CAREC Regional Integration Index (CRII)



In 2017, the CAREC Institute has designed the CAREC Regional Integration Index (CRII) based on the Huh and Park Asia-Pacific Regional Cooperation and Integration Index (RCI) to measure the depth and breadth of regional economic cooperation among the 11 member countries. It compares the intra-CAREC state of integration vis-a-vis regional and global integration index rankings. It also helps identify policy gaps and provides policy recommendations to enhance regional integration.


Following the lead of RCI, the CRII includes 26 indicators that measure various aspects of regional integration along six dimensions: (i) trade and investment integration, (ii) money and finance integration, (iii) regional value chains, (iv) infrastructure and connectivity, (v) free movement of people, and (vi) institutional and social integration. The 26 indicators are normalized and aggregated using principal component analysis to yield an index ranging from 0 to 1, with higher values representing higher levels of integration.


Within the specific context of the CAREC region, regional integration is a strategy that promotes the benefits of collective and collaborative activities among member countries through economies of scale, more vigorous intra-regional trade, expansion of markets, shared information platforms for exchange, and harmonized frameworks for social and economic interaction.


The initial version of the CRII paper included data for 2006-2016 years. The CAREC Institute is currently updating the index to prepare it for the annual release.


Trends, Challenges, and Opportunities for Agricultural Development in CAREC



The CAREC Institute and the International Food Policy Research Institute (IFPRI) have conducted a joint study on review of trends, challenges, and opportunities for agricultural development in the CAREC member countries.


While agricultural systems of the CAREC countries are too diverse to suggest a one-size-fits-all strategy, some common threads appear when discussing avenues for further growth, namely:


  • Policymakers should target improving the capacity of small farmers throughout the region. Smallholder farming is a crucial employer of the CAREC region’s large rural population. Understandably, smallholders demonstrate low capacity to get SPS and other certification to access new markets and integrate into value chains, compounded with the issue of product traceability, difficulties to achieve mechanization and improve logistics, and absence of a working public-private partnership (PPP) mechanism to make impact on a large scale. A primary and immediate need is to set in place systems that allow farmers access to modern technology, inputs, and knowledge.


  • Investments in public goods, such as irrigation and road infrastructure can provide the type of support that would aid household farmers and farm businesses of all types. Investing in public infrastructure must also focus on improving governance of these institutions which manage irrigation resources, road networks, and border points.


  • Improvements in agricultural infrastructure, development of storage and logistics facilities. Many countries in CAREC lack capacity to extend the shelf-life of horticultural goods that would allow them to be marketed at a maximum economic gain. The accompanying institutional and regulatory frameworks are also essential. Improving veterinary, SPS inspections and certification services would help increase trade in meat and animal products.


  • To unleash the growth potential of their economies, countries in the region will have to identify constraints and apply improvements to all aspects of their respective agricultural sectors, with an eye at changing nature of agricultural trade, competing trade interests, characteristics of market integration, e-commerce, issues of diversification and specialization, and how the Belt and Road Initiative (BRI) can change the dynamic.


  • Water becomes a key constraint in agricultural production, including PRC.


  • Identify and act on missed opportunities to learn from one another how to handle land ownership, productivity issues, etc.


  • How agricultural development and food security can become nutrition driven, necessity for nutrition strategies, a need to place more value money on good environment, and how to bring nutrition into the BRI to conform to PRC’s two-mountain theory to take effective measures in ecology and transform the ecological advantage into the economic and development advantage.


The CAREC Institute and IFPRI joint research team underlined that there is a need to augment governments’ research capacity, continue research, and develop a comprehensive policy framework to replace the piecemeal policy advice and action to achieve tangible results.


40 Years of Fiscal and Economic Reforms: Chinese Experience



The Chinese Academy of Fiscal Science (CAFS) and the CAREC Institute undertook a joint work to mark 40 years of the reforms of the People’s Republic of China (PRC), and share knowledge about the PRC’s policies and practices across a range of sectors including: public private partnerships, state owned enterprises, small and medium enterprises, e-commerce, fiscal policies, public sector reform, urbanization and municipal services, poverty alleviation policies, trade policy, and trade facilitation reforms.


The Chinese reform experience proved unique; an undertaking never accomplished by other socialist countries. It was a progressive reform path where various systems interacted, influenced, promoted, and governed one another. Metaphorically, the reform journey was compared with “crossing the river while feeling the stones,” meaning that policy makers were engaged in a continuous cycle of learning, reflection, adjustment, and issue-focused targeted implementation. Adjustments were timely and adequate to maintain a dynamic balance.


These reforms resulted in the government function optimization, improvements in public service capabilities which ultimately lifted hundreds of million out of poverty, and improved people’s living standards substantially. As a result, by 2019, China has graduated as the second largest economy in the world, second largest contributor to the United Nations, and a significant investor around the globe.


The summary volume of English translation describes the context of policy decisions for all mentioned sectors, elaborates on stages of development, and aspects of particular policies. The original version of the book has been published in Chinese in August 2019.



Macroeconomic Monitoring and Forecasting Model for CAREC Member Countries



With the macroeconomic monitoring and forecasting model, the Institute tried to provide a learning tool for conducting analysis of the state of the economy and forecast near-term challenges and prospects of the CAREC members. The purpose was to develop a model to reflect the economic structure for member economies and provide country write-ups on recent economic developments and emerging key policy issues. The components of the model allowed customization to conform with peculiar domestic economic conditions.