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.
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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.
Pradumna B. Rana and Binod Karmacharya
Nepal’s economic performance during the post-conflict period has been driven by remittances from the export of labor services and the improved performance of the agricultural sector, which is still very much weather dependent. The chapter makes the case for a connectivity-driven development strategy for the country. It argues that improved connectivity within Nepal and cross-border connectivity with its neighbors in South Asia, the Association of Southeast Asian Nations (ASEAN), and the People’s Republic of China (PRC) could be important ‘engines of growth’ for the country. Nepal has adopted a multi-track approach to promoting regional cooperation and integration in connectivity with its neighbors. However, a lot more needs to be done, especially in the context of the difficult political situation in the country, and donors have an important role to play in this regard. Ten priority projects to convert Nepal into a land-linked state are identified, but a detailed impact analysis of these projects is beyond the scope of this chapter.
This chapter discusses trade facilitation in the context of enhancing trading links between South and Southeast Asia. One of the reasons for the limited trade between the two regions is that trade facilitation with trade partners in developed countries is more user-friendly and stable. This suggests that enhancing trade facilitation within the two regions could promote intra- and inter-regional trade. The chapter identifies the scope of trade facilitation and profiles the current overall situation in the two regions. It highlights the key issues and constraints, often referred to as non-trade barriers, in terms of both ‘soft’ and ‘hard’ infrastructure, and highlights ongoing initiatives designed to promote change, especially through the application of new approaches and procedures. It concludes by discussing the key regional trade facilitation issues and proposing recommendations to eliminate the non-trade barriers that are adversely impacting on trade within and between the regions.
Dushni Weerakoon and Nipuni Perera
As an island economy, Sri Lanka’s regional connectivity has been mainly through its main seaport in Colombo, a transshipment hub port for South Asia. Investments to expand capacity at Colombo port are under way as part of Sri Lanka’s renewed efforts to develop its infrastructure following the long internal separatist conflict that ended in 2009. Despite significant improvements in physical infrastructure connectivity, Sri Lanka has made only limited headway in strengthening its trade and investment links with the rest of the region. Moreover, the country has seen a sharp decline in its overall exports-to-gross domestic product (GDP) ratio, which is worrying in view of the growing external debt financing of many large infrastructure projects through state-led investment initiatives. Thus, Sri Lanka needs to focus on two priority areas: engaging private investment in infrastructure by strengthening the country’s institutional and regulatory environment; and implementing a more strategic trade policy geared to enhance regional integration efforts.
Suthiphand Chirathivat and Kornkarun Cheewatrakoolpong
Thailand’s increasing importance as a regional co-production base, and growing intra-regional trade and border trade, are mainly due to recent changes in its economic structure, namely, lack of operational workers, rise in wages, and increase in outward FDI, together with a change of regional policies in Southeast Asia. As a result, improvements in physical connectivity, trade facilitation, energy cooperation and financing infrastructure play an important role. Extending such connectivity to South Asia could also complement the current promotion of regional trade and regional production networks. This chapter reviews the current stages of Thailand’s intra-regional trade, physical connectivity, trade facilitation, energy cooperation and infrastructure funding, as there are planned projects in all these areas which could have a tremendous impact on Thailand and its linkages to the whole Southeast Asian region and beyond, such as the South Asian region. However, Thailand’s political instability impedes the progress and implementation of such projects. The chapter also examines the current financing mechanism of Thailand’s infrastructure projects, which relies heavily on public spending. Suggestions for strategies are provided in order to promote physical infrastructure, trade facilitation and energy cooperation of Thailand with the mainland of Southeast Asia and South Asia.