Overview A pilot economic corridor between Almaty, the largest city in Kazakhstan, and Bishkek, the capital of the Kyrgyz Republic, was established to foster trade, enhance free movement of labor and capital, and promote infrastructure modernization. The countries are connected by several roads and border crossing points, and a common history and challenges. However, connectivity remains an issue, and the potential of tourism and agribusiness to contribute to economic growth is largely untapped. A knowledge and support technical assistance grant from the Asian Development Bank (ADB) worked to support both countries in identifying and conceptualizing investment projects for the Almaty–Bishkek Economic Corridor (ABEC), such as the modernization of border crossing points and wholesale markets and building tourism infrastructures, to accelerate integrated regional development. Project Information TA 9487-REG : Almaty–Bishkek Economic Corridor Support Project Snapshot Dates 15 December 2017 : Approval Date 15 December 2022 : Completion Date Cost $3,225,000 : Total Project Cost Institutions / Stakeholders Financing : Asian Development Bank ($2,475,000) Financing : United Kingdom Fund for Asia Regional Trade ($750,000) Executing agency : Asian Development Bank Development Challenges The Almaty–Bishkek Economic Corridor is a flagship project for regional integration since 2014 under the Central Asia Regional Economic Cooperation (CAREC) program, a partnership of 11 countries and development partners working together to promote development through cooperation. Though Almaty and Bishkek have grown and developed for years after the Soviet era, transport connectivity issues remain. Despite their proximity, the travel time between these cities often takes more than 4 hours because of the cumbersome border crossing points. These borders have become a bottleneck for the more than 30,000 people crossing them daily, making it difficult for tourists to easily visit the countries and enjoy a dense experience of adventure, sports, and culture. Aside from the unpredictable delays especially during peak seasons, the availability of transportation at border crossing points is unreliable and affected by political tensions. Bus services between the two cities and their airports do not follow a regular schedule. During the winter, both cities experience deep smog and polluted air from coal power plants, vehicles, and the burning of wood and coal, causing severe health problems and a high prevalence of respiratory disease. This situation has been dire for decades. Context Economic corridors define a geographic region and provide an avenue for cooperation in specific sectors that offer complementarities. In terms of trade, for example, if one country has lower wages while another has more funds to invest, a common market can consolidate these comparative advantages and improve trade between the two to help facilitate exports to other regions. Economic corridors rely on good connectivity through systematic borders, efficient transport networks, and other infrastructure, such as power, information and communication technology, and industrial parks. Developing economic corridors includes urban development and the integration of the functions of the cities with their surrounding areas. Solutions Approved by ADB in 2017, the knowledge and support technical assistance grant initiated projects to leverage the economic potential of the Almaty–Bishkek Economic Corridor. The interventions included facilitating the movement of people and goods across borders with the same ease as crossing from one province to the other; developing a common regulatory environment to harmonize regulatory systems so businesses, tourists, and the local population can participate in an integrated market; conducting project preparatory analytical work to showcase the feasibility of regional infrastructure projects and conceptualized common public goods that facilitate private investments, such as wholesale market infrastructure; and supporting the efforts of Bishkek and Almaty to improve air quality. As a first step, ADB financed 100 air quality sensors. Publication of air quality data aims to increase the awareness of the local population regarding the causes and health impacts of air quality and serves as the basis for air quality improvement strategies. Outcomes Three connectivity projects are currently being implemented: 1) the regional improvement of border services project, 2) the Almaty–Issyk-Kul alternative road project, and 3) the direct regular bus services initiative between the two cities and their airports. Modernized border crossing points and processes are expected to minimize bottlenecks and improve tourism experience especially for first-time visitors. Aside from regular direct bus services, bus lanes are being put in place to reduce travel time. Routes connecting the airports of Bishkek and Almaty will help coordinate flight schedules for more regular national and international flights. A road project between Almaty and the lake Issyk-Kul area is crucial for tourism development and transport integration. It will reduce travel time to less than 4 hours from 7 hours or more making weekend tourism possible and encouraging more business investments. Tourism infrastructure projects, such as the Turgen Mountain Resort Project on the Kazakh side and the Cholpon-Ata urban tourism project on the Kyrgyz side, are being developed to encourage more tourism in the corridor. Developing this mountain region will spur investments in winter sports facilities, such as ski resorts. Linking these facilities with summer tourism around the Issyk-Kul lake will help ensure the flow of tourists all year round and increase investment opportunities in these areas. The technical assistance led to a project proposal to support the modernization of wholesale markets (WSMs) to improve food safety and food security and increase food trade within and outside the CAREC region. Modern infrastructure will facilitate certification for exports, traceability systems, transparent market access, and storage of fresh produce. This will promote greater diversification and competitiveness, enabling businesses to specialize more and operate on a larger scale. Higher demand will allow for production growth and deliver incentives for improving quality. These will benefit small- and medium-sized producers in the region. In addition, cross-border service sectors were coordinated to increase market size and competitiveness. For example, if regulations are aligned, costly medical testing laboratories do not need to be set up in each country if one facility can serve them both. ADB is supporting the development of Clean Air Action Plans for Almaty and Bishkek. The plans will develop technological solutions, policy actions, and investment proposals for air quality management. Lessons Economic corridors have the potential to pave the way for broad regional development. Almaty and Bishkek can achieve more by working together. Physical connectivity through roads is only one aspect of integrated regional development. To succeed, economic corridors need a much more comprehensive approach by including reforms to improve public policy, the regulatory environment, and climate change mitigation and adaptation support. Transformative public investments and public–private partnerships with regional impact will help integrate the market, further develop infrastructure and services for the region, and attract private investments. Moreover, commitment and bilateral institutional setup can drive success. Regular meetings at the policy and working levels can build trust and lead to innovations. Resources ABEC: Almaty–Bishkek Economic Corridor website. Asian Development Bank (ADB). 2017. Almaty–Bishkek Economic Corridor Support: Technical Assistance Report Almaty–Bishkek Economic Corridor Support Manila. ADB. Kyrgyz Republic: Almaty–Bishkek Economic Corridor: Modern Agriculture Wholesale Market Development Project Central Asia Regional Economic Cooperation (CAREC). 2016. Growing Together: Almaty–Bishkek Corridor Investment Framework. K. Rosback. 2019. Testing the 3D Approach to Economic Corridor Development in Central Asia. Asian Development Blog. Ask the Experts Kristian Rosbach Economist (Regional Cooperation), Central and West Asia Department, Asian Development Bank Kristian joined ADB in 2013. He leads the development of a pilot economic corridor between Almaty and Bishkek. He has also led and contributed to several ADB country partnership strategies and loan projects. Asian Development Bank (ADB) The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. 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