The economies of South Asia and Southeast Asia are growing and forging closer economic ties than ever before. Improving the quality of regional transport infrastructure can increase trade and economic growth.

This ADB Brief by Peter Morgan, Mike Plummer, and Ganeshan Wignaraja examines the critical role of regional transport infrastructure to connect South Asia and Southeast Asia and maps $63 billion worth of road, rail, and port projects.

Key Points

•The economies of South Asia and Southeast Asia are a bright spot in a fragile world economy. These economies are growing steadily and forging closer economic ties than ever before. However, regional integration between South and Southeast Asia is still relatively limited, hindered by various problems particularly bottlenecks in transport infrastructure.

•Road and rail links between Bangladesh, India, Myanmar, and Thailand—the key land connections between the two regions—are patchy, with belowstandard sections and missing links. In the case of rail transport, these problems are compounded by differences in gauges and rolling stock. Furthermore, seaports in the Bay of Bengal suffer from deficiencies in draft, capacity, operational efficiency, and road and rail access.

•Improving the quality of regional transport infrastructure, and adding it where it does not exist, will lower unit transport costs, reduce shipment times, and increase throughput, all of which can lead to increased trade and greater benefits. The analysis of transport infrastructure in this brief focuses on two important areas: (i) road and rail connections between Cambodia, Bangladesh, India, Myanmar, Thailand, and Viet Nam; and (ii) ports in the Bay of Bengal, which typically have high costs but the potential to contribute to the development of supply chain networks connecting the two regions. The brief draws upon research undertaken for the ADB–ADBI flagship study entitled Connecting South Asia and Southeast Asia, which analyzed improvements in regional transport infrastructure, including highways, railroads, and seaports that can contribute to increased trade and investment between the two regions.

•Total costs of new regional transport projects (roads, railways, and ports) are estimated by the ADB–ADBI study at $62.6 billion, while the cost for priority transport projects is estimated at $8.4 billion. Meanwhile, the estimated potential benefits of reduced transportation costs (ranging from $89 billion to $358 billion) are larger than these costs.