Name: Chauyen Lai Shrestha, Secretary General, Institute of International Relations, Nepal

Title: Promoting Regional People-to-People Exchanges and Establishing Mechanisms of Exchanges and Cooperation among Regional Think Tanks

Abstract:

From the second century BC to the end of the fourteenth century AD, a great trade route originated from Chang’an (now Xi’an, in the east and ended at the Mediterranean in the west, linking China with the Roman Empire). But there are now signs of its revival. Connectivity between India-Nepal-China should be an important part of this new trade corridor.

Actually, there were two Silk Roads: the northern one that began in present day Xi’an in China which branched into two routes and converged in Kashgar in Central Asia before continuing westward. And there was the lesser known south-western Silk Road which began in Yunnan province of China and traversed Myanmar, Vietnam and Thailand with two overland routes via Tibet and Nepal to India.

The Silk Routes were at their peak in the mid-13th century when political stability fostered trade. It was during this time that Marco Polo traveled to China. Trade on the Silk Road declined after the collapse of the Mongol Empire in the 14th century, and the isolationist Ming and Qing dynasties in China were not conducive to trade.

Now, the importance of the Silk Road has once more been revived. Maritime Asia is starting to become more continental with expanding road networks, railways, and pipelines. The Qinghai-Tibet Railway will reach Xigatse this year and is to be extended soon to reach the border with Nepal. The Beijing-Lhasa expressway has been completed until Xining, the halfway point. Connectivity within the Greater Mekong Subregion has also been improved.

Under the traditional theory of comparative advantage, developing countries produced labor intensive goods which they then exchanged for capital-and skill-intensive ones produced by more advanced countries.

All separate tasks involved in production, however, were done entirely in one country. Now, production is sliced into separate fragments in production blocks around the would which are linked by efficient logistics service. While sea freight is still the most cost effective way of moving goods for bulky items, road transportation is quicker among neighboring countries and air transport is necessary for perishable items.

The Master Plan on Connectivity of 2010 seeks to promote physical, institutional, and people-to-people Connectivity among its 10 member countries and emphasizes the importance of ASEAN’s connectivity with its neighbors, such as India, China and the other members of the East Asia Summit (EAS). The Economic Research Institute for ASEAN and East Asia (ERIA) has come up with two projects for ASEAN-India Connectivity, namely the Mekong-India Economic Corridor and the Trilateral Highway connecting India and Myanmar with Thailand. While the first project focuses on connecting production blocks in Southeast Asia with those in India especially the automotive industry in Bangkok with those in Chennai by sea, the second project focuses on the development of the north-east region of India.

What has been lacking so far is an effort to promote the China-ASEAN-South Asia Connectivity by reviving the Southern Silk Road. ERIA should consider a Yunnan Myanmar-India-Nepal-Tibet-Yunnan Economic Corridor or a Circular Economic Corridor in Asia and sensitize the project concept and its feasibility. Such a project would lead to a win-win situation for all countries including shared prosperity between India and China in which Nepal could serve as a land bridge and production hub between Asia’s two giants.

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