This chapter identifies cross-border initiatives with Bangladesh’s involvement particularly at the bilateral, subregional and regional levels. Some of these initiatives are also integrated with Asia-wide broader connectivity particularly through the Asian Highway and Trans Asian Railway initiatives. Ongoing initiatives include construction and upgrading of multi-lane highways and railways, road and rail bridges, procurement of locomotives and wagons, and construction of internal container river ports. A consensus among the concerned countries is needed with regard to standard operating procedures, harmonization of standards and customs procedures, and service charges and user fees for transit facilities. Additionally, significant investment will be required for trade facilitation and to upgrade border trade facilities at land ports, inland waterways and sea ports. The chapter identifies five key areas where concrete action from major stakeholders is required: (1) mobilizing the necessary funds for building physical infrastructure; (2) identifying and sequencing of priorities; (3) cross-border coordination; (4) building human resources to manage cross-border mega projects; and (5) building supply-side capacities to benefit from connectivity-driven regional market opportunities.
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Mustafizur Rahman, Khondaker Golam Moazzem, Mehruna Islam Chowdhury and Farzana Sehrin
Ganeshan Wignaraja, Peter J. Morgan, Michael G. Plummer and Fan Zhai
This chapter estimates the potential gains from South Asian–Southeast Asian economic integration using an advanced computable general equilibrium (CGE) model. It estimates the potential gains to be large, particularly for South Asia, assuming that the policy- and infrastructure-related variables that increase trade costs are reduced via economic cooperation and investment in connectivity. As Myanmar is a key inter-regional bridge and has recently launched ambitious, outward-oriented policy reforms, the prospects for making progress in these areas are strong. If the two regions succeed in dropping inter-regional tariffs, reducing non-tariff barriers by 50 percent, and decreasing South Asian–Southeast Asian trade costs by 15 percent – which this chapter suggests is ambitious but attainable – welfare in South Asia and Southeast Asia would rise by 8.9 percent and 6.4 percent of gross domestic product, respectively, by 2030 relative to the baseline. These gains would be driven by rising exports and competitiveness, particularly for South Asia, whose exports would rise by two-thirds (64 percent relative to the baseline). Hence, the chapter concludes that improvements in connectivity would justify a high level of investment. Moreover, it supports a two-track approach to integration in South Asia, that is, deepening intra-regional cooperation together with building links to Southeast Asia.
Edited by Michael G. Plummer, Peter J. Morgan and Ganeshan Wignaraja
Moe Thuzar, Rahul Mishra, Francis Hutchinson, Tin Maung Maung Than and Termsak Chalermpalanupap
With closer regional integration there is increasing interest within the Association of Southeast Asian Nations (ASEAN) and on the part of the ASEAN’s dialogue partners in the potential gains of closer connections between Southeast Asia and South Asia. The strategic positions of India, Myanmar and Thailand provide the basis and scope for implementing multi-modal connectivity projects, for building upon and improving existing infrastructure and processes for cross-border connectivity in trade. With outward-looking policies in the various subregions that seek to link their economies closer than ever, the ASEAN and South Asian countries are presented with a wide array of options at the bilateral, subregional and regional levels that can be pursued in partnership under the different frameworks for cooperation. The role of regional entities such as the Asian Development Bank is also important to consider. This chapter assesses the political economy and other implications of cross-border connectivity between South and Southeast Asia, and suggests practicable options for moving forward.
This chapter describes India’s trade and investment relations with Southeast Asia and its policies to increase integration. India’s regional integration with Southeast Asia has been advancing well and several projects are being implemented currently. India’s regional connectivity with Southeast Asia has been evolving on two pillars: Northeast India for multimodal and intermodal operations and Southern India for multimodal operation. It presents India’s broad proposals on connectivity projects with Southeast Asia and policy recommendations to strengthen connectivity in Asia in general and that between ASEAN and India in particular. Enhancing connectivity between South and Southeast Asia is a multifaceted task that will require the implementation of strong policy initiatives. Development of the Southeast Asia and South Asia connectivity would throw up significant opportunities to industrial development in India and its trade potential with South and East Asian countries.
Investment in infrastructure for increasing trade and connectivity in South Asia and South East Asia has been impacted by reduction in commercial bank participation in project financing, which has made the role of multilateral financial institutions and export credit agencies significant. The financing model needs to change to a more sustainable local market and local currency financing by harnessing the domestic savings for financing its infrastructure and connectivity projects. This chapter analyzes the means and constraints in funding cross-border connectivity projects. Using the most recent data from sources including the World Bank, the ADB and other financing and research institutions, barriers to financing cross-border projects have been explored and analyzed with the help of case studies. The research brings to the fore the potential benefits of regional funding platforms and role of multilaterals in resolving such barriers.
David Wignall and Mark Wignall
This chapter examines the seaports responsible for handling the majority of trade around the Bay of Bengal with a view to identify projects that will contribute to improving maritime infrastructure and enable trade in and around the Bay of Bengal. It reviews the nature of trade and how that trade could evolve, analyzes the primary types of maritime trade around the Bay of Bengal and the ships that carry that trade. It also reviews the changes that could occur and would have a significant impact on trade patterns allowing for quantum limits on their ability to change trade patterns (with special consideration of the Indian East Coast Corridor Study). It examines the main ports on the Bay of Bengal to understand their history, regulatory regimes, purpose, capabilities, primary specifications, constraints, productivity, fitness for purpose when compared to other ports in comparable situations, and their opportunities to improve and develop. Finally, the chapter develops strategic options through which the seaports around the Bay of Bengal could adjust and develop to support the evolution of trade. The chapter provides policy recommendations on how the constraints can be addressed.
Michael G. Plummer, Peter J. Morgan and Ganeshan Wignaraja
This chapter summarizes the overall purpose, background, major findings and policy recommendations in this book. The goal of this book is to identify the main constraints to South Asian–Southeast Asian economic integration, to provide specific policies that governments – together with the private sector and other development partners – should follow to overcome them, and to estimate the potential benefits and costs of those policies. It surveys the key issues, delineates existing bottlenecks and what can be done to resolve them, and considers the stakes involved, that is, the benefits and costs of deepening inter-regional links. It offers policy recommendations for governments, presents promising new approaches for regional institutions, identifies priority projects, and uses a computable general equilibrium model to estimate overall benefits and impacts of various scenarios of greater cross-regional integration. The chapter provides the historical background of integration between the two regions, and describes the current state of trade and investment integration. It then summarizes the findings of the chapters and, finally, synthesizes some of the main findings of the study and summarizes key policy recommendations.
South Asia and Southeast Asia have been connected for centuries, with the degree of connectivity varying over time. This chapter explores strengthening connectivity between the two subregions by identifying the missing road and rail transport links, and analyzes the role of cross-border transport infrastructure investments. It assesses possible road and rail land corridors that would help create seamless transport connectivity between the two regions. Missing gaps and corresponding transport infrastructure projects are identified, and projects are screened and prioritized. For the selected critical projects, the study recommends a phased investment approach.
Hector Florento and Maria Isabela Corpuz
This chapter examines the road and railway links in Myanmar connecting northeast India on the one side with the rest of Southeast Asia on the other. It also discusses the importance of new deepwater ports in creating alternative shipping routes, essential for Myanmar’s international links. It reviews the country’s external trade patterns, and analyzes issues related to trade facilitation, exchange rate policy, financial sector reform and private sector development. The extent to which these gaps can be addressed will depend on the costs and benefits. South Asia–Southeast Asia connectivity can only be accomplished if Myanmar improves the hard and soft infrastructure aspects of connectivity.