Regions and Countries

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p. 13 of 22 BACK | NEXT I. Summary II. Background and Rationale III. The ADB Initiative Towards Economic Cooperation in Central Asia IV. Sector Priorities and the Proposed Program 2001-2003 A. Trade B. Energy C. Transportation V. Addressing Poverty and Governance and other Cross-Cutting Concerns VI. Issues and Challenges

Central Asian Regional Economic Cooperation : IV. Sector Priorities and the Proposed Program 2001-2003

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C. Transportation

33. All of the railroads and major roads in Central Asia cross national boundaries and affect the ability of each country to move goods cheaply, quickly, and effectively. However, because of the former economic integration of the CARs within the Soviet Union, their transportation infrastructure was physically and institutionally oriented toward European Russia. This did not lead to sufficient investments in infrastructure to facilitate intra- or inter-republican trade and traffic. The location of railroads, for instance, was designed to take raw materials to specific, usually distant processing plants rather than to local processing plants.

34. Rail is the most important mode of transport in the region. In the CARs, rail transport accounts for more than 75 percent of all freight transport and a significant percentage of inter-city passenger transport. The existing rail network already links the major cities and industrial centers of the region, and coverage is generally sufficient for current and near-term levels of economic activity. There are, however, critical gaps in rail coverage. In particular, the single rail corridor connecting the CARs with the PRC is a potential bottleneck to trade. Providing for intermodal connections between the Uzbek and the PRC rail systems across the Kyrgyz Republic would reduce the cost of shipping goods to South or East Asia from Central Asia and vice versa. In addition there is a critical need to improve commercially oriented operations of the transborder rail links. Opportunities exist to encourage increased technical cooperation between the rail entities and to improve communications, data base management, and maintenance. In addition, there is a need to reorient operations in a more consumer or client-oriented fashion. These projects are being further examined in the Phase II operations.

35. Road transport is also important for trade, and freight volumes are increasing as a percentage of the regional transportation mix. One reason is that higher-value finished consumer goods are entering local markets (especially for the yet small but significant urban, high-income market segments) and roadways allow for distribution to all parts of the region from local warehouses. Another reason is that the economies of the region have been freed from the constraints of centrally planned distribution systems, making the speed and flexibility of trucking more important.

36. Because the main road arteries connect the major economic and population centers, the road network of Central Asia is generally sufficient to meet current and near-term needs. More urgent than new construction, however, is the need to upgrade the existing network to meet the demands of future economic growth and activity. Most of this network is badly deteriorated as a result of poor construction and the lack of maintenance. The roads were not built to support the large volume of heavy trucks that are appearing as the economies open to increased cross-border trade. As a result, travel is slow, with considerable wear on vehicles and damage to goods. There is an urgent need to upgrade major roadways to carry larger volumes at higher speeds, with less damage to both rolling stock and the products being transported.

37. One major paved road corridor links the CARs—the east-west highway linking Tashkent with Almaty. This road runs beyond both of these cities, to Termiz in the southwest, and to the Kazakhstan-PRC border at Horgos and onward to Urumqi in the east. Portions of the road have been upgraded in Xinjiang, PRC, but major reconstruction of several sections of the road is still needed. As noted, the ADB is now processing parallel and coordinated loans to the governments of Kazakhstan and the Kyrgyz Republic for upgrading and rehabilitating the Almaty-Bishkek road, and for providing technical assistance to ensure that policy deficiencies do not inhibit the trade and traffic that would naturally develop with an improved infrastructure system. The activity is now fully integrated in ADB’s country programs.

38. In conjunction with the proposed improvements to transport infrastructure, a number of cross-border issues also need to be addressed. Such issues include closures of border crossings, inadequate border crossing facilities and procedures, transit restrictions and charges, inappropriate or weak control by police and other authorities along transit corridors, high international transport charges, and inter-railway payments. Other related issues include the lack of regional traffic data and the need for improved transshipment facilities. As discussed below, within its general initiative, the ADB should increase its efforts to work with other international organizations, especially the European Union to provide technical assistance and smooth regional cooperation in this area.

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