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Asian Economic Integration

New Refinery in India Could Boost Trade with Pakistan.

Many countries in South and Central Asia stand to benefit from increased trade and economic integration, or a New Silk Road.

Many countries in South and Central Asia stand to benefit from increased trade and economic integration, or a New Silk Road. This New Silk Road envisions a network of economic and transit connections running from India to Kazakhstan and beyond, with a stable, secure, and prosperous Afghanistan at its heart.

Asian Economic Integration
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Pakistan, for example, has a 30 percent electricity deficit, while Tajikistan has significant potential to export surplus summer power, and Uzbekistan has almost six hundred million barrels of proven oil reserves. While India has only half the natural gas it needs, Turkmenistan's Galkynysh gas field is the second largest in the world.

Many were initially skeptical about the New Silk Road vision, as this region is one of the least integrated in the world. But already the region is becoming more connected through infrastructure, energy, goods, services, and people.

Energy is one of the most promising areas for increased trade and transit. The Baku-Tbilisi-Ceyhan energy corridor shows that linking producers in the region with consumers in Europe is a win-win. It is hoped that the Turkmenistan-Afghanistan-Pakistan-India, or TAPI, gas pipeline will be a similar boon for South and Central Asia.

South and Central Asia are also becoming more integrated through trade liberalization, which includes reduction of non-tariff trade barriers, improved regulatory regimes, transparent and efficient border clearance procedures, and coordinated policies, to accelerate the flow of goods, services, and people throughout the region.

Many countries in the region are making serious efforts to join the World Trade Organization, or WTO. Kyrgyzstan and Tajikistan have already joined. Azerbaijan, Kazakhstan, and Afghanistan are making progress in their accession efforts. WTO access will open markets and increase economic opportunity for the people of the region.

Beyond the WTO, Kyrgyzstan, Tajikistan, and Afghanistan have formalized a Cross-Border Transport Agreement. Afghanistan and Pakistan are also working to implement a transit trade agreement which will reduce trade costs and transport delays.

Clearly challenges remain, including in maintaining progress for security in Afghanistan. Ensuring private investor’s security is equally important by enacting key economic reforms and overcoming bottlenecks to transit-trade agreement implementation.

But overall, there is reason for optimism about the region. With the support of the U.S. and international partners, the countries of Central and South Asia can play a central role in Afghanistan’s transition to lasting stability and economic progress.