2016年-世界发展银行全球_Georgia_Economic_Impact_of_East-West_Highway_Phase_2___Assessing_the_Impact_of_East-West_Highway_Investments_on_Exports_through_Gravity_Modeling_29页_564kb

Summary of "Economic Impact of EW Highway Phase 2" Report

Core Content

This report evaluates the economic impact of the East-West Highway (EWH) improvement program on Georgia's export performance and its ability to access international markets. It uses a gravity model and computable general equilibrium (CGE) analysis to estimate the effect of infrastructure upgrades on trade flows and economic growth.

Main Objective

The primary goal is to assess how EWH upgrades have influenced Georgia's exports, particularly those transported by road, and to estimate the broader economic benefits of the investment.

Key Findings

• EWH's Strategic Importance: The EWH is a key component of the Caucasus Transit Corridor (CTC), which is part of the TRACECA transport corridor. It connects Central Asia and the Far East with Turkey and Europe and carries over 60% of Georgia's total foreign trade.
• Investment Overview: The EWH upgrade program, estimated to cost USD 2.265 billion, is being implemented by the Georgian government with support from international financial institutions (IFIs). As of 2015, 160.5 km of the 392 km EWH had been upgraded.
• Impact on Exports: A 10% increase in the length of upgraded road networks is associated with a 1.1% increase in exports transported by road, with no significant effect on other transport modes.
• Substitution Effect: There is a substitution effect between road and sea transport, with an increase in road exports leading to a decrease in sea exports.
• Customs Offices: The impact of EWH upgrades is statistically and economically significant only for customs offices located along the EWH.
• Time-Sensitive Products: Only exports of time-sensitive products showed a positive and significant response to EWH improvements.
• Economic Benefits: Upgrading the entire EWH is estimated to generate additional export revenues between USD 776 million and USD 1,466 million. Long-term GDP growth is projected to increase by 4.2%, with additional gains from exports, household consumption, and income. Rural income gains are slightly higher than urban.
• Methodology: The study employs a gravity-type model in first-differences to estimate the effect of EWH upgrades on export growth. This approach controls for time-invariant factors and potential selection biases in transport modes.

Key Information

• Time Period: The analysis covers the period from 2005 to 2015.
• Gravity Model: The model predicts bilateral trade flows based on trade partner sizes and distances. It was modified to incorporate the effect of EWH upgrades and to account for time-varying factors.
• Data Sources:
  • Exports data is disaggregated by mode of transport, customs office, and 6-digit Harmonized System (HS) categories.
  • EWH upgrade projects are detailed in Table 2, including start and completion dates for each section.
• Economic Impact:
  • The CGE model estimates the long-term economic benefits, including GDP growth and welfare improvements.
  • The study acknowledges the potential for endogeneity in infrastructure investment and trade performance, but focuses on observable and measurable impacts.
• Challenges:
  • Data limitations prevent detailed analysis of domestic trade flows.
  • The model assumes that trade costs depend on both time-invariant and time-varying factors, with EWH upgrades reducing time-invariant trade costs for customs offices along the route.

Main Viewpoints

• Infrastructure and Trade: Improving transport infrastructure enhances export competitiveness, reduces trade costs, and increases economic growth.
• Road Transport Advantage: Road transport is more affected by EWH upgrades due to its direct link to the corridor and lower cost compared to other modes.
• Regional Connectivity: The EWH plays a crucial role in connecting Georgia to global markets, especially in light of sanctions affecting the southern corridor through Iran.
• Policy Implications: The study supports the government's strategy to develop Georgia as a logistics hub, emphasizing the need for continued investment in transport and logistics infrastructure.

Conclusion

The EWH upgrade program has had a positive and significant impact on Georgia's exports, particularly those transported by road. While the overall trade effect is somewhat reduced due to substitution between road and sea transport, the long-term economic benefits, including increased GDP and welfare, are substantial. The study highlights the importance of infrastructure investment in enhancing trade performance and economic growth in Georgia.