New Delhi, November 01, 2018
Distinguished guests, ladies and gentlemen – thank you for joining us at this conference on the important subject of regional connectivity. Thanks as well to CUTS, FICCI, and the East-West Center for their hard work in organizing today’s event.
As we know, the global economy has grown exponentially over the last few decades – driven by technological changes in transportation, communications, and finance, among other things. We see the enormous impact that flows of people, capital, goods, services, and data have on our welfare and prosperity, and even on our security. Connectivity has thus become a central feature of our life and the backbone our economies.
Of course, connectivity may mean many things. Fundamentally, we may wish to think of it as making connections among people, companies, organizations, states, and countries. It means making sure that borders are not barriers. We can facilitate these connections by developing infrastructure – for transportation by land, sea, or air; for trade and investment; for telecommunications and flows of data; for financial flows; and for the sharing of resources, including energy and water.
While we recognize that connectivity can bring great benefits, we also must acknowledge that it carries significant risks. Such risks include illicit trade, political interference, unsustainable debt arrangements, vulnerability to cyber attacks, and the spread of environmental pollution and disease. That is why increased connectivity must be managed effectively with transparency among stakeholders, with agreed-upon technical and behavioral standards, and with responsible governance.
What is remarkable about South Asia is that it is one of the fastest growing regions in the world and home to nearly one-fourth of the planet’s population, yet it remains, by almost any measure, one of our least connected regions. This conference is an important effort among all of us as part of the process of changing that situation – to enhance sustainable connectivity throughout South Asia in a positive way that promotes economic development and serves the needs of the people.
This is consistent with the vision that the United States and other like-minded countries have for South Asia and the broader Indo-Pacific region – an inclusive vision of a free, open, and rules-based region, with respect for sovereignty and territorial integrity, that promotes economic connectivity through private-sector-led growth, free and fair trade, the use of responsible debt-financing practices, and the transparent development of infrastructure.
I would like to highlight briefly some of the work of the United States related to connectivity in the South Asia region.
U.S. Efforts on Regional Connectivity
Let me note at the outset that no government alone has the resources to meet all of South Asia’s infrastructure needs – whether it be for highways, railroads, inland waterways, bridges, seaports, airports, logistics facilities, or electricity. Only with the support of the private sector can we mobilize the resources necessary for such needs over the next decade and beyond. Our recently passed BUILD Act is intended to consolidate U.S. government programs into a new development finance corporation with additional resources to leverage America’s private sector engagement in developing countries.
American companies are already playing a significant role in building connectivity in South Asia, from GE providing generators for power plants to Baltimore-based Ellicott Dredges supplying the machines that keep inland waterways navigable and enable commerce within and between countries – including between India and Bangladesh.
The U.S. government is also playing a critical role. We promote people-to-people interaction through our educational and cultural exchanges, and the work of our health agencies with local authorities in northeast India to address HIV/AIDS, cancer detection, and malaria.
In aviation, we are partnering with companies and the Government of India to improve safety, security, and standards harmonization. At Chennai International Airport, the U.S. Trade and Development Agency is helping to enhance air navigation and connectivity. This initiative will enable the Airport Authority of India to handle growing capacity demands with new air traffic management techniques and safety measures.
Maritime connectivity is equally important. That is why the U.S. Department of Commerce is sponsoring a series of training courses focused on ports and inland waterways in South Asia under the Special American Business Internship Training (SABIT) program. In citing this program, port operators at Bangladesh’s inland Pangaon port (near Dhaka) developed a new incentive structure to increase shipment volumes.
And the energy sector provides numerous examples of the work that we can do together to advance our connectivity goals. This is particularly evident in India’s Northeast, an area that I recently visited.
For India, regional connectivity provides a pathway for meeting the power needs of its northeastern States – a region that is difficult for India to service due to its geography. While India remains the electricity source for these States, with regional connectivity it can utilize transmission infrastructure in Bangladesh to expand power access, improve reliability, and lower pricing in remote areas.
Similarly, Bangladesh can save millions of dollars annually by importing power from India that is lower in cost than the fuel it would require to generate power internally. While visiting the State of Tripura in northeast India, I saw this potential first-hand at the power plant near Agartala, which uses natural gas from Tripura to produce electricity for the region. The people of the State receive clean energy, and surplus generation is exported across the border into Bangladesh. Both countries benefit.
The plant’s generators and other equipment were manufactured by General Electric. Thanks to an agreement between India and Bangladesh, GE was able to transport the turbines and other heavy materials via Bangladesh’s inland waterways. That agreement produced huge savings in transport time and cost.
Recognizing these benefits of energy cooperation, countries in the region have formalized their efforts through the South Asia Association for Regional Cooperation’s Framework Agreement for Energy Cooperation, and the Power Trade Agreement between India and Nepal. These agreements lay the foundation for a regional power market in South Asia.
The U.S. government strongly supports broad partnerships such as these for a more prosperous and stable region. To facilitate efforts toward a regional energy market, the U.S. Agency for International Development works with eight South Asian countries – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka – under its South Asia Regional Initiative program. Since 2000, this Initiative has helped create an enabling environment for regional energy cooperation through technical assistance and analytical studies, peer exchanges, consensus building, and conferences, such as the one we are hosting today.
That spirit of partnership is also seen in the Millennium Challenge Corporation’s $500 million compact with Nepal. This compact, signed in September 2017, will help to expand Nepal’s road network and electricity infrastructure. It includes a $130 million investment from the government of Nepal, bringing the total value of this joint effort to $630 million.
Digital Connectivity and Responsible Governance
Digital connectivity is another area in which South Asia can thrive. New information and communications technologies provide a different way to cross borders, not by traveling in person, but by exchanging ideas and working together over distance in real time.
The free flow of information across borders via the Internet drives productivity, growth, and innovation. For that reason, we urge India and other countries to be cautious in enacting data localization requirements and data privacy legislation, which may well address legitimate policy concerns but, if not done carefully and with the involvement of all stakeholders, can also unnecessarily restrict data flows, impose burdensome regulations, and disrupt connectivity.
Indeed, that is why governance is such an important issue with regard to connectivity. By developing harmonious regulatory regimes, taking into account governmental and private sector concerns, and aligning overall governance efforts, we can facilitate economic relations and enhance prosperity. We can also reduce frictions at national borders to ensure the free movement of people, increase our trade in goods and services, and keep communications, data, and information flowing throughout the region.
In sum, whether we focus on trade in goods and services, the development of infrastructure and energy systems, or the movement of people and data, the United States is committed to working with all of our partners to create a strong, prosperous, and interconnected South Asian and broader Indo-Pacific region.
I wish you the best for a successful conference and will look forward to hearing your recommendations.
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