The Complexity of E-Business and Markets in Central-Asia, and Impact on Economic Development

Abstract

The development of digital economy and e-business platforms, is intertwined with Foreign Direct Investment (FDI), as a key element and driving force behind economic growth and regional economic integration. This paper focuses on the dynamic relationship and impact of e-business infrastructure on FDI's, and how such relationship may determine progress. This research explores challenges to the dynamic region of Central-Asia, and to derive lessons to other regions around the world on how to go about integration, growth and attracting sustainable FDI's because of effective e-business infrastructure. Methodology in this paper consisted of examination of essential elements of e-business applications, and key economic indicators in Central-Asia as published by the World Bank, IMF, OECD and Asian Development Bank, to determine key performance indicators. Analyses shows that the Central-Asian region is suffering from low-competitiveness as a direct result of poor infrastructures, lack of effective administrative systems, oversized-state owned companies, low-digitalization, low per-capita income, low productivity-based competitiveness, and concentration of wealth within a minority of the population. All of which, is limiting the attractiveness of FDI in the region. Yet, this does not deter China and Russia from attempting to dominate FDI in this vital region. E-business infrastructure and digitalization remains a core-driver in the economic development of the region. The legacy of the Soviet Union, coupled with rich energy-based natural resources, and vast population in search of a low-wage employment in nonboring countries, will continue to dominate the region's ability to pave a way in the global economy and prevents generating dominant highly skilled supply of digital-based expertise.