Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway Network
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Madhur, Srinivasa; Wignaraja, Ganeshan; Darjes, Peter Working Paper Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway Network ADB Working Paper Series on Regional Economic Integration, No. 37 Provided in Cooperation with: Asian Development Bank (ADB), Manila Suggested Citation: Madhur, Srinivasa; Wignaraja, Ganeshan; Darjes, Peter (2009) : Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway Network, ADB Working Paper Series on Regional Economic Integration, No. 37, Asian Development Bank (ADB), Manila, https://hdl.handle.net/11540/2342 This Version is available at: https://hdl.handle.net/10419/109544 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/3.0/igo
Roads for Asian Integration: Measuring ADB’s Contribution to the Asian Highway Network Srinivasa Madhur, Ganeshan Wignaraja, and Peter Darjes No. 37 | November 2009 ADB Working Paper Series on Regional Economic Integration
Srinivasa Madhur+, Ganeshan Wignaraja++, and Peter Darjes+++ Roads for Asian Integration: Measuring ADB’s Contribution to the Asian Highway Network ADB Working Paper Series on Regional Economic Integration No. 37 November 2009 The authors would like to thank Rafaelita Aldaba and Ivan de Leon for their invaluable contributions to the preparation of this paper. The views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of ADB, its Board of Directors, or the governments they represent. +Srinivasa Madhur is the Senior Director, Office of Regional Economic Integration, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Tel +632 632 5744, Fax +632 636 2183, [email protected] ++Ganeshan Wignaraja is Principal Economist, Office of Regional Economic Integration, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Tel +632 632 6116, Fax +632 636 2183, [email protected] +++Peter Darjes is consultant, Office of Regional Economic Integration, Asian Development Bank, 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines.
The ADB Working Paper Series on Regional Economic Integration focuses on topics relating to regional cooperation and integration in the areas of infrastructure and software, trade and investment, money and finance, and regional public goods. The Series is a quick-disseminating, informal publication that seeks to provide information, generate discussion, and elicit comments. Working papers published under this Series may subsequently be published elsewhere. Disclaimer: The views expressed in this paper are those of the author(s) and do not necessarily reflect the views and policies of the Asian Development Bank or its Board of Governors or the governments they represent. The Asian Development Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term "country" in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. Unless otherwise noted, $ refers to US dollars. © 2009 by Asian Development Bank November 2009 Publication Stock No.
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abstract iv 1. Introduction 1 2. Emerging Regional Cooperation and Integration, and Regional Road Needs in Asia 2 3. A Yardstick for Regional Roads: The AH Network 4 3.1 Classification and Design Standards 4 3.2 Asian Highway Database 7 3.3 Measuring ADB’s Contribution to the Asian Highway Network 8 4. Findings on ADB's Contribution to Regional Roads 10 4.1 Regional Roads in ADB's Portfolio 10 4.2 ADB’s Contribution to the AH Network 15 5. Conclusion 18 References 26 ADB Working Paper Series on Regional Economic Integration 28 Tables 1. Summary of Asian Highway Design Standards 6 2. Asian Highway Sections by ADB Developing Member Country (DMC) 6 3. ADB Road Projects by Type of Road (km) 10 4. ADB Transport Projects by Road Type and Regional/Subregional Group (km) 13 5. Indicators of ADB Contributions to the Asian Highway Network 17 Figures 1. ADB-Financed Highway Projects (km) 11 2. Composition of ADB-Financed Highway Projects (%) 11 3. Construction Costs and Financing (Million $, 2008 Prices) 12 4. The Asian Highway Route Map 16 Appendix 1. Asian Highway Design Standards 20 2. Generic Networking Planning Process 21 3. ADB Loans for Road Projects—Loan Documents Reviewed 22
4. ADB Road Projects by Category, Construction Cost, and ADB Loan Amount 23 5. Development and Project Costs, and ADB Financing ($ Million, Nominal and 2008 Prices) 24 6. Development and Composition of ADB Highway Projects 24 7. Asian Highway Roads and ADB-Financed Regional Roads (km) 25
Abstract Against the backdrop of growing momentum for regional cooperation and integration (RCI) in Asia, this paper examines the link between regional roads and Asian Development Bank (ADB) support between 1966 and 2008. The novel methodology used in this paper includes an Asia-wide definition of regional roads that fall on the Asian Highway (AH) network. The AH network is a system of about 140,000 kilometers (km) of standardized roads crisscrossing many Asian countries and with linkages to Europe. The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) conducts research on Asian roads and works with member countries to identify financing sources for AH network development. In relation to assessing ADB's contribution to regional roads, three tasks are attempted in this paper: (i) an identification of ADBfinanced regional roads and other kinds of roads in ADB's portfolio, (ii) an estimation of ADB's contribution to the AH network, and (iii) the development of a map where ADB’s contribution to regional road construction and infrastructure can be easily juxtaposed with the AH network. The paper finds that regional highways have been a notable and growing part of ADB's road portfolio since the 1990s, particularly in ADB’s subregional programs such as the Greater Mekong Subregion (GMS) and Central Asia Regional Economic Cooperation (CAREC) programs. It also finds that ADB road investment has made a significant contribution to the AH network, representing about two thirds of the network’s core roads. While parts of the AH network have been completed, substantial gaps still exist, including an estimated $43.8 billion required for priority projects. As part of its mandate to promote better integration of Asian infrastructure, ADB may have a role to play in addressing the financing, planning, and institutional development of the AH network. Furthermore, strengthened coordination among ADB, UNESCAP, and other actors can enhance both the AH network and the process of regional road development in Asia. Keywords: Asian highway, regional roads, regional cooperation, infrastructure development, multilateral development bank JEL Classification: R42, F15, N75
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 1 1. Introduction "Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighborhood of the town. They are upon that account the greatest of all improvements." (Smith, 1776, I, p. 165) Connecting countries through roads is a pivotal element of regional integration. Such connectivity across borders brings many benefits, including improved competitiveness of production networks, better trade flows, and reductions in development gaps between rich and poor countries. Building roads has been a core area of the Asian Development Bank's (ADB) operational support for the region's economic development since the 1960s and remains an important part of its future strategy as manifest in ADB's Strategy 2020. The link between regional road development and ADB support, however, remains unexplored. In part, this may be due to the concept of regional roads being somewhat elusive in an empirical context: is a regional road simply a road that connects two countries or something broader connecting Asia as a whole? In reality, both definitions may have merit depending on the purpose. In this context, the paper addresses an important question: how much has ADB, as the region's development bank, contributed to the development of regional roads? This paper uses an Asia-wide definition of regional roads as it is convenient for empirical analysis and assumes that regional roads are those that fall on the Asian Highway (AH) network. While the notion of the AH network is not new to the region, the Intergovernmental Agreement on the Asian Highway Network, which provides a framework for coordinated international highway development in Asia, only became effective in 2005. UNESCAP has been working with member countries to identify financing sources for AH network development. The paper undertakes three interrelated tasks in relation to assessing ADB's contribution to regional roads: (i) identify ADBfinanced regional roads and other kinds of roads in ADB's portfolio, (ii) estimate ADB's contribution to the AH network, and (iii) develop a map where ADB's contribution to regional road construction and infrastructure can be easily juxtaposed with the AH network. These tasks include a stocktaking of ADB’s loan and grant road projects since 1966, as well as the development of a map and database of ADB-financed transport projects that fall on AH routes. The rest of the paper is structured as follows. Section 2 provides a brief background of the regional cooperation and integration (RCI) process in Asia, gains from investment in regional infrastructure, and estimates of future regional road needs in Asia. Section 3 discusses the application of the AH network as a yardstick for regional roads and develops a methodology to measure ADB's contribution to the network. Section 4 presents the results for regional roads in ADB’s portfolio and its contribution to the AH network. Section 5 concludes with suggestions.
8 | Working Paper Series on Regional Economic Integration No. 37 some member countries to submit basic information and/or information on updates to the AH network. Since inputs are not provided evenly and consistently by all member countries, the intervals at which the AH database is updated seem to be too long to make the data operationally useful. Apart from frequent updating, the AH database needs to be integrated closely with national road planning processes and systems. In order to be effectively utilized as a tool for network planning and/or road asset management, additional critical planning steps must be carried out to ensure that the proposed road works are viable. Such steps include network analysis, evaluation of options, and feasibility analysis,5 all of which remain the domain of national authorities. Thus, while the AH network criteria discussed above provide a prima facie justification for road sections to be included in the AH network, not all roads that are currently on the AH map may pass national-level planning hurdles. Feasibility analysis might indicate that some of the proposed road works are not viable. Thus, strengthening the link between the AH Network “as a coordinated plan for the development of highway routes of international importance” and the planning processes of the member countries is necessary to make the database a more effective planning tool.6 3.3 Measuring ADB’s Contribution to the Asian Highway Network The approach adopted in this paper can be summarized as follows: ADB’s contribution to the AH network was measured by calculating the proportion of ADB-funded regional road projects falling on the AH network to the total road length of the network. Expressed in road length, this is represented by the equation below: Y X onContributiADB n iij ∑ = =1 (1) where: X: length of regional road falling on the AH network that is funded through ADB loans (expressed in km) Y: total distance covered by the AH network (expressed in km) going through ADB DMCs i: member country of ADB j: ADB regional road project that falls on the AH network The data used to assess ADB's contribution to the AH network are based primarily on loan documents of transport projects financed by ADB. A review was carried out of 176 approved loans covering 168 projects in 27 DMCs from 1966 through October 2008 to 5 See Appendix 2 for an illustration of a generic highway planning process. 6 UNESCAP (2003).
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 9 determine which road projects fall under the AH network. At the same time, all maps provided in the loan documents were coded to facilitate development of a single AH network map. Based on the loan documents, the following data were collected and tabulated: • ADB loan numbers to identify the projects, • type of road (e.g., regional, national, feeder), • construction design standards for regional and national roads, • cost of construction (total and unit cost per km in US dollars), • date of completion, and • ADB financing (in terms of loan amount in US dollars). In general, roads can be classified into three categories: regional, national, and feeder. It is evident from the equation above that in assessing ADB’s contribution to the AH network, a clear definition and proper classification of roads is crucial to generating a realistic estimate. Based on the AH network classification and design standards discussed in the previous section, the definitions given below were adopted. Regional roads were defined using the AH network classification and design standards to include all border access roads, roads shown on the AH map, and key arteries through countries forming a transport corridor. Not all identified regional (ADB-financed) roads are shown on the AH maps. For instance, many expressways in the PRC that are regional in character are not shown on AH maps. Another example of this discrepancy is the East–West Highway in Malaysia, which received ADB project financing. Although the East–West Highway was constructed two decades ago and meets the AH criteria, it is not shown on AH maps. While this road and other examples are not included in either the AH database or AH maps, they were considered regional roads for the purpose of this paper. National roads include all roads marked as national roads on official country maps and trunk roads discernible as such without numbering on the maps. Feeder roads include all roads characterized as such in loan documentation, as well as provincial roads and all roads covered under maintenance sector projects. Finally, in most road classifications, regional roads are considered national roads, but not all national roads are regional roads. In such cases, regional roads were not counted again under the national road category. ADB has financed a number of sector programs focusing on road maintenance that comprise specified scopes of work mostly expressed in terms of road length. While these programs have in some cases covered the entire road hierarchy, the sections were not specified in the loan documents and, therefore, could not be geographically identified. Most of these roads were included in the group of feeder roads.
10 | Working Paper Series on Regional Economic Integration No. 37 4. Findings on ADB's Contribution to Regional Roads 4.1 Regional Roads in ADB's Portfolio From 1966 through October 2008, ADB financed the construction of 87,003 km of roads in 27 DMCs. Of this total, 17,754 km (20.4%) comprised regional highways, 21,466 km (24.7%) comprised national roads, and 47,782 km (54.9%) comprised feeder roads (Table 3). Appendix 4 gives the ADB contribution for each DMC by road category. All regional roads and a portion of the national roads—totaling about 37,000 km—can be traced on the maps that were coded. Table 3: ADB Road Projects by Type of Road (km) Period Regional % National % Feeder % Total 1966–1975 206 21.5 719 75.0 34 3.5 959 1976–1980 216 14.8 887 60.6 361 24.7 1464 1981–1985 203 10.8 949 50.4 730 38.8 1882 1986–1990 897 10.8 1952 23.6 5,436 65.6 8285 1991–1995 1,149 8.1 2,323 16.4 10,650 75.4 14,122 1996–2000 2,452 18.7 2,863 21.8 7,803 59.5 13,118 2001–2005 4,248 28.0 2,694 17.8 8,223 54.2 15,164 2006– Oct 2008 8,384 26.2 9,079 28.4 14,545 45.4 32,009 Total 17,754 20.4 21,466 24.7 47,782 54.9 87,003 Source: ADB loan documents.
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 11 Figure 1: ADB-Financed Highway Projects (km) Source: Author’s estimates. Figure 2: Composition of ADB-Financed Highway Projects (%) Source: Author’s estimates. 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 1966–19751976 – 19801981–1985 1986 – 1990 1991 – 1995 1996 – 2000 2001–20052006 – Oct2008 REGIONAL NATIONAL FEEDER TOTAL 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 1966–1975 1976–19801981–1985 1986–1990 1991–1995 1996–2000 2001–20052006–Oct2008 REGIONAL NATIONAL FEEDER
12 | Working Paper Series on Regional Economic Integration No. 37 Figure 2 shows the composition of ADB’s financial assistance to the road sector from 1966 through October 2008. The share of regional roads as a portion of the total has been on a rising trend since the period 1991–1995. While Figure 2 indicates that this trend may have slowed after 2006, the loan projects that are currently in the ADB pipeline and others pending approval have not been included. Once updated to include 2009, the database will most likely reflect a continuation of the rise in the share of regional roads as a portion of all ADB-financed roads. In terms of project costs, the total amounted to $42,017 million, with accumulated ADB loans of around $18,478 million (Appendix 5).7 Based on 2008 prices, the total cost is estimated at $48,145 million, while the corresponding ADB financing reached $21,141 million.8 Figure 3 shows the development of construction costs and ADB financing in real terms. The rising trend in the cost of regional roads reflects the increase in design standards in later years. For example, some regional roads were constructed to fourlane, access-controlled expressway standards. Figure 3: Construction Costs and Financing (Million $, 2008 Prices) Source: Author’s estimates. 7 The project costs figure includes both actual cost of completed projects and cost estimates related to ongoing projects. 8 The original costs and loan amounts were adjusted to 2008 prices by using an index derived from construction costs and the weighted average of the ADB projects in terms of construction standards. The index was applied to the mid-point of the respective 5-year periods.
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 13 Table 4 shows the composition of ADB road programs by type of road in two regional groups, ASEAN and South Asian Association for Regional Cooperation (SAARC),9 as well as in ADB’s subregional groups comprising GMS, CAREC, and South Asia Subregional Economic Cooperation (SASEC).10 Regional roads comprise around 20.4% of ADB’s total road programs. The focus on transport that is common to ADB’s subregional programs is reflected in the significantly higher share of regional road projects in their respective total road programs. Table 4 shows the share of regional roads at 32.6% in GMS, 40.4% in CAREC, and 28.6% in SASEC. In SAARC, the composition of regional road projects is around 20%, which is consistent with ADB’s total share. In ASEAN as a whole, the share of regional roads is about 16%. However, two ADB member countries, Singapore and Brunei, have not received any ADB assistance and are not represented in the road data. Table 4: ADB Transport Projects by Road Type and Regional/Subregional Group (km) Regional National Feeder Total SAARC 4,330 6,002 11,361 21,693 % share 20.0 27.7 52.4 100.0 GMS 3,917 3,174 4,934 12,024 % share 32.6 26.4 41.0 100.0 CAREC 4,100 1,646 4,403 10,149 % share 40.4 16.2 43.4 100.0 SASEC 3,762 4,598 4,808 13,169 % share 28.6 34.9 36.5 100.0 ADB Total 17,754 21,466 47,782 87,003 % share 20.4 24.7 54.9 100.0 Source: ADB loan documents. Notes: CAREC = Central Asia Regional Economic Cooperation, GMS = Greater Mekong Subregion Project, SAARC= South Asian Association for Regional Cooperation, SASEC = South Asia Subregional Economic Cooperation. GMS and SASEC have regional road shares of 26% and 35%, respectively, which are relatively higher than the total share for ADB, while the CAREC countries have the lowest share of regional roads at only about 16%. 9 Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. 10 Bangladesh, Bhutan, Nepal, and the eastern states of India.
14 | Working Paper Series on Regional Economic Integration No. 37 Due to their unique geographic situations, there are several national roads that are not considered to be regional roads, according to AH classification, even though they play crucial roles in linking together different parts of the country. For example: • Malaysia’s East–West Highway, which cuts across the Malaysian peninsula and is a strategic link between the eastern and western parts of the country, neither meets the AH criteria nor the criteria adopted for regional roads. Yet, while the East–West Highway is likely as significant as the North–South Corridor connecting Malaysia with Thailand and Singapore, the North–South Corridor is a part of the AH network and the East–West Highway is not. ADB has contributed to the rehabilitation and upgrading of the East–West Highway in two phases.11 Accordingly, in this paper, the East–West Highway is considered a regional road. • The Panay Island Road project12 is representative of several similar road projects financed by ADB in archipelagic countries like the Philippines. The road is of strategic significance for the island’s economy and for the integrity of the country as a whole. Due to its location on the periphery of regional transport corridors, the road does not qualify as a regional road. • Road projects in ADB’s Pacific developing member countries (PDMCs) mostly escape the regional classification. Good examples include the Hiritano Highway,13 which is a major road on the southern part of the Papua peninsula, and the Highlands Highway,14 which is a strategic link between the southern and northern part of the same peninsula. The PDMCs do not figure at all in the AH project nor can their roads be regarded as regional. • Hunan Province in the PRC is a landlocked province that does not border other countries. The population and geographic size of the province are comparable to Thailand and the Philippines. However, due do its geographic peculiarities, Hunan roads cannot be considered regional in nature. A case in point is the Hunan Expressway Project that connects the provincial capital with other parts of the provincial network.15 Feeder roads, whose cumulative share reached 55%, accounted for the largest share of ADB’s total road programs. In ASEAN, feeder roads accounted for about 64% of ADB’s total road programs. In SAARC, the same ratio was around 52%. With respect to feeder roads among ADB subregions, a share of 41% was registered in GMS, 43% in CAREC, and 37% in SASEC. 11 ADB Loan No. 588-MAL: East–West Highway Project. Approved in 1982. 12 ADB Loan No. 477-PHI: Second Road Improvement Project. Approved in 1988. 13 ADB Loan No. 116-PNG: Hiritano Highway Project. Approved in 1972. 14 ADB Loan No. 327-PNG: Highlands Highway Project. Approved in 1977. 15 Loan No. 1261-PRC: Hunan Expressway Project. Approved in 1993.
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 15 On the whole, ADB’s transport projects have contributed significantly to the development of balanced national networks that comprise a hierarchy of roads. Roads foster spatial integration and trade within a national economy and among national economies. Regional roads have become more important given the increasing pace of globalization and economic integration in Asia. In addition, regional roads derive their significance from national and feeder roads that provide them with traffic. From this perspective, ADB’s contribution to the development of national networks has been well-balanced and proportionate to the significance of various roads within each network’s hierarchy. 4.2 ADB’s Contribution to the AH Network ADB has financed a total of 17,754 km of regional roads. Table 5 lists the regional roads supported by ADB in DMCs, while Figure 4 plots ADB-financed roads on the AH map as indicated by the highlighted sections. To measure ADB’s contribution to the AH network, the ratio of ADB regional roads to the 2006 AH database was calculated. As a caveat, this indicator is prone to potential inaccuracies due to the following: (i) regional roads financed by ADB that were started or completed after 2006 may not be reflected in the respective category of the AH database against which ADB regional road projects were compared; (ii) the contents of the AH database may have changed since 2006, as some roads financed from sources other than ADB may have been upgraded and, therefore, were moved to a different AH category; (iii) some ADB roads have received repeated ADB assistance over time to maintain the value of the road,16 while the AH data base of 2006, on the other hand, may show sections that have been improved or may have fallen into disrepair in the interim; and (iv) not all ADB regional roads are recognized as AH roads. These words of caution notwithstanding, ADB’s contribution to the AH network was measured in three ways: • First, as a proportion of the core AH network consisting of 27,816 km of roads with two or more lanes and covering primary, class I, and class II highway category standards. • Second, as a proportion of a broader reference base that would apply to all AH sections with two or more lanes and covering primary, class I, class II, and class III highway category standards. • Third, as a proportion of the total AH network including roads below class III, and others, totaling 105,546 km. These indicators are shown in Table 5 below. The first indicator shows that ADB’s contribution represented around 64% of AH core roads comprising primary, class I, and class II roads. Based on the 2006 data, these AH categories have a total of 27,816 km and contain upgraded roads. Most ADB regional roads have conformed to the standards of these categories. 16 The East–West Highway in Bhutan is an example. Due to the rapid and often unpredictable deterioration of the road, ADB has so far made three loans to maintain the road at serviceable conditions.
16 | Working Paper Series on Regional Economic Integration No. 37 Figure 4: The Asian Highway Route Map Sources: Author's estimates based on ADB and UNESCAP data. The second indicator applies a broader definition of AH roads to include class III roads. Based on this, ADB’s contribution is about 20% of AH roads with two or more lanes covering primary, class I, class II, and class III roads, and representing a total of about 90,000 km. The roads with two lanes or less are not universally paved and are in various state of repair. Most of the AH roads in categories III and below need upgrading. It is in this class where the bulk of improvement work should be concentrated, not only to meet the required design standards, but also to bring the roads to serviceable conditions.
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 17 Table 5: Indicators of ADB Contributions to the Asian Highway Network Asian Highway Road Sections (km) ADB Contribution DMC Core AH Network: Primary, Class 1, Class II Broader Reference Base: Primary, Class 1, Class II, Class III Total Asian Highway ADB Regional Roads As % of Core AH Network As % of Broader Reference Base As % of Total AH Network Afghanistan 621 4,247 4,247 660 106.28 15.54 15.54 Armenia 519 998 998 Azerbaijan 1,094 1,442 1,670 186 17.00 12.90 11.14 Bangladesh 461 1,805 1,805 857 185.90 47.48 47.48 Bhutan 6 167 167 1,067.3 17,788.33 639.10 639.10 Cambodia 398 1340 1340 328 82.41 24.48 24.48 PRC 7,078 10,529 25,929 2,624.7 37.08 24.93 10.12 Georgia 796 1,154 1,154 India 484 11,458 11,458 1,096 226.45 9.57 9.57 Indonesia 1,953 3918 3952 1542 78.96 39.36 39.02 Kazakhstan 839 13,207 13,207 929 110.73 7.03 7.03 Kyrgyzstan 464 1,695 1,695 748.2 161.25 44.14 44.14 Lao PDR 2,375 2,378 1,321.3 55.63 55.56 Malaysia 1,595 1,595 1,595 300.4 18.83 18.83 18.83 Mongolia 440 4,286 4,286 1,359 308.86 31.71 31.71 Myanmar 291 3,003 3,003 253.2 87.01 8.43 8.43 Nepal 311 1,326 1,326 741.8 238.52 55.94 55.94 Pakistan 1,634 5,377 5,377 218 13.34 4.05 4.05 Philippines 44 3,367 3,517 206 468.18 6.12 5.86 Republic of Korea 907 907 907 114.8 12.66 12.66 12.66 Sri Lanka 269 650 650 349.4 129.89 53.75 53.75 Tajikistan 289 1,925 1,925 453.9 157.06 23.58 23.58 Thailand 3,980 5,108 5,112 783 19.67 15.33 15.32 Turkmenistan 2,204 2,204 Uzbekistan 1,020 2,966 2,966 131 12.84 4.42 4.42 Viet Nam 2,323 2,678 2,678 1,484.3 63.90 55.43 55.43 Total 27,816 89,727 105,546 17,754.3 63.83 19.79 16.82 Note: This paper compares the actual length of roads belonging to the AH concept with roads defined in this paper as regional roads. By AH definition, these roads could qualify as AH roads. For that reason, ADB's contribution to the regional network in Asia in some countries exceeds the AH network considerably. AH = Asian highway, DMC = developing member country, km = kilometers, Lao PDR = Lao People’s Democratic Republic, PRC = People’s Republic of China. Source: Authors’ estimates.
24 | Working Paper Series on Regional Economic Integration No. 37 Appendix 5: Development and Project Costs, and ADB Financing ($ Million, Nominal and 2008 Prices) Appendix 6: Development and Composition of ADB Highway Projects REGIONAL NATIONAL FEEDER TOTAL 1975ANDBEFORE 20 6 719 34 959 1976‐1980 216.4 886. 8 361 1464 1981‐1985 203 949 730 1882 1986‐1990 897195254368285 1991‐1995 1149 2323 10650 14122 1996‐2000 2452 2863 7803 13118 2001‐2005 424 8 2694 8223 15164 2006ANDLATER 8384 9079 14545 32009 TOTALADB 17754 21466 47782 87003 KM REGIONA L ROADS actual real(2008) real(2008) actual real(2008) PRIORTO1975 74.40 195.60 329.60 32.80 86.23 1976‐1980 399.30 914.40 346.24 145.70 333.65 1981‐1985 442.80 882.94 324.16 184.40 367.69 1986‐1990 968.20 1,681.76 1,434.40 467.30 811.70 1991‐1995 1,947.70 2,853.06 1,838.40 986.20 1,422.98 1996‐2000 6,757.20 8,905.99 3,922.88 2,903.60 3,826.94 2001‐2005 8,672.95 9,956.55 6,796.16 3,608.40 4,142.44 2006‐2010 22,754.60 22,754.60 13,415.04 10,149.50 10,149.50 42,017.15 48,144.90 28,406.88 18,477.90 21,141.14 TOTALCOST ADBFINANCING ALLROADS Source: Author's estimates based on ADB data. Source: Author's estimates based on ADB data.
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 25 Appendix 7: Asian Highway Roads and ADB-Financed Regional Roads (km) Notes: Primary to Class II = Asian Highway sections with 2 or more lanes corresponding to highway categories Primary, Class I, and Class II standards. Class III and below = Asian Highway sections with 2 or more lanes covering highway categories Primary, Class I, Class II, and Class III. Total AH Roads = sections with 2 or more lanes covering highway categories Primary, Class I, Class II, and Class III and roads classified as others. ADB Total = ADB-financed regional roads conforming to Asian Highway “A” categories. Percentages above 100% indicate that ADB-financed regional roads are a multiple of the roads included in the AH system and/or that ADB has been involved more than once in rehabilitating a given road. The Bhutan East–West Highway meets both conditions. ADB-financed regional roads that are expected to link the southwestern part of Mongolia with the People’s Republic of China (PRC) are not yet included in the AH system. Source: UNESCAP (2006), Asian Highway Database (2004), and updates from member states. ADB DMCs PRIMARY TO CLASS III TOTAL ADB TOTAL CLASS II AND BELOW AH ROADS KM PRIMARY TO CLASS III TOTAL CLASS II AND BELOW AH ROADS THAILAND 3,980 5,108 5,112 783 19.7% 15.3% 15.3% MALAYSIA 1,595 1,595 1,595 300 18.8% 18.8% 18.8% INDONESIA 1,953 3,918 2,966 1542 79.0% 39.4% 52.0% PHILIPPINES 2,323 2,427 3,952 206 8.9% 8.5% 5.2% MYANMAR 291 1,274 3,003 253 87.0% 19.9% 8.4% PDMCs - - - LAOS - 2,375 2,378 1321 55.6% 55.6% VIETNAM 2,323 2,427 2,678 1484 63.9% 61.2% 55.4% CAMBODIA 398 1,141 1,340 328 82.4% 28.7% 24.5% PRC 7,078 9,086 25,929 2625 37.1% 28.9% 10.1% MONGOLIA 440 785 4,286 1359 308.9% 31.7% 31.7% KOREA 907 907 907 115 12.7% 12.7% 12.7% SRI LANKA 269 459 650 349 0.0% 76.1% 53.8% INDIA 484 11,353 11,458 1096 226.4% 9.6% 9.6% NEPAL 44 2,916 3,517 742 1685.9% 25.4% 21.1% BANGLADESH 461 937 1,805 857 94.5% 94.5% 94.5% BHUTAN 6 6 167 1067 17788.3% 17788.3% 639.1% PAKISTAN 1,634 4,203 5,377 218 49.5% 27.8% 5.1% AFGHANISTAN 621 698 4,247 660 106.3% 94.6% 15.5% ARMENIA - - - AZERBAIJAN 1,094 1,442 1,670 186 17.0% 12.9% 11.1% KAZAKHSTAN 839 10,843 13,207 929 110.7% 8.6% 7.0% KYRGYZ REP. 464 975 1,695 748 161.3% 76.7% 44.1% TAJIKISTAN 289 892 1,925 454 0.0% 50.9% 23.6% UZBEKISTAN 1,020 2,638 2,966 131 12.8% 5.0% 4.4% TURKMENISTAN 2,180 2,204 TOTAL 27,816 89,727 105,546 17754 64% 20% 17% ADB SHARES IN AH CLASS AH ROADS (KM) ADB REGIONAL ROADS Source: Author's estimates based on ADB data.
26 | Working Paper Series on Regional Economic Integration No. 37 References Asian Development Bank (ADB). 2008. Emerging Asian Regionalism: A Partnership for Shared Prosperity. Manila. ADB and Asian Development Bank Institute. 2009. Infrastructure for a Seamless Asia. Manila and Tokyo. ADB, Japan Bank for International Cooperation and World Bank. 2005. Connecting East Asia: A New Framework for Infrastructure. Manila, Tokyo, and Washington DC. Arnold, J. 2009. The Role of Logistics Infrastructure and Trade Facilitation in Asian Trade. In Francois, J., P. B. Rana and G. Wignaraja, eds. Pan Asian Integration: Linking East and South Asia. Basingstoke (UK): Palgrave Macmillan Press. Bhattacharyay, B.N. 2009. Infrastructure Development for ASEAN Economic Integration. ADBI Working Paper Series. No. 138. Borrus, M., D. Ernst, and S. Haggard, eds. 2000. International Production Networks in Asia: Rivalry or Riches. London: Routledge. Country Surveyors Society. 2004. Framework for Highway Asset Management. Shrewsbury, UK: Country Surveyors Society. Francois, J.F. and G. Wignaraja. 2008. Economic Implications of Asian Integration. Global Economy Journal. 6(3). pp.146. Kawai, M. 2005. East Asian Economic Regionalism: Progress and Challenges. Journal of Asian Economics. 16:1 (February). pp. 29–55. Krumm, K. and H. Kharas, eds. 2003. East Asia Integrates: A Trade Policy for Agenda for Shared Growth. Washington D.C: World Bank. Kumar, N. and P. De. 2008. East Asian Infrastructure Development in a Comparative Global Perspective: An Analysis of RIS Infrastructure Index. New Delhi: Research and Information System for Developing Countries RIS Discussion Paper No. 135. Kuroiwa, I. and T.M. Heng, eds. 2008. Production Networks and Industrial Clusters: Integrating Economies in Southeast Asia. Singapore: Institute of Southeast Asian Studies. Leinbach, T.R.1989. Road and Rail Transport Systems. In Leinbach, T.R. and C.L. Sien, ed. South-East Asian Transport: Issues in Development. Singapore: Oxford University Press. Levinson, D.M. 2002. Financing Transportation Networks. Cheltenham, UK: Edward Elgar.
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28 | Working Paper Series on Regional Economic Integration No. 37 ADB Working Paper Series on Regional Economic Integration* 1. “The ASEAN Economic Community and the European Experience” by Michael G. Plummer 2. “Economic Integration in East Asia: Trends, Prospects, and a Possible Roadmap” by Pradumna B. Rana 3. “Central Asia after Fifteen Years of Transition: Growth, Regional Cooperation, and Policy Choices” by Malcolm Dowling and Ganeshan Wignaraja 4. “Global Imbalances and the Asian Economies: Implications for Regional Cooperation” by Barry Eichengreen 5. “Toward Win-Win Regionalism in Asia: Issues and Challenges in Forming Efficient Trade Agreements” by Michael G. Plummer 6. “Liberalizing Cross-Border Capital Flows: How Effective Are Institutional Arrangements against Crisis in Southeast Asia” by Alfred Steinherr, Alessandro Cisotta, Erik Klär, and Kenan Šehović 7. “Managing the Noodle Bowl: The Fragility of East Asian Regionalism” by Richard E. Baldwin 8. “Measuring Regional Market Integration in Developing Asia: a Dynamic Factor Error Correction Model (DF-ECM) Approach” by Duo Qin, Marie Anne Cagas, Geoffrey Ducanes, Nedelyn Magtibay-Ramos, and Pilipinas F. Quising 9. “The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future” by Michael G. Plummer and Ganeshan Wignaraja 10. “Trade Intensity and Business Cycle Synchronization: The Case of East Asia” by Pradumna B. Rana 11. "Inequality and Growth Revisited" by Robert J. Barro 12. "Securitization in East Asia" by Paul Lejot, Douglas Arner, and Lotte Schou-Zibell 13. "Patterns and Determinants of Cross-border Financial Asset Holdings in East Asia" by JongWha Lee 14. "Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA" by Masahiro Kawai and Ganeshan Wignaraja 15. "The Impact of Capital Inflows on Emerging East Asian Economies: Is Too Much Money Chasing Too Little Good?" by Soyoung Kim and Doo Yong Yang 16. "Emerging East Asian Banking Systems Ten Years after the 1997/98 Crisis" by Charles Adams 17. "Real and Financial Integration in East Asia" by Soyoung Kim and Jong-Wha Lee 18. “Global Financial Turmoil: Impact and Challenges for Asia’s Financial Systems” by Jong-Wha Lee and Cyn-Young Park 19. “Cambodia’s Persistent Dollarization: Causes and Policy Options” by Jayant Menon
Roads for Asian Integration: Measuring ADB's Contribution to the Asian Highway | 29 20. "Welfare Implications of International Financial Integration" by Jong-Wha Lee and Kwanho Shin 21. "Is the ASEAN-Korea Free Trade Area (AKFTA) an Optimal Free Trade Area?" by Donghyun Park, Innwon Park, and Gemma Esther B. Estrada 22. "India’s Bond Market—Developments and Challenges Ahead" by Stephen Wells and Lotte SchouZibell 23. “Commodity Prices and Monetary Policy in Emerging East Asia” by Hsiao Chink Tang 24. "Does Trade Integration Contribute to Peace?" by Jong-Wha Lee and Ju Hyun Pyun 25. “Aging in Asia: Trends, Impacts, and Responses” by Jayant Menon and Anna MelendezNakamura 26. “Re-considering Asian Financial Regionalism in the 1990s” by Shintaro Hamanaka 27. “Managing Success in Viet Nam: Macroeconomic Consequences of Large Capital Inflows with Limited Policy Tools” by Jayant Menon 28. “The Building Block versus Stumbling Block Debate of Regionalism: From the Perspective of Service Trade Liberalization in Asia” by Shintaro Hamanaka 29. “East Asian and European Economic Integration: A Comparative Analysis” by Giovanni Capannelli and Carlo Filippini 30. “Promoting Trade and Investment in India’s Northeastern Region” by M. Govinda Rao 31. "Emerging Asia: Decoupling or Recoupling" by Soyoung Kim, Jong-Wha Lee, and Cyn-Young Park 32. “India’s Role in South Asia Trade and Investment Integration” by Rajiv Kumar and Manjeeta Singh 33. “Developing Indicators for Regional Economic Integration and Cooperation” by Giovanni Capannelli, Jong-Wha Lee, and Peter Petri 34. “Beyond the Crisis: Financial Regulatory Reform in Emerging Asia” by Chee Sung Lee and Cyn-Young Park 35. "Regional Economic Impacts of Cross-Border Infrastructure: A General Equilibrium Application to Thailand and Lao PDR" by Peter Warr, Jayant Menon, and Arief Anshory Yusuf 36. "Exchange Rate Regimes in the Asia-Pacific Region and the Global Financial Crisis" by Warwick J. McKibbin and Waranya Pim Chanthapun * These papers can be downloaded from: (ARIC) http://aric.adb.org/reipapers/ or (ADB) www.adb.org/publications/category.asp?id=2805
Roads for Asian Integration: Measuring ADB’s Contribution to the Asian Highway Network In this paper, Srinivasa Madhur, Ganeshan Wignaraja and Peter Darjes examine the link between regional roads and ADB support in Asia between 1966 and 2008. The paper finds that regional highways are a notable and growing part of ADB’s road portfolio since the 1990s, particularly in the Banks’ subregional programs like the Greater Mekong Subregion (GMS) and the Central Asia Regional Economic Cooperation Program (CAREC). It also finds that ADB road investment has made a significant contribution to the Asian Highway itself, representing about two-thirds of Asian Highway core roads. Furthermore, strengthened coordination between ADB, UNESCAP and other actors can enhance the Asian Highway network and the process of regional road development in Asia. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org/poverty Publication Stock No. Printed in the Philippines