Physical Trade Infrastructure - ADB

Physical Trade Infrastructure - ADB

Information dated: 2017
Physical trade infrastructure

Physical trade infrastructure is one of the pillars of ADB’s RCI strategy published in 2006. ADB recognizes that the competitiveness of Asia’s trade—and of its increasingly sophisticated production networks in particular—depends on efficient, fast, reliable, and seamless infrastructure connections. Vast parts of Asia—inland and remote areas, landlocked countries, and distant islands—are isolated economically as well as geographically; so much of the region’s huge potential remains untapped. In 2009 ADB and ADBI published a book on the required infrastructure for the region up to 2020.[1] The study finds that between 2010 and 2020, Asia needs to invest approximately $8 trillion in overall national infrastructure. In addition, Asia needs to spend approximately $290 billion on specific regional infrastructure projects in transport and energy that are in the pipeline. Of these regional projects, 21 high priority projects that could be implemented by 2015 at a cost of $15 billion have been identified. The successful implementation of these high-priority projects and their wider regional benefits would create a strong drive toward further strengthening regional infrastructure networks. This amounts to an overall infrastructure investment need of about $750 billion per year during this 11-year period.

Some projects have also been spelled out in more recent subregional strategies. For instance, the Action Plan included in the CAREC Transport and Trade Facilitation Strategy 2020 focuses on various infrastructure projects: about 24,000 kilometers (km) of roads, 20,000 km of railways, and 28 border crossing points along CAREC corridors; two ports (Aktau in Kazakhstan and Baku in Azerbaijan) and a shipping route (400 km between Aktau and Baku); and 41 airports with international air services. The Action Plan includes the priority investment and TA projects to develop infrastructure, upgrade technology, and improve management through policy reforms and capacity strengthening. There are 62 investment projects with an estimated cost of $21.1 billion. The investment projects comprise 40 new projects with an estimated cost of $15.8 billion and 22 ongoing projects with an estimated cost of $5.3 billion.

More than 1,200 years ago, during the Tang Dynasty, merchants in Yunnan, People's Republic of China (PRC) began forging trade routes to carry the region’s aromatic tea and other goods to the far corners of Asia. One of these southern caravan trails cut through what is today Luang Namtha Province in the Lao People’s Democratic Republic (Lao PDR), and across the Mekong River into Thailand. Today these routes are being revitalized. The 2008 completion of the ADB-supported Route 3 Highway in the Lao PDR, stretching from Boten at its northern border with the PRC to Houayxay in the south, coupled with the 2013 inauguration of the 4th Thai-Lao Friendship Bridge spanning the Mekong River, are bringing new life to this ancient trade route, and communities all along the corridor. The general impact has been a much freer movement of people and goods, and new businesses are being developed as a result.

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[1] ADB and ADBI. 2009. Infrastructure for a Seamless Asia. Manila: Asian Development Bank and Tokyo: Asian Development Bank Institute.