Infrastructure and Trade in Asia

Infrastructure and Trade in Asia

ADBI series on Asian Economic Integration and Cooperation

Edited by Douglas H. Brooks and Jayant Menon

Analysis of infrastructure’s role in facilitating international trade and consequently regional economic integration is still rudimentary. This original book fills that knowledge gap by exploring relevant concepts, measurement issues, aspects of the implementation of trade-related infrastructure facilities and their impacts on poverty, trade, investment and macroeconomic balances.

Chapter 2: A Framework for Considering Infrastructure for Regional Co-operation

John Weiss

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics


John Weiss INTRODUCTION Regional co-operation has received considerable attention as a means of stimulating ‘inclusive-growth’ in developing countries in Asia. Conceptually such discussions can be seen as a part of the analysis of the ‘New Regionalism’. The focus here is on co-operation through preferential trade and investment agreements that aim to strengthen structural economic reform, aid economic transformation, attract foreign investment and generally raise the international competitiveness of participating countries (IDB, 2002). It is possible to identify four broad mechanisms and levels for regional co-operation. These distinguish among: 1. co-operation in various aspects of infrastructure in both ‘hard’ (for example, ports, roads, telecommunications) and ‘soft’ (for example, social networks, legal frameworks) variants; formal agreements on trade and investment (free trade agreements, investment agreements); monetary co-operation (currency swaps, exchange rate pegs, currency unions); and regional public goods (health and environmental protection). 2. 3. 4. Here we focus on the first of these mechanisms since the latter three have been examined extensively elsewhere (for example, see Bhattacharya, 2006; Kawai, 2005). The issue we discuss in this chapter is how and why infrastructure can assist in this process. While it may seem intuitively obvious that co-operation and economic activity more generally require infrastructure we seek to clarify more sharply why this might be so and thus provide 15 16 Concepts and measurement issues a framework for subsequent empirical analysis of where policy interventions might be most effective. INFRASTRUCTURE AND GROWTH A simple way of thinking about the role of infrastructure in growth...

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