Strategy 2030 and

Fostering Regional Cooperation and Integration

ADB’s financing partnerships cofinanced in 2019 some 50 projects designed to increasingly interconnect Asia. Regional cooperation and integration have become more critical than ever, particularly in sharing health and medical knowledge and resources to address the ongoing global pandemic.

ADB’s Strategy 2030 in regional cooperation and integration (RCI) lays down strategic steps to enhance connectivity and competitiveness, promote regional public goods, strengthen cooperation in the finance sector, and strengthen subregional initiatives. ADB’s goals of a more integrated Asia-Pacific through can be achieved through:

  • greater and higher-quality connectivity between economies
  • expanded global and regional trade and investment opportunities
  • increased and diversified regional public goods

ADB, as a multinational development organization, has regional cooperation in its DNA. This paved the way for developing member countries to link up and integrate with other countries to tap economies of scale; strengthen supply chains; facilitate the movement of goods, services, technology, and capital; and respond collectively to global events and shocks.

ADB operationalizes RCI mainly through the following subregional programs:.

  • Central Asia Regional Economic Cooperation (CAREC) - The program helps promote regional cooperation in Central Asia in four priority areas: transport, trade facilitation and trade policy, energy, and economic corridor development. It is an essential point of intervention for ADB to help the CAREC partner countries to emerge as a center of trade and commerce because of the rapid economic expansion of the People’s Republic of China and Japan to the east, the Russian Federation to the north, and India and Pakistan to the south. It is a partnership of 11 countries: Afghanistan, Azerbaijan, People’s Republic of China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.

  • Greater Mekong Subregion (GMS) - The GMS is an area covering 2.6 million square kilometers and a combined population of 340 million. The GMS countries are Cambodia, the People’s Republic of China (specifically Yunnan Province and Guangxi Zhuang Autonomous Region), Lao People’s Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam. GMS focuses on increasing connectivity through sustainable development of physical infrastructure and economic corridors; improving competitiveness through facilitation of cross-border movement of people and goods and enhancing value chains; and building a greater sense of community through shared concerns.

  • Pacific Islands Forum – The program bats for a region of peace, harmony, security, social inclusion, and prosperity. It comprises 18 members: Australia, Cook Islands, Federated States of Micronesia, Fiji, French Polynesia, Kiribati, Nauru, New Caledonia, New Zealand, Niue, Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.

  • South Asia Subregional Economic Cooperation (SASEC) - This program brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka. Priority areas for cooperation include transport, trade facilitation, energy, and economic development. SASEC countries share a vision of boosting intraregional trade and cooperation in South Asia, while also developing connectivity and business with Southeast Asia.

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Trade and tourism are booming in western Tajikistan after the rehabilitation of a road that leads to the border with Uzbekistan. A collaboration between the ADB and the OPEC Fund for International Development, the new road links to a cross-country highway that serves as conduit for trade goods.

In 2019, ADB approved 50 cofinanced projects that included RCI elements in their project design. Cofinancing for these projects totaled $2.74 billion. Among the top cofinanciers were JICA with $2.35 billion contributions, AIIB with $200 million, EBRD with $60 million, OFID with $40 million, and the Government of Australia with $23.9 million. The sectors with highest RCI-related projects were transport, energy, finance, water and urban infrastructure and services, and industry and trade. The DMCs with most RCI-related projects in 2019 were the Philippines, Sri Lanka, Bangladesh, multi-country or regional, and Georgia.

Fostering Greater and Higher-Quality Connectivity Between Economies

ADB supports technologically advanced, multimodal transport and ICT cross border connectivity; soft infrastructure to increase the efficiency and productivity of cross-border connectivity; and renewable energy and sustainable transport connectivity infrastructure.

In Tajikistan, the Tajikistan: Central Asia Regional Economic Cooperation Corridors 2, 3, and 5 (Obigarm-Nurobod) Road Project, was cofinanced with the European Bank of Reconstruction and Development for $150 million, the Asian Infrastructure Investment Bank for $40 million, and the OPEC Fund for International Development for $40 million. Through this partnership, a 72-kilometer-long road will be constructed through the mountainous terrain in the Obigarm-Nurobod road section of Tajikistan’s M41 highway. This road bypasses the hydropower plant reservoir that, upon opening in November 2023, will affect some sections of the highway. This bypass road must be operational by the time the hydropower plant opens because no other part of Tajikistan’s national highway network can provide for this traffic, and the only alternative route would represent a deviation of about 500 km. The project will run from 2019 to 2024.

Start-Ups Deliver Inclusive Tourism in the Mekong Region

Empowered tourism start-ups are helping tourists find their way to more diverse attractions in the Mekong Region, leading to a more sustainable and inclusive tourism sector. The Government of Australia supports the project.

Similarly, in Georgia, the North-South Corridor (Kvesheti–Kobi) Road Project was approved in 2019 with cofinancing from the European Bank of Reconstruction and Development for $60 million. The project, which runs from 2019 to 2026, is expected to improve connectivity and safety along the North-South Corridor through a 23-kilometers climate-resilient two-lane highway between Kvesheti and Kobi.

To address energy needs, a project in Mongolia, Sermsang Khushig Khundii Solar Project with cofinancing from the Leading Asia’s Private Infrastructure Fund (LEAP) for $9.1 million was approved. The project involves the construction, operation, and maintenance of a 15-megawatt (MW) solar power plant in Khushig Valley, which is located 40 kilometers from Ulaanbaatar and 17 kilometers from the new international airport.

In Sri Lanka, the South Asia Subregional Economic Cooperation Port Access Elevated Highway Project was approved with cofinancing from the Japan International Cooperation Agency for $342.7 million and technical assistance (TA) from the Japan Fund for Poverty Reduction for $1.3 million. The project will construct about 5.3 kilometers of an elevated toll highway with related facilities between the New Kelani Bridge and Galle Face in central Colombo. It will provide a direct link to the city center and the port from the Colombo-Katunayake Expressway via the New Kelani Bridge, and then extend the expressway network into the city. The project will improve last-mile connectivity between the country’s expressway network and Colombo’s international port, provide better logistics services for freight operations, and facilitate regional trade. It will help alleviate traffic congestion in Colombo’s densely populated areas. It will run from 2019-2025.

Expanding Global and Regional Trade and Investment Opportunities

Increasing cross-border economic activities through trade and investment is at the heart of regional cooperation. ADB supports DMC implementation of global and regional trade and investment agreements; promotes policy, infrastructure, and business investments to develop cross-border economic corridors; and strengthens regional financial cooperation and stability and the reduction of risks among financial intermediaries.

Some hindrances to trade include unstreamlined regulations and various requirements to move goods. To address this, a project in the Maldives, the South Asia Subregional Economic Cooperation National Single Window Project, was approved with cofinancing from the High-Level Technology Fund for $500,000. The technical assistance will contribute to supporting the Government of the Maldives in related capacity development of various stakeholders, including on change management. The project will use information and communication technology to improve efficiency in cross-border control procedures by supporting the development of an automated system to share and harmonize data across systems of transnational regulatory agencies. It will also allow traders and other service providers to submit and obtain unified clearance of export and import documentation requirements through a single point of entry. It will run from 2019-2023.

Partnerships and investments that address congestion in transport and distribution hubs help increase efficiency in the delivery of goods and services across borders.

Covering the countries of Cambodia, India, Thailand, and Viet Nam, the Supporting Internationalization of Small and Medium-Sized Enterprises: Linking India and the Greater Mekong Subregion project was approved with a $3 million cofinancing from the United Kingdom Fund for Asia Regional Trade and Connectivity under the Regional Cooperation and Integration Financing Partnership Facility. Running from 2019 to 2021, this technical assistance will help catalyze trade and cross border investment (internationalization) by small and medium enterprises (SMEs) by establishing partnerships with business accelerators to identify SMEs with the potential to internationalize; and providing these SMEs with a composite package including information on opportunities, industry expertise, mentoring, and guidance on market entry issues to assist their internationalization. The assistance also links business accelerators and financial intermediaries.

Increasing and Diversifying Regional Public Goods

ADB supports the provision of regional public goods that could positively influence the impact of national and global public goods. Its work in this area encompasses regional climate change mitigation and adaptation, shared environmental management, and expansion and diversification of regional education and health services.

The technical assistance, Implementing the Integrated Trade Agenda in the Central Asia Regional Economic Cooperation Program, was also approved in 2019 with cofinancing support from People’s Republic of China Poverty Reduction and Regional Cooperation Fund for $800,000. The TA supports the implement the Central Asia Regional Economic Cooperation (CAREC) Integrated Trade Agenda (CITA) 2030. CITA 2030 aims to help CAREC members integrate further into the global economy. Running from 2019 to 2021, it aims to increase market access, promote economic diversification, and strengthen trade institution for the participating countries. These are Afghanistan, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, People’s Republic of China, Tajikistan, Turkmenistan, and Uzbekistan.

In all the three RCI pillars, ADB promotes strengthening of cooperation and dialogue among its DMCs. A $1.5 million technical assistance was approved with cofinancing from the United Kingdom Fund for Asia Regional Trade and Connectivity under the Regional Cooperation and Integration Financing Partnership Facility for Supporting the Implementation of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Initiatives (BIMSTEC). The technical assistance aims to address the needs of the member states and the BIMSTEC secretariat to advance RCI in select thematic areas. The project covers Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, Thailand, and runs from 2019 to 2021. 

Moving Forward

The ongoing pandemic has highlighted the urgency of regional cooperation.

The global threat that the novel coronavirus, or COVID-19, presented in early 2020, has highlighted how critical regional cooperation is. ADB’s Asian Development Outlook puts regional economic growth in developing Asia in a sharp decline in 2020 because of the pandemic. This puts all developing Asia’s subregions in weak growth this year due to weak global demand. The report opines that “subregions that are more economically open, like East and Southeast Asia, or tourism-dependent like the Pacific, will be hard hit.”

While some amount of cross-border trade and investment activities is seen to slow down, regional cooperation in the areas of health and medical information sharing must be doubled. An ADB analysis observes that “COVID-19 reminds us that we are highly interconnected, not just in terms of goods, capital, and information but also human interaction, and that disease does not respect national boundaries.”