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ADB’s Initiatives for Transport and Trade Facilitation in South Asia and Beyond Kavita Iyengar India Resident Mission Asian Development Bank July 2016 Disclaimer: In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
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AD’s Initiatives for Transport and Trade Facilitation in … · 2016-07-27 · AD’s Initiatives for Transport and Trade Facilitation in South Asia and Beyond ... BIMSTEC Bay of

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Page 1: AD’s Initiatives for Transport and Trade Facilitation in … · 2016-07-27 · AD’s Initiatives for Transport and Trade Facilitation in South Asia and Beyond ... BIMSTEC Bay of

ADB’s Initiatives for Transport and Trade Facilitation in South Asia and Beyond

Kavita Iyengar India Resident Mission

Asian Development Bank July 2016

Disclaimer: In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular

territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other

status of any territory or area.

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The Drivers for Creating Opportunities

The Challenges

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Share of Major Regions in World GDP

Baseline 2009 Year 2014 Asian

Century Scenario 2050

RoW, 5.4%

Asia, 34%

EU, 28%

US, 33%

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South Asia: the Least Integrated Region in the World

Intra-regional Trade Share (%)

Source: ADB ARIC Trade and Integration database (www.aric.adb.org); raw data from IMF DOTS

100 hours for trucks to cross between Petrapole & Benapole 200 signatures in Nepal to trade goods with India

5

37.5

0.1

7.4

2.7

29.20

45.5

7.1 4.8 5.3

35.50

0

5

10

15

20

25

30

35

40

45

50

ASEAN+3 Central Asia Oceania South Asia East Asia

1990

2014

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India’s Merchandise Trade

6

Region 1997-98 % exports

2014-15 % exports

1997-98 % imports

2014-15 % imports

EU Countries (27) 26.50 15.90 27.16 11.00 Other West and East European Ctys 1.77 2.20 3.20 5.80 North America 20.64 15.30 10.04 6.50 Latin America 1.42 3.70 1.46 6.00 Africa 4.03 10.60 5.85 8.60 Asia 41.48 49.60 39.35 58.90 East Asia 1.36 1.00 3.58 2.50 ASEAN 8.67 10.30 7.50 10.00 WANA 9.99 19.50 15.89 24.80 North East Asia 16.31 12.20 11.76 20.90 South Asia 5.15 6.60 0.62 0.70 Others 4.28 1.10 12.92 1.70 Source: Ministry of Commerce and Industry, Government of India, website

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Transport • Road transport is the dominant mode (65–70% of

movement) but substantial missing links across national boundaries

• Post 1947, border management led to closure of historical land routes

• IWT transit was restored in 1972

• Transit through Pakistan from India to Afghanistan remains suspended

• Incompatible transport technology platforms emerged impairing interoperability, esp rail

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Asian Highway

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Trans-Asia Railway

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Trade Facilitation Indicators

10

Source: Ease of doing business, World Bank 2015.

0

50

100

150

200

250

300

350

0 20 40 60 80 100 120

Tim

e t

o im

po

rt:

Bo

rder

co

mp

lia

nc

e (

ho

urs

)

Time to export: Border compliance (hours)

OECD

Bangladesh

South Asia

Nepal Thailand

China

Singapore

India

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ADB’s RCI Strategy

• Four ‘key pillars’ of regional cooperation and economic integration:

– Cross-border infrastructure and associated software

– Money and finance

– Trade and investment

– Regional public goods

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The Garland of an Integrated Asia

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ASEAN Association of Southeast Asian Nations BIMP-EAGA Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area BIMSTEC Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation CAREC Central Asia Regional Economic Cooperation GMS Greater Mekong Subregion IMT-GT Indonesia Malaysia Thailand Growth Triangle PIF Pacific Islands Forum SAARC South Asian Association for Regional Cooperation Disclaimer: In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular

territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other

status of any territory or area.

SASEC

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RCI in Practice in South Asia

Nepal

Sri Lanka

Afghanistan

Bangladesh

India

Bhutan

Pakistan

Maldives

Thailand

Myanmar

BIMSTEC (1997)

SASEC (2001)

SAARC

(1985)

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BIMSTEC

15

India

12% GDP

SE & E Asia

12% GDP

PRC

18.4% GDP

BIMSTEC FTA Potential: $43B-$59B trade creation

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• Roads

• Telecommunications

• Power Transmission Line

Infrastructure Development in

GMS (1992)

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• Roads

• Telecommunications

• Power Transmission Line

Infrastructure Development in

GMS (2010)

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• Roads

• Telecommunications

• Power Transmission Line

Infrastructure Development in

GMS (2015‒2020)

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• Institution-light; projects-heavy

• 37 investment projects –US$ 6.7 billion since 2001

• 69 TA projects – US$ 64.5 million since 2001

• Focus on transport, trade facilitation, energy

• Additional areas supported: tourism, ICT

• Ensures private sector participation in SASEC activities

• Supports SAARC and BIMSTEC

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SASEC Transport Corridors

• SAARC Corridors 4, 8

• Bangladesh- Dhaka NW Corridor, Banglabandha-Mongla/ Chittagong

• Bhutan- Nanglam-Dewathang, Pasakha Access Rd./ Puentsholing Mini-Dry Port

• India- Panitanki-Fulbari/ Jaigaon-Changrabandha, LCS

• Nepal- Strategic Roads Improvement SASEC-Myanmar Corridor

•Bangladesh- Sylhet-Sheola/ Gundum-Chatta •India- Imphal-Moreh (with Myanmar)/ Silchar-Karimganj (with Bangladesh) •Other SASEC Transport Projects (Bridge, Rail, Port)

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SASEC Trade Facilitation

21 Source: UNESCAP

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BBIN MVA, Thimphu, 15 June 2015

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The Challenge: Poverty, Jobs, Productivity

• 500 million live below $1.25 a day

• Need to create 1 million jobs per month

• Better high productivity jobs are generated in industry and services

Relative labor productivity by income and sector (1991-2010)

Source: UNIDO. 2014. Industrial Development Report

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Driver 1. Trade Facilitation

Ranking on the ease of trading

across borders:

South Asia Lags

ADB. July 2012. Asia Economic Integration Monitor

Trade Facilitation Costs Per Subregion (2012)

Real cost to

export

(man days)

Real cost to

import

(man days)

Time to

export

(days)

Time to

import

(days)

Documents

to export

(number)

Documents

to import

(number)

High-income countries 6 6.4 8.9 8.6 4 4.7

Latin America 25.1 28.5 20.7 15.2 6.2 6.3

Africa 114.7 152.3 38.3 29.5 9.1 8.2

Asia 9.9 12 16.4 14.8 5.7 5.4

East Asia 7.2 7.6 16 14.1 5.7 4.7

Southeast Asia 9.4 11.7 13.2 13.2 4.9 5.9

Central Asia 41.4 64.8 56.5 59.9 8.6 10.2

South Asia 34.5 35.6 20.4 17.2 7.8 8.7

GDP effect of reducing supply chain barriers

is much higher than for tariffs

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Driver 2. GPNs Share of South and Southeast Asia in

World Total Production Network Exports,

1992–2011

Source: Connecting South Asia and Southeast Asia—Interim

Report

World Bank. 2009. World Development Report

Average cost of a telephone

call to the US Freight costs own

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GPNs, Example 1.

The Levi’s

Jeans Journey

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GPNs, Example 2

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Driver 3. Economic Corridors

Industrial Clusters Urban

Clusters

Trade and Transport Corridor

30

Access,

Distribution, Collection

Labor, Technology, Knowledge, Innovation, Commerce

Access to Markets, Gateways

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Economic Corridors in India Deepen regional economic corridors, build on Myanmar’s opening

TAPI

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For more information: www.sasec.asia

email [email protected]

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