The Strategy Den Blog

Countries in Central Asia, particularly Kazakhstan, are concerned with competitiveness. They seek some way to become wealthier, diversify their economies, and put in place reforms that will lead to sustained economic growth. A litany of studies have been undertaken to address the matter. Sectoral analyses have lauded the opportunities in industries as diverse as fruit cultivation, tourism and high technology. Governments proclaim initiatives to diversify the economy, create economic opportunities and unleash the entrepreneurial spirit of citizens.

I suggest that studies be undertaken to determine why these efforts have yielded so little. Economies in the region are still oriented towards natural resources. Small and medium sized business are not yet the bulwark of economic growth that they are in developed economies, and constituents are unclear what national competitiveness strategies have accomplished. Countries need to analyze why competitiveness strategies are not successful and what is it about policies, decision-making and elements of the business environment that limit improvement. Clearly, government structure is not fit for rapid improvement in these areas. Inertia, interests and simply how government works need to be remedied or competitiveness won’t be achieved.

There are many good reasons for countries to not rely on extractive industries. The most important is the environmental impact of these industries makes them unsustainable.

In addition, there are factors that are beyond the manageable interest of a single government or head of state to master alone. China and the former Soviet republics have different gauge train tracks. China is undergoing a number of trade-related reforms such as harmonizing protocols for foreign transport vehicles. Currently, Kazakhstani vehicles of all types cannot circulate in China. This impacts trade and economic growth. Kazakhstan can join the customs union with Russia and Belarus, but Kazakhstan alone cannot make delays at borders disappear. Water, energy, transport and trade require regional cooperation to overcome the formidable obstacles to growth faced by the region.

Just back. I enjoyed “one of the world’s most secretive places.” Did not find it so secretive as the philosophy is made clear. Criticism is viewed as being impolite, and the government spends tons of money on basic utility service.

With a population of 5 million people and gas revenues at more than $1 billion a day, Turkmenistan can take care of its basic needs, but economic reform and investment in education are needed.

The infrastructure in this village 30 minutes from Ashgabat looks excellent.

Imagine the near-future with cars that get three times the fuel efficiency as today. Europe has severely cut growth in consumption of fossil fuels and will continue to do so. Demand in Europe not been growing over the past several years. India and China are the growth markets, but there are a lot of large producers. Technology may make deposits increasingly accessible. While Turkmenistan may eventually sell most of its gas to China, it may find competition from Russia and other suppliers. The deal with China was made possible largely because Russia didn’t have a customer for the Turkmen output in Europe or domestically (where Russian gas is sold below market rates).

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I can get behind free gas for this greenhouse growing lemon trees and other tree crops.
Without a prolonged discussion about the extent to which economies based on extractive industries in the Former Soviet Union suffer from Dutch disease, suffice it to say that basing your economy on these can lead to environmental and societal retrograde. Countries are aware. The real “disease” is overcoming the inertia of a state apparatus subservient to these industries.

More here about this a related issues from Steve Levine.

Where’s the superbig brainhead alien? Richard Dreyfus? More post-modern triumphalist architecture, please.

When the Soviet Union broke up, like a corporation, it liquidated assets. Warsaw Pact countries were sold off at bargain prices. The Baltic States, Central Asian States, Georgia and the rest of the Caucuses. African nations, perhaps the only place with a few countries that have something gain through communism, Cuba, etc.
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But Russia is back and it is reasserting its influence in Central Asia and elsewhere. The high price of oil, reform and drastically reduced spending of the former-Soviet state are the reasons. You can watch Russia Today, (Fox-skaya TV) Russia’s English language news channel on free to air satellite to hear about it. This should be expected. The countries of the Former Soviet Union share a common language, trade and transport links oriented towards Russia, and a considerable number of citizens residing in Russia and vice versa. Some countries have considerable political, geographical and social obstacles to their self-sufficiency. They have few choices but to take aid from Russia or others. Russia is availing itself of a number of policy tools: trade agreements, aid, military cooperation, budget support and provision of public services.

Staking the central banks of states crushed by the 2008 economic downturn, increasing the attractiveness of hydrocarbon transport deals and advancing the ruble as a reserve currency, the Russian corporation is taking an equity stake in its neighbors that’s more legitimate, and shares more realistically risks and rewards. Re-integration as some see it or increased economic integration will continue between Russia and its neighbors. In the past, this dynamic was based on imposed socioeconomic policies and military threat to back them up. Now, Russia is behaving more like a multinational. I agree with the opinions of the Eurasian Development Bank in these matters. Russia should continue to seek mutual benefit and true cooperation.

The Market in Dushanbe, Tajikistan

There is more to gain through this approach than dictating terms and demanding obedience from these countries. Furthermore, it is considerably more economical for Russia to influence outcomes in neighboring countries now that those countries are independent as Russia is no longer responsible for running these countries.

A number of factors led to this move. First, the Agency made me an offer I couldn’t refuse. Second, with great skiing and horse meat on the menu, I won’t miss Switzerland much.

I am the Senior Economic Policy Specialist for USAID’s Central Asia Mission based in Almaty. My portfolio consists of projects that improve cross-border trade in Kazakhstan, Kyrgyzstan and Tajikistan. Customs reform, trade negotiations such as those required for WTO accession and compliance with WTO agreements, and implementing better processes for trading goods and services across borders occupy my time.

Damn, now it’s the end of February and that crane is still not moving. The credit crisis is deep in this part of the world. I should do an emerging market crane movement index that would become an indicator for investors. It would be like some kind of discount rate calculation base on construction crane usage. We could have emerging market crane cam, cool.

The business mind never stops working, even considering somewhat mudane areas. I don’t know why I am going out of my way to give some of the best run businesses in the world new ideas, but if Coke or Pepsi put out a product with 50% of the sugar of their regular offerings, it would be massive. I am thinking of a dryer version of Coke, perhaps in small glass bottles like the mysterious espresso sodas or Italian bitter drinks.

I also have a few ideas for cigarette manufacturers, but I don’t like to encourage smoking…

The Health Metrics Network at the World Health Organization and other partnerships have to meet the needs of diverse constituents. If they do not, donors should spend their money elsewhere. The need for accurate and timely health information is undeniable, but who needs a partnership like ours?

We are situated with the WHO’s Information, Evidence and Research cluster, largely concerned with setting a variety of standards and norms.  As an apex organization, the Health Metrics Network aspires to intellectual leadership in the subject matter conferred by usage of the tools, standards and recommendations we produce, but also from knowing what is happening in the space, packaging it, communicating it to those that care and getting governments and donors to spend more on health information systems strengthening.

Bill Gates was in the house yesterday. He met with directors and higher ups in one of the auditoriums. To summarize, his comments were critical of the UN bureaucracy and reiterated the Gates Foundation’s commitment to research, technology and finding the next killer app for health. The Foundation attracts some criticism for this strategy. You got a better idea? Didn’t think so. Watching the West Coast try to reconcile itself with international development, NGOs, multilateral and bilateral donors is painful. What justifies the vast sums of money spent on secretariats, meetings, conferences, workshops and costly travel budgets? The flying around, the talking funny, etc. My boss from many years ago at Deloitte was of the same opinion when we spoke last week.

Here is a book that matters, Global Health Watch 2.

I was only going to read the Gates chapter, but I got sucked in. It is a well-written, fast paced, 350+ pager. They keep the pressure on the US, and that section gets a little gratuitous. The facts are thin in places and cherry-picked to back their arguments with some obfuscation. Any Ivy-league debater with a William F. Buckley t-shirt could go the other way just as effectively, but it is well-written. Then there are some generalities that come across as just attention-getting, but it is otherwise hard to get more than seven people outside the authors’ Facebook circles to read this stuff. The bottom line is that this is the ideal level of depth for the big arguments about the subject matter. The authors know that the US taxpayer would be happy to devote more money to international organizations if there was more transparency in their operations, costs and governance structures, and these were communicated effectively…… wait, I am not sure you’d want to do that….

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… and you all know my review is better than the nice, softball from the shill who got hers in the Lancet. I guess the authors will cite her more often in their stuff.

Lousy photo from my Blackberry.

Guess what he said in his address? What do you think he said about maternal and child health, the H1N1 virus, the interconnectedness of nations and humankind? Yup, he said all those things, but every time I hear it, there is the possibility for epiphany, for understanding of one of the “big issues,” maternal mortality for example. Sarah Brown followed BKM. She made maternal mortality sound like a supply chain issue: get enough of a few drugs to where they are needed to avoid avoidable deaths. I am sure this won’t completely solve the problem, but it would get us some movement towards this Millennium Development Goal. I have to dig out my old books from the American Production and Inventory Control Society.