In 2024, the World Bank Education Team in Georgia, under the analytical activity - Strengthening Higher Education and Research in South Caucasus, issued a call for policy research papers. The objective was to gain insights into existing challenges within the higher education sector from the...

In parallel with global developments, inflation in the Central Asia and Caucasus (CCA) has exhibited large swings in recent years. This paper investigates inflation dynamics in the CCA and its main drivers and derives conclusions that can inform policymaking. The analysis is based on three...

Economic growth and development are key to societal well-being, yet emerging economies in Central Asia and the Caucasus face challenges such as labor market inefficiencies, uneven capital distribution, and weak institutions. This study examines the impact of education, institutional quality,...

This policy brief examines the strategic importance of the South Caucasus and its pivotal role in the European Union's evolving engagement with Central Asia. The regional landscape, however, remains highly volatile. Russia's aggression in Ukraine has had direct and indirect repercussions for the...

One of the Wehrmacht's main goals in the Caucasus were the oil fields. A special unit for the Caucasus operation was the "Technische Brigade Mineralöl" (Mineral Oil Technical Brigade). The large volume of surviving files from the TBM allows us to glean new insights into the German prisoner of...

A growing literature examines the roles of financial literacy in an individual's income, saving behavior, and the use of financial products including financial technology (fintech). However, no study has examined the effects of the financial literacy of family business owners on fintech use and...

Food insecurity has become of increasing concern following the economic downturn during the COVID-19 pandemic and the subsequent sharp rise in inflation, including food price inflation. To better understand the conditions of food insecurity and the impacts of inflation and other drivers of food...

Policymakers in the South Caucasus region all know a difficult truth: the performance of their universities is disappointing. None of the institutions in the region can boast of a world-class status; none reach a meaningful rank in any of the university rankings. The countries' institutions, on...

We document novel evidence that confidence in macrofinancial stability has a positive impact on financial inclusion in CCA countries and more broadly. This channel is particularly important for CCA countries, with confidence gains of 1 unit leading to 0.7 unit improvement in financial inclusion....

Russia’s invasion of Ukraine has accelerated global dynamics that profoundly impact the post-Soviet South. Relations with Russia are still strong, but the former subalterns are raising their voices. The empowerment is most visible in their foreign relations, but also tends to strengthen...

In this paper, we use survey data from the South Caucasus countries (Armenia, Azerbaijan, and Georgia) to document the presence of gender gaps in the labor market and examine its consequences. To do the analysis, we use a numerical general-equilibrium occupational choice model with heterogeneous...

A growing literature examines the roles of financial literacy in an individual's income, saving behavior, and the use of financial products including financial technology (fintech). However, no study has examined the effects of the financial literacy of family business owners on fintech use and...

One of the Wehrmacht's main goals in the Caucasus were the oil fields. A special unit for the Caucasus operation was the "Technische Brigade Mineralöl" (Mineral Oil Technical Brigade). The large volume of surviving files from the TBM allows us to glean new insights into the German prisoner of...

Food insecurity has become of increasing concern following the economic downturn during the COVID-19 pandemic and the subsequent sharp rise in inflation, including food price inflation. To better understand the conditions of food insecurity and the impacts of inflation and other drivers of food...

School closures have a negative impact on children's educational outcomes. During the COVID-19 pandemic, Central Asia and the Caucasus introduced online classes and TV programs with a view to preventing learning loss. Based on a household survey in nine countries (Afghanistan, Azerbaijan,...

This paper analyzes historical census data from the final Soviet census in 1989. We find that, even in the absence of sex-selective abortions, the fertility decisions of Armenian, Georgian, and Azeri parents living in Russia in the late 1970s and the 1980s were significantly more son-biased than...

Since February 2022 - when Russia invaded the Ukraine - the geopolitical situation in the South Caucasus changed dramatically. On the one hand, EU sanctions on Russia made the "Middle Corridor" of the Chinese Belt and Road Initiative through the South Caucasus more attractive for China and...

Risk and uncertainty are on the rise, and countries across Europe and Central Asia (ECA) are not immune from it. The region is being hit by crises, conflicts, and continued uncertainty that are negatively affecting people's livelihoods in the short term and prosperity in the long term. Then...

Transport connectivity is an important determinant of agglomeration economies and urbanization. However, measuring its impacts is a complex task when causality is considered. An important empirical challenge comes from potential endogeneity of infrastructure placement. To deal with the...

This report looks at resilience through national health system lenses and provides lessons to strengthen health systems for future shocks. The findings are based on case studies from five countries in Eastern Europe and the South Caucasus (Armenia, Azerbaijan, Georgia, Moldova and Ukraine), as...

In response to the COVID-19 pandemic, education systems had to redeploy inputs typically used in schools to remote education. This significantly reduced average student learning, with disadvantaged students experiencing a disproportionately large decline. Not closing these learning losses will...

This paper documents a substantial change in regional trade patterns precipitated by the war on Ukraine and the subsequent introduction of trade sanctions on Russia. It provides evidence suggestive of intermediated trade via neighbouring economies being used to circumvent the sanctions. The...

The South Caucasus, straddling Asia and Europe, is a complex area of ethnic, nationalist and great-power rivalries. The post-Soviet Union era has been marked by flareups of military conflict and economic, social and political confrontation. Taking a regional perspective, AsiaGlobal Fellow...

Connectivity, especially in the transport sector, has become a ubiquitous issue in the South Caucasus in recent years. Transport connectivity also plays a central role in the European Union’s policy towards the region. As part of its Global Gateway Initiative, the EU has made a commitment that...

Central banks in Caucasus and Central Asia (CCA) have been enhancing their monetary policy frameworks in the last decade, and are at different stages of the transition to a type of inflation targeting regimes. This paper documents their progress and the current state of their monetary policy...

This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is...

Amidst a global backdrop of persistent post-COVID inflation and spillovers from Russia's war in Ukraine, the countries of the Caucasus and Central Asia (CCA) region have faced strong price pressures in recent years. Inflation is estimated to have peaked in early 2023, but still exceeds central...

Raising long-term growth and resilience and improving living standards and inclusion are the top economic policy priorities for countries in the Caucasus and Central Asia (CCA). The region responded strongly to the COVID shock, which unavoidably caused a contraction in output and an increase in...

The South Caucasus has long been a theatre of Turkish and Iranian cooperation and rivalry. While these two regional powers have historically balanced their interests, there are signs that rivalry is taking precedence. Turkey’s unwavering backing of Azerbaijan during the 2020 Karabakh War...

This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is...

This paper analyzes historical census data from the final Soviet census in 1989. We find that, even in the absence of sex-selective abortions, the fertility decisions of Armenian, Georgian, and Azeri parents living in Russia in the late 1970s and the 1980s were significantly more son-biased than...

This study addresses the different distributional and welfare implications of price volatility amid the ongoing cost-of-living crisis, focusing on both Turkey and the South Caucasus region, which have different welfare regimes and patterns of price changes. This paper explores the impact of...

This study empirically investigated the factors affecting firms' ability to adjust production in response to the COVID-19 outbreak. This study used firm-level survey data from the Enterprise Survey implemented by the World Bank Group, including a standard Enterprise Survey (Baseline) and two...

The Caucasus region has experienced an increasing inflow of Chinese official development finance in the last twenty years. The inflow accelerated after the countries of the Caucasus region became participants in the Belt and Road Initiative. Chinese finance into Eurasia aims to build energy and...

Among the many significant geopolitical consequences of Russia's war against Ukraine has been the reinvigoration of the Middle Corridor, both as a regional economic zone comprising Central Asia, the Caucasus, and Turkey but also as an increasingly attractive alternative route between Europe and...

Declining but still high dollarization rates in the Caucasus and Central Asia (CCA) region affect macroeconomic stability, monetary policy transmission, and financial sector development. Although several studies have investigated the dynamics of dollarization in the CCA, the relative roles of...

This paper presents stylized facts on financial development in the CCA countries relative to their EM and LIC peers and assesses how financial development can boost growth in the CCA. Drawing on IMF’s multidimensional index of financial development, we find that CCA countries have made...

This study empirically investigated the factors affecting firms' ability to adjust production in response to the COVID-19 outbreak. This study used firm-level survey data from the Enterprise Survey implemented by the World Bank Group, including a standard Enterprise Survey (Baseline) and two...

Limited economic diversification has made the economies of the Caucasus and Central Asia particularly vulnerable to external shocks. The economies in the region are heavily reliant on oil and mining exports as well as remittances. In some countries, tourism and capital flows also play a...

The COVID-19 crisis raises the risk of renewed financial sector pressures in the Caucasus and Central Asia (CCA) region in the period ahead. Bank distress and its economic and fiscal fallout have been recurring features of many CCA countries, as seen after the global financial crisis and the...

Among the many significant geopolitical consequences of Russia’s war against Ukraine has been the reinvigoration of the Middle Corridor, both as a regional economic zone comprising Central Asia, the Caucasus, and Turkey but also as an increasingly attrac­tive alternative route between Europe...

It has become cliché to argue that Turkish-Iranian relations oscillate between a controlled rivalry and limited cooperation. However, in Iraq and Syria, rising tensions between Turkey and Turkey-affiliated groups on the one hand and Iran and Iran-backed groups on the other, have put the two...

The Belt and Road Initiative is one of the platforms for regional cooperation that enables participating countries to develop and deepen economic ties. The South Caucasus has always had great historical, political, geographical and economic significance for Iran. Through the research, we tried...