The central endeavor of Central AsiaRegional Economic Cooperation (CAREC) is the deepening ofcooperation between its members across the entire range ofdevelopment activities. Recent papers prepared by the WorldBank for consideration of the ministers and officials ofCAREC countries have focused on fostering cooperation inborder trade and in supporting key institutions thatunderpin border trade such as bazaars in central Asia. Butcooperation in border areas goes much deeper than tradealone. Economic development activities related to trade suchas tourism, retail, business and trade facilitation as wellas cooperation in public services (such as shared healthfacilities, other infrastructure services such assmall-scale irrigation), optimal use of the environment,cultural and sports activities often have a significantcross-border character. Therefore, cross-border arrangementsthat support such activities and realize economies of scalein the provision of services can yield high dividends; andthe key public policy question is how to best make sucharrangements flourish. This paper presents initial thinkingon this question, responding to the request made by CARECrepresentatives. It is based on discussions with officialsin Kazakhstan, Kyrgyzstan and Tajikistan in 2008-09 and onan examination of legal acts pertaining to cross-border cooperation.
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