Vision 2020 – – ADB ADB’ ’s s Trade and Trade and Vision 2020 I nvestment Strategy – – and how to and how to I nvestment Strategy create spillover from I ndia’ ’s s create spillover from I ndia Northeast Northeast Achievements & Future Direction Achievements & Future Direction Hans-Peter Brunner Senior Economist Asian Development Bank New Delhi, 10 and 11 March 2008
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Phase I I Activities Phase II activities have adopted three conclusions: 1. Need to improve the performance of the existing corridors based on the finding of the in depth analysis. • The solution at gateway points should be pursued at the local level with overall support from the central governments. 2: Need to address sector wide issues • Four areas identified as priority: (i) the establishment of a system to enable trucks of one country to travel into others; (ii) the establishment of customs clearance arrangements so as to ensure that transit cargoes be handled as transit cargoes; (iii) the adoption of a single administrative document as a common customs declaration form; (iv) the development of electronic data interchange (EDI); (v) system of product standards, conformity assessment, metrology, and certification. 3: Need to broaden the current scope of work – Need to develop a strategy for establishing effective physical links connecting SASEC and GMS subregions (BIMSTEC initiative) 3
Objective of the TrWG under Phase I I I • Several views have been expressed from participating countries on TrWG activities – Slow progress of TrWG activities – Need to accommodate differing needs of SASEC countries, both land locked and transit/coastal countries – Need to reflect recent changes in international trade environment by expanding the scope of the TrWG study to include the linkage with GMS • Sub-regional cooperation has followed its own process of evolution – Started in a conservative manner. At the initial stage, it was agreed to: (i) confine the study scope to existing corridors (no new corridor); and (ii) no change to the existing bilateral arrangements. An important role is the provision of a platform where four countries can communicate each other under different setting rather than usual bilateral setting for talk. – As a study progresses, more serious look has begun to be given to specific needs or benefits for each country. – The consultant had come up with identifications of impediments and a rather long list of possible actions for the removal of these impediments. – The phase III is for the implementation of the findings of the Phase II study. This requires: (i) the selection of priority corridors; and (ii) development of actions to be taken for each of the priority corridors. This would also require the discussion on the institutional arrangement for implementation. 4
Cost to upgrade harvesting and post-harvesting techniques to lower the cost of harvesting and lessen post-harvest losses: Integrated Value Chain Analysis for Quality Control/Standards/Laboratories: US$4,250,000 Pineapple in NES Grading and Sorting Facilities: US$3,750,000 Improve Harvesting Techniques/Technology: US$5,500,000 Labor Equipment Transport 82.8% 10.3% 6.9% Land Planting Fertilizing Spraying Plant Irrigation Harvesting Administration Preparation Maintenance 8.4% 6.5% 0% 0% 13.3% 0% 68.5% 3.2% Cost of enhancing and developing Labor: Labor Equipment Transport US$4,500,000 through Labor Equip & Packing & upgrading and operating 86.9 7.6% 5.5% Materials Transport vocational training and 21.8% 15.8% 63.4% education centers Labor Post-harvest Transport Transport and Logistics Improvements: Losses Services 10.4% 26.0% 63.6% Cost to develop cold chain: US$19,500,000 (includes cost to establish cold storage, procure reefers, and improve facilities at airports and border posts) 5
Pilot: Develop NE SME Trade Hub Pilot: Develop NE SME Trade Hub Bamboo, Rubber, Pineapple Dibrugarh potential Guwahati mostly River concentrated in Ganga this area – potential for trade hub (unofficial picture is not to scale) Haldia 6
Source: Bhutan, Source Tripura, Assam, All NER, Meghalaya, Meghalaya, Nagaland, R Other Value Chains Assam, Tripura Pineapple Value Chain u Manipur, Mizoram b b e r Plantations Source: V a Bangladesh, Nepal l u e All states of NER C P h l s a a n i i n n a h t a C t e i u o Source l a n V s r All NER, Assam, e Regional Hub h t Seedling labs O Mizoram Guwahati Nurseries Pre-processing Production - ICD Plantations Training units/ CFCs units - Trade Center facilities Final Market - Warehousing Bamboo Value Chain Delhi, Kolkata Collection P EU, USA, r u Centers o n France… c i Production e t s s s i n g units Regional Hub Agartala Cargo hub Cold storage - Trade Center Final Market Domestic/ International Value chain lattice for Value chain lattice for 7 the NER the NER Final Market Final Market Domestic/ Europe… International
Project Benefits Project Benefits Establishment of value chains in the NER Establishment of value chains in the NER Inclusion of new SMEs SMEs and businesses, and and businesses, and Inclusion of new backward linkages in value chains backward linkages in value chains ~ 250,000 jobs in 10- -12 value chains 12 value chains ~ 250,000 jobs in 10 Generation of around $2 billion output across Generation of around $2 billion output across NER NER 8
Multiscale Agent Model Multiscale Agent Model Labor (categories) Labor (categories) Firms (categories) Firms (categories) Employment Employment Productivity Productivity Economic production Economic production Market prices Market prices Costs of transportation Costs of transportation Trade networks Trade networks 9
New England Complex Systems I nstitute ( Necsi New England Complex Systems I nstitute ( Necsi) and ADB ) and ADB 10 10
New England Complex Systems I nstitute ( Necsi New England Complex Systems I nstitute ( Necsi) and ADB ) and ADB 11 11
The Bamboo- -Rhino I VCA Rhino I VCA The Bamboo (I ntegrated Value Chain Analysis) (I ntegrated Value Chain Analysis) 12
Key Barriers to competitiveness… …1 1 Key Barriers to competitiveness Item Issues Public Private Item Issues Public Private X X Market Undeveloped primary processing support units close to X X Market Undeveloped primary processing support units close to Bamboo- Bamboo -Rhino locations (forest and homestead) Rhino locations (forest and homestead) X X High High transaction transaction costs costs of of raw raw bamboo bamboo moving moving from from X X homestead/ forest to processing units, including high unofficial homestead/ forest to processing units, including high unofficial charges charges X X High transaction costs of moving finished product to export High transaction costs of moving finished product to export X X markets and/or importing machinery and other inputs from markets and/or importing machinery and other inputs from abroad abroad Poor road infrastructure in rural and urban areas X X Poor road infrastructure in rural and urban areas Poor electricity infrastructure in rural areas Poor electricity infrastructure in rural areas X X Undeveloped bamboo commercial plantations X Undeveloped bamboo commercial plantations X X Limited supply of locally produced high quality chemicals and Limited supply of locally produced high quality chemicals and X other inputs used in rhino- -bamboo product manufacturing bamboo product manufacturing other inputs used in rhino Insufficient access to export/import containers & customs X X X X Insufficient access to export/import containers & customs clearance from & to Guwahati directly to and from foreign clearance from & to Guwahati directly to and from foreign location location . Source: Global Development Solutions, LLC . 13 Source: Global Development Solutions, LLC
Key Barriers to competitiveness… …2 2 Key Barriers to competitiveness I tem I tem I ssues I ssues Public Public Private Private X Governance/ Pervasive rent- -seeking seeking behavior behavior of police and forestry of police and forestry X Governance/ Pervasive rent officials along bamboo- officials along bamboo -moving roads and location moving roads and location Institutional Institutional X X Most important institutions that facilitate movement of Most important institutions that facilitate movement of X X goods in and out of NER (ICD, etc) primarily driven to goods in and out of NER (ICD, etc) primarily driven to accommodate tea exports from the region, without accommodate tea exports from the region, without support for bamboo- -rhinos and other sectors rhinos and other sectors support for bamboo X Pervasive rent- -seeking seeking behavior behavior by customs officials in by customs officials in X Pervasive rent main clearing points of Amingaon/Guwahati Amingaon/Guwahati and main clearing points of and Kolkata Kolkata X Insufficient R&D of bamboo species & their processing Insufficient R&D of bamboo species & their processing X applications applications Unorganized bamboo commercial planting sector Unorganized bamboo commercial planting sector X X Human Human Resource Resource X Unorganized bamboo processing sector Unorganized bamboo processing sector X Source: Global Development Solutions, LLC. Source: Global Development Solutions, LLC. 14
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