Economic Corridor Development

Almaty, Kazakhstan, and Bishkek, Kyrgyz Republic, to develop first CAREC economic corridor

At the 13th CAREC Ministerial Conference in Bishkek, the city administrations of Almaty and Bishkek signed a memorandum of understanding to develop the Almaty–Bishkek economic corridor. Read more

Developing economic corridors is a priority for the CAREC Program, which has funded infrastructure connectivity among member countries for more than a decade. As CAREC member countries become more developed and connected to each other, they can benefit by cooperating at a higher level by linking markets, ideas, and people.

Economic corridor development (ECD) can be instrumental in promoting this regional cooperation agenda. ECD is concerned with the spatial organization of economic activities. It brings together existing and new infrastructure, policies, and institutions to attract private investment that will create jobs and encourage growth. Infrastructure requirements encompass transport networks (primary and secondary roads, railways, ports, airports), energy, information and communication technology, urban infrastructure, and economic zones. ECD overlaps naturally with urban development: it supports the growth of large economic clusters, which are typically urban, and improves links between urban clusters, and between urban and rural areas.

Since its inception, CAREC has mobilized about $27.7 billion for transport, energy, trade policy, and trade facilitation. In 2011, CAREC countries adopted a long-term strategic framework that stressed ECD.

Economic Densities in Select Cities in Central Asia*

(*Economic density is the ratio of city gross regional product over area. Yellow circles indicate distances of 300, 600, and 900 kms from Almaty. Click to view bigger image)

 

Frequently Asked Questions

What is an economic corridor?

It is not a particular road. Economic corridor development does not consist of building or promoting commercial establishments on or along a particular road.

An economic corridor is a spatial concept. It defines a geographic region dedicated to or dominated by economic activities that may typically be focused on specific sectors such as information technology, production of specific manufactured commodities, tourism, etc.

An economic corridor includes as prerequisites a good transport network; primary and secondary roads; and other infrastructure such as power, information and communication technology, and industrial parks.

What is needed to develop an economic corridor?

Experience across Asian countries shows that a few factors are critical to an economic corridor’s success:

(i) Economic potential. An economic corridor cannot develop from nothing; rather, it magnifies and builds on underlying economic potential, which can subsequently attract private investment. The starting point for economic corridor development is selecting and prioritizing a target geographical area based on identified economic potential.

(ii) Economic and technical analysis to (a) identify ways of building on economic potential and prioritize where and how resources should be allocated; and (b) identify business opportunities, infrastructure needs, and policy and regulatory prerequisites

(iii) Political commitment and coordination among multiple stakeholders at various levels of government, diverse government agencies at each level, and countries (for cross-border economic corridor development). Political commitment at the highest levels is another prerequisite for ensuring the successful development of economic corridors.

(iv) Sustained commitment over a decade or more. Since economic corridor development typically requires public and private investment in infrastructure, completing projects will take substantial time and resources. Successful growth of firms in the corridor can also take time.

What is the Almaty-Bishkek Corridor Initiative (ABCI)?

The ABCI is exploring the feasibility of developing an economic corridor between Almaty, Kazakhstan, and Bishkek, Kyrgyz Republic, as well as the scope and content of such a corridor. The ABCI is supported by the Asian Development Bank (ADB) through CAREC.

A memorandum of understanding was signed between Almaty and Bishkek to work together on exploring the corridor’s development. Subsequently, the governments of the two countries established a joint working group (JWG) to guide, monitor, and implement the initiative in its first phase (2015–2016): technical analysis to identify opportunities to develop the economic corridor.

The initiative was proposed in a study undertaken by the CAREC Secretariat. The study provided a framework for developing CAREC corridors along three tracks: (i) transport corridors to improve domestic transport networks within member countries; (ii) transit corridors to improve cross-border transport connectivity and flow of goods; and (iii) economic corridors that build upon existing connectivity with additional infrastructure, policies, and institutions to foster diverse economic activities in specific spatial clusters such as cities.

What will the Almaty–Bishkek Corridor Initiative do?

During the first phase (2015–2016), the initiative’s joint working group will identify infrastructure, policy, and institutional requirements to promote the corridor’s development. At its first meeting in December 2014, the ABCI joint working group (JWG) pinpointed the following for further analysis: coordinated long-term city planning, agriculture, education, health services, tourism, and infrastructure and logistics development. Through the CAREC Program, the Asian Development Bank is helping undertake the technical and economic analysis to support the JWG’s activities.

The JWG will also identify potential financing for infrastructure projects, including from the private sector and other development partners.