Path to Prosperity

Republica

30 July 2014

Pradumna B. Rana

Building up on the successful visit of Indian Minister of Foreign Affairs Sushma Swaraj, Nepal should seek to enhance the country’s role as a land-bridge between India and China by proposing Trans-Himalayan Economic Corridors during Prime Minister Narendra Modi’s visit.

China’s emergence as the “Factory of the World” based on its focus on exporting labor-intensive manufactures is well-known. Less known is the role that infrastructure played in this strategy. In the short run, infrastructure development boosts investment and economic growth. In the longer run, quality infrastructure boosts productivity of a country and enhances the competitiveness of its exports. A recent issue of The Economist cites a McKinsey Global Institute report that from 1992 to 2007 China spent 8.5 percent of its GDP on infrastructure, well over the developing country norm of 2-4 percent. During the period between 1992 and 2007 it built 35,000 km of highways at the cost of US $120 billion.

… The author is Associate Professor at S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore

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