purpose of the projects – analysis of mutual influence of the urbanization and industrialization processes in Uzbekistan and Central Asia during the transition period.
Demographic Trends
• Population of Central Asia will continuously grow reaching 80-84 mln in 2030-2035
• Major share of the population – around 65% – will constitute people in working age (15-64 years old)
• Share of rural population will prevail until 2030 in most of the countries and in the region as a whole
UNDESA forecasts
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Rural population (thousands) Urban population (thousands)
Urban and rural population in Central Asia in 2025
Kazakhstan Kyrgyzstan Tajikistan
Turkmenistan Uzbekistan
0
10000
20000
30000
40000
50000
60000
70000
80000
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
20
20
20
25
20
30
Population aged 15-64 in Central Asian states in 2025
Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan
Total population
40 744
30 639
Limited Land and Water Resources
• CA states succeeded in restoring and increasing food production
• Limited and unequally distributed land and water resources prevent from developing agriculture in extensive way
• Intensive development of agriculture will further limit employment opportunities in rural areas
Calculations based on World Development Indicators and UNDESA data
Climate change impact on rivers flow
Projected reduction of river
flow
0
10
20
30
40
50
60
70
80
90
Amudarya Syrdarya
Average annual flow, cubic km
13
.7
2.1
0.7
6.9
1.0
11
.3
1.7
0.5
5.5
0.8
0
2
4
6
8
10
12
14
16
Kazakhstan KyrgyzRepublic
Tajikistan Turkmenistan Uzbekistan
Agricultural land per capita, hectares
2005
2025
0
20
40
60
80
100
120
140
160
1992 1995 1998 2001 2004 2007 2010
Food production index (2004-2006 = 100)
Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
Economic Growth and Its Sustainability (1) • All CA states managed to recover economic growth
in 1990s and increase growth rates in 2000s
• CA states were relatively successful in overcoming effects of the world financial crisis
• Dependence from natural resources decreased, but remains relatively high – Kazakhstan 27,6 %
– Turkmenistan 43,9%
– Uzbekistan 29,4%
– Kyrgyz Republic 9,2%
– Tajikistan 0,9%
Данные World Development Indicators
0
50
100
150
200
250
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Total natural resources rents in CA countries, % of GDP
Kazakhstan
Turkmenistan
Uzbekistan
Kyrgyz Republic
Tajikistan
4.44
2.02
9.58 9.79 10.54
7.12
0
2
4
6
8
10
12
World High income Uppermiddleincome
Middleincome
Lowermiddleincome
Low income
Total natural resources rents by group of countries, % of GDP
-15
-10
-5
0
5
10
15
20
25
1991 1995 2000 2005 2008 2009 2010 2011
GDP growth in 1991-2011, % Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
Economic Growth and Its Sustainability (2) • Value added in agriculture decreased in all countries of the region, share of service sector increased, highlighting successes in
structural reforms
• However decrease in share of agriculture in GDP with mostly rural population in CA countries is challenging efforts in sustaining and increasing living standards
World Development Indicators
0
5
10
15
20
25
30
35
40
45
50
1992 1995 2000 2005 2010 2011
Agriculture, value added (% of GDP)
KazakhstanKyrgyz RepublicTajikistanTurkmenistanUzbekistan
0
5
10
15
20
25
30
35
40
1992 1995 2000 2005 2010 2011
Manufacturing, value added (% of GDP)
Kazakhstan
Kyrgyz Republic
Tajikistan
Uzbekistan
0
10
20
30
40
50
60
70
80
90
1992 1995 2000 2005 2010 2011
Services, etc., value added (% of GDP)
KazakhstanKyrgyz RepublicTajikistanTurkmenistanUzbekistan
0
10
20
30
40
50
60
70
1992 1995 2000 2005 2010 2011
Industry, value added (% of GDP)
Kazakhstan Kyrgyz Republic Tajikistan
Turkmenistan Uzbekistan
Urbanization and industrialization in post World War II period
• Period of 1960-1990s characterized by notable urban development and considerable changes in economy and demography. Several Territorial-industrial Complexes (TIC) were established, incl.:
South-Tajik TIC in Tajikistan
Mining and smelting TIC in Navoi
Almalyk-Angren TIC near Tashkent
Petrochemical complex in Fergana
Kostanay and Pavlodar-Ekibastuz TIC
• Up until 1991 framework of territorial distribution of productive forces in Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan was focused on demands of local agrarian economy
• Industrial facilities/capacities were allocated in a way to support export from the region of hydrocarbon and mineral resources, cotton and other raw materials
• Share of resource industries in total industrial production in the region was two fold higher than average in Soviet Union, while share of manufacturing was much lower than average value
Urbanization in post World War II period
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
1926 1939 1959 1979 1989
Total Population in Central Asia, thousands
Kazakhstan Kyrgyzstan Tajikistan
Turkmenistan Uzbekistan
1926 1939 1959 1979 1989
0
10
20
30
40
50
60
Share of Urban Population in Central Asia, %
Kazakhstan Kyrgyzstan Tajikistan
Turkmenistan Uzbekistan
Population growth and urbanization dynamics in Central Asia
0
5000
10000
15000
20000
25000
30000
35000
1926 1939 1959 1979 1989 2012
Total Population in Central Asia in 1926-2012, thousand
Kazakhstan Kyrgyzstan Tajikistan
Turkmenistan Uzbekistan
0
10
20
30
40
50
60
70
1926 1939 1959 1979 1989 2012
Urban Population in Central Asia in 1926-2012, %
Kazakhstan Kyrgyzstan Tajikistan
Turkmenistan Uzbekistan
Population growth and urbanization dynamics in Central Asia
0
10000
20000
30000
40000
50000
60000
70000
0
5
10
15
20
25
30
35
40
45
50
1926 1939 1959 1979 1989 2012
Urbanization in Central Asia in 1926-2012
Total population, thousand Urban population, %
Challenges for urbanization policies in CA region during transition
• In majority of CA countries challenges of urbanization are mostly linked with high rates of population growth and rural to urban migration flows.
• These processes are catalyzed by decreasing employment opportunities in rural areas due to limited land and water resources.
• Migrants from rural areas are mostly settled in big cities. However urban infrastructure and employment generation capacities in cities are below the demand for new jobs produced by growing urbanization.
These list can be expanded with such issues like:
• Limited energy generation capacities in the areas with high population density
• Higher costs of transportation, especially for small and medium enterprises from rural areas
• … what else?
Outcomes of urbanization process in Central Asia
• Urbanization in CA countries are following different scenarios.
• During last 20 years share of urban population in Uzbekistan increased by 10.2%, in Kazakhstan – by 5%, in Turkmenistan – by 2%.
• At the same time Kyrgyz Republic and Tajikistan experienced decreased in share of urban population – 2% and 9% respectively.
• However the common feature for all countries is a continuous outflow of population from rural areas, mostly for the employment purposes. This is particularly the case for Kyrgyz Republic, Tajikistan and Uzbekistan. In the medium term rural to urban migration will shape the major trends in urbanization.
Urban population in Central Asia in 2025
1-5 mln 22,23 %
0,5-1 mln 14,71 %
less than 0,5 mln 63,05 %
6813
4507
19319
0
5000
10000
15000
20000
25000
1-5 mln 0.5-1 mln less than 0,5 mln
Shortcomings in urbanization policies: causes and consequences
CA countries went through a difficult transformations in terns of industrialization and urbanization during last 20 years. Results of such transformations are not always positive:
• Gaps in social and economic development among territories
• Increased rural-urban gaps in living conditions
• Worsened conditions in many small and medium cities
• Signs of de-urbanization and de-industrialization in some countries
• Outdated systems of municipal government and municipal budgets
• Growing pressure on deteriorating urban infrastructure
Causes
• Lack of comprehensive urban development policies in all CA countries:
– As of today non of CA countries adopted a single strategic document outlining priorities and policies for urban development
– Urban development issues are partially covered by different sectoral and regional development programs
• Lack of comprehensive researches on urban development models and policies in CA countries, which could assist in formulating vision for development of cities
Scale of economies
Agglomeration vs. Congestion
Transport costs
Transport & communications,
Trade barriers
Factor mobility
Labor, capital, etc.
Regional integration to lower transport and
communication costs and increase international
trade opportunities
Rural-urban transformation to
improve mobility and increase in density of
economic activity
Territorial development to
improve market links between leading and
lagging regions
CA Spatial Development Drivers
Challenges and opportunities for development
CA countries have to go through the following stages to become urbanized nations:
1. Targeted development of cities – transformation of rural economy into urban one, shift from agrarian to industrial development pattern with particular focus on balanced development of territories
2. Promoting agglomerations – focusing policies on linking territories with transportation and communications networks
3. Establishment of strategic settlement frameworks – increase of density of economic activities, linking territories and compressing space, further development of cities
The ultimate goal of development policies should be not just simple increase of urban population, but the radical shift in spatial development of the region
This requires development of urban infrastructure and increase of absorption capacities of cities – housing, social infrastructure, employment opportunities etc
Small and medium cities as the pillar of urbanization
• Promotion of big agglomerations and large industrial enterprises stimulate economic growth, but not necessarily produce multiplying effect in terms of SME development and wider employment generation.
– Challenges related with congestion, environment, infrastructure.
• Better links between big cities and small/medium cities create better environment for
– SME development and employment generation
– Promotion of small and medium cities and balanced spatial development
• Small and medium cities constitute in Kazakhstan – 63 out of 84 cities, in Kyrgyz Republic – 20 out of 22, in Tajikistan – 15 out of 17, in Turkmenistan – 21 out of 25, in Uzbekistan – 102 out of 119.
– They house around 1/3 of urban population: in Kazakhstan – 25%, in Kyrgyz Republic – 39%, in Uzbekistan – 35%.
• Small and medium cities are well integrated with urban type settlements and act as a buffer for outflow of workforce from rural areas (around 100 000 annually in Uzbekistan).
• However, not all small and medium cities will survive the spatial transformation.
Conclusions
• CA countries pursued policies focused on:
– Creation of equal (to the extent possible) opportunities for people irrespective their place of living
– Effective utilization of natural resources and industrial potential of territories
– Promotion of local self-governance structures
• Outcomes of urbanization in CA countries has the following in common:
– Growing urban population (particularly in small and medium cities)
– Increasing concentration of population, economic activities and social developments in large cities
– Continuous inflow of new residents in cities, expansion of urban areas and growth of agglomerations
– Deterioration of urban infrastructure and worsening environment conditions in cities
• To saddle the urbanization all CA countries will need strong political and economic instruments/institutions to:
– promote urban development (incl. land markets, infrastructure development, investment promotion management etc.)
– Increase effectiveness and efficiency of government policies and interventions
Thank you!
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