VIEW: The imperatives of regional connectivity —Dr Rashid Ahmad Khan

The rapidly growing economies of leading Asian countries such as China, Japan and India have created strong imperatives for inter-regional as well as intra-regional connectivity

The federal government has allocated a hefty amount of Rs 61 billion in the annual budget for enhancing regional connectivity with member countries of the South Asian Association for Regional Cooperation (SAARC) and the Economic Cooperation Organisation (ECO). The countries include Iran, India and Afghanistan. The amount would be spent under the transport development programme for 2010-2011, which envisages the establishment of industrial clusters, oil and gas pipelines, and oil storage facilities along 432 km-long motorways and expressway corridors to open potential hubs of trade and business activities with China, the Central Asian Republics (CARs), India, Iran and western countries.

The plan for developing a network of roads and other communication links among the countries of South Asia, West Asia and Central Asia reflects the recognition of the growing importance of intra-regional and inter-regional connectivity for achieving the goals of regional integration through the expansion of trade and promotion of economic cooperation. Realising that better connectivity will create an enabling environment for the achievement of the goals of regional integration, the countries grouped into regional forums like SAARC, ECO and the Shanghai Cooperation Organisation (SCO) are taking steps to enhance intra-regional connectivity to fulfil the objectives for which these organisations were formed. For example, the declaration of the 14th Summit of SAARC held in New Delhi in April 2007 announced the agreement among the participating heads of state or government to improve intra-regional connectivity, particularly physical, economic and people-to-people connectivity. According to the declaration, the participating heads of state or government agreed to the vision of South Asian connectivity, where there was smooth flow of goods, services, peoples, technologies, knowledge, capital, culture and ideas throughout the region.

In October 2006, ministers from eight Central Asian and neighbouring countries –Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan — gathered in Urumqi, the capital of Xingjiang Autonomous Region of the People’s Republic of China under the Central Asia Regional Economic Cooperation (CAREC) and issued a declaration called the Urumqi Declaration, outlining a comprehensive action programme to strengthen the momentum and increase the benefits of regional connectivity. In his keynote address to the ministerial conference, the president of the Asian Development Bank (ADB), Haruhiko Kuroda, referred to the rapid economic rise of China and Japan in the east, Russia to the north, and India and Pakistan in the south, generating a real and growing demand for improved connection between Europe and Asia. Regarding the Central Asian region, he said: “The momentum provides the region with an unprecedented opportunity to emerge as a centre for trade and commerce, to achieve higher levels of economic growth and to lift the burden of poverty from the shoulders of its people.”

The start of the ECO container train service between Islamabad and Istanbul through Tehran from August 14, 2009 is an example of a serious effort to promote inter-regional connectivity. The container train service will also, as Prime Minister Gilani said, forge links of the ECO states with European countries and establish a new corridor of trade and investment to the mutual benefit of the ECO member countries.

Following the settlement of all the issues relating to the tariff and security of the gas pipeline, Pakistan and Iran have recently put their signature to the final agreement on its construction. If successfully completed, the pipeline would help overcome Pakistan’s energy troubles. The proposed oil and gas pipeline between Turkmenistan and Pakistan through Afghanistan (TAP) would establish the much desired energy corridor between South Asia and Central Asia, with Pakistan becoming a vital link between the two regions.

The rapidly growing economies of leading Asian countries such as China, Japan and India have created strong imperatives for inter-regional as well as intra-regional connectivity. The countries of the three regions are responding to these imperatives by concluding various framework agreements to facilitate the movement of goods and people across their borders. In comparative terms, South Asia lags much behind other regions so far as intra-regional connectivity is concerned. Although SAARC is 25-years-old, intra-regional trade stands at a dismal low of five percent of the total trade of the member countries. According to a survey, the cost of trading across the borders in South Asia is one of the highest in the world. The region has minimal cooperation in energy, despite India being the most energy-hungry country in the world, and being situated next to three energy surplus countries — Bangladesh, Nepal and Bhutan.

In the area of physical connectivity, there has been some progress, but it has remained confined to the northeastern sub-regions of South Asia. Early this year, Nepal and India signed an agreement and a couple of Memorandums of Understanding to start new air services between the two countries and develop railway infrastructure at five points along the Nepal-India border. But it is India and Bangladesh that have taken the most impressive steps to ensure connectivity. Under agreements reached between the two countries during Prime Minister Hasina Wajid’s visit to India, Delhi would give Bangladesh one billion dollars for projects, including construction of railway infrastructure and road infrastructure in Dhaka. Bangladesh has agreed to the use of Monga and Chittagong seaports by India to transport its goods to and from India through a network of roads and railways. It has also extended this access to Nepal and Bhutan to use these ports for their import and export trade. In order to promote people-to-people connectivity between India and Bangladesh, agreement has been reached to start the Maitree Express between Dhaka and Kolkata. It is argued that by trading its services, Bangladesh could improve its balance of trade with India. “If Bangladesh wants 8-9 percent growth and the status of a middle income country,” says noted Bangladeshi economist Farouk Subhan, “there is no way out but regional and sub-regional cooperation.”

Progress towards regional connectivity has been slow in South Asia because of tensions between Pakistan and India. It is expected that with the restoration of the dialogue process, the two countries would enhance connectivity by taking bold decisions on bilateral trade, transit facilities and people-to-people contacts.

The writer is a professor of International Relations at Sargodha University. He can be reached at rashid_khan192@yahoo.com