With the enhancement and diversification of cross-country and regional economic ties, the development of cross-border infrastructure has become increasingly important, especially to landlocked developing countries. Cross-border infrastructure projects involve two or more countries, private investment, and coordination of a wide range of actors. Cross-border public-private partnerships (PPPs) could be an effective mechanism for such projects.

Several dozen cross-border PPP projects have been implemented around the world to develop transport infrastructure (railways, roads, pipelines), water and energy facilities, and telecommunications. In Eurasia, however, the potential for cross-border PPPs has hardly been realised, with the exception of the Amur River bridge project. The EDB attaches particular importance to the formulation of guidelines for cross-border PPPs to raise awareness among governments and private investors of PPPs’ potential for cross-border infrastructure development, to facilitate the launch of cross-border PPP projects, and to minimise their risks.

The Bank has prepared an analytical report that outlines the criteria and scope of cross-border PPP projects, assesses PPPs’ potential for cross-border infrastructure development in the EAEU and Central Asia, and suggests guidelines for effective cross-border PPPs in the region.

• What are the criteria for classifying infrastructure projects as cross-border, as well as the areas of infrastructure development where cross-border PPPs could be most effective?
• International experience in implementing cross-border PPPs, with case studies from the transport and energy sectors.
• How could cross-border PPPs be used for infrastructure projects in the EAEU and Central Asian countries?
• The EDB’s guidelines for cross-border PPPs, including a draft framework for a model agreement for a cross-border PPP infrastructure development project.

A prerequisite for the sustainable and harmonious development of Eurasian economies is the creation of enabling conditions for all types of businesses, including those launched by young people. The cultivation of a new generation of young entrepreneurs focusing on Eurasian integration in their business projects will improve the coherence of the common economic space and help to devise new projects that will further drive integration.

Young people experience both the benefits of, and barriers to, doing business and are one of the most vulnerable groups of entrepreneurs. They seek the removal of non-tariff barriers in the EAEU common market and need additional support, from business education, mentorship, and project acceleration to concessional loans and grants. The development of in-country and supranational communities of young businesspeople could help unlock the potential of youth entrepreneurship.

The Eurasian Economic Union (EAEU) has enormous potential for integration in transport and logistics, water and energy, trade, and other areas of economic cooperation. To unlock this potential, the Eurasian Development Bank has initiated key investment mega-projects: the Eurasian Transport Network, which will enhance transport connectivity between EAEU countries; the Eurasian Commodity Distribution Network, an open integrated system for managing flows of agricultural commodities within the EAEU; and the Water and Energy Complex, to develop Central Asia’s energy systems in a balanced way, including opportunities for interconnected operation.

These mega-projects need a cooperation model that will help to coordinate planned infrastructure projects and develop infrastructure jointly in the interests of all EAEU countries. This model will also include multilateral project financing partnerships between EAEU countries and the EDB, private and institutional investors, and development institutions.

Public-private partnerships (PPPs) have been used for decades and are an established means of attracting private investment into sectors such as transport, energy, and agricultural infrastructure. There is now a notable trend for using PPPs to build and operate digital platforms and infrastructure connected with international transport corridors and/or cross-border logistics.

• Strengths and weaknesses of PPPs for key investment mega-projects.
• Cross-border and cross-country PPPs vs PPPs for the “national segments” of integrated infrastructure in international transport corridors.
• Using PPPs to build cross-border water and energy infrastructure to serve Central Asia’s water and energy complex: opportunities and constraints.
• The EDB as a “linchpin” in PPP projects set up to implement key investment mega-projects.

The situation in the global economy after the outbreak of the COVID-19 pandemic has been challenging. The world has faced global instability and geopolitical turbulence. The fragmentation of the global trading system has significantly increased the role of regional integration blocs. Under these circumstances, there is a growing need in the Eurasian Economic Union (EAEU) to develop cooperation mechanisms, including industrial ties, that would mitigate external risks and promote the member states’ development with greater reliance on domestic supplies.

Stable and sustainable economic growth can only be ensured by a diversified economy based on a well-developed real sector and, above all, industry. In this context, with growing global competition and the transformation of global value chains in the last decade, there has been a sharp increase in global interest in industrial policies. Between 2014 and 2019 alone, at least 84 countries adopted industrial development strategies or policy frameworks. Industrial development in the EAEU can be achieved by enhancing the competitiveness of goods and their producers, making sure that shared resources, technology, expertise and, most importantly, capital are used efficiently.

Deeper industrial cooperation among the Union’s member states is a priority in the EAEU. Between 2015 and 2021, industrial output in the Union rose by almost 17%. Manufacturing grew more rapidly than industry as a whole – by 22%. The largest increases were in the pharmaceutical industry, the manufacture of finished metal products, other vehicles and equipment, pulp and paper, textiles, wood processing, and the manufacture of machinery and equipment. Mutual trade in manufacturing products within the EAEU increased by more than 65% compared to 2015. The highest growth rates were in the manufacture of other vehicles and equipment, pharmaceuticals, furniture, metallurgy, wood processing, and electronic and optical products.

However, EAEU countries are facing both conventional key risks to industrial development and cooperation (greater technological and trade protectionism, volatile prices of key inputs and exports, increasing share of illegal trafficking and competition from third-country producers, lagging behind in technology, and reliance on imports) and new challenges in the context of recent political developments and related economic constraints, including the disruption of traditional production chains, the blocking of logistics corridors, and a worsened investment climate.

The fact that some international companies have pulled out of the Russian market as well as disrupted supplies of raw materials, components, and equipment have created serious risks for Russian companies’ production processes, but have also freed niches for other manufacturers and suppliers. The current trade, economic, and logistical problems facing industrial enterprises in EAEU member states necessitate industrial cooperation, as it promotes job creation and the exchange of technology and best practices and can lower production costs thanks to common EAEU markets.

Industries differ in their suitability for industrial cooperation. The greatest potential for cooperation exists in transport and agricultural engineering, food production, the manufacture of building materials, petrochemistry, energy engineering, and some others. One way to foster this cooperation is through the creation of industrial parks and innovation cities. They make life easier for companies and allow them to adapt more quickly to change and create jobs.

Session participants will discuss how to devise new ways to develop industries; models and mechanisms to stimulate joint initiatives and projects using the countries’ existing capacities; and how to mobilise investment and other types of support for projects, ensure technology transfer, and set up industrial clusters to boost production and supply chains.

• How are cross-border industrial companies in the EAEU changing strategy in response to new opportunities?
• What are the industries in which the EAEU could create unique Eurasian technological solutions, bring industrial production closer to the world technology frontier in the medium term, and develop regional value chains?
• What are the sectors in which it is still not possible to move closer to the world technology frontier and in which cooperation should be developed with Asia’s rapidly developing nations to ensure access to technology that Eurasia lacks?
• Global experience suggests that modern SMEs have a qualitatively higher potential to bring about structural change in industry. How could this potential be harnessed to develop industrial cooperation within the EAEU?
• How could logistics be adapted more effectively to the new market conditions?
• How could EAEU industries secure the raw materials they need, given external constraints?
• Would the creation of a Eurasian pharmaceutical system help to promote the pharmaceutical sovereignty of EAEU countries?
• What new needs are emerging in the provision of financial services such as project finance, investment lending, and trade finance transactions?

The trend towards globalisation in the digital economy is accompanied by growing regionalisation and focus on national agendas, which prioritise the transition of countries and national economies to a new economic setup. This creates a new operating environment for international companies and regional and national actors. The latter, on the one hand, gain a comparative advantage by tapping into national markets, but, on the other, they need to secure their place in international and regional networks.

The session will present new digital projects that could be important in the context of digital transformation, integration, and the development of joint competencies.

EAEU countries together form a vast and largely inland territory with a population of 184 million. The development and accessibility of infrastructure, and transport connectivity, have a direct impact on the pace of their social and economic development. These countries have already achieved a great deal, but today’s challenges require new perspectives and new approaches.

One of the challenges (or indeed opportunities) for 2023 is the development of the region’s transport and logistics capacity. There is a growing need for new international freight routes to external markets such as the International North–South Transport Corridor, which includes the North–South Road Corridor in Armenia and the International Trans-Caspian Transport Route.

All EAEU countries are implementing long-term infrastructure plans, which makes their synchronisation and harmonisation (including in respect of customs regulations) particularly important.

Attracting finance for transport infrastructure depends largely on whether it can generate cash flows. International experience suggests that airports, highways, railways, port terminals, logistics hubs, and even border checkpoints can be built and operated by charging tolls and other fees.

• International North–South Transport Corridor: the role of the Eurasian Transport Network in developing new logistics. Synergies between the North–South and West–East transport corridors.
• Project to renew the fleet of freight locomotives in Kazakhstan: impact on railway efficiency.
• Physical infrastructure projects and the role of “soft infrastructure” in attracting finance and ensuring return on investment.
• Project to construct a third railway border crossing on the Kazakhstan–China border, with access to the existing Semey–Aktogay railway section, and its impact on the region’s trade.
• Challenges associated with financing transport infrastructure projects with tolls and other fees: global approaches.
• Project to construct the Verkhniy Lars customs and logistics centre: new opportunities for EAEU freight owners and carriers.

The Central Asian economies and, in particular, their agriculture and industry are highly energy- and water-intensive. Despite certain progress, Central Asia has low water use efficiency rates compared to global benchmarks. In 2018, water use efficiency in the region was US $2.5 per cubic metre, while the world’s weighted average was US $19.01.

The socio-economic development of the Aral Sea basin countries is taking place amid the depletion of water resources, and this trend determines relations among the region’s countries. The pressure on Central Asian water resources (SDG 6.4.2) is already very high at 81.4% and may increase significantly by 2040. The region’s energy sector is also facing significant challenges that need to be addressed at the regional level. For example, capacity and energy shortages in the interconnected Central Asian power system during the autumn and winter peak demand overload Kazakhstan’s North–South section and trigger the automatic division of transit energy flows in it as well as unscheduled energy flow deviations between the power systems of Russia and Kazakhstan.

All these negative factors cause accidents in the energy systems of Central Asian countries, a decline in the multi-year storage capacity of water reservoirs, and an increase in the critical shortages of irrigation water even in high-water years. For example, a major accident in January 2022 confirmed once again that the Central Asian power sector needs to be upgraded and developed as soon as possible. Investment needs until 2035 equal tens of billions of dollars.

In addition to underinvestment in the region’s water and energy complex, the low efficiency of water and energy use is due to the lack of regional cooperation. The Blue Peace Index indicates low cross-border cooperation in the Syr Darya and Amu Darya basins compared to the other basins (5^th and 6^th out of seven).

Strengthening regional cooperation in Central Asia and the growing shortage of water and energy resources present an opportunity to reshape relations in the region’s water and energy complex and implement joint investment projects. The main objectives of integration and regional cooperation in Central Asia are the sustainable supply of drinking water to people, as well as water and energy resources to industries, which will be possible if the water and energy complex operates efficiently.

In 2022, the EDB prepared an analytical report titled Regulation of the Water and Energy Complex of Central Asia, which contains proposals for its five main components: a system of principles for the effective regulation of the region’s water and energy complex; comprehensive modernisation of the existing institutions; establishment of the International Water and Energy Consortium of Central Asia as well as consortia for individual major projects; forms of involvement of financial operators (including the EDB) in consortium activities; and building up finance for joint research and developments in the sector. The EDB, as part of its strategy, intends to finance joint infrastructure projects aimed at advancing the Central Asian water and energy complex and to take part in devising mechanisms for its joint regulation.

• Could the countries cooperate more closely in developing the water and energy complex of Central Asia?
• Does the mechanism for managing the water resources of transboundary rivers in Central Asia need to be modernised?
• What are the important energy projects in Central Asia, and what are their effects?
• What role do international financial institutions play in developing Central Asia’s water and energy complex and promoting cooperation among the countries?
• Is the green agenda relevant for Eurasia?

Eurasia boasts significant production and resource potential. Sustaining the momentum of unlocking this potential and effectively responding to global challenges necessitates a collaborative approach.

The Eurasian region has significant potential for the implementation of major investment projects in transport, infrastructure, energy, agriculture, and digital infrastructure. The development of transport and logistics is of particular importance.

The green transformation has become a significant global trend that shapes the socio-economic outlook of countries worldwide, including those in Eurasia. Projects that have positive effects on the environment and contribute to combating climate change are vital drivers of the green transition in Eurasian countries.

Enhancing trade and investment partnerships with third countries, including those from East Asia, South Asia, Africa, and Latin America, holds special significance for the development of Eurasia.

Humanitarian cooperation and human capital development projects remain pertinent, as they are integral to our endeavours in promoting sustainable economic growth across our countries.

• What are the strengths of Eurasian countries, and how can they be combined?
• What are the most significant constraints for the development of Eurasian countries today?
• What should be done to develop transport and logistics corridors in our countries?
• Which projects in transport, energy, industry, agriculture, and digital infrastructure are priorities?
• What should be done to substitute for imports of investment and intermediate goods from third countries?
• Where are Eurasian countries now in the green transition? What should be done to unlock the potential of our countries?
• What decisions is Azerbaijan taking to ensure food security?
• What areas of cooperation are promising between Eurasian and third countries, including those from Southeast Asia, Africa, and Latin America?
• What role do development institutions play in promoting sustainable economic growth in Eurasia?