Economic Corridor Development
Sector: Economic Corridors Total Cost: $358 million Status: Ongoing
The overall Program will enhance industrial growth and create high-quality jobs in Andhra Pradesh by supporting priority infrastructure investments in the corridor, and policy reforms and institutional development. The first tranche will strengthen institutional management of corridors and improve ease of doing business; develop internal infrastructure for industrial areas; and establish a stronger project development mechanism.
Economic Corridor Development Strategy
- Promote synergies and linkages between economic corridors across SASEC countries to optimize development gains
- Coordinate planning and programming of projects to link transport infrastructure with urban and industrial development in and among SASEC countries
- Prioritize construction of economic corridors with potential cross-border linkages
- Optimize opportunities to bring innovation into public-private partnerships
Key Facts
- Despite robust economic forecasts, South Asia remains home to more than 800 million of the world’s poor, and has pressing need for effective industrialization and job creation
- South Asia needs to invest nearly $2.4 trillion from 2010 to 2020 to address its infrastructure gap; meanwhile, urban population growth has outpaced urban infrastructure development, with 200 million living in slums
- Building transport corridors is only the first step in sustainable development: developing the areas alongside and between transport corridors extends the benefits, and encourages economic transformation and growth for more of the population
- Planning and/or development is currently underway for three economic corridors in Bangladesh, India, and Sri Lanka – all of which have potential for cross-border or international linkage to industrial production in neighboring countries
Key Challenges
- Current industrial bases in South Asia are unconnected to regional and global value chains, which severely hinders the capacity of SASEC countries to optimize effective industrialization processes
- FDI levels in South Asia remain low as a result of both inadequate infrastructure connectivity and also ‘business unfriendly’ regulatory and institutional frameworks, which in turn negatively impact productivity and competitiveness
- Poor connectivity infrastructure and regulatory constraints at gateways and border crossings lead to high cost of trading across borders in South Asia, which is still among the highest in the world
Unlocking the Future:
Connected Economic Corridors
- Synchronizing and integrating urbanization and industrialization to boost productivity and living standards in South Asia and neighboring regions
- Strengthening existing value chains – both supply chain infrastructure and trading and logistics capacities – and connecting them to value chains in neighboring countries
- Improving regulatory frameworks to enhance investment climate and provide ease of logistics.
- Upgrading key transport and trade facilitation infrastructure to build regional multimodal connectivity between economic corridors in neighboring countries
- Designing robust mechanisms to strengthen collaboration among public and private players in South Asia