The economic development in eastern China has significantly outpaced development in the western region. Xinjiang is one of the less developed provinces. The net income per capita for farmers is 76% of the national average. The poverty incidence of 18% (2004) is higher than the national average of 10%, and is concentrated in the southern Xinjiang where 80% of the poor population resides and where the Project is located. The Project expressway is part of the Government's Western Development Plan to address the needs of 12 western provinces and includes development of road network to (i) provide stronger links with the eastern provinces, and (ii) accessibility to its population spread over a large area.
Xinjiang shares a 5,600 km border with eight neighboring countries that are mostly member of the ADB's CAREC program. The cross-border trade of $7.9 billion is growing at 28.5% per annum. However, cross-border transportation is affected by (i) poor condition of border roads, and (ii) lack of unified transport regulations among the Central Asia region including PRC (Xinjiang).
The Project improves border roads and facilitates harmonization of cross-border procedures agreed by the CAREC member countries.
While PRC has achieved rapid economic development, the rural areas have lagged behind leading to widening income inequalities. One reasons for this disparity is lack of access to rural areas. To address this, the Government has embarked on a major national rural roads construction program. The Project supports this and provides (i) financing for development of selected rural roads in the poorest and remotest areas of Xinjiang, and (ii) pilot test policy reforms to improve rural transport services.
The Project supports the Government's Western Region Development Plan (WRDP) and National Expressway Development Plan (NEDP) of building expressways to provide stronger links with the eastern provinces and improve accessibility for the western region's population. The project expressway is part of one of eight major road corridors under the WRDP and one of 34 expressways under the NEDP. By improving priority local roads in the poorest and remotest area of Xinjiang, the Project also supplements Government's Rural Roads Construction Program. The upgrade of local roads will facilitate easier and safer access to schools, hospitals, and markets for mainly of poor and ethnic minorities.
The Project reflects ADB's Central Asian Regional Economic Cooperation (CAREC) Transport and Trade Facilitation Strategy, which aims for accelerating of economic growth and reducing poverty by upgrading key transport corridors across CAREC region. The Korla-Kuqa expressway will serve as an important transport corridor ensuring efficient and safe movement of goods and passengers, and will play a critical role in furthering trade and regional cooperation. The Project will foster economic development and promote interregional trade, thereby supporting the key objective of poverty reduction through sustainable development.