Transport Integration in Asia: Slow but Steady Progress

An Asia-wide transport network is essential for Asian countries to get their goods to market more efficiently, quickly, and cheaply, but, its overall physical progress has so far been limited. There are many social, political, economic, and technical factors behind its slow progress. Technical factors affecting transport integration in Asia in general include: absence of integrated and harmonized railway networks (e.g., Myanmar–India and PRC–Viet Nam), absence of adequate and active overland official trade outlets and associated facilities (e.g., India–Bangladesh and PRC–Lao People's Democratic Republic [Lao PDR]), absence of trade facilitation (soft infrastructure) policy measures (especially in the interior part of Asia), and absence of transit trade (in the whole of Asia with some exceptions).

Efforts to develop an Asia-wide transport network started as early as the 1960s. However, little progress was achieved until the 1980s (UNESCAP 2006). During the 1980s and early 1990s, the region experienced significant political and economic changes which ultimately have helped increase the trade and mobility of production factors in Asia. Subsequently, the demand for physical connectivity increased during the 1990s to support the export-led growth strategy and fragmented production network which later fuelled successful implementation of some transport corridors in the Greater Mekong Subregion (GMS) and elsewhere in Asia. Nevertheless, the need for full regional connectivity in Asia is still unmet. This also highlights the significant role regional cooperation can play in enhancing physical connectivity.

3.1 Progress in Asian Land Transport Infrastructure Network

In 1992, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) initiated the Asian Land Transport Infrastructure Development (ALTID) project with the aim of improving and expanding transport and communications links within the region, as well as with other regions. The ALTID project is comprised of the Asian Highway (AH), the Trans-Asian Railway (TAR), and the facilitation of land transport. At the initial stages of the ALTID project implementation, the main emphasis was placed on the formulation of the AH and TAR networks and the establishment of related standards and requirements. AH and TAR could become the major building blocks of the development of an international integrated intermodal transport system in Asia and beyond.

3.1.1 Asian Highway Network

The process of identifying the AH routes began in the late 1950s, but it has only seen relatively better progress only after 1992 when the ALTID project was initiated. Initially, 69,000 km of AH routes were identified with the participation of 18 member countries: Afghanistan, Bangladesh, Cambodia, the PRC, India, Indonesia, the Islamic Republic of Iran, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, and Viet Nam (see UNESCAP 1995). From 1995 to 2002, an additional 72,000 routes were identified and added to the AH⁷ with participation of new members from Central Asia and the South Caucasus, the Russian Federation, and the remaining part of Asia. These routes formed the northern corridor of the AH, effectively linking Northeast Asia with Central Asia, the Caucasus, and Europe. Finally, with the participation of Japan in 2003, the entire network of the AH was extended to cover a total of 141,000 km of highways in 32 countries (see Map 1 [ PDF 131.3KB | 1 page ]).

With progress in the formulation of the AH, it was considered necessary to formalize the network through an intergovernmental agreement to ensure effective coordination of national planning with regional requirements and regular region-wide reviews and updating of the network. Following a series of negotiation meetings among experts and representatives of member states, the Intergovernmental Agreement on the Asian Highway Network was adopted at an intergovernmental meeting held in November 2003, followed by a signing ceremony organized during the 68th session of UNESCAP in Shanghai, PRC in April 2004. Finally, the Intergovernmental Agreement on the Asian Highway Network⁸ entered into force on 4 July 2005, and as of 31 March 2008, the agreement has been signed by 28 countries, of which 22 are contracting parties (see Appendix, Table 1). The main obligations of the contracting parties to the AH agreement are to adopt the AH network as a coordinated plan for the development of highway routes of international importance, to bring the AH routes in their respective countries in conformity with classification and design standards as provided by the agreement, and to facilitate navigation along the routes through the placement of adequate signage.

Since 2004, significant progress has been achieved in developing and upgrading the AH network. During 2005 and 2006, about 10,000 km of the AH in member countries has been upgraded to meet minimum standards and other sections have been improved to higher class standards.⁹ However, according to UNESCAP (2008b), about 12,000 km (or 9% of the network) still remain below minimum standards (see Figure 2 [ PDF 40.7KB | 1 page ]).

About US$26 billion has been invested or committed for the development of various sections of the AH routes in member countries (UNESCAP 2008b). The study also identified 121 priority projects to upgrade and improve about 26,000 km of the AH, which require around US$18 billion of investment. To help support financing of AH routes, the Asian Highway Investment Forum was set up by UNESCAP in 2007 to discuss investment opportunities and prospects in member states, different approaches to project financing, and the experiences of international financing institutions and the private sector in financing, development, and operation of major highways. A working group on the Asian Highway was also established to enforce the agreement and consider any amendments. The working group also provides a forum to discuss policies and issues related to the development of international highways in member states. A forum of Asian Transport Ministers, constituted by UNESCAP, is envisaged to play significant role in providing strategic guidance for the regional development of highways in Asia.

The Intergovernmental Agreement on the Asian Highway Network has made it easier for member countries to secure grants and loans to upgrade the AH routes. The upgrading and development of the AH has been receiving priority attention from member countries and is being incorporated into national plans. For example, the Fourth Five-year Development Plan (2005–2009) of the Islamic Republic of Iran envisages development of the Asian Highway; the AH routes have received priority attention in the Association of Southeast Asian Nations (ASEAN), with the result that the AH routes in Indonesia, Malaysia, Singapore, and Thailand now conform to the AH or higher standards, and all AH routes in Cambodia and Lao PDR are committed for upgrading with construction in progress; the AH connecting four metropolitan cities, New Delhi, Mumbai, Kolkata, and Bangalore, and the North-South corridor are being upgraded to four lanes under the National Highways Development Project in India; the international community is assisting Afghanistan in rehabilitating and restoring most of the AH routes to re-establish regional connectivity; Mongolia is implementing the Millennium Road Project which includes the development of all Asian Highway routes in Mongolia; and the PRC is developing 35,000 km of a high-standard national truck highway system which includes the majority of AH routes in the PRC. The AH will continue to serve as a coordinated plan for the development of the road network in Asia, being given priority for development, upgrading, and financing.

3.1.2 Trans-Asian Railway Network

The TAR was originally conceived in the 1960s. Its medium- to long-term objective was to provide a continuous 14,000 km rail link between Singapore and Istanbul, Turkey, with possible onward connections to Europe. Following the endorsement of the ALTID project in 1992, the original concept was extended into a regional network to cover the entire Asian continent, linking to the pan-European rail network at various locations and offering connections to major seaports in Asia and Europe, as well as providing sea access to landlocked countries either directly or in combination with highways.

In view of the varying standards used by national railways and the differences in their level of technical development, UNESCAP adopted a step-by-step approach to identify the TAR network. For practical reasons, it was divided into four major components reflecting economic and (or) geographic subregions, as well as potential traffic flows, and each component was studied separately.

The progress of the TAR has been very similar to the AH. From 1995 to 2001, about 80,900 km of railway routes under the TAR were identified. The first study was completed in 1995 to define the northern corridor (32,500 km), connecting the rail networks in the PRC, Kazakhstan, Mongolia, the Russian Federation, and the Korean peninsula (UNESCAP 1995).¹⁰ A second study defined a subregional railway network (12,600 km) in the ASEAN and Indochina area (UNESCAP 1996b). A third study identified the southern corridor (22,600 km) connecting Thailand and the southern PRC province of Yunnan with Turkey, through Myanmar, Bangladesh, India, Pakistan and the Islamic Republic of Iran, with Sri Lanka also part of the corridor (UNESCAP 1999b). In 2001, the north-south corridor (13,200 km) linking Northern Europe and the Persian Gulf through the Russian Federation, Central Asia, and the Caucasus was studied (UNESCAP 2001b).

Building on the success of the Intergovernmental Agreement on the Asian Highway Network, the TAR network has also been formalized through a related intergovernmental agreement. Following an extensive negotiation process from 2004–2005, the Intergovernmental Agreement on the Trans-Asian Railway Network¹¹ was adopted by the 62nd session of the UNESCAP in Jakarta on 12 April 2006 through Resolution 62/4. A formal signing ceremony of the agreement was organized on 10 November 2006 during the Ministerial Conference on Transport held in Busan, Republic of Korea and 18 member States signed on that occasion. The agreement has now been signed by 22 countries of which six have ratified or accepted it.¹² The current TAR network covers 114,000 kilometres of railways in 28 member countries. The Intergovernmental Agreement on the Trans-Asian Railway Network will come into force on 11 June 2009 with the PRC becoming the eighth country approving the agreement (UNESCAP 2009).

Map 2 [ PDF 104.3KB | 1 page ]

In parallel with the formulation and formalization of the TAR network, UNESCAP has promoted the operational integration of national railway networks through the implementation of a series of demonstration runs of container block-trains along the TAR northern corridor. During 2003–2004, four demonstration runs were successfully implemented: from Tianjin (PRC) to Ulaanbaatar (Mongolia), from Lianyungang (PRC) to Almaty (Kazakhstan), from Brest (Belarus) to Ulaanbaatar (Mongolia), and from Nakhodka (Russian Federation) to Malacewicze (Poland). These runs demonstrated the capability of railways to develop efficient container services and to serve the international movement of containers within Asia and between Asia and Europe. The number of trains that operated on the route of Nakhodka/Vostochnaya–Almaty-Assake, which started operation in February 2003, reached 107 trains from January–August 2007. In 2007, 31 container block train services were in operation along the route linking the PRC, Kazakhstan, Mongolia, and the Russian Federation.

Figure 3 [ PDF 35.2KB | 1 page ]

Investment in physical infrastructure development of the TAR network has now become an important issue. According to UNESCAP's estimate, around 6,500 km, which is 8% of 81,000 km of the TAR network, is missing links, mostly in the South-East Asia subregion (Figure 2). An estimated investment of US$15 billion is required to build single-track lines on the missing links to complete the TAR network (UNESCAP 2008c).

3.2 Role of the Subregional Transport Corridor Programs in Restoring the Silk Route

In addition to regional initiatives such as the AH and TAR, there are several subregional initiatives to connect countries within the subregions (see Bhattacharyay 2008, 2009). These subregional programs have undertaken several road and railway projects, some of which can facilitate the restoration of Asia-wide networks.

The GMS program is comprised of Cambodia, two provinces of the PRC, Lao PDR, Myanmar, Thailand, and Viet Nam and has undertaken three major economic corridor projects: the East-West Economic Corridor, running from Da Nang, Viet Nam, through Lao PDR and Thailand to Myanmar; the North-South Economic Corridor, which covers the major routes running from Kunming through Chiang Rai to Bangkok or Nanning through Hanoi to Haiphong; and the Southern Economic Corridor, running through the southern parts of Thailand, Cambodia, and Viet Nam. The countries in the GMS have also signed a cross-border transport agreement (CBTA) for facilitating the movement of goods and vehicles across borders.

Association of Southeast Asian Nations (ASEAN) has several cross-border transport projects, of which the ASEAN Highway and the Singapore-Kunming Railway projects are the major ones.

The South Asian Association for Regional Cooperation (SAARC) which is an economic bloc of eight countries in South Asia has planned transport corridors across the region. Ten road corridors, five rail corridors, ten inland or maritime gateways, and seven aviation gateways were identified in 2007 for implementation.

The South Asia Subregional Economic Cooperation (SASEC) initiative involving Bangladesh, Bhutan, India, and Nepal gives priority to the following transport projects: improvement of Kakarvitta–Panitanki–Fulbari–Banglabandha road (chicken neck), establishment of a missing rail link between Agartala and Akhaura, devising and implementing an arrangement for cross-border trucking operation, and modernization of cross-border management regime. However, the progress in all four projects has been very slow.

Likewise in the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), a regional study (BIMSTEC Transport Infrastructure and Logistic Study) was completed in 2008. The implementation of BIMSTEC Trilateral Highway linking India-Myanmar-Thailand has also been undertaken by the member countries in 2005 for improving physical connectivity in the subregion.

The Subregional Economic Cooperation in South and Central Asia (SECSCA) program was initiated in 2003 to support the Central and South Asia Transport and Trade Forum initiative involving Afghanistan, the Islamic Republic of Iran (as an observer), Pakistan, Tajikistan, Turkmenistan, and Uzbekistan and support other potential cooperation opportunities among these countries. Another objective of this program is to connect landlocked Central Asia and seaports in South Asia via Afghanistan. The SECSCA has two major corridors connecting the Central Asian countries to the Arabian Sea and the Persian Gulf via Afghanistan—namely, the North-South Corridor (connecting Tajikistan, Turkmenistan, and Uzbekistan through Afghanistan to the ports of Karachi, Gwadar, and Port Qasim in Pakistan) totaling about 2,800 km and the East-West Corridor (connecting the same countries, through Afghanistan to the ports of Bandar-e-Abbas and Chabahar in the Islamic Republic of Iran) totaling about 2,900 km.

The Central Asia Regional Economic Cooperation (CAREC) program, comprised of Afghanistan, Azerbaijan, the PRC (Xinjiang Uygur Autonomous Region), Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan, has six transport corridor projects for facilitating transport and trade within the subregion and beyond. These corridors are: Corridor 1, Europe–East Asia; Corridor 2, Mediterranean–East Asia; Corridor 3, the Russian Federation–Middle East and South Asia; Corridor 4, the Russian Federation–East Asia; Corridor 5, East Asia–Middle East and South Asia; and Corridor 6, Europe–Middle East and South Asia. Box 1 [ PDF 39KB | 1 page ] shows the latest development in the CAREC.

3.2.1 Euro-Asian Transport Linkages

The Euro–Asia Transport Linkages is a joint project of the United Nations Economic Commission for Europe (UNECE) and UNESCAP, undertaken in 2001. The objective of this project is to integrate Europe and Asia through transport corridors. Countries which have participated in the project at this initial stage include Afghanistan, Armenia, Azerbaijan, Belarus, Bulgaria, the PRC, Georgia, the Islamic Republic of Iran, Kazakhstan, Kyrgyzstan, the Republic of Moldova, Romania, the Russian Federation, Tajikistan, Turkmenistan, Turkey, Ukraine, and Uzbekistan (UNECE/UNESCAP 2004).¹³

In 2000, UNECE and UNESCAP put forward their "Common Economic Commission for Europe/ Economic and Social Commission for Asia and the Pacific (ECE/ESCAP) Strategic Vision for Euro-Asian Transport Links" at the Second International Euro-Asian Conference on Transport, which was subsequently modified and adopted by the UNECE Inland Transport Committee in 2001. The "Strategic Vision" has proposed following four major Euro-Asian transport corridors with links to Pan-European Transport Corridors (PETC):

1. Trans-Siberian: Europe (PETCs 2, 3, 9)–the Russian Federation–Japan, with branches from the Russian Federation to:
   1. Kazakhstan–PRC and the Korean peninsula
   2. Mongolia–PRC;
2. Transport Corridor Europe-Caucasus-Asia (TRACECA): Eastern Europe (PETCs 4, 7, 8, 9)–across the Black Sea–Caucasus–across the Caspian Sea–Central Asia;
3. Southern: Southeastern Europe (PETC 4)–Turkey–the Islamic Republic of Iran, with branches from the Islamic Republic of Iran to:
   1. Central Asia–PRC
   2. South Asia–Southeast Asia/Southern PRC;
4. North-South: North Europe (PETC 9)–Russian Federation, with branches to:
   1. Caucasus–Persian Gulf
   2. Central Asia–Persian Gulf
   3. Across the Caspian Sea–the Islamic Republic of Iran–Persian Gulf.

3.2.2 Lessons Identified

Much as yesterday's Silk Road today's land transport network in Asia aims to serve cultural exchanges and trade within Asia and between Asia and Europe. In the contemporary world, today's network is assumed to cover a much wider territory than its mythical past and, needless to mention, reaches a much bigger market. In summary, progress in transportation links so far has been made through several subregional initiatives. Although some subregions such as the GMS have successfully implemented cross-border corridors and progressed much further in strengthening connectivity, few others (such as the SAARC) have yet to make any major breakthroughs. The subregional transport corridors like the GMS transport and trade facilitation program have created a demonstration effect in Asia and have become a role model for other subregions in Asia (such as in CAREC). The improvement of the subregional transport corridors in the GMS has resulted in significant savings in vehicle operating costs and reduced travel time (ADB 2009a; 2009b). Although several benefits are apparent from completed subregional projects, three main issues hamper the full delivery of these benefits: first, the subregional transport corridors ("hardware") in Asia are not always supported by "software" (trade facilitation) except perhaps in the GMS; second, missing infrastructure links in many subregions have reduced the effectiveness of the completed projects in subregions; and third, lack of synergy between national and subregional transport corridors is very common. As a result of the road improvement, national traffic has increased across the corridors, indicating that national level benefits have been high. It is apparent that international traffic has been slow to grow, partly due to the absence of an agreement to facilitate cross-border movement of vehicles and absence of strong and stable pan-Asian transport networks. The pan-Asian transport corridors (AH and TAR) as well as country strategies continue to depend on national institutions for planning and national funds for implementing the projects. The overall attitude toward AH and TAR projects apparently favors addressing national constraints rather than developing regional arrangements.

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