Opening remarks by ADB Pakistan Resident Mission Country Director Xiaohong Yang at the CAREC Strategy 2030 Launching Workshop on 4 December 2017 in Islamabad, Pakistan.
Your Excellency, Mr. Arif Ahmed Khan, distinguished guests, ladies and gentlemen.
It is my great pleasure be here today to warmly welcome you to today’s Central Asia Regional Economic Cooperation Strategy 2030 (or CAREC Strategy 2030) launching workshop in Pakistan. I particularly would like to thank those who have traveled from overseas to join us including Mr. Arif Ahmed Khan just finished his Shanghai Cooperation Organization (SCO) meeting. It is great to showcase our good work led by Safdar Parvez and Guoliang Wu in the field of regional cooperation and integration (RCI).
First, on behalf of ADB, I would like to express our deep appreciation to the Government of Pakistan, in particular for those present today from the Economic Affairs Division, for your important contributions and continued support of the CAREC Agenda.
Pakistan is a key member of CAREC and has been playing a frontline role in CAREC. It successfully hosted the 2016 meeting of CAREC Ministers; Pakistan’s commitment is also evident from its timely ratification of the intergovernmental agreement for the CAREC Institute and contributed greatly in the formulation of CAREC Strategy 2030.
I personally have been deeply involved with RCI issues for a long time, including being the transport director for the 10 countries in the CAREC region, the principal author of CAREC Transport and Trade Facilitation Strategy 2020, and now Country Director here at ADB.
I would like to reflect on three issues central to new CAREC Strategy 2030:
- First, why regional cooperation and integration is so important to Pakistan;
- Second, what has been our experience, including ADB’s own experiences in Pakistan; and
- Third, what are the prospects of CAREC looking forward?
Importance of CAREC for Pakistan: A strategy for growth and prosperity
To start with, why is CAREC so important for Pakistan?
First, by cooperating and working together with other CAREC member countries, Pakistan can better unlock its vast economic potential. By reducing or removing barriers at the border and behind the border, economies of scale can be tapped.
As you all know, for my home country, “Made in [the People’s Republic of] China” would not be possible without the supply chains and production networks that thrive on economic efficiency and integration.
Trade in goods and services, technology transfers, labor mobility, and financial transactions all support the realization of Pakistan 2025. At present, except for the People’s Republic of China, the trade value of Pakistan with other CAREC member countries are at very low levels. I very much look forward to see lots of “Made in Pakistan” products in CAREC countries. CAREC will help Pakistan to create a much larger and much needed regionally integrated market.
Second, CAREC acts as a bridge between individual countries and the rest of the world. CAREC can help policy makers better respond to global challenges—whether to financial shocks and crises or climate change—thereby making Pakistan economies more resilient. Regional safety nets are critical—whether financial, social, environmental, or disaster-related.
Third, CAREC can contribute to long-term political and economic stability, thereby, creating a peace dividend. It can provide the impetus for maintaining stable and sustained growth that is needed to alleviate poverty and keep Pakistan moving forward.
What has been our experience, including ADB’s own experiences in Pakistan?
Our experience in regional cooperation and integration including Pakistan
First, let me reflect: ADB’s journey in promoting RCI dates back to its Charter and its founding in 1966. By 2006, ADB was supporting five major subregional initiatives including the Greater Mekong Subregion (GMS) Program, the CAREC Program, and the South Asia Subregional Economic Cooperation (SASEC) Program. In 2006, ADB adopted a more formal RCI Strategy—anchored on the four pillars:
- cross-border infrastructure and the regulatory “software” for greater physical connectivity,
- trade and investment,
- monetary and financial cooperation, and
- regional public goods.
Then, in 2008, ADB adopted a Long-Term Strategic Framework, known as Strategy 2020, which elevated RCI as one of three strategic development priorities, and one of five core areas of operations. It targets RCI-related projects to comprise at least 30% of total operations by 2020.
CAREC has done very well in its history, about 16 years of operation across member countries. Since joining in 2010, Pakistan has benefited from regional connectivity investments under CAREC worth $1.5 billion of which ADB has provided over $800 million. Roads have been developed, railway strategies are being prepared, we’ve got energy projects done, and trade and trade facilitation work undertaken.
Why is the CAREC Program changing direction?
While maintaining its comparative advantage in the existing priority areas of transport, energy, trade facilitation, and trade policy development, the new CAREC Strategy 2030 presents a vision that is consistent with stakeholders’ desire to broaden and deepen the regional cooperation. It now includes.
- supporting regional economic and financial stability, and
- regional initiatives in the areas of tourism, agriculture and water resources, as well as health and education.
We firmly believe the expanded CAREC 2030 agenda will make CAREC better and respond to some of the new realities.
ADB is committed to CAREC and to the new strategy. And, in fact, our President pledged at least $1 billion a year for the next 5 years to CAREC.
In Pakistan, in addition to key sectors such as energy, transport, finance, agriculture, and public sector management, ADB’s new pipeline for 2018 to 2020 includes about $2 billion per year in assistance, expanding our support to urban development, water resources management, health, and education.
With support from the Department of Foreign Development of the United Kingdom, ADB is also actively working on economic corridor development to help reduce inequality by linking secondary towns and lagging border areas with major production centers.
The new strategy is anchored on the mission to connect people, policies, and projects.
To conclude, with the rapid economic expansion of RICE countries, the Russian Federation to the north, India to the south, the People’s Republic of China and Japan to the east, and emerging Europe, there is a unique opportunity for Pakistan to emerge as a center of trade and commerce, achieve higher levels of economic growth, and reduce poverty.
CAREC is very important to the region, to its 11 countries, and its people. CAREC will become even more important for Pakistan as a means to connect with each other and grow.
We at ADB will continue to play a key role for mobilizing political will on RCI and supporting Pakistan’s bright future.
I look forward to your active participation.