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While extreme poverty has largely been eradicated, the countries in the Western Balkans, South Caucasus and Central Asia continue to face multiple development challenges.

Exclusion is widespread and inequalities are on the rise. In many countries, decent employment is scarce while social safety nets are outdated. Women’s participation in the workforce and politics remains limited. Youth are particularly at risk of being marginalized at a time of rapid economic change.

Outward and transit migration flows are among the highest globally, with many countries in the region experiencing extensive depletion of human capital.

One of the biggest challenges will be to reconcile economic growth with social progress and environmental sustainability. Climate change is already exerting pressure on shared natural resources and triggering devastating weather events. And in some countries, conflicts and governance issues persist, exacerbated by weak social cohesion, ethnic tensions and violent extremism. 

Central Asia

(Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan)
The Central Asian countries face important choices concerning global and regional integration opportunities associated with accession to the World Trade Organization, membership in the Eurasian Economic Union, and participation in the ‘Belt and Road’ initiative led by the People’s Republic of China.

They continue to wrestle with a set of of interrelated human development challenges (often cross-border) that combine inequalities with lack of job opportunities; underdeveloped transport infrastructure and connectivity; ethnic tensions; corruption; and unsustainable management of hydrocarbon, mineral, water and land resources.

The paucity of decent jobs; erosion of previous gains in gender equality; climate and seismic risks; and growing concerns about radicalization and violent extremism complicate the development prospects of Central Asia.

South Caucasus and Western CIS

(Armenia, Azerbaijan, Georgia, Belarus, Moldova, Ukraine)
Development in the South Caucasus and Western Commonwealth of Independent States (CIS) countries continues to be affected by weak democratic practices and increasing income inequalities and bleak job perspectives and intra-regional disparities. In many parts of the sub-region, tensions remain related to disputed territories, and cross-border and post-conflict situations.

Poverty rates remain high particularly in the South Caucasus. The dynamics of the European Union neighbourhood policies influence development agendas of the entire sub-region, and some countries have geared their foreign and domestic policies towards European integration, while others see little appeal in a closer affiliation with Europe and acceded to the Eurasian Economic Union.

The Western Balkans and Turkey

(Albania, Bosnia and HerzegovinaKosovo*, MontenegroSerbiathe former Yugoslav Republic of MacedoniaTurkey)

Countries in the Western Balkans and Turkey share a joint European aspiration, the EU agenda driving the domestic policy priorities and reform processes.

Development in the Western Balkans continues to be affected by legacies from recent conflicts and persisting inter-ethnic tensions within and across borders, and only slowly improving sub-regional cooperation.

Economies have been picking up, but jobs continue to be scarce. Countries continue to struggle with multiple human development challenges related to skills gaps, high unemployment, social exclusion and widening income inequalities, translating into the highest inequality ratios in the region.

Emerging challenges are climate change and environmental risks, such as water scarcity, flooding and land degradation, as well as the migration crisis.

* All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999).

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