Investigating Economic Growth, Trade Issues and Future Energy Strategies for Central Asian Countries

Abstract

We examine the economic growth, energy development policies and strategies for the CAC from various perspectives. We apply statistical data analysis techniques and mathematical modelling methodologies focusing upon regression model analysis in order to deal with the economic and energy related data during the period 1990-2014, and to investigate the relationship among economic growth, energy production, and the trade of energy resources in order to find future desirable policies and strategies for the CAC. Findings show that energy production growth would bring statistically significant positive impact on GDP growth in fossil-fuel rich Kazakhstan, Uzbekistan, and Turkmenistan while we also find negative impact of GDP growth on the trade balance of the CAC except for Turkmenistan. Another finding follows that the foreign direct investment has a significant influence on the trade balance in the cases of Uzbekistan and Turkmenistan, which institute import substitution policies right from their initial years of independence. Based on these quantitative investigations on economy, energy, and trades we propose future energy strategies for the CAC, stressing the importance of diversification of economies.