EXPANDING ACCESS, UNLOCKING POTENTIAL Advancing regional connectivity for growth in South and Central Asia Program for Asia Connectivity and Trade (PACT) A Partnership of the World Bank—United Kingdom’s Foreign, Commonwealth and Development Office (2018-2024) under the Asia Regional Trade and Connectivity Program (ARTCP) ©2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Photo credits: ©World Bank, ©Adobe Stock, ©Shutterstock, ©Freepik, ©Project Implementation Unit, Ministry of Finance, Republic of Tajikistan, ©Rabeya/Bangladesh, ©SAESM Design: Clay Brains Designs LLP. Note: The information and data in this report reflect results delivered during the program implementation period of individual projects as well as the overall trust fund. The World Bank financial year is from July 1 to June 30, and all financial figures in the report are in U.S. dollars, unless indicated otherwise. The Program for Asia Connectivity and Trade (PACT) is a regional trust fund administered by the World Bank FOCUS AREAS and financed by United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) under their Asia Regional Trade and Connectivity Program (ARTCP). PACT, which closed in 2024, aimed at improving pro-poor connectivity infrastructure and unlocking the Transport and Trade Connectivity potential of regional economies by enhancing cross-border Feasibility studies and analytics to inform the connectivity in energy, transport, trade, and digital infrastructure. design of regional transport projects and PACT-supported activities worked within and across investments of over $1.5 billion, and South Asia and Central Asia. investments in cross-border trade supply Regional Energy Connectivity Advisory and technical support to develop a robust pipeline of cross-border energy $23.3 10 projects including in Nepal and Bhutan Million financing Beneficiary to support trade, energy, countries across transport, and digital South Asia and Digital Connectivity connectivity Central Asia Supporting investment opportunities in cross-border digital connectivity and harmonizing regional regulations to improve cross-border investments 100 PACT-supported + activities leveraged Technical knowledge products shaped policy insights and $8.2 Knowledge and Strategic Billion in World 1 Connectivity guided investments Bank investments Supporting knowledge sharing and convening influential stakeholders to progress momentum on regional integration 1 Data from World Bank's Program for Asia Trade and Connectivity (PACT) Completion Report, 2024, Annex 4. Restricted circulation. CONTENTS 06 08 INTRODUCTION TRANSPORT AND TRADE CONNECTIVITY 12 16 REGIONAL ENERGY DIGITAL CONNECTIVITY CONNECTIVITY 20 24 KNOWLEDGE CROSS-CUTTING AND STRATEGIC AREAS CONNECTIVITY 26 ACKNOWLEDGMENTS @World Bank @World Bank @Adobe Stock @SAESM INTRODUCTION The United Kingdom and the World Bank have maintained PACT-supported activities built on SARTIP’s foundation a strong partnership in fostering regional connectivity in and advanced regional cooperation in South Asia and South Asia with funding from the UK's Foreign, Central Asia, focusing on four key areas: transport and Commonwealth & Development Office (FCDO) through trade, regional energy, digital, and knowledge and initiatives like PACT and its predecessor, the South Asia strategic connectivity. These priorities aligned with the Regional Trade Integration Program, (SARTIP, 2012-18). World Bank’s and UK’s regional priorities. These programs played a crucial role in shaping the World Bank’s regional integration lending portfolio by providing technical support for project preparation, technical analysis, AND STRATEGIC system testing, and facilitating high-level dialogue. TRANSPORT KNOWLEDGE AND TRADE REGIONAL The World Bank’s South Asia Regional Integration, Connectivity Connectivity Connectivity Connectivity DIGITAL ENERGY Cooperation, and Engagement (RICE) Program, which began in 2010, supports transboundary cooperation for greater connectivity, cross-border trade, climate resilience, and human development in the region. Women empowerment is a key focus of the program, ensuring that all women stakeholders benefit equitably from regional integration efforts. 06 EXPANDING ACCESS, UNLOCKING POTENTIAL The program also aimed to enhance economic recovery connectivity within South Asia, especially in the and development post-COVID-19 while strengthening Bangladesh, Bhutan, India, and Nepal sub-region. It cooperation across South Asia and extending linkages addressed policy, structural, and capacity challenges, to neighboring regions like Central and Southeast Asia. supporting studies on economic corridor development, PACT-supported activities provided technical inland waterways transport, and trade facilitation. assistance—including analytical work, project preparation, These efforts were reinforced by a $2.1 billion regional and capacity building—along with implementation World Bank transport lending program in Central and support and strategic engagement to build an enabling South Asia. environment for regional cooperation. The activities PACT-supported activities informed and helped shape evolved in response to the changing conditions, World Bank operations and investments totaling including pandemic recovery efforts, and offered approximately $8.2 billion across Central and South valuable insights to guide the next phase of regional Asia. This approach served as a strategic entry point for connectivity initiatives in the Indo-Pacific. supporting government policies and programs in these To enhance regional connectivity, PACT-financing regions, demonstrating that its impact extended beyond promoted digital trade solutions, green and resilient individual activities. By leveraging larger World Bank infrastructure, and institutional and policy reforms. It investments, PACT support contributed to overcoming facilitated collaboration among stakeholders, informed barriers to regional integration, with a focus on economic World Bank programs, and provided technical guidance growth, women empowerment, and climate considerations. to maximize regional benefits. For instance, it helped The program enabled the World Bank to bring together develop a World Bank-supported pipeline of over a range of influential policymakers and stakeholders in 2,500 MW of cross-border energy projects in Central various dialogue and technical platforms. By leveraging and South Asia and played a key role in shifting its members’ expertise, local knowledge, and extensive discussions from bilateral trade to regional energy networks, these platforms provided valuable insights market collaboration. Technical economic modeling into regional challenges, perspectives, and opportunities. demonstrated that up to $6.4 billion in economic This approach ensured sustained progress in regional benefits could be realized from electricity trade in cooperation within a complex and evolving geopolitical 2020-2030 among Central Asian countries. The program landscape. played a key role in advancing trade and transport ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 07 TRANSPORT AND TRADE CONNECTIVITY BRIDGING BORDERS, BOOSTING TRADE @WorldBank THE CHALLENGE THE INTERVENTION In South and Central Asia, trade barriers and lack of integrated transport networks hinder economic PACT funding played a key role in reducing trade growth. Despite shared trade potential, businesses barriers, modernizing transport networks, and shaping often find it cheaper to trade with distant markets than over $1.5 billion World Bank investments in regional with neighboring countries due to long customs connectivity projects in South Asia. delays, high logistics costs, and outdated infrastructure. For instance, it is estimated that with transport and With this financial support, the World Bank conducted trade challenges, it is about 15–20 % less expensive technical analysis and feasibility studies, which for a company in India to trade with a company in helped validate priorities under the World Bank’s Germany than with a counterpart in Bangladesh.2 $1.03 billion Accelerating Transport and Trade Connectivity in Eastern South Asia (ACCESS) In South Asia, trade among Bangladesh, Bhutan, program, for improved connectivity in Bangladesh, India, and Nepal (BBIN) grew sixfold between 2005 and 2019, yet unexploited opportunities remain, Nepal, and Bhutan. Some of the priority areas with potential growth of 93% for Bangladesh, 50% zand the Butwal-Gorusinghe-Chanauta (69 km) for India, and 76% for Nepal.3 Besides tariff barriers, section in Nepal, which will facilitate faster freight non-tariff barriers including infrastructure gaps, movement. To ease border congestion, PACT- manual processes, and lack of harmonized standards, supported analysis also identified three key land ports have restricted intraregional trade in South Asia to in Bangladesh—Benapole, Bhomra, and Burimari barely 5% of its total trade. In comparison, —for modernization, reducing customs wait times intraregional trade in 60% of total trade in Europe and improving efficiency. and 25% in the Association of Southeast Asian Nations. The World Bank also led feasibility studies on the revival of inland water transport (IWT), promoting In Central Asia, long clearance times, poor multimodal trade solutions for landlocked regions. multimodal connectivity, and inefficient rail and road A study on sustainable inland water navigation in networks limit trade between Kazakhstan, Uzbekistan, the Sundarbans addressed challenges related to the Kyrgyz Republic, and Tajikistan, further slowing siltation and hydrology changes, influencing policy access to global markets. discussions between India and Bangladesh. 2 Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia, 2021 3 Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia, 2021 08 EXPANDING ACCESS, UNLOCKING POTENTIAL PACT FINANCING SUPPORTED THE WORLD BANK’S STRATEGY OF TRADE AND TRANSPORT CONNECTIVITY IN SOUTH ASIA AND ITS BROADER GOAL OF REDUCING TRADE AND TRANSPORT COSTS BY WORKING ACROSS THREE PILLARS: ECONOMIC CORRIDOR DEVELOPMENT INLAND WATERWAYS TRANSPORT CONNECTIVITY TRANSPORT AND TRADE FACILITATION In Central Asia, PACT supported multimodal trade and logistics efficiency assessments, identifying improvements in key rail and road corridors, particularly the Middle Corridor linking Central Asia with China and Europe. Three agribusiness value chains in Tajikistan were integrated into the World Bank’s Rural Economy Development Project (REDP) matching grants program, strengthening trade opportunities for local businesses. By modernizing transport corridors, facilitating trade, and strengthening multimodal logistics, South and Central Asia are better positioned to integrate into global markets and accelerate regional @World Bank economic growth. ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 09 THE IMPACT Integrated 3 Agribusiness Value chains into Tajikistan’s REDP matching grants program, Identified expanding trade access 3 Major Land Ports in South Asia – Benapole, Bhomra, and Burimari-for Informed and identified customs modernization under the ACCESS program Strengthened multimodal priority development of Connectivity 112 KM of regional road corridors in Assessments including optimizing trade routes in Kazakhstan, Bangladesh and Nepal, Uzbekistan, and Tajikistan easing freight movement Supported preparation of $1.03 Billion World Bank’s Accelerating Transport Supported and Trade Connectivity in Eastern Policy Reforms South Asia Program to improve transport and trade infrastructure in to cut down clearance times at Bangladesh, Nepal, and Bhutan key trade routes, including Petrapole-Benapole (India-Bangladesh) 10 EXPANDING ACCESS, UNLOCKING POTENTIAL IMPROVING LIVES, BOOSTING TOURISM How Better Sanitation Transformed Tajikistan's Hospitality Sector Khairiddin Idoev, a worker at a homestay in Darvoz district, in Gorno-Badakhshan Autonomous (GBAO) Region of Tajikistan, remembers the time when the sojourn struggled to attract tourists. The district is popular for the Darvoz mountain range—a subrange of the Pamirs—offering dramatic gorges and a rich cultural connection to ancient Silk Road routes. While visitors found the stunning scenery and warm hospitality captivating, they often left disappointed due to the lack of proper sanitation facilities. “In 2023, we Lailo Chorshanbezoda, Deputy Chairperson of Rushan District, REDP had only 140 guests throughout the year," Idoev recalls. Photo credit @Project Implementation Unit, Ministry of Finance, Republic of Tajikistan Things turned around in 2024 when the homestay received support from the World Bank’s Tajikistan Rural The project's impact is not limited to infrastructure—it has Economy Development Project (REDP), which was backed empowered artisans and entrepreneurs. Zoir Alamshoev, by extensive research and technical assistance funded an artisan craftsman from Roshtkala district in GBAO, by PACT. shares how REDP transformed his felt-making business. With this support, the homestay installed modern "Previously, I crafted felt (fiber textile) products by hand, sanitation facilities, including new bathrooms and water but with the new equipment provided through the storage tanks. "Thanks to the project, we welcomed 300 project, I can produce more efficiently and expand my tourists in 2024," Idoev says proudly. product range," he says. The impact of REDP extends beyond individual homestays. Rushan District made significant strides in developing tourism infrastructure. Deputy Chairperson of Rushan District, Lailo Chorshanbezoda says REDP supported over 17 projects in the district, which included upgrading hotels, restaurants, and the reconstruction of the Rushan District Culture and Recreation Park. The focus on sanitation and hygiene addressed a critical gap in the local tourism ecosystem by providing matching grants to guesthouse owners to upgrade their facilities. The project also aimed at integrating Tajikistan in the Silk Road Fortresses Itinerary together with Kazakhstan, Uzbekistan, and the Kyrgyz Republic. Zoir Alamshoev, an artisan craftsman from Roshtkala district in GBAO, shares how REDP transformed his felt-making business Photo credit @Project Implementation Unit, Ministry of Finance, Republic of Tajikistan ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 11 REGIONAL ENERGY CONNECTIVITY UNLOCKING THE POWER OF COLLABORATION THE CHALLENGE Regional electricity connectivity is crucial for Central and South Asia’s renewable energy and net-zero targets, enhancing energy security, affordability, and supply reliability. South Asia, where over 250 million people still live @Adobe Stock without access to electricity, is yet to fully harness its hydro, solar, and wind potential.4 The region has a THE INTERVENTION major opportunity to expand access and integrate regional energy markets. Growing demand, driven by industrial The World Bank, through PACT, shifted regional and technological advancements, underscores the need perspectives on electricity market through facilitated for reliable power. discussions and robust analytics. Key stakeholders Studies suggest regional energy cooperation in South in Central and South Asia are moving from Asia could triple hydropower and clean energy capacity skepticism to a growing recognition of the by 2040, increasing from 64 GW in 2015 to 170.2 GW.5 potential benefits of regional power collaboration. This would enhance energy security, reduce fossil fuel reliance, and generate over $9 billion annually in PACT’s support has been instrumental in laying economic benefits, along with significant emissions the groundwork for cross-border electricity trade reductions. through a mix of technical studies, investment Central Asia, meanwhile, has historically struggled with planning, and policy engagement. This contributed a legacy of aging infrastructure, resulting in persistent significantly to shaping regional energy integration challenges in ensuring the reliability of electricity supplies. efforts, building country readiness for power Although new transmission lines linking north and south in Kazakhstan and Tajikistan have improved trade, developing energy trade options, and distribution, the plentiful resources have not met creating an enabling environment for regional domestic needs and frequent harsh winters have put electricity markets. the spotlight back on the need for strengthening energy security of the countries in the region.6 With financial TRANSFORMING SOUTH ASIA’S support from PACT, the World Bank’s analysis estimated ENERGY MARKET economic benefits of up to $6.4 billion from electricity trade among Central Asian countries between With financing from PACT, the World Bank 2020-2030. operations in South Asia facilitated a pipeline of 2,500 MW in cross-border energy projects. PACT support provided timely technical support and 4 In the Dark: How Much Do Power Sector Distortions Cost South Asia, World Bank, 2018 5 How Would Cross-Border Electricity Trade Stimulate Hydropower Development in South Asia? 2018 advisory for proposed energy investments in 6 Central Asia Energy-Water Development Program, Brochure, 2016 12 EXPANDING ACCESS, UNLOCKING POTENTIAL Nepal and Bhutan, including the Butwal-Gorakhpur electricity and enhance interconnectivity across four interconnector project (400 KV), the Upper Arun countries—Kyrgyzstan, Tajikistan, Afghanistan, and Hydropower Project (1,040 MW) in Nepal and the Pakistan—in Central and South Asia. Dorjilung Hydropower Project (1,125 MW) in Bhutan, supporting clean and sustainable energy development. In a region where countries have traditionally approached regional collaboration with caution, PACT supported nine South Asia Power Secretaries’ Roundtable (PSRT), bringing together high-level power and energy sector officials from South Asia to foster dialogue on energy security and trade. This built on support provided by its predecessor SARTIP program to the PSRTs. By providing a platform for discussions and data-backed insights, 17 PSRTs in total have helped shift focus from bilateral energy deals toward a more integrated regional power market. In Sri Lanka, PACT funding supported a World Bank study on offshore wind energy, highlighting the potential for connecting the country’s renewable energy resources to neighboring power markets. The findings contribute to South Asia’s growing renewable energy ambitions and future cross-border energy projects. STRENGTHENING CENTRAL ASIA’S REGIONAL GRID Geopolitical shifts and enhanced regional cooperation have opened new opportunities for cross-border energy trade in Central Asia. PACT supported technical analysis to drive a regional short-term electricity trade pilot, aligning with the World Bank’s potential $1 billion Regional Electricity Market Interconnectivity and Trade project. An investment prospectus on the energy sector landscape identified the potential for approximately $20 billion in investments across Central Asia by the year 2030–including solar, wind, and hydro power generation. Meanwhile, PACT’s analytical contributions have supported the CASA (Central Asia-South Asia)-1000 @Freepik initiative, which aims to deliver 1,300 MW of surplus ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 13 THE IMPACT 9 South Asia Power Secretaries’ 2,500 MW pipeline of cross-border energy roundtables that strengthened regional electricity cooperation projects in South Asia developed with World Bank support, exceeding the original ARTCP target Technical analysis highlighted $20 $6.4 BILLION BILLION worth of potential investments by 2030 identified in Central Asia’s estimated economic benefits energy sector spanning solar, from increased electricity wind, hydropower, and grid trade in Central Asia infrastructure (2020-2030) 14 EXPANDING ACCESS, UNLOCKING POTENTIAL SOUTH ASIA POWER SECRETARIES’ ROUNDTABLE Shifting the discourse on energy cooperation On a crisp October morning in 2024 in Kathmandu, the over 6.4 GW in 2022. There has been consistent capital city of Nepal, a historic trilateral electricity trade upgradation of rules and regulations for cross-border agreement was signed between Nepal, India, and electricity trade. For example, Nepal is trading electricity Bangladesh, marking a major milestone in South Asia’s on the day ahead market via the India Energy Exchange energy cooperation. For the first time, Nepal secured the since 2021, and Bhutan followed shortly in 2022. This ability to export 40 MW electricity to Bangladesh via India’s marked a shift toward market-based cross-border transmission infrastructure—an achievement that was electricity trade, and also strengthened the foundation for years in the making. a regional electricity market. The discourse on energy collaboration in the region has The PSRTs have not only shifted the energy discourse in historically centered around bilateral energy agreements the region but have, in many ways, also contributed to the rather than broader regional energy cooperation. In 2014, new momentum of World Bank support, in coordination an informal gathering of senior energy officials from each with development partners, to in-country transmission South Asian country set into motion the making of the and reforms for enhanced energy security. This has been South Asia Power Secretaries’ Roundtable (PSRT)—a a key stepping stone for advanced deployment of clean strategic platform with the purpose of increasing demand energy resources, both domestically and regionally. for and national ownership of regional energy cooperation and connectivity across the South Asia Region. The World Bank and partners support the PSRT as a forum for informal dialogue and thought leadership on topical regional integration issues and cross-border projects. Over the years, 17 PSRTs—with nine supported by PACT—have been held, providing a neutral and trusted platform for open discussions on energy cooperation. The Roundtables have significantly influenced the dialogue on power sector cooperation among South Asian countries, including Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sri Lanka. These informal discussions have also provided cues to some of the existing bilateral Joint Working Groups (JWG) or Joint Steering Committees in the power sector among the South Asian countries. In the last decade or so, South Asia’s grid connectivity, cross-border trade, and the authorizing environment has significantly improved. Cross-border electricity transmission @Adobe Stock capacity in the region increased from 2.1 GW in 2015 to ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 15 DIGITAL CONNECTIVITY BRIDGING THE DIVIDE THE CHALLENGE Despite impressive strides in telecommunications and broadband infrastructure, Central and @Shutterstock South Asia continue to grapple with significant digital disparities. Over the last decade, international bandwidth growth in both regions skyrocketed, but the benefits remain unevenly THE INTERVENTION distributed. Many countries still suffer from some of the world’s highest international The World Bank, with PACT’s financial support, bandwidth costs and lowest per capita played a key role in shaping digital connectivity bandwidth availability. As the "fuel" of the initiatives across Central and South Asia, digital economy, limited and costly bandwidth guiding the identification and design of regional weakens the digital ecosystem and hinders investments in digital infrastructure. social and economic development.7 In South Asia, PACT’s financing complemented the In South Asia, the proliferation of 4G networks World Bank’s broader digital connectivity agenda has expanded, but broadband internet and with a flagship report, South Asia’s Digital Opportunity: smartphones remain unaffordable for the Accelerating Growth, Transforming Lives. The region’s poorest people. An estimated 61% of report analyzed opportunities and challenges in South Asians live within network coverage but digitalizing the economies, societies, and governments still do not use the internet. Financial inclusion of Afghanistan, Bangladesh, Bhutan, India, Maldives, remains another hurdle, with South Asia home Nepal, Pakistan, and Sri Lanka. to over 20% of the world's unbanked adults. While digital services could provide opportunities In the absence of strong regional institutions, PACT for growth, gaps in access, literacy, and trust funding supported the creation of Regional Digital hinder their adoption.8 Network comprising think tanks and key government stakeholders across Bangladesh, Bhutan, India, Nepal and Sri Lanka (BBINS). 7 South Asia’s Digital Opportunity: Accelerating Growth, Transforming Lives, World Bank. 2022 8 South Asia’s Digital Opportunity: Accelerating Growth, Transforming Lives, World Bank. 2022 16 EXPANDING ACCESS, UNLOCKING POTENTIAL This network helps shape a cohesive regional narrative e-commerce platforms can connect informal firms and on cross-border data flows while ensuring that workers to markets in the country, improving economic recommendations remain practical and actionable. opportunities for female domestic workers in low-paying service jobs. PACT also supported policy recommendations to harmonize regional regulations and enhance cross-border investments Other knowledge work explored Bhutan’s international for data infrastructure and services. Many of the South Asian connectivity as a part of the Accelerating Transport and countries including Bangladesh, India, and Sri Lanka Trade Connectivity in Eastern South Asia program, and benefited from a timely regional report on India’s international connectivity plans, in collaboration cross-border data flows as they revised data protection with the private sector along the eastern coast (West laws and established Data Protection Authorities. New Bengal, Orissa). knowledge on market integration, including work to foster In Central Asia, PACT-financing supported initiatives in integration of financial systems, further stimulated digital government, entrepreneurship, e-commerce, discussions among the South Asian countries. and FinTech, emphasizing broadband’s critical role in In Sri Lanka, advisory inputs fed into drafting of the the digital economy and its macroeconomic impact. An Cybersecurity Bill and technical inputs on the trust assessment of regional digital connectivity is now ecosystem shaped the national digital economy informing efforts to expand internet access and digital strategy, which was adopted by the Cabinet in May 2024. services in Tajikistan, Kyrgyz Republic, Uzbekistan, and Kazakhstan. It is also supporting preparation of Trans-Caspian PACT-financing also enabled World Bank-led analysis to submarine cable project, which will connect Azerbaijan identify regulatory, capacity, and cost barriers in and Kazakhstan via a 362.2 km fiber-optic link, enhancing Pakistan’s information technology service sector. In connectivity between Central Asia and Europe. Bangladesh, technical analysis explored how digital @Shutterstock ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 17 THE IMPACT Technical insights into integration of financial systems and cross-border payments systems between South Asian countries Sri Lanka Cybersecurity Bill drafted to mitigate and respond to cybersecurity threats. The Bill is yet to be Informed Nepal’s passed by Cabinet cybersecurity strategy and preparation of telecommunications reform roadmap Technical inputs provided to Sri Lanka’s national digital economy strategy, which was adopted by the Cabinet in May 2024 Support to development of Trans-Caspian submarine cable project, which will connect Azerbaijan and Kazakhstan via a 362.2 km fiber-optic link, enhancing connectivity between A Regional Digital Network Central Asia and Europe of think tanks and key government stakeholders established to ensure a cohesive narrative and practical solutions on cross-border data flows 18 EXPANDING ACCESS, UNLOCKING POTENTIAL BUILDING DIGITAL BUSINESS ECOSYSTEMS Reducing delays and costs for Rabeya and Gopal In the heart of Panisara, Bangladesh, Rabeya carefully The program, built on three core pillars—digital systems weaves fresh and dried flowers into stunning decorations for trade, green and resilient infrastructure, simplified and accessories. Her small business is thriving, but every policy and stronger institutions—is helping to cut down day brings the same worry—will her materials arrive on unnecessary paperwork, modernize land ports, and time? The ribbons, packaging, and special dyes she needs upgrade transport networks. must be imported from India. The Benapole Land Port, the The ACCESS program is supporting faster, safer, and busiest trade gateway between India and Bangladesh, does more efficient trade for people like Rabeya and Gopal. It is not have adequate facilities for women traders like her, so expected that freight movement will increase by 30%, she relies entirely on her supplier, hoping that her raw cutting border wait times, while travel time will drop by materials arrive on time. 30%. Her supplier doesn’t have it easy either. To clear one The program is also supporting smoother and quicker consignment alone, he must go through 109 steps, collect customs processes, reducing manual inspections and 55 signatures, and process 22 documents.9 The process cutting down unnecessary delays. For Rabeya, this will lasts for six long days, delaying deliveries and raising costs. eventually mean on-time deliveries and lower costs. For Across the border, Gopal, an Indian truck driver, faces his Gopal, it will translate to less wait time at the border, with own battle. Every day, he drives along the at least two extra days at home with his family. With Petrapole-Benapole trade corridor, carrying goods ACCESS, digitalizing trade processes will finally work for between the two countries. His truck crawls at just 15 km those who depend on it. per hour, stuck in endless traffic jams. It takes him seven exhausting days to complete one trip from Kolkata to Benapole, waiting at the border, battling paperwork, and longing to get back home to his family. The challenge is not just about roads. It’s about manual customs processes too— excessive and slow paperwork, and a mismatch in how trade is handled on both sides. Petrapole (India) can process 750 export trucks a day, but Benapole (Bangladesh) can only process 350 import trucks. Rabeya and Gopal’s challenges reflect a much bigger issue. South Asia is a region of rapid growth yet remains among the least economically connected regions globally. To improve trade connectivity, the World Bank’s ACCESS program, supported by PACT financing, is working to make trade increasingly digitized, with simpler, and more efficient processes. Rabeya weaves dried and fresh flowers into stunning accessories Photo credit @Rabeya/ Bangladesh 9 Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia, 2021 ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 19 KNOWLEDGE AND STRATEGIC CONNECTIVITY STRENGTHENING NETWORKS THE CHALLENGE @SAESM Regional cooperation is not just about physical infrastructure; it is about people, networks, and knowledge flowing seamlessly across borders. South Asia and Central Asia THE INTERVENTION offer immense potential for shared economic The World Bank, supported by PACT funding, played a growth, trade, and environmental resilience. crucial role in enabling knowledge exchange, However, collaboration across sectors and institutionalizing regional dialogues, and strengthening borders remains fragmented, limiting the multi-country cooperation across South and Central Asia. exchange of knowledge and best practices. Strengthening coordination among With the support of PACT, the South Asia Champions policymakers, businesses, and institutions Process has successfully convened influential thought in the region—through improved access to leaders and policymakers across the region, fostering strategic research and successful models— deeper regional integration through informal dialogue can enhance regional trade, connectivity, and strategic policy engagement. Established in 2011 and sustainable development. with co-funding from the erstwhile United Kingdom’s While regional forums exist, they are often Department for International Development (DFID), this short-term, lacking the institutionalized initiative plays a pivotal role in shaping regional platforms needed for sustained knowledge cooperation efforts within an evolving geopolitical -sharing and collaboration. Without structured landscape. As the only Track 2 platform that includes policy dialogue, research-backed decision- all eight South Asian countries, the Champions Process making, and multi-country engagement, the stands out for its unique approach—combining high-level full potential of regional cooperation remains untapped. dialogue with robust technical backstopping by the World Bank, and a strong focus on the practical implementation of regional initiatives. PACT has facilitated the most recent 13 meetings. 20 EXPANDING ACCESS, UNLOCKING POTENTIAL In a region where geopolitics often overshadows Financial contributions enabled the convening of geoeconomics, the Champions serve as trusted high-level South Asia Economic Policy Network intermediaries to act not only as catalysts for change Conferences, with think tanks and academic institutions but also as providers of critical intelligence and strategic on range of issues including social norms and gender insights for cross-border initiatives. The Champions equality, green growth, migration, and social progress have played an instrumental role in identifying priority in South Asia. To engage South Asian diaspora and areas for regional collaboration, including transport academics, PACT funding also supported co-organization and trade connectivity, digitalization, labor mobility, of South Asian Network on Economic Modeling climate cooperation, cross-border digital payments, (SANEM)-World Bank North America Discussion Forum, and human capital development. Their efforts have with over five discussions held around topics including directly shaped World Bank investments in South Asia, jobs and resilient growth. demonstrating the tangible impact of their vision and leadership in advancing regional prosperity. Beyond economic and academic cooperation, the World Bank also led on the Resilient Landscapes PACT funding has also strengthened regional youth Restoration Initiative in Central Asia (RESILAND CA+) platforms such as the South Asian Economics Students’ which brings together youth from five Central Asian Meet (SAESM). Sustained funding has ensured the countries to build capacity on climate change and continuity of the SAESM, which since 2004 has been develop entrepreneurial skills for nature-based products. bringing together undergraduate economic students The work highlights that higher education institutions from South Asian countries to participate in an can play a crucial role in fostering "green" entrepreneurship academic and cultural exchange and share aspirations and interdisciplinary collaborations, empowering youth for South Asian development. The 2024 SAESM as catalysts for sustainable development in their communities conference in Colombo, supported by PACT funding, and beyond. marked 20 successful years of this platform. Visit of South Asia Champions to Colombo Port Container Terminals and Colombo Dockyard, October 2023 Photo credit @World Bank ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 21 THE IMPACT Continued strategic dialogue with support to 13 most recent Champions Meetings which were instrumental in shaping regional collaboration priorities—ranging from connectivity and digitalization to Support to South Asian climate cooperation and human Economics Students’ Meet, a capital—directly influencing World platform which since 2004 Bank investments and advancing has engaged South Asia’s prosperity over 1,300 + youth and students in cross-border dialogue and academic exchange Support to enhancing regional collaboration for landscape restoration, and for promoting schools and education institutions as anchors Strengthened for natural resource management and knowledge links and climate resilience, particularly in exchanges with think Uzbekistan, Kazakhstan, and Tajikistan tanks, local, and regional institutions 22 EXPANDING ACCESS, UNLOCKING POTENTIAL BUILDING STUDENT LINKAGES Shaping the future #OneSouthAsia leaders On a chilly January morning of 2004, Ali Hasnain, a Navya Sriram from India, a participant at the 19th young Pakistani economist, boarded the Samjautha SAESM, says the meet was her first experience of Express from Attari railway station in Pakistan to New interacting with a fellow South Asian in an academic Delhi in India. Hasnain, along with nine other economics context, discussing the intertwined histories and students, was traveling for the first time to the political backgrounds. “Bringing young people together neighboring nation, carrying along a mix of raw curiosity, like this is important as it fosters discussions from an subdued excitement, and nervousness. early stage,” she adds. As the train pulled into the platform in New Delhi, SAESM was born to address a particular gap in Hasnain heard a loud roar. "I was nervous to even look economics education in South Asia—the lack of out, but then we realized, it was a group of Indian opportunity to interact or exchange ideas with students students carrying banners and shouting to welcome across borders. Over the years, this gap has been us," he says. That moment of warmth and camaraderie addressed, and many collaborations forged. A recent marked the beginning of the South Asian Economics tracer study, authored by SAESM alumni, has concluded Students’ Meet (SAESM), a platform that has since that over 89% of the alumni surveyed reported that brought together over 1,300 young economists across SAESM was their first opportunity to travel to another South Asia to share research and ideas, build friendships, South Asian country, and 71% reported, it was their first and reimagine a more connected future. interaction with a fellow South Asian student. The Over the last 20 years, SAESM—with World Bank study also highlighted that post the Meet, over 78% of support—has held 19 meets, bringing together undergraduate the respondents have been in touch with their peers, economics students from seven South Asian countries. and more than 89% agreed that the SAESM experience The students share academic research, interact with positively influenced their perception of fellow South fellow students from the region—for many a first-time Asians. SAESM, over the years, has not only been an experience—and eventually, leave with lifelong friendships. investment in regional cooperation, but also in human PACT funding ensured the continuity of the Meet, with capital and participation of youth in South Asian support to the 19th SAESM in Colombo, which incidentally development, the study concludes. marked the 20 years of the initiative. ©WorldBank Students at the 19th SAESM Meet in Colombo, Sri Lanka, 2024 23 Photo credit @SAESM ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA CROSS CUTTING AREAS FOCUS ON WOMEN, CLIMATE, AND MARGINALIZED GROUPS The World Bank through PACT funding worked across multiple sectors to focus on integrating climate resilience, women-led approaches, and marginalized groups into its programs. SAR COVID-19 household monitoring SAR COVID-19 Designing inclusive household infrastructure monitoring Women-led nature-based solutions A first-of-its-kind regional study was conducted covering 43,000 people across eight South Exploring digital platforms Asian countries to understand the impact of for women workers pandemic on households. It provided gender-disaggregated analysis that informed targeted government responses. Focus on financial inclusion and skill development 24 EXPANDING ACCESS, UNLOCKING POTENTIAL Designing Women-led inclusive nature-based infrastructure solutions PACT’s support to Improving Regional Waterway Work in the Sundarbans focused on sustainable Transport Connectivity helped design the Customs and inclusive growth through regional House, Chattogram (CCH) and Customs, Excise cooperation and produced guidelines for enhancing and Vat Training Academy (CEVTA) with inclusive nature-based coastal protection with a strong features, such as separate washrooms for women focus on inclusion of women in its planning and as well as childcare facilities and a designated implementation. service desk for women. Exploring digital Focus on financial platforms for inclusion and women workers skill development In Bangladesh, a Randomized Controlled Trial PACT supported women’s participation in trade, (RCT) was conducted to study the impact of digital connectivity, and leadership roles, HelloTask, an application for finding domestic informing policy frameworks that promote employment in informal sector. The study, financial inclusion and skills development for conducted in collaboration with HelloTask, Oxfam, women. Work on cross-border data flows in the explored how the digital platforms—in BBIN sub-region underscored the benefits of combination with skills training—can benefit digitally enabled health services, improving female workers by offering more flexible hours, women's access to quality healthcare. greater potential to work from home, increased bargaining power and reduced exposure to workplace harassment. ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 25 ACKNOWLEDGMENTS The Program for Asia Connectivity and Trade (PACT) was funded by the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) under its Asia Regional Trade and Connectivity Program (ARTCP). The World Bank administered and implemented PACT from 2018 to 2024, with a total allocation of GBP 21 million, of which 85% ($23.3 million) was transferred by FCDO to the World Bank. PACT was led by Mandakini Kaul, Regional Coordinator, South Asia Regional Integration and Engagement, World Bank, with a core Secretariat team comprising Debbie Menezes, Sanjay Gupta, Namita Vij, and Risha Jain. The PACT team extends its gratitude to Cecile Fruman, Director, South Asia Regional Integration and Engagement, World Bank, for her valuable guidance and support; to the World Bank’s Practice Managers and Task Team Leaders of PACT-funded activities for their excellent contributions; and to FCDO’s Indo-Pacific Regional Department for their close partnership throughout the implementation of the PACT Trust Fund. This brochure was prepared by Pawan Bali, External Affairs Officer, South Asia Regional Integration and Engagement, and Sonia Sarkar under the supervision of Mandakini Kaul, with inputs from the World Bank’s Global Practices and the PACT team. We acknowledge all the World Bank staff, counterparts, and beneficiaries who graciously made time for interviews and provided information during the writing of the brochure. We thank the World Bank’s South Asia External Communications team, especially Elena Karaban, for their advice throughout the process. Namita Vij supported the team during the entire cycle of production. 26 EXPANDING ACCESS, UNLOCKING POTENTIAL The World Bank’s South Asia Regional Integration, Cooperation, and Engagement (RICE) approach is a framework to create a stronger, more resilient region which focuses on three primary themes: enabling regional connectivity, increasing climate resilience, and investing in human capital. The framework, adopted in 2020, has been extended to 2025. Our regional work with countries uses a mix of tools and approaches including partnerships with other development partners, platforms for dialogue and communication to develop consensus, and innovative social and economic analyses to lay the building blocks for inclusive approaches to trade facilitation and cross-border investments. The United Kingdom’s Foreign, Commonwealth & Development Office’s (FCDO’s) vision is to deliver for the UK internationally, leading the government’s diplomatic, development and consular work around the world. FCDO’s Indo-Pacific Regional Department (IPRD) focuses on development opportunities that go beyond country borders, for example boosting trade between countries or improving the management of shared rivers and water. A regional approach complements not only the work happening within countries and through global UK programs, but also global initiatives (like those through the UN) and brings economies of scale. FCDO and the World Bank have a long-standing partnership on advancing regional cooperation in South Asia including through several trust fund programs including South Asia Regional Trade Integration Program (SARTIP, 2012-18), Asia Regional Transport and Connectivity Program (ARTCP, 2018- 24) and the Resilient Asia Program (ongoing). ADVANCING REGIONAL CONNECTIVITY FOR GROWTH IN SOUTH AND CENTRAL ASIA 27