Central Asia Regional Economic Cooperation

Table of Contents


The Central Asian Regional Economic Cooperation (CAREC) program is a multilateral partnership program among 11 countries for the development of infrastructure, economic growth, and alleviation of the poor. The program was started in 1997 by the 5 Central Asian countries for economic coordination and growth. CAREC follows the principle of “Good Neighbours, Good Partners, and Good Prospects.” Since its establishment, CAREC has generated $40 billion in investment as of December of 2020, which helped in establishing transport infrastructure, increased trade and security, facilitated free movement of people and freight, and laid the groundwork for the development of the economic corridors in the future.

In 2006, an intergovernmental body was set up by the member states of CAREC, the CAREC Institute (CI). The purpose of the CI is to contribute to collective knowledge generation, sharing, and capacity building of the member states. Its headquarters is situated in Urumqi, Xinjiang Uygur Autonomous Region, the People’s Republic of China and is collectively shared, owned, and managed by the 11 member states, including Pakistan.

Objectives of CAREC

CAREC focuses on improving the infrastructure and policy environment for optimal economic growth in the region. The main areas of focus for CAREC are transport, energy, trade policy, and trade facilitation.

However, the spectrum of CAREC objectives was revamped in its new vision and plan, CAREC 2030, with the aim of shared and sustainable development; built on the foundation of CAREC 2020’s success. The 5 main areas of operation include both traditional and new areas and consist of economic and financial stability, trade, tourism and economic corridors, infrastructure and connectivity, agriculture and water, and human development.

CAREC and Pakistan

Pakistan became a member of CAREC in 2010 and is among the nations in shared control of CI. Pakistan’s strategic location is ideal for the Central Asian countries as it provides the landlocked nations of Central Asia access to the warm waters of the Arabian Sea, giving them access to trade with Middle Eastern countries. In order to serve this purpose and expand its trade with the CARs, Pakistan has been actively improving its nationwide transport and energy infrastructure. This will allow Pakistan to fulfill the role of a bridge, not only connecting CARs to the Arabian Sea but also connecting Central Asia to Southeast Asia.

As of 2019, CAREC has invested an accumulated amount of $1.47 billion in Pakistan to improve its infrastructure. Moreover, Pakistan’s national infrastructure would become a part of the CAREC 5 Economic Corridor which will connect landlocked countries with the Arabian Sea, through Karachi and Gwadar. The natural deep port of Gwadar would prove to be very beneficial for all the countries. Uzbekistan has already signed a transit trade agreement (TTA) with Pakistan for its access.

Pakistan has also been able to fulfill its energy needs by importing energy from the CAREC nations. In the future, Pakistan will become the hub of economic activity and will be a transit economy as its location will allow landlocked nations to access Southeast Asia and the Middle East, and vice versa.

Joint Ventures

Additional funding of $273 million was approved in 2016 for the M-4 Gojra-Shorkot-Khanewal section of the National Motorway in order to connect Gojra and Shorkot to the network of National Motorways and improve north-south connectivity.

A combined project for improving cross-border services and infrastructure at Torkham, Chaman and Wagha borders for increasing efficiency in the movement of goods and persons across borders, with a total investment of $300 million.

Moreover, there are many programs that CAREC and Pakistan are working on such as improving customs, policies, infrastructure, and technical support by the use of knowledge sharing, strategic planning frameworks, and investment programs.

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