A new approach to developing economic corridors can change the way we think about regional integration.
Throughout many parts of Asia, impressive multi-lane expressways zip through the countryside, linking major cities and political centers. But these highways often leave behind the people and communities who live beside it.
Travelers make fewer stops along the highway for goods and services. Communities are often physically divided by the road making travel from one side to the other more difficult and sometimes dangerous. And access to the highway itself is sometimes limited. These impediments reduce the benefits of the highway for a region.
To address this issue, some of these highways have been converted into economic corridors that cluster economic activity along a roadway. But this is a flawed approach.
Economic corridors should be designed the other way around, with the original goal being to unite a region and reap the benefits from growing together. Physical connectivity – building a highway – is only one dimension of the integrated development of a region. Economic corridors need a comprehensive approach to succeed.
An example of this approach can be found in Central Asia, where Almaty in Kazakhstan, and Bishkek in the Kyrgyz Republic are undertaking an unprecedented initiative. The cities are working together with their national governments and ADB to build a new kind of economic corridor.
Traditionally, economic corridors are created along roads in populated areas that link two cities in the same country. Factories, tourist sites, markets and ease of access draw in people from nearby to fuel economic activity. Both cities sit under the same national legal and regulatory framework, and only regional and municipal differences need to be addressed.
The Almaty-Bishkek Economic Corridor, the pilot economic corridor under the Central Asia Regional Economic Cooperation (CAREC) program, is a much more complicated undertaking. This cross-border economic corridor connects businesses of different sectors as if they would be in one country.
The pilot corridor has been created in a region that is sparsely populated, divided by mountain ranges, and far away from major markets. But within Central Asia, the economic corridor builds on two relatively close urban drivers of economic growth.
To successfully implement the corridor, political leaders at both the national and local levels are working together in new and innovative ways. One goal is to facilitate international border crossings by both people and goods with the same ease as crossing from one province to the other. Another is that doctors, tourists, and private companies can operate under a compatible regulatory system that creates an integrated powerful market in Central Asia.
Once this groundwork is laid, a business-friendly environment will need to be in place to attract the much-needed private sector investment that will be the deciding factor for the corridor’s success.
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To address these formidable challenges and fully develop the potential benefits of the two areas, the two cities are using an innovative “3D approach”—including linear, spatial and virtual aspects—to create an economic corridor that will turn both cities, and the area between them, into a single, prosperous economic space.
Almaty and Bishkek are two economic centers connected by a rehabilitated road, which is the underlying linear dimension of the economic corridor. But in the middle of this modern highway is an international border crossing that was established during the changing political and trade relations between the two countries.
With increasing regional integration and trade, the border crossing has become a bottleneck for the more than 30,000 people that cross it each day. To increase trade, tourism, and knowledge exchange, modern border crossing facilities and procedures are being developed.
Another vital linear link is between Almaty, the most prosperous city in Central Asia, and lake Issyk-Kul, a popular tourist destination. The two areas are only about 80 km apart, but the 485-km road connecting them runs around the formidable Tian Shan mountain range. A more direct toll road across the mountains is thus being explored as part of the economic corridor.
An important dimension of the project is spatial planning, which is key to efficiently organizing economic activity to attract private investments. For example, the mountain range between Almaty and lake Issyk-Kul has great potential to attract international tourists.
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Developing this mountain region can spur connected winter sport investments such as ski resorts. Also, linking it with summer tourism opportunities around the lake would reduce seasonality and investment risks of tourism flows. A master plan for the area is being developed to capture these benefits.
The virtual dimension of the corridor includes coordinating cross-border service sectors to increase market size and competitiveness. For example, costly medical testing laboratories do not need to be set up separately in each country if one facility can serve both areas.
Another problem to fix is in the fast-growing tourism sector, which suffers from a lack of skilled labor to move into high-quality tourism products that would attract more visitors to the region. The two cities are working together to identify cooperation projects to address this skill gap.
The goal of the Almaty-Bishkek Economic Corridor is to improve the lives of the people in both cities, but an important byproduct of the innovative 3D approach could be a new understanding of how economic corridors are created and managed. The benefits of economic corridor development first emerge from improvements within one dimension, but as the corridor develops, cross-dimensional benefits take effect.
Under the umbrella of the CAREC program, the 3D approach is also being rolled out to other economic corridor developments in the region. Work has started to assess the feasibility of connecting Tashkent, the capital of Uzbekistan, with neighboring Shymkent in Kazakhstan, Khujand in Tajikistan, and surrounding oblasts. Innovative economic corridor development is an important building block for deeper regional economic integration in this sparsely populated part of the world.