June 26 (UPI) -- The post-COVID-19 world will be radically different for businesses than before the pandemic. Nowhere is this more true than in emerging markets.
Besides the sheer number of deaths in Brazil, Iran and China, the new business paradigms given birth because of the communicative nature of the disease will destroy old social processes and business patterns and open new pathways for growth.
In an ironic twist, the coronavirus outbreak may ultimately bring the world closer together and deliver an acceleration of inter-connectivity. Remote learning, video conferencing and other technologies will forge new partnerships, alliances and, above all, opportunity for perceptive entrepreneurs.
Supply chains, which have been decimated during the pandemic, will need to be rebuilt. This presents a chance to more closely align logistics with national interests. Insightful leadership can leapfrog legacy systems and more fully take advantage of a country's comparative advantages.
In the United States, the Trump administration is pushing to decouple America from the Chinese mercantile model for national security reasons. Other nations are going the other direction, looking to capitalize on Beijing's Belt and Road Initiative and the investment it could bring.
The United States and China will compete in the heart of Eurasia, and especially in Central Asia, which needs everything from jobs to hospital beds, and from infrastructure to new industries that would replace the traditional mining, oil and gas and legacy agriculture.
This possibility takes on even more importance when considering the coronavirus outbreak has significantly reduced revenue from hydrocarbon exports as global demand contracts. For governments dependent on oil and gas, minerals and raw materials, this is a dire economic crisis. Social unrest may be just around the corner.
This consequence of the disease highlights the urgent need to diversify economies in emerging markets across the globe through investment and better governance.
In Central Asia, Uzbekistan has become the cause celebre for international financial institutions as a paragon of economic reform. With COVID-19, the Asian Development Bank boosted loan disbursement for existing programs. The ADB Trade Finance Program, which covers Kyrgyzstan, Uzbekistan and Tajikistan, went up from $1.35 billion to $2.15 billion to support projects that respond directly to the impact of COVID-19 or deals with its economic impacts.
Uzbek President Shavkat Mirziyoyev signed a decree that will allow the country to take $3.1 billion in soft and long-term loans from international financial Institutions, including the World Bank, the ADB, the Islamic Development Bank and the Asian Infrastructure Investment Bank.
The World Bank has increased its lending to Uzbekistan by $300 million, including $95 million for public health and $200 million for implementing environmental, health and social economic policy programs.
However, one nation in the region is combining the anti-COVID-19 effort with a drive to grow a new financial base, integrating technology, trade, the rule of law, complete with application of English law and legal expertise, and boosting foreign direct investment.
Kazakhstan's Astana International Financial Center is pushing to be the foremost regional financial center in Central Asia. There, the COVID-19 pandemic presents a chance to turbocharge this agenda.
"Another equally promising opportunity lies with mid-cap companies in Russia, Kazakhstan, Belarus, Georgia and other countries in the region that are eager to engage with Chinese investors and we are helping to bring them together," AIFC governor Kairat Kelimbetov said in June 2019.
AIFC hopes that it's push to connect investment capital with regional projects will drive more foreign entities to deploy capital in the Central Asian region.
"We must clearly understand that attracting foreign investment will develop the economy and allow us to solve the issue of the quality of life of the population, create new jobs and solve social issues," Prime Minister Askar Mamin said in April 2019, as the government set up the Coordinating Council for Investment Attraction and appointed him investment ombudsman.
"We are ready to work through the new approach regulations and actively work in the new structure in the future, which will not only attract investments, but also better understand the system challenges that exist in the economy," said Agris Preimanis, chairman of the Kazakhstan Foreign Investors Association and country director of the European Bank for Reconstruction and Development.
"The proposed measures will allow to consolidate and quickly form investment subsidies for investors and begin a comprehensive work to increase the volume of net direct investments. At one of the next meetings of the government, a complete list of all necessary measures for the implementation of new approaches and the corresponding roadmap will be submitted," finance minister Alikhan Smailov said.
In addition to driving foreign direct investment, AIFC is also tasked with developing human financial capital in the former Soviet nation.
The AIFC is opening competence centers at Kazakhstan's major universities to improve investment literacy. The initiative also intends to help develop the key competencies and practical skills of new experts in finance, investment and other industries, The Astana Times reported.
AIFC sees these efforts as a way to take an environmental leadership role in Central Asia. While the emerging markets are facing challenging times, the energy and dedication of the peoples of Central Asia suggest that the ancient Silk Road will continue to thrive into the 21st century and beyond.
Ret. Col. Wes Martin of the U.S. Army Military Police has served in law enforcement positions around the world and holds a MBA in international politics and business.
