Transcript Download: Presentation of Mr. K.L. Thapar

Regional Conference on Strengthening Transport Connectivity
and Trade Facilitation in South and South-West Asia
9-10 December 2013
Potential and Prospects of
Strengthening Transport Connectivity
in South and Southwest Asia
K. L. Thapar
Chairman
Asian Institute of Transport Development
Dominating Geography of Silk Routes

In the crescent from Turkey to Dhaka lie the world’s
oldest civilisations that have produced the world’s
religions, its culture and indeed the fabric of its very
weave.

The two regions (South Asia and Southwest Asia)
are a well-defined physical entity and have been the
dominating geography for the ancient trade routes.

They have centuries old historical links both by land
and sea and have extensively traded with each other
through the millennia.
Disruption and Colonial Interests

The region suffered grievously because of Russian
and British empire-building in the eighteenth
century. Most of South Asia became a set of
colonies.

This led to emergence of Empire specific transport
links with inherent disconnects both in continuity
and operational technologies. In the sub-continent,
transport corridors were largely oriented to suit
colonial commercial and political interests.

The British Empire did not encourage the
development of railways in Afghanistan, for the fear
of providing Russia with access to India.
Partition of the Sub-Continent

The division of the sub-continent in 1947 disrupted
traditional economic and transport linkages.

Overnight 7,419 km of land borders were created
leading to closure of several land routes.

Some parts of the sub-continent became virtually
land-locked.

As a result, Pakistan now enjoys a special
advantage in respect to West Asia and India with
respect to the South-East Asia.
Hostage to Geo-Political Environment

The transport links once again became hostage to
the geo-political environment.

With the passage of time, operational technology
disconnects have become more pronounced.

Rail transport has suffered the most. Having lost the
advantage of minimum critical mass in terms of
traffic and network, the railway systems in
Bangladesh, Pakistan and Myanmar are languishing.

We have thus lost the advantage of a socially benign
mode of transport which is staging a comeback
through the rest of the world.
Loss of Benefits of Common Geography

Restrictive policy regimes have neutralised the
beneficial effects of common cultural affinity, common
geography, and the ‘gravitational pull’ of proximity on
movement of goods and people.

It has been hostage to closed and divisive mindsets and
distrust of neighbours. It has been insensitive to high
incidence of poverty in the countries.

Nearly a third of the population lives below the poverty
line. 10-15 percent of the youth is unemployed. Human
development indicators are abysmally low, further
compounded by gender bias.

The region is home to 1.8 billion people and accounts
for 26 percent of the world population but only 5
percent of its GDP. Contrast it with 25 percent share
of the Indian sub-continent alone in the eighteenth
century.

Despite the fall in tariff rates, the costs of non-tariff
and behind the border measures remain very high.
There is potential of reducing these costs by as much
as 30-40 percent.

The prevailing trading regime is often saddled with
several opaque measures. Land routes are restricted
for movement of commodities even though these are
not in the negative list. The benefit of proximity is
thus lost and consumer welfare suffers.
Dividend of Free Trading Regime

The restrictive trade practices inevitably lead to
smuggling activities. As a result, the state loses the
revenue. Its institutional integrity also falls prey to
criminal syndicates.

Liberalised trade is an important instrument of
economic development and poverty alleviation. It also
has a huge dividend of peace and stability.

These inherent benefits have the potential of lowering
the likelihoods of democratic failures in the countries
which is so important in case of South and SouthWest Asia where democratic polities have only
recently emerged.
Green Shoots

Maritime sector has seen significant developments
leading to opening of new sea-cum-land routes for
bilateral and transit trade.

Newly developed ports at Bandar Abbas and Chabahar
(Iran) and Gawadar (Pakistan) have opened alternate sealand routes for accessing Afghanistan and beyond.

Bhutan and Nepal have been allowed the use of Mongla
and Chittagong sea ports in Bangladesh, in addition to
the sea ports in India for their third country traffic.

Myanmar has allowed the use of its port at Sittwe for
transit traffic to North-East region of India.

The recently completed road from Delaram-Zaranj
links the road network of Afghanistan with Iran and its
port at Chabahar.

In the rail sector, Uzbekistan has extended its railway
line from Termez (Uzb) to Mazar-i-Sharif (75 km).
Turkmenistan has already a rail link with Afghanistan
at Kushak (Turk)-Torghundi (Afg).

Pakistan has planned to extend railway line from
Chaman (Pak) to Spind Boldak (Afg), a distance of 12
km.

Iran has completed its railway line from Bafq to
Mashhad. This will enable building a spur line of 124
km between Khawaf (Iran) and Herat (Afghanistan).

Iran has built a rail link from Kerman–Zahedan (Iran) to
Kuh-i-Taftan (Pak) providing a multi-gauge rail corridor all
the way from Bangladesh to Turkey.

Iran has developed transport links to the Central Asian
Republics, thereby opening a new corridor for South Asia
to access these republics.

Turkey has started a train ferry designed to carry rail
traffic through Lake Van. This facility enables rail link
between Razi (Iran) and Van (Turkey).

Agreement on Trans-Asian railways and Asian highways
networks has the potential of providing integrated intermodal transport corridors.

In trade facilitation, an important initiative has been the
development of integrated check-posts at the borders.
Future Scenario

Distance does matter, more so in the context of
looming depletion of fossil fuels. Rising freight
charges will give a fillip to the trend towards making
products closer to the market.

Regional rather than global production networks are
likely to become more important in future.

Availability and access to relevant technologies in the
neighbouring countries would be cost-effective in the
long run and would also bring about harmonization of
transport technologies.

Overland pipelines would be the most economical
means for carrying energy from South-West Asia and
beyond.
Direction Markers

Restoration of traditional transport links by road, rail and
waterways would involve minimal investments and would
result in maximum benefits in the shortest timeframe.

This would help in revival of languishing railway systems
as the transit traffic would add to their volumes and the
additional earnings to their bottom lines.

Trans-border pipelines carrying energy and optic fibers
providing digital connectivity can be laid alongside the
railway lines and highways.

These corridors can thus become economic corridors of
the countries for multiple developmental purposes.

Transit traffic would account for trade in services and
thus benefit the trade matrix of the transit countries.

Harmonization of operational platforms would promote
interoperability of transport services.

Introduction of container services would reduce
transport costs, improve efficiency and minimize
losses.

Use of ICT would reduce transaction costs, thereby
making the goods cheaper.

Pending integration at the regional level, sub-regional
cooperation
could yield substantial benefits. The
building blocks would result in emergence of regional
networks.
Prospects

There is a strong undercurrent of mutual good-will
and amity among the people of the region.

The new generation will focus on change for a life
free from deprivation, hunger and poverty.

Democratic polities that have emerged in the
region, have a huge stake in peace and stability.

There is a perceptible trend for liberalising the
trading regimes.

The process will, however, be painfully slow and
often mired by security concerns drawing heavily
on political sagacity.
Role of Non-Govt, Non-Profit Institutions

Regional cooperation need not be only at the government level.
Non-government organisations having a regional footprint have
an important role to play. AITD has taken several initiatives in
this regard. The Institute has a special consultative status with
the United Nations

Asian Railways Association has been established to promote
cooperative research, harmonization of hardware technologies
and operational practices.

Regional training programme, which is free of cost, has been
launched for training of personnel in technical, economic and
social aspects of infrastructure.

The upcoming academic and training facilities of the institute
could provide the habitat of a regional training centre for
promoting sustainable transport.
Message

Poverty, disparities and low levels of human
development indicators demand change in the
mindsets.

Integration of economies would strengthen democratic
polities that have emerged in the region after long
hiatus.

Transport networks are basic instruments for
economic growth and poverty alleviation. Make use of
infrastructure already in place in the region.

Make borders irrelevant and aim at integrated
seamless south and south-west Asia thereby reducing
the transaction costs.
Message

Promote investment in inter-country infrastructure
and develop socially beneficial modes of transport.

Promote regional production networks drawing on
inherent synergies and physical proximity.

Promote harmonisation of technology and operational
platforms to minimise disconnects in regional
network.

Technical issues must not be held hostage to
antagonistic political environment.

Launch meaningful cooperative programmes that
would enhance integration at various levels.