Improving Regional Competitiveness and Developing Industry Connectivity by Cooperation in Transportation Infrastructure

We are living in the changing world. One of the main drivers which make the world change is the global trade. Actually, history of global trade has created a very diverse picture for the world economy over the very uneven distribution of living standards and human development levels among the continents and regions around the world. Today, when talking about an economic sector or an industry, we can confirm that a region is more developed and competitive than another region. Is the competitive advantage of a region to another region favoured by nature, or because of certain objective reasons? Some people may consider it is true in some part. However, many economic researchers think that is not necessarily so. Actually, an industry can create more competitive products dependent less on natural resources. The ability to create a higher productivity than the other competitors is the secret to a region to be more competitive than another. The more industries with high labor productivity in a region the more competitive it is. And then what are the reasons behind the story and what is the difference between the regions? The reality shows the biggest difference when we go from an underdeveloped region to a developed region: it is the differential development of infrastructure, particularly in the transport sector, differences in the linkages as well as addressing duplication of the key transport hubs such as air, rail, road and waterway. Developed regions do not build airport, roads, railways, subways, waterways diffusely.

 

The world economy is also going up and down. In the second half of 2008 and 2009, the global economy was badly affected by the financial crisis with stalled investments, crunched credits, depressed consumer demand and prolonged manufacturing slump. Now as we are all aware that the European debt crisis remains the biggest threat to the world economy. Following the marked slowdown in 2011, global growth would likely tepid in 2012 with most regions expanding at the pace below potential. Further continued slowdown was expected in 2012, with only slight upward trends in 2013. The report estimated that world trade growth would slow further to 4.1 percent this year, down from 13.1 in 2010 and 6.6 percent in 2011.

 

Nevertheless, the ASEAN-China economic relationship is a positive phenomenon among not many in the context of the world economy. Between 2005 – 2010, total trade between ASEAN – China increased at an average of more than 19 percent per annum. In 2011, ASEAN overtook Japan to become China’s third largest trading partner, having $ 362.3 bill., up 24 percent from 2010. China now is the largest trade partner of ASEAN. The establishment of China-ASEAN Free Trade Area (CAFTA) has created enabling conditions for the industrial cooperation between the two sides, so it is inevitable choice for China and ASEAN to strengthen their industrial cooperation to realize the mutual benefit and win-win situation. The value of trade between China and ASEAN is expected to exceed the goal of $ 500 bill. by 2015 when ASEAN is expected to become China’s no. 1 trading partner. Currently, strengthening the industrial cooperation has become one of the important measures for both sides to respond to the unstable of the world economy and also the major step forward to promote the development of CAFTA.

 

For a region, esp. For ASEAN and China, the development strategy for the cooperation of all industries is a key. Building and developing Industry connectivity and networking preserve the fundamental values ​​of the economy, ensuring the traditional values ​​and is stable in term of economic, politic and creates the jobs for the society. The new mobility options coupled with the increasing development of the region require building new and properly maintaining and upgrading infrastructure in terms of roads, rails, ports, airports and pan-regional hubs to connect these modes. Integrated planning is needed to ensure that infrastructure matches local demand. Long-term vision will promote appropriate mobility options. This should focus on two main areas:

 

Traditionally, the flows of regional trade have based largely on sea transport. While this is naturally the best way to ensure the efficient movement of goods within Asia and between Asia, Europe and North America. Consequently, coastal areas have always attracted the establishment of manufacturing and trading centers which in turn became catalysts for the settlement of populations with higher incomes, greater employment opportunities, better access to education and health facilities, and higher standards of living. The physical population flows are moving around the centers. The gaps between the coastal and rural areas are widening. It has also brought with it a number of problems, such as unbalanced spatial development, social inequalities and over-exploitation of resources in certain areas. Hence developing highway, tran-railway and facilitation of land transport is a call for the region. In fact, working on how many individual transport infrastructure solutions offered by road, rail, inland water ways, ports and airports, can be effectively linked to increase efficiency so that each mode can play on its specific strengths while complementing others to offer smooth transport solutions and expand the reach of transport services so that population in disadvantaged areas can be part of mainstream economic development and prosperity in the region

 

An increasing regional trade volume is expected to cause congestion around ports as well as on the countries’ road and rail networks therefore there is a need for the respective national governments to rethink their transport policies and adopt a innovative and more comprehensive logistic approach to integrate them within the broader concept of international intermodal transport corridors and supply chain management in which foremost among them are facilities, such as dry ports placed at strategic locations and serving as cross-over points where freight can switch modes without damage or delays. A recent study is showing that the highest quality of connectivity is reached when the delivery of different modes of transport and other related services are grouped at one single location to include infrastructure provision, road and rail transport services, customs processing and bonded areas, warehousing and distribution facilities, and electronic communication.

 

In the regional economic integration, ASEAN and China need to cooperate more. In transport infrastructure, policy makers in the national governments, professional operators, financial institutions are involved in the main target group for related activities. However, as the activities have expanded to the development of intermodal interfaces, there are in need of other stakeholders such as freight forwarders and logistics services providers. The national Government can influence the process through micro and macro-economic policy by creating a favorable business environment for enterprises and industry, for instance, PPP, transport standards… in a consistent and sustainable way.

 

The relevant regional businesses with common interests will gradually unite, cooperate to create the Industry connectivity and networking. The competitiveness of the Industry connectivity and networking will be based on the factors of industrial production such as investment in technology, research and product development, marketing, quality...

 

The regional civil societies also have an important role in the process of linking industries. The people are both a subject and an object of the industry connectivity and networking. The limitations in the development of industry connectivity and networking affect quickly the people's quality of life. On the other hand, the most sensitive issues of the inadequate industry connectivity and networking are often discovered by civil society.

 

Regardless of how the world is changing or whatever economic fluctuations in the regions will happen, the ASEAN-China economic relationship will continue to depend on sustainable transport infrastructure and services in order to raise the regional competitiveness. This will be certainly coupled with more and more business opportunities that are believed to bring a brighter future to the region.