IMPROVING physical access and communication between different parts of the world has gained importance as the cornerstone of global and regional integration and economic growth in recent years. However, its foundations were laid decades ago in 1776, when Adam Smith penned down his thoughts in simple words: “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 of the neighbourhood of the town. They are upon that, the greatest of all improvements.”
The quote highlights the benefits of connectivity; efficient and cost-effective mobility and trade, which leads to improved access to opportunities such as labour and food markets, etc, and facilities such as health, energy and education, amongst others. Consequently, it helps in reducing inequality within and between countries. Sustainable and planned connectivity, global or regional, is thus one of the major factors in growth and sustainability in developed states.
Enhanced regional connectivity and corridors can have a significant positive impact on Pakistan’s economy, by linking different markets, goods, ideas, technology, energy and people. These will boost trade, tourism and attract investments, in turn generating more employment opportunities and national income. Considering the geostrategic location of Pakistan, this connectivity can enable it to become a significant trade and transit hub, translating into more sustainable and inclusive growth.
The Karakoram Highway, completed in 1974, was a major milestone in Pakistan’s quest to improve regional connectivity. More recent efforts include the China-Pakistan Economic Corridor (CPEC) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. Both have potential to be the bedrock for future regional development, open new trade routes giving access to landlocked Asian countries and create new livelihood opportunities for the local population. Additionally, these interventions, if implemented appropriately, will have a direct impact on the achievement of the SDGs, including decent work and economic growth (SDG 8), affordable and clean energy for all (SDG 7), sustainable cities and communities (SDG 11), no poverty (SDG 1), zero hunger (SDG 2), and industry, innovation and infrastructure (SDG 9), to name a few.
Returning to normal will take time. Or there could be a new normal.
In the wake of the recent outbreak of Covid-19 in late 2019, both regional and global connectivity have been adversely affected. To contain the spread of this deadly virus, governments around the world have adopted immediate restrictive measures including closed-border policy, restriction on mobility (air/road, etc) and social distancing. All of these restrict different means of connectivity. Resultantly, global trade, an outcome of this connectivity, is expected to drop from $18.89 trillion to $16.4tr (in the best-case scenario), and to $12.84tr (in the worst-case scenario) in 2020.
Returning to normal will take time. Or there could be a new normal that will require rethinking our economic models with an emphasis on producing and consuming locally. Covid-19 provides an opportunity to rethink our unsustainable world. In this context, there must be a push towards more sustainable production and consumption, re-strategising trade and adapting to the ‘build back better’ approach.
The important role the digital realm will now play in ensuring regional connectivity is undeniable. For instance, while telemedicine was a pre-pandemic practice, it has certainly gained a lot more momentum and technology has enabled it to go beyond being simple consultations. Same is the case with distance learning: schools and universities have now gone online in full force to ensure education is not disrupted. The world as we know it has transformed from physical corridors to digital connectivity.
The benefits of digital connectivity can be reaped tremendously. For example, increase in digital regional connectivity will enable SMEs and firms from developing countries to increase their share in global trade; due to their competitive edge of pre-existing lower production costs and prices. According to WTO predictions, this reduction can especially benefit SMEs and firms from developing countries, increasing their share in global trade from 46 per cent to 57pc.
The pandemic provides an opportunity for Pakistan to rethink and adapt short-term strategies that involve improving the digital ecosystem, producing and buying locally, and making businesses transition to the digital realm efficiently. In the long term, the existing potential of regional corridors such as CPEC and TAPI is unquestionable. The building up of these regional corridors is not only going to help Pakistan economically, but also help generate livelihood opportunities for the local population, as well as aid in achieving a number of sustainable development goals.
The writer is resident representative, UNDP Pakistan.
Published in Dawn, June 17th, 2020