• 042-35941921, UAN: 03-111-999-101
  • info@kipscss.net

Post-Pandemic Central Asia: Moving Beyond ‘Helicopter Money’

  • Gregory Gleason
  • June, 2020
  • 178

Social and economic upheaval at such a scale as experienced amid the COVID-19 pandemic unavoidably entails political effects.

IMF Managing Director Kristalina Georgieva described the scope and scale of the COVID-19 pandemic challenge bluntly: “COVID-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory.” The recent announcement by the IMF that it would provide $375 million in emergency assistance to Uzbekistan demonstrates the commitment of international financial institutions to address the economic upheaval created by the pandemic in the Central Asian region.

Virtually all major financial institutions long associated with the “West,” such as the World Bank and the Asian Development Bank, have announced major financial assistance programs that apply to Central Asia. The newer international financial institutions associated with the “East,” such as the Eurasian Development Bank and the Asian Infrastructure Investment Bank, have also stepped forward offering emergency assistance.

These actions echo emergency measures under way in the economically advantaged countries of Europe and North America. European Commission President Ursula von der Leyen told European parliamentarians, “We need a Marshall Plan for Europe’s recovery and it needs to be put in place immediately.” European Central Bank (ECB) President Christine Lagarde put it succinctly, stating the “Pandemic Emergency Purchase Programme,” (PEPP), is prepared to provide an economic stimulus “by as much as necessary and for as long as needed.”

The challenge of the COVID-19 pandemic is global in scope but the specific, local problems in some respects are very different. COVID-19 makes its own rules. It knows no nationality and no borders. The infection spreads without discrimination based on form of government, religion, or ethnicity. COVID-19 challenges all countries in common ways and the response, for all countries, is comprised of three stages: first, the immediate public health emergency; second, the mid-term economic and social requirements of containing the spread of the virus and mitigating the effects; and third, the long-term effects of recovery and restoration of normal economic and social relationships.

The Central Asian countries face the same challenges as countries around the world, but they also face some unique problems that are a product of their particular circumstances of geography, economy, and even culture. The governments of Central Asia are responding to the situation and international financial institutions are taking steps to help. The Central Asian countries have not, in comparative respects, done badly in mobilizing for the first emergency stage of this crisis. As we move toward the longer-term questions of sustainability, there are very real questions about whether regional finances will be sufficient to meet the challenge.

Until very recently in economically developed countries, discussion of so-called “helicopter money” was a subject for philosophically-inclined economists. COVID-19 changed that. Today discussion of “bail-out money” fills the talk of even budget managers and parliamentarians in the United States and the European Union. If “manna from heaven” works for highly developed countries, can similar mechanisms be used to address the challenges Central Asian countries face? Foreign assistance is often motivated by altruism but often comes with conditions.

Nothing is free, especially money.

Just as in all countries around the world, the SARS-CoV-2 virus and the disease it causes, COVID-19, came as a surprise to Central Asia. In the Central Asian countries, as in other countries around the world, the first response steps were emergency measures. Political authorities called on medical personnel and law enforcement to respond quickly and effectively. After the first cases of COVID-19 were identified in March 2020 in Kazakhstan, Kyrgyzstan, and Uzbekistan, counter-infection measures were taken quickly. Tajikistan took some measures but sought to downplay the spread of the virus, perhaps out of misplaced bravado or out of concern about panic. The neighboring Turkmen leader generally avoided the virus issue but did respond to requests from neighboring leaders to participate in joint action in a video conference on April 9, 2020.

All Central Asian countries shared the same wrenching adaptation to the pandemic and its economic consequences as scores of other countries around the world. Air, rail, and road traffic connections were severed. Supply chains linking many of the most important sectors of the economy to world suppliers and world markets were suddenly broken. Markets, shops, factories, schools, public institutions, and places of worship were put into lockdown. An unprecede...

Share on facebook or twitter

Email to a friend