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November 2014 Economy and Policy

Published on: 2014-11-11 00:00:00     648 times read    0  Comments
--By Madhukar SJB Rana
 
When we speak of Nepal as a 'transit economy', we have in mind the provision of land transport infrastructure providing various modes of transportation such as railways, highways, waterways, rope ways, pipelines, gas lines, electricity grids and fiber optic cables.
 
Further, such transit transport corridors may also include transhipment infrastructure such as warehouses, container depots, cold storage, weighing machines, material handling equipment, including food and lodging facilities for transport operators.
 
Transport corridor's purpose is to provide for efficient means of carriage of goods and services in transit with minimal damage to the goods and their quality. Where there is damage, it provides facilities for insurance surveys as well as for lodging claims. Having done so, the transit economy collects transit fees for services rendered.
 
The limitation of such an economy is that it deprives the transit state with the possibilities of value adding and creating supply chains to reap multiplier benefits to its economy. To override this constraint, we call for 'economic corridors'. The purpose of economic corridors is to integrate the economies sub regionally by creating growth triangles, quadrangles and so on between two or more nations. It does so by creating SEZs, FTZs, EPZs, industrial parks, dry ports, Export Promotion Villages (EVPs) and so on in order to attract FDI.
 
China leads the way with such innovations. But the most illustrious example of sub regionalism is the ADB's Greater Mekong Sub Region Economic Programme (GMS-ECP). Economic corridors in Nepal that I have in mind are those that are aligned to the great rivers of Nepal and sub regional cooperation between its immediate neighbours in Tibet and India. For example, the Kosi Economic Corridor that will integrate parts of Tibet with Sikkim, North Bengal with Nepal's Eastern Development Regions; or the Karnali Economic Corridor will integrate the economies of parts of Uttarakhand and North Uttar Pradesh with the Far West Development Region of Nepal and so on. Similarly, with the Bagmati Economic Corridor and Gandhaki Economic Corridor could be linked to the contiguous regions in Tibet, Bihar and UP.
 
Globalization is giving way to Glocalization through the process of devolution in nation states. One such trend is to call for Public-Private-Partnership (PPP). And so it is fashionable for each state in a federal set up or each region or metropolitan city to undertake regional planning by creating growth centres, growth hubs and spokes and so on. The best example of a vision for trilateralism that I have come across is the research by Prateek A Anand, which appeared in The Bihar Times in 2012 under the heading "Bihar Needs An Economic Corridor".
 
It is an impressive piece of work that creates links with not only Nepal and through Nepal to Tibet but also links up with the Delhi- Mumbai Industrial Corridor by linking it with the Industrial Corridors of Jharkhand and Odisha with Paradeep as the gateway seaport. 
 
It may be underscored that the beauty of his idea is that it respects the alignments of the Trans Asia Highway  and Tran Asia Railway and also captures possibilities for river transportation given the vast mineral resources of the sub region.
 
In short, it is a vision to uplift almost all the BIMARU (underdeveloped) states of India with the subsidiary linkages to Gorakhpur, Varanasi, Rewa and Katra in Uttar Pradesh. He believes that, at a cost of just $ 2 billion to be borne by the Central and State Governments, it may be the world's most lucrative infrastructure project for FDI and PPP. Furthermore, it allows huge potential for novel strategies of development in the tribal States of India with incorporation of one more 'P' to PPP--namely People-Public-Private-Partnership (PPPP). 
 
Former Finance Minister Rana is Professor at South Asian Institute of Management.
 

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