1. Strengthening Transport Connectivity for Regional Economic Integration in Southern and Central Asia
Policy Dialogue on Strengthening Transport Connectivity in Southern Asia
New Delhi, 6 March 2016
Nagesh Kumar

2. The Criticality of Connectivity for Southern and Central Asia
Changed external context and increasing criticality of regional economic integration
Despite geographical contiguity, least integrated region
Untapped intra-regional trade potential in Southern and Central Asia, is estimated at more than 50 per cent of potential
Southern and Central Asian subregion has also lagged behind in terms of poverty reduction
Southern and Central Asia together accounts for 36 percent of world’s extreme poverty
Poor transport connectivity and facilitation prevents the subregion from exploiting benefits of geographical contiguity, scale economies, potential for regional production networks
Prevents from benefiting from leveraging the strategic geographic location

3. Challenges to Connectivity
Transport infrastructure gap is huge for Southern and Central Asian countries
Investments up to US$ 2.5 trillion may be required to cover the overall infrastructure gap in South Asia alone
Require increase in spending up to about 9% points of GDP annually until 2020
Transport infrastructure development scattered across disconnected subregional projects in the Southern and Central Asia
ECO, SAARC, BIMSTEC and ASEAN corridors are proceeded in isolation
Poorly developed soft connectivity and facilitation
Lack of region-wide transit and transport agreements
High trade costs are significantly higher for intra-regional trade than for overall trade of Southern and Central Asian countries
Intra-regional trade costs in South Asia is markedly higher at about 114% compared to that of South East Asia at 76% and East Asia at 51%
Intra-regional trade costs in Central Asia is prohibitively high at 121%
Hinders formation of regional value chains

4. Multilateral and Subregional Corridor Development
ECO
Facilitated by ECO Transit Transport Framework Agreement signed in 1998 and the ECO Transit Trade Agreement signed in 1995
Multimodal; both transport and trade facilitation coverage
SAARC
SAARC Regional Multimodal Transport Study adopted in 2006
Multimodal routes identified (10 road corridors and 6 rail corridors); Limited trade facilitation coverage
Motor Vehicles and Railway Agreements being finalized
BIMSTEC
BIMSTEC Transport Infrastructure and Logistics Study (BTILS) adopted in 2007
ASEAN
Master Plan on ASEAN Connectivity adopted in 2010
Multimodal, comprehensive coverage including all dimensions of connectivity and trade facilitation measures

5. Multilateral and Subregional Corridor Development
International North–South Transport Corridor (INSTC)
11 Member States
BCIM Corridor
Cross-border transport project under Bangladesh-China- India- Myanmar Forum for Regional Cooperation
SASEC Corridors – South Asia Subregional Economic Cooperation
Covers 6 Countries - Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka
Facilitated by Trade and Transport Facilitation Monitoring Mechanism
Multimodal; broad coverage
BBIN Cooperation
BBIN Motor Vehicles Agreement provides transit across Bangladesh, Bhutan, India and Nepal
India-Myanmar-Thailand Trilateral Highway (IMT-GT)
Trilateral Motor Vehicle Agreement expected to be signed in 2016

6. Multilateral and Subregional Corridor Development
CAREC Corridors – Central Asia Regional Economic Cooperation
10 Countries - Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan,, Turkmenistan, Uzbekistan
Quadrilateral Transit Agreement between China, Kyrgyz Republic, Kazakhstan And Pakistan
Specific focus on cross border transport infrastructure
Limited coverage of trade facilitation measures

7. Benefits of Broadening Connectivity
Promote development of regional production networks
Wider connectivity networks enhance sourcing options for upstream firms and chances of market participation for downstream firms in the value chain
Efficiency of regional sourcing of inputs will increase proportionately with reach of regional transport networks to as many downstream production units as possible
Maximize network externalities
Strategic location of Southern and Central Asian subregion offers immense possibilities of inter-regional connectivity with EU and ASEAN
Besides facilitating intraregional trade can make Southern Asia a hub of East-West trade
Major boost for least developed and landlocked countries in Central Asia and South Asia like Afghanistan, Bhutan, Nepal
Easier to mobilize resources for infrastructure and institutional development in a broader regional framework
Synergies between overlapping corridor development programmes
Avoid duplication of investments

8. Contours of an Integrated Approach to Connectivity
Integration of subregional corridors into regional corridors by harmonizing both hard (physical) and soft (policy) infrastructure
Asian Highway (AH) and Trans-Asian Railway (TAR) route networks at the Asia-Pacific level can guide the integration of transport corridors
Collaboration between subregional organizations for coordination of subregional transport development projects
Follow a building block approach as a part of an agreed Connectivity Master Plan
Easier to mobilize resources for regional projects

9. ESCAP’s Pillars of Multimodal Connectivity in the Asia-Pacific
Asian Highways Network
Intergovernmental Agreement adopted on 18 November 2003
Trans-Asian Railways Network
Intergovernmental Agreement adopted on 11 June 2011
Dry Ports Network
Intergovernmental Agreement opened for Signature on 8 June 2013

10. Three Asia-Europe Continental Land Bridges
Southern corridor is the least integrated
Southern corridor passes through the most populous subregions of the world
Southern corridor has the maximum potential for consolidating factory Asia

11. Connecting Southern and Central Asia and Europe
INSTC and ITI-DKD-Y Inter-modal Container Rail Corridors
Extend Istanbul-Tehran-Islamabad (ITI) container train corridor to Delhi-Kolkata-Dhaka (DKD) using existing physical infrastructure
Exploit multimodal linkages along TAR and AH networks
Interconnections with INSTC, CAREC, BBIN, IMT and other important subregional corridors
Only a transit trade agreement needed between concerned countries
Can become a major trade corridor linking South Asia with Afghanistan, Central Asia and Europe

12. Turkey-Iran-Pakistan-India-Bangladesh-Myanmar (TIPI-BM) Road Corridor along Asian Highway

13. UNESCAP Regional Cooperation Frameworks for Integrated Transport and Trade Facilitation
Regional Cooperation Framework adopted for AH and TAR networks; Framework for Dry Ports under development
Models for secure and efficient border-crossings and transit
Provide policy guidelines for integrating transport and trade facilitation programmes
Guidelines for formulating bilateral/subregional agreements to standardize operations
Guidelines for adoption of new technologies
Guidelines for simplifying intermodal interfaces
Encourage participation of member countries in international transport conventions

14. Building Blocks for Inter-regional Connectivity
Provide platform for cooperation between subregional organisations
Common member states can play a vital role in advancing this process
Taking stock of parallel developments in different parts of Southern and Central Asia
Recent developments include BBIN Motor Vehicle Agreement
Extension of Afghanistan Pakistan Trade Transit Agreement (APTTA) to include Tajikistan

15. Towards A Connectivity Master Plan
Elements of the Connectivity Master Plan
Stock taking of physical infrastructure requirements of trunk corridors and their sublinks
Strategy for institutional cooperation between governmental agencies and multilateral bodies for implementing region wide transit and transport agreements
Plan for building synergies between ongoing corridor development projects in the Southern and Central Asia subregion
Plan for ICT development and digitization of documentation required for cross-border transit and transport in the subregion
Plan for resource mobilization and framework for cooperation in this regard between governmental and multilateral agencies and the private sector

16. The Way Forward Regional Policy Dialogues Connectivity Master Plan
Container train trial runs
Facilitate Production Hubs and Processing Centers for Key Locations alongside the Corridors
Platform for Coordination amongst subegional frameworks

17. Thank you 17 17