The Advantages of East Cost Corridor

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east cost corridor advantages

Vizag Port to become an Investment magnet for major MNC’s of the world marketing major employment opportunities.

 

The east coast of India adjoining the Bay of Bengal stretching from Kolkotta to Capecomorin (Kanyakumari) is associated with rich history. From the ports of Orissa and Andhra Pradesh traders, Buddhist preachers and intellectuals spread the message of our culture and influenced the societies of Thailand, Malaysia, Laos, Cambodia, Indonesia, Philippines and China.

East coast is also the area where India took the first step for entering into the modern industrial societies. Thanks to the influence of British, French and other European nations.Liberalization, Integration of the world economy and the out sourcing boom extending from I.T to manufacturing sectors like apparel, consumer durable’s, auto spares is throwing a new opportunity for fast development and improving the standard of living of the people.

The stretch of 1000 kilometers coast in Andhra Pradesh is having different characteristics in terms of geography, hinterland, water availability, road infrastructure, power availability and availability of skilled people. The southern most stretch of east coast is relatively most developed. The city of Chennai with all the advantages of a big metropolitan city has mainly contributed to the growth of this region. The Andhra Pradesh coast is the subject of this study. This segment of east coast is having a large number of delta regions. The big rivers Krishna and Godavari meet the Bay of Bengal and in this process creating huge fresh water bodies near the coast. There are also large streams and rivulets flowing into the sea from the Eastern Ghats. There is a possibility of developing nine minor ports in a short period in this region besides the existing ports of Visakhapatnam and Kakinada.

 

The coastal region is reasonably well connected by network of roads. The telecom network is well etablished and has one of the highest penetration levels in the country. The two operational airports of Visakhapatnam and Vijayawada can be supplemented by several smaller airports all along the coast in a short period of time. The coastal Andhra Pradesh is poised to take full advantage of the liberalization process underway.

The relatively superior infrastructure advantage can propel an explosive growth of manufacturing sector especially in Steel; Automobile spares Pharmaceuticals, Textiles, Food processing, Petrochemicals and fertilizers.Manufacturing is going to be an area of focus where ever we are internationally competitive.

Government is planning a healthy 10%to12% growth in this sector, manufacturing creates employment for the poor and less educated. Coastal china which is the manufacturing hub of the world will soon loose the advantage in costs. Labour cost in coastal Andhra for technical and unskilled workers is half that of coastal china and skilled labour is available in large numbers. The industrial world is also looking seriously for a second manufacturing hub for outsourcing to reduce risks and total dependence on China.

We are talking about export lead growth, and anticipating yearly $40 billion FDI investments. The recent discovery of huge gas deposits close to Kakinada port is going to be a strong factor for attracting capital in  industrializing this area.

Coastal areas have a natural advantage for manufacturing establishments. Transportation cost for international destinations are considerably reduced specially for export oriented Industries. There is also an advantage if the industry requires bulk imports as input.

The biggest change that has occurred in the last thirty years in human history is the transformation of China from an under developed economy to a developing economy which will lead the world in the coming years. Two factors are mainly responsible for this transformation of the Chinese economy.

The first factor was liberalization of Chinese economy by Deng Xiaoping and the choice of Guangdong province for starting the liberalization experiment.

Guangdong province in the south east part of china was a backward and under developed area along the pacific coast. Deng reluctantly choose this province against a better alternative Shanghai. Shanghai city is also a coastal city along pacific ocean had a developed infrastructure., like Mumbai it is the commercial capital and modern face of china Deng Xiaoping had lurking doubt, that in case reforms fail the political impact will be severe, if Shanghai was selected for doing liberalization experiment.

Liberalization experiment in Guangdong coastal province was a success beyond anybody’s imagination.  In a short period of time the province became the manufacturing hub for exports. Massive investments flowed into the province from oversea Chinese business men initially, and then from many of the fortune 500 companies.

The point to be emphasized is the tremendous advantage of developed coastal areas for attracting capital in the globalized environment .The growth in the coastal provinces was contagious and most of the progress of Chinese economy was from the coastal regions. In the last twenty five years. In India we have a similar situation, the developing states of Gujarat and Maharastra have maximum number of small ports and recent development is in close vicinity of these ports.

 

Coastal A.P has lot more advantages to offer, there is abundance of fresh water available all along the coast unlike Gujarat which has a serious water shortage problem. It has a close similarity to Guangdong province. There are large stretches of open uncultivable land available all along the coast and massive industrial growth will not disturb the agricultural society. A.P is fortunate to have political leadership which is oriented towards growth, employment creation, wealth creation and poverty reduction. The leadership is also innovative and prepared to take marginal risks.

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