Emerging Trans-Regional Corridors: Perspectives From South And Southeast Asia – Analysis

By K. Yhome and Rajeev Ranjan Chaturvedy*

Asia’s rise in the global economic map is necessitating greater interconnection within and with the outside world. Development of interconnection is taking place between nations, in sub-regions and across regions of Asia. The concept ‘economic corridor’ is used to explain this phenomenon. Economic corridors link economic agents within a country or across regions by providing connection between economic nodes or hubs where economic resources and actors are concentrated.[1] Economic corridors are seen as “catalyst for regional integration” and “driver for inclusive growth” by bringing in lagging regions into the growth process. They also provide “spatial focus for regional cooperation” initiatives by facilitating priorities of regional projects and provide access to global production chain.[2] The basic emphasis that lies in the creation of economic corridors is to ensure that within a contiguous area, there is potential to attract investments and generate economic activity.[3]

Much of the emphasis in this form of economic activity is based on enhancing industrial development, along a region where the potential economic development exists but remains underutilized. One of the important pre-requisites for the development of economic corridors is the need to strategize and integrate the infrastructural development within a particular area and connect it to the regions that are adjacent to these areas. Enhancing transportation systems which potentially link the regions along such corridors are capable of connecting and integrating the processes of infrastructural development to other key sectors such as trade, investments and other economic agencies. While this aspect remains the positive effect of such corridors there are also some downsides that need to be factored in which relate to the issues of social displacement and social conflict that needs to be addressed especially because these regional connectivity projects often permeate through the peripheral areas of nation-state boundaries, which at times remain somewhat removed from the mainstream processes. Another factor that needs to be factored in is the question of large scale environmental issues that can be affected by the expansion of industry.[4]

As Asia witness development of several economic corridors, this volume looks at four specific ideas and projects of trans-regional economic corridors connecting South and Southeast Asia and through them to other regions. The idea of Indo-Pacific Economic Corridor will connect the Indian and the Pacific Oceans through South and Southeast Asian littorals. The China’s Maritime Silk Road initiative plans to link East Asia to Africa and Europe through South and Southeast Asia. The four-nation Bangladesh, China, India and Myanmar Economic Corridor (BCIM-EC) plans to connect China’s southwest region to India’s eastern region through Bangladesh and Myanmar. Lastly, the idea of a Trans-Himalayan Economic Corridor will link South and Southeast Asia to Central Asia through Nepal. While economic corridors are seen from the perspective of economic benefits, which indeed is largely acknowledged, there are also strategic and security issues associated with these corridors, as is evident from the papers in this volume.

The volume puts together perspectives from South and Southeast Asia on trans-regional economic corridors with a focus on connecting the two regions. An obvious question here is why South and Southeast Asia regions. There are two simple reasons. First, these papers were presented at a conference jointly organised by two think tanks––Observer Research Foundation (India) and Institute of South Asian Studies (Singapore)––representing South and Southeast Asia, respectively.[5] Hence, it was considered imperative that the two regions look at how they would be impacted by the various emerging economic corridors. The second reason is perhaps more compelling. South and Southeast Asia together form a significant geographic zone both in continental Asia and maritime Asia and links the Indian Ocean with the Pacific Ocean. No trans-regional economic corridor in the Indo-Pacific region is conceivable without linking South and Southeast Asia. Furthermore, the two regions also act as a bridge linking inner land-locked Asia to the open seas of Indian and Pacific Oceans.

The first two papers address some board ideas and developments in connecting South Asia and Southeast Asia and set the stage for discussion on various issues and dimensions. Tariq Karim provides a South Asian perspective by bringing the focus of the discussion sharply on domestic and bilateral context of South Asia. As Karim argues the Bangladesh, Bhutan, India and Nepal Motor Vehicles Agreement (BBIN-MVA) was, to a large extent, a result of improving political relations between Delhi and Dhaka. The key idea here is that once two countries establish connectivity––whether it is road, rail, air, river, energy, IT––this then can be expanded to sub-regional and regional levels. This can be achieved if political leaderships realise that cooperation is in their larger national interests. He also argues that there is a need to “rethink” connectivity corridors by taking into account the diversity of terrain in different regions. He asserts that there is need to adopt “organic approach” and suggests “multi-modality of transport rather than uniformity” and stressed on the need to link national waterways of the Ganges basin and the eastern Himalayan countries.

Sreeradha Datta discusses connectivity between South and Southeast Asia from the perspective of seeing India as the bridge between in the two regions. The paper asserts that India’s central location in South Asia and with long land and maritime boundaries with Southeast Asia nations it is a natural bridge. Though enjoying an advantageous geographical position, India is often handicapped by various challenges that include security and poor infrastructure in its Northeast region that share land boundary with Myanmar and ineffective execution of connectivity projects. Datta also points out the challenge of terrain in India’s Northeast region for building road and rail lines. The paper suggests that as India pushes for connectivity through continental routes, it is important that maritime links with Southeast Asia is further strengthened as there is huge scope to improve and expand maritime connectivity.

The next four papers focus on various trans-regional connectivity corridors in and around South and Southeast Asia that are at different stages of development – from ideational stage to works in progress. Shankari Sundararaman addresses the key factors responsible for the emergence of the concept of Indo-Pacific Economic Corridor (IPEC) and highlights the opportunities and challenges in translating the vision into reality. Sundararaman argues that the origins of the IPEC idea lie in the growing recognition that the Indian and Pacific Oceans can no longer be seen as two separates regions but as a “one single maritime entity.” The paper further asserts that the IPEC is a vision rooted in the US ‘rebalance’ and ‘pivot to Asia’ strategy to intensify its role in the wider Asia-Pacific region. In the context of South and Southeast Asia, Sundararaman points out that the objective of the United States of linking Indian and Pacific Oceans opens up the possibility of further connecting economies of the two regions.

In his paper on the Chinese proposal for the development of a 21st century Maritime Silk Road (MSR) initiative, Rajeev Ranjan Chaturvedy examines the rationale behind the proposal and identifies the strengths and challenges of the MSR proposal. Chaturvedy argues that the Chinese MSR initiative manifests many elements of a ‘grand strategy’ of a rising power––a masterstroke that aims to transform China’s domestic challenges of production overcapacity and the slowing down of economy as well as aimed at creating a favourable international environment conducive to China’s economic development. The paper asserts that China’s “economic outreach” through the MSR provides huge opportunities for South and Southeast Asia as it complements various connectivity initiatives both within and between the two regions. He concludes with a word of caution and observes that the onus lies with China in explaining “how and what” of the MSR to gain confidence of nations in South and Southeast Asia.

The paper on Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) by K. Yhome explores the evolution of the sub-regional initiative and assesses its future prospects. Examining the problems and challenges of the BCIM-EC, Yhome asserts that as the BCIM initiative makes progress there are new issues and dilemmas confronting the sub-regional forum. He points out that there is still no clarity on what approach/idea may form the base of the BCIM initiative––regionalism or sub-regionalism; “economic driven” or “people-centric”; and centralisation or decentralisation. Different views on how to take the BCIM initiative forward and the geostrategic issues create hurdles for realisation of the BCIM-EC. The paper concludes with a few suggestions on areas the sub-regional forum might undertake for cooperation keeping in mind the ground realities.

Madhukar SJB Rana examines the idea of a Trans-Himalayan Economic Corridor (THEC) centred on Nepal. The paper suggests that as China revives the old Silk Roads and the initiative to reconnect China’s Yunnan with India through the BCIM-EC, the extension of the corridor to Nepal will complete the full revival of the ancient “Southern Silk Road” that once connected Tibet, Nepal, India and Yunnan. The paper argues that given its geographical location Nepal can “act as a Himalayan land-bridge” between Central, South and Southeast Asia and emphasises Rivers as the bedrock of sub-regional cooperation. He also discusses interesting ideas such as ‘green mission’, ‘total connectivity’ and ‘trilateralsim’ for sub-regional and trans-regional cooperation.

The following next three papers discuss the economic and security implications of the emerging trans-regional economic corridors with a particular focus on the MSR. Amitendu Palit addresses the economic implications of the MSR on regional trade and specifically the challenges India has in fully integrating with the MSR. Palit argues that variations in economic conditions and capacities among the MSR will mean “differentiated abilities” to exploit the benefits of the MSR. This might limit the benefits of the MSR and may produce “mixed results.” The paper also brings the focus on the challenges of Indian ports and suggests that unless India develops its own infrastructure capabilities with long-term objectives of developing trans-shipment hub, it will remain incompetitive and unable to take advantage of the emerging economic corridors.

Darshana M. Baruah examines the strategic implications of the MSR from an Indian perspective and within the context of the evolving regional geopolitical dynamics marked by growing competition and rivalry. Baruah argues that the MSR would obviously contribute to regional connectivity and boost regional integration in Asia, but the strategic consequences of the initiative on countries like India cannot be overlooked. The paper also addresses the question of how India may respond to the MSR by suggesting that if the evolving geopolitical dynamics has created strategic challenges to Delhi in the form of China’s MSR, it also provided more strategic options such as Japan and the United States. India needs to take full advantage of developing its infrastructure with its partners and friends.

Martin A. Sebastian provides a Southeast Asian perspective on the MSR by examining the evolving security and economic relations between China and the ASEAN nations. Sebastian asserts that the MSR is China’s “charm offensive” to allay fears and mend its ties with Southeast Asian nations in the backdrop of the rising tensions in the South China Sea disputes. The paper observes the Chinese would like to achieve two goals through the MSR – safeguarding the sea lanes and access to resources. China’s growing regional clout is pushing the ASEAN nations towards the United States to balance a rising China. The complex security ties between China and ASEAN ties will cast is shadow over the MSR.

This article was originally published in GP-ORF’s ‘Emerging Trans-Regional corridors: South and Southeast Asia


[1] Hans-Peter Brunner, “What is Economic Corridors Development and What Can it Achieve in Asia’s Sub-regions,” ADB Working Paper Series on Regional Economic Integration, No. 117, August 2013, p. 1 at  http://www.adb.org/sites/default/files/publication/100110/reiwp-117-economic-corridor-development.pdf

[2] Kunal Sen, ‘Global Production Networks and Economic Corridors: Can They be Drivers for South Asia’s Growth and Regional Integration?’, ADB South Asia Working Paper Series, 33, Asian Development Bank (ADB), Manila, December 2014 at http://www.adb.org/sites/default/files/publication/152708/south-asia-wp-033.pdf

[3] Pradeep Srivastava, “Regional Corridors Development in Regional Cooperation,” ADB Economics Working Paper Series, No. 258, May 2011, pp. 6-16.

[4] Ibid.

[5] The conference under the theme “Emerging Trans-Regional Corridors: South and Southeast Asia” with participation from South and Southeast Asia was held on December 7, 2015 in Kolkata.


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Observer Research Foundation

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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