Racing to a new prosperity

Four countries are examining ways of establishing a new Asian trade lifeline

When 20 vehicles set off on the first-ever Kolkata-to-Kunming car rally in 2013, the event wasn't simply a sporting contest, it was a harbinger of things to come.

Over two weeks and 3,000 kilometers, from India to China via Bangladesh and Myanmar, the participants crossed terrain that ranged from mountains to dense, tropical jungle, from vast, fertile plains to deep valleys, plus sluggish streams and expansive rivers.

But while the topography of the region offers inspiration for adventurous travelers, the journey had a much deeper significance.

The BCIM Car Rally, named after the four countries the racers crossed, was part of a wider plan to revive a route that was once an artery of the southern Silk Road, the ancient trade route that covered most of what was then called "the known world".

The BCIM Economic Corridor, the name by which the proposed modern-day counterpart will be known, is less evocative than the original, which conjures up images of caravans, camels and cargo, but it is intended to be equally as far-reaching in impact.

The proposed route will create a fast and efficient link between Kunming in China's southwestern Yunnan province and Kolkata, the most important city in the eastern part of India, while also connecting the cities of Mandalay in Myanmar, and Dhaka and Chittagong in Bangladesh en route.

If things go as planned, the road will not just connect Asia's two economic powerhouses, but will also give an economic boost to Bangladesh and Myanmar, two nations that have not yet capitalized on Asia's tremendous growth in recent years.

Game changer

The planners hope the corridor will turn out to be a game changer in the regional economy that will improve the lives of millions of people.

At a distance of around 1,500 km, Kolkata is geographically closer to Kunming than to the Indian capital, New Delhi. It therefore makes perfect sense for road access to be improved to help facilitate trade between the two giants.

The corridor is an ambitious project. Several rounds of high-level discussions have already taken place to take the proposal forward, and a timetable has been set. Although China has been the main proponent of the road, the other countries are all keen to engage.

The main questions for the planners, however, are whether the project is feasible and the key benefits each of the four countries will enjoy if it goes ahead.

Developing the corridor will require linking a number of existing highways, such as the Chinese-built north-south highway in Myanmar, and the Indian-built Kalemyo-Tamu Road, which runs from Kalemyo in northern Myanmar to Moreh in India, just over the border from the town of Tamu in Myanmar. An international highway already runs from Dhaka in Bangladesh to Kolkata.

In theory, all that's required is the construction of new highways to link the existing roads.

"There's a long way to go, and a lot of things, including security concerns, are still to be sorted out. But as things are panning out, there is hope," said Jeff Xu, a partner at the financial services firm Deloitte in Shanghai.

Given predictions that China and India will be the world's leading economies by 2050, and with Bangladesh and Myanmar emerging rapidly, the construction of the corridor makes sense, he added.

Political leaders and entrepreneurs are enthusiastic about the project because they believe that a new highway will fuel trade in the region and create a large number of jobs.

"This is quite important for all four countries, where unemployment is a concern," said Syed Abdus Samad, executive chairman of the Board of Investment in Bangladesh. "Moreover, the BCIM region is a market of 2.8 billion people, and had GDP of $9.3 trillion in 2011, so it's a huge opportunity. The proposed BCIM Economic Corridor would greatly reinforce the existing connectivity initiatives taken by the two Asian giants."

For Biswajit Sengupta, head of financial markets at Standard Chartered Bank, the proposed route would go a long way to easing New Delhi's concerns about the yawning imbalance, in China's favor, in bilateral trade.

Other commentators are predicting a boost for tourism too. "Of the 70 million outbound tourists from China, India gets only 100,000 visitors. The number is very small," said Kong Can, deputy director of the Yunnan Development Research Council. "Many Chinese tourists are big spenders. There is a huge opportunity waiting to be grabbed in the eastern and northeastern parts of India," he said, adding that he's keen to see tourism become a two-way street.

"We would also be delighted to see more tourists from the region visiting China, especially the southwest."

Kong's words were in sync with the views of Premier Li Keqiang. During his maiden visit to India in May last year, Li and his Indian counterparts discussed India's Look East focus - the country's efforts to cultivate economic and strategic ties with Southeast Asia - and China's southward thrust from Yunnan province into Myanmar.

According to Li, India's Look East policy will be incomplete if it only includes Southeast Asia, and the proposal for a Kolkata-to-Kunming corridor that would benefit all the countries involved made good economic sense.

Avishek Gupta, a corporate strategy analyst at SREI Infrastructure Finance, firmly believes that India's new government under Narendra Modi will push forward with strategies upon which India and the other BCIM countries have already agreed.

"No matter that there has been a change of guard in the country, I am sure the proposed economic corridor will excite the new administration as well," he said.

Last year, Modi's predecessor, Manmohan Singh, revealed India's enthusiasm for bolstering regional connectivity, a form of cooperation that looks set to continue.

"The new prime minister has given a clear indication that regional cooperation figures prominently in his scheme of things. That was quite evident from the list of guests for the swearing-in ceremony of the new government," Gupta said. "Almost all the heads of state of India's neighboring countries, including the prime minister of Pakistan, Nawaz Sharif, attended the ceremony."