Recommendations

Major recommendations drawn from our review and lessons learned include the following:

1. Rationale as a cross-border project should be articulated during project preparation. This is important when the financing requirement for the project is large. An explicitly regional perspective could help in mobilizing funds from a wider circle of donors.
2. More time and resources should be allocated to distribution analysis in order to clarify the project rationale and mitigate coordination failure, as well as to help mobilize funds. In particular, regional benefits beyond the sum of domestic benefits should be identified and estimated to the extent possible. For projects in the transport sector, the analysis done for the CAREC Regional Road Corridor Improvement Project seems to be a good start (see Table 3 [ PDF 24.3KB | 1 page ] for an illustration). For projects in the energy sector, the analysis done for the Nam Theun 2 Hydroelectric Project seems to be a good start (see Table 4 [ PDF 19.2KB | 1 page ] for an illustration). Even when a project is located within a single country, showing additional cross-border benefits accruing to neighbor countries would enhance inter-country cooperation and promote better alignment of national and regional development goals. A properly prepared distribution analysis can help adjust project design for a win-win outcome. Detailed distribution analysis by disaggregated stakeholders across is desired, as illustrated in Appendix 4 [ PDF 102.6KB | 3 pages ].
3. Completing different sections of a transport corridor in a timely manner is important in assuring maximum developmental impact. When different donors are involved in assisting construction of a transport corridor, careful coordination is required. The number of donors involved and associated uncertainties should be minimized. When recipient governments' capacities for coordination are weak, donors might together co-finance sector-wide technical assistance for capacity building.
4. In the energy and ICT sectors, regional development agencies such as ADB should focus more on their role as an “honest coordinator” in preparation of cross-border projects as they have a fair chance of public–partnership in financing.
5. Where political tensions tend to stall inter-country cooperation in preparing cross-border infrastructure projects, regional development agencies such as ADB should play an “honest mediator” role based on the historical background of the parties involved.
6. To the extent possible, measurable indicators for evaluating cross-border benefits should be identified in the project preparation stage and monitored throughout the project cycle. For example, transport projects should collect the following categories of baseline information: (i) traffic count by vehicle type, origin, and destination; (ii) freight movements by type of freight, origin, and destination (through a survey of freight forwarders); and (iii) trade impact (by gathering time series customs data on major commodities being moved along corridors). In order to mitigate resource constraints on the part of developing countries, donors could attach to project support piggy-backed technical assistance specific to evaluation purposes for selected projects aiming at collecting baseline data and monitoring critical cross-border impact indicators. For positive externalities, such indicators could include trade and investment as well as household income along the economic corridors. For negative externalities, indicators could include incidence of infectious diseases, human trafficking, and forest areas cleared.
7. In complementing physical construction of transport corridors, the necessary regulatory aspects of cross-border trade, especially transit trade, should be put in place as early as possible. For example, a region-wide standard similar to the Transport International Routier Convention should be put in place along with cross-border transport agreements, as suggested by Banomyong (2007).
8. Preventive and mitigation measures should be prepared against some of the easily predictable and potentially large negative impacts of cross-border transport projects. For example, the Dushanbe–Kyrgyz Border Road Rehabilitation (Phase II) Project includes a grant-financed component on HIV/AIDS and migration to support Tajikistan's Ministry of Health's National HIV/AIDS Center in developing an integrated, community-based, gender-responsive approach to HIV/AIDS and sexually transmitted diseases. The Mongolia Regional Road Development Project includes technical assistance for awareness and prevention of HIV/AIDS and human trafficking on the North–South Road Corridor in the CAREC program.

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