Connecting Thrive to Connecting to Thrive Challenges and Opportunities of Transport Integration in Herrera Dappe, Kunaka Eastern South Asia Matías Herrera Dappe and Charles Kunaka, Editors INTERNATIONAL DEVELOPMENT IN FOCUS INTERNATIONAL INTERNATIONAL DEVELOPMENT IN FOCUS Connecting to Thrive Challenges and Opportunities of Transport Integration in Eastern South Asia MATÍAS HERRERA DAPPE AND CHARLES KUNAKA, EDITORS © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 23 22 21 20 Books in this series are published to communicate the results of Bank research, analysis, and operational experience with the least possible delay. The extent of language editing varies from book to book. This work is a product of the staff of The World Bank with external contributions. 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Contents Foreword vii Acknowledgments ix About the Editors and Authors xi Abbreviations xv Overview 1 Matías Herrera Dappe and Charles Kunaka Making the border irrelevant can deliver significant gains 4 Regional and domestic building blocks are needed to achieve effective seamless regional connectivity 6 Experience with transport integration agreements yields valuable lessons 7 The motor vehicles agreement is an important first step that can be improved 10 Seamless connectivity requires better transport infrastructure and services 18 Local benefits can be enhanced 22 Summary and concluding remarks 25 Notes 26 References 27 Chapter 1 Identifying the Gaps: An Assessment of the Motor Vehicles Agreement 29 Charles Kunaka International approaches to the regulation of road transport services 30 Regulation of road transport services in South Asia 34 Methodology for assessing the motor vehicles agreement 35 Strengthening the motor vehicles agreement 41 Summary and concluding remarks 45 References 46 Chapter 2 Analysis of Route and Mode Transport Choice in Eastern South Asia Following Integration Agreements 49 Gerard de Jong, Manish Sharma, Marco Kouwenhoven, Gijs van Eck, Yashar Araghi, Rachit Mittal, Mayank Pratap, Matías Herrera Dappe, and Megersa Abate Existing corridors, routes, and mode choice 51 Methodological approach and data 56 iii iv | Connecting TO THRIVE Results of mode and route choice model estimation 61 Simulation results for the analysis of mode and route choice 66 Summary and concluding remarks 74 Annex 2.A Survey 76 Annex 2.B Calibrated elasticities 78 Annex 2.C Level-of-service attributes 79 Notes 80 References 80 Chapter 3 Economic Gains and Losses from Integrating Road Transport between Bangladesh and India 83 Matías Herrera Dappe, Mathilde Lebrand, and Diana Van Patten Wider economic benefits of regional corridors 84 Assessing the wider economic benefits of integrating road transport services with a spatial general equilibrium model 85 Economic gains from the motor vehicles agreement 88 Economic gains from full regional integration 92 Gains from regional integration and labor mobility 95 Summary and concluding remarks 96 Annex 3.A Model and calibration 98 Notes 100 References 100 Chapter 4 Maximizing Rural Spillovers of Regional Corridors: A Case Study of Bangladesh 103 Charles Kunaka, Niklas Sieber, and Roman Constantin Skorzus Regional and local dimensions of connectivity 104 Enhancing local connectivity: a case study 111 Summary and concluding remarks 116 Annex 4.A Data requirements for implementing the analytical model 118 References 119 Chapter 5 Enhancing Women’s Opportunities in Export-Oriented Agricultural Value Chains in Bangladesh 123 Muneeza Mehmood Alam, Ursula Casabonne, Barbara Coello, and Gaia Hatzfeldt Purpose, methodology, and conceptual framework 124 Women’s participation in export-oriented agricultural value chains 126 Characteristics of the cut flower, mango, and fish farming value chains 127 Challenges faced by producers 130 Mapping women’s participation in three value chains 133 Factors limiting women’s participation in value chains 136 Opportunities for women in cross-border trade 139 Policy considerations 141 Summary and concluding remarks 144 Notes 145 References 145 Boxes 1.1 The three main elements of international transport agreements: The vehicle, the driver, and the load 33 2.1 Stated-preference experiments 57 5.1 Opening up opportunities for women as cross-border traders 139 Contents | v Figures O.1 Average trade costs between Bangladesh and India and between each country and Germany in 2010–17 2 O.2 Building blocks for effective seamless regional connectivity 6 O.3 Correlation between real income gains in Bangladesh and India under full integration and the Motor Vehicles Agreement, by district and state 17 O.4 Actual versus free-flow travel time in Bangladesh, by corridor 19 3.1 Intermediate outcomes and wider economic benefits of a corridor intervention package 84 3.2 Spatial inequality in wages in Bangladesh and India 89 3.3 Correlations between real income gains in Bangladesh and India under full integration and the MVA, by district and state 95 3.4 Spatial inequality in wages in Bangladesh and India 95 4.1 Analytical framework for corridors and local connectivity 105 4.2 Traders’ perceptions of obstacles to business operation in Bangladesh 109 5.1 Cut flower value chain in Bangladesh 128 5.2 Mango value chain in Bangladesh 129 5.3 Fish farming value chain in Bangladesh 130 Maps O.1 Connectivity network in northeast India 2 O.2 Nighttime light intensity per capita in India and Bangladesh 3 O.3 Predicted percentage changes in real income in Bangladeshi districts and Indian states under full transport integration 5 O.4 Predicted freight traffic between northeast India and rest of India in 2025 under integration 12 O.5 Predicted freight traffic of exports from and imports to northeast India in 2025 under integration 13 O.6 Predicted bilateral freight traffic in 2025 under integration 15 O.7 Predicted percentage changes in real income in Bangladesh and India from the Motor Vehicles Agreement 16 O.8 Predicted percentage changes in number of workers in Bangladesh and India following adoption of the Motor Vehicles Agreement 23 2.1 Industrial clusters and the connectivity network in northeast India 52 2.2 Potential new route and mode choices following implementation of integration agreements 56 2.3 Predicted freight traffic between northeast India and rest of India in 2025 if agreements are implemented 69 2.4 Predicted freight traffic of exports from