Economic Corridors to Stimulate South Asia’s Growth and Integration

Economic Corridors to Stimulate South Asia’s Growth and Integration

Economic corridors are more than just infrastructure projects; they’re the lifelines that can propel South Asia into a new era of prosperity.

By enhancing trade, fostering industrialization, and bridging connectivity gaps, these corridors address critical infrastructure deficiencies and business constraints. They create jobs, promote regional integration, and bolster manufacturing competitiveness, all contributing to sustainable economic growth and poverty reduction.

Catalysts for Transformation

Economic corridors are instrumental in driving economic growth and structural transformation, serving as integral components in the pursuit of regional development and economic integration. They not only enhance connectivity and trade but also foster industrialization, job creation, and balanced regional growth.

In South Asia, particularly in Bangladesh, Bhutan, Nepal, India, and Sri Lanka, the development of economic corridors presents a promising pathway to unlock economic potential, strengthen regional ties, and promote sustainable development.

India’s Pivotal Role

India, with its vast and diverse economy, plays a crucial role in the development of economic corridors in Bangladesh, Bhutan, Nepal, and Sri Lanka. The country’s strategic initiatives, such as the National Industrial Corridor Development Programme (NICDP) and the Prime Minister Gati Shakti (PM-GS) National Master Plan, aim to enhance connectivity and promote economic integration.

The NICDP is India’s most ambitious infrastructure programme, focusing on developing new industrial cities as “Smart Cities” and converging next-generation technologies across infrastructure sectors. This initiative seeks to create employment opportunities and economic growth, leading to overall socio-economic development.

Supporting the NICDP is PM Gati Shakti, an overarching infrastructure plan that aims to create an integrated, multimodal transportation network. This initiative connects roads, railways, ports, and airports across India, ensuring industries can move their goods more efficiently and seamlessly.

Bangladesh’s Infrastructure and Trade Logistics

In Bangladesh, the development of economic corridors is focused on enhancing infrastructure and trade logistics. Notable examples include the South West Economic Corridor, spanning from Khulna and Jessore to Dhaka, and the North East Economic Corridor, connecting Dhaka to Sylhet.

These corridors are designed to improve the country’s trade infrastructure, diversify production networks, and integrate with regional and global value chains, all the while stimulating economic activities in less developed areas.

Bhutan’s Gelephu Mindfulness City

Bhutan has planned to develop Gelephu Mindfulness City, envisioned as the country’s largest economic hub, attracting foreign investment and integrating with the rest of South Asia and Southeast Asia.

Multimodal connectivity of Gelephu with India and Bangladesh will be a critical factor in its future success.

Nepal’s Overcoming Geographical Challenges

Nepal, a landlocked country with challenging terrain, faces unique obstacles in its quest for economic development. The development of economic corridors, such as the East-West Highway and the North-South Corridors, is crucial for improving connectivity, reducing trade barriers, and fostering regional integration.

These corridors aim to link Nepal more effectively with its neighbours, promoting economic activities and development in the region.

Sri Lanka’s Colombo-Trincomalee Economic Corridor

Sri Lanka’s Colombo-Trincomalee Economic Corridor (CTEC) connects the Western Region, including Colombo Port, with the East Coast to Trincomalee Port. It aims to facilitate economic growth through a network of export zones and free trade zones.

This infrastructure is expected to boost trade, attract investments, and promote balanced regional growth.

Building Blocks of Economic Corridors

Economic corridor development involves a building block approach of constructing and enhancing transport networks, energy grids, and trade facilitation measures that connect key economic hubs within and across borders.

The transport and trade corridors are designed to streamline the movement of goods, services, and people, thereby reducing costs, increasing efficiency, and boosting competitiveness. The initiative also emphasizes the importance of aligning national policies and regulations to ensure seamless operations and to maximize the benefits of regional integration.

Job Creation and Poverty Alleviation

One of the key objectives of economic corridor development is job creation, a critical development goal for South Asian countries. The expansion of the manufacturing sector through corridor development directly contributes to poverty alleviation by creating formal jobs.

By facilitating the formalization of labour and incentivizing firms to adopt modern technology, corridor development helps to increase productivity and wages, thereby improving the standard of living for workers. Government actions to provide gender-inclusive housing, upgrade the skills of female workers, and appoint female board members in industrial node boards further enhance economic corridors’ impact on poverty reduction and gender equality.

A Pathway to Prosperity

Economic corridors are pivotal in shaping South Asia’s economic future by enhancing trade, industrialization, and regional cooperation.

Continued investment, policy alignment, and inclusive development strategies will be essential in maximizing their benefits and ensuring sustainable, equitable growth.