This working paper cover the impacts of regional economic integration of Central Asia Regional Economic Cooperation (CAREC) member countries on their trade and GDP growth. Though several bilateral and multilateral agreements to boost mutual trade are considered measures of economic integration, in the absence of high-quality physical infrastructure of transport and logistic services the implementation of such agreements is not possible. So, the provision of good trade and transport-related logistic services has been taken as a key indicator of integration among the countries in the region.
This paper discusses the role of the magnitudes and modes of financing in determining the provision of logistic services and transport-related infrastructure. The results emphasize the causal relations between trade and transport-related infrastructure and GDP growth. The most important conclusion is the identification of short-term external borrowing as the most effective mode of financing