Greater Mekong Subregion

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p. 13 of 176 BACK | NEXT Thirteenth Ministerial Conference on Subregional Economic Cooperation Program Twelfth Ministerial Conference on Subregional Cooperation Eleventh Ministerial Conference on Subregional Economic Cooperation Ninth Ministerial Conference on Subregional Cooperation Appendix 1 Appendix 2 Appendix 3 Appendix 4 Eighth Ministerial Conference on Subregional Cooperation Sixth Meeting of the Subregional Transport Forum Seventh Meeting of the Subregional Transport Forum Fifth Meeting of the Subregional Transport Forum Fourth Meeting of the Subregional Transport Forum Eleventh Meeting of the Subregional Electric Power Forum Tenth Meeting of the Subregional Electric Power Forum Ninth Meeting of the Subregional Electric Power Forum Eighth Meeting of the Subregional Electric Power Forum Seventh Meeting of the Subregional Electric Power Forum Sixth Meeting of the Subregional Electric Power Forum Fifth Meeting of the Subregional Electric Power Forum Fourth Meeting of the Regional Power Trade Coordination Committee Second Meeting of the Regional Power Trade Coordination Committee First Focal Group Meeting of Regional Power Trade Coordination Committee Ninth Meeting of the Experts Group on Power Interconnection and Trade Eighth Meeting of the Experts Group on Power Interconnection and Trade Seventh Meeting of the Experts Group on Power Interconnection and Trade Sixth Meeting of the Experts Group on Power Interconnection and Trade Fifth Meeting of the Experts Group on Power Interconnection and Trade Fourth Meeting of the Experts Group on Power Interconnection and Trade Third Meeting of the Experts Group on Power Interconnection and Trade Second Meeting of the Experts Group on Power Interconnection and Trade Sixth Meeting of the Subregional Telecommunications Forum Fifth Meeting of the Subregional Telecommunications Forum Steering Committee Meeting for the Regional Technical Assistance on the Establishment of the Backbone Telecommunications Project for the Greater Mekong Subregion - Phase 1 (RETA 5915) Fourth Meeting of the Subregional Telecommunications Forum Eleventh Meeting of the Working Group on Environment Tenth Meeting of the Subregional Working Group on Environment Ninth Meeting of the Working Group on Environment Seventh Meeting of the Working Group on Environment Sixth Meeting of the Working Group on Environment Fifth Meeting of the Working Group on Environment Fourth Meeting of the Working Group on Environment Workshop on Drug Control Initiatives in the Greater Mekong Subregion Sixth Meeting of the Working Group on Human Resource Development Fourth Meeting of the Working Group on Human Resource Development Third Meeting of the Working Group on Human Resource Development Second Meeting of the Working Group on Human Resource Development 16th Meeting of the Working Group on the Greater Mekong Subregion Tourism Sector 15th Meeting of the Working Group on the Greater Mekong Subregion Tourism Sector 14th Meeting of the Working Group on the Greater Mekong Subregion Tourism Sector Twelfth Meeting of the Subregional Working Group on Tourism Eleventh Meeting of the Subregional Working Group on Tourism Tenth Meeting of the Subregional Working Group on Tourism Ninth Meeting of the Subregional Working Group on Tourism Eighth Meeting of the Subregional Working Group on Tourism Special Meeting of the Trade Facilitation Working Group Fourth Meeting of the Trade Facilitation Working Group Third Meeting of the Trade Facilitation Working Group Second Meeting of the Trade Facilitation Working Group Workshop on Customs Facilitation in the GMS Inception Meeting of Trade Facilitation Working Group Fourth Meeting of the Subregional Investment Working Group Third Meeting of the Subregional Investment Working Group Second Meeting of the Subregional Investment Working Group GMS Mid-Term Review cum Senior Officials Meeting Workshop on the Preinvestment Study for the Greater Mekong Subregion: East-West Economic Corridor Quadripartite Meeting on the Chiang Rai-Kunming via Lao PDR Road Improvement Project

Ninth Ministerial Conference on Subregional Cooperation

Introduction

The Ninth Conference on Subregional Economic Cooperation (the Conference) was held in the Asian Development Bank (ADB) Headquarters, Mandaluyong City, Philippines on 13 January 2000. The Conference was preceded by the Greater Mekong Subregion (the GMS) Senior Officials' Meeting (the SOM) held on 11 January 2000.

The objectives of the Conference were as follows: (i) to review the progress of subregional cooperation in the various sectors; (ii) to discuss the issues and challenges of the GMS Program (the Program) and the measures required to address them; (iii) to review the present operational strategies of the Program and define the elements of a medium-term strategy; (iv) to update the GMS Work Program for the period 2000-2002 based on progress made in the various sectors and taking into account the elements of the medium-term strategy; and (v) to discuss three strategic thrusts, namely, economic corridors, environmental strategy, and poverty reduction. The Conference Agenda and Program is attached as Appendix 1.

The Conference participants included delegations from the Kingdom of Cambodia, the People’s Republic of China (the PRC), Lao People’s Democratic Republic (Lao PDR), Union of Myanmar, Kingdom of Thailand, and the Socialist Republic of Viet Nam. Representatives from bilateral, multilateral, and international organizations attended the Meeting as observers. Officials from ADB attended the Conference as resource persons and lead discussants. The Conference was chaired by Mr. Myoung-Ho Shin, Vice President (West), ADB. The list of participants is attached as Appendix 2.

Session I: Opening Session

Mr. Tadao Chino, President, ADB, welcomed the participants to the Conference. He recognized the many significant accomplishments of the GMS Program since its modest and tentative beginnings in 1992, citing that these are reasons for optimism for the future of regional cooperation at the onset of the new millennium. He spoke of the recent milestone achievement of the Program — the signing of the cross-border agreement among Lao PDR, Thailand, and Viet Nam to facilitate the movement of goods and people along the East West Corridor — as an accomplishment that augurs well for further openness and cooperation. This attests to the region's resiliency in the face of the difficulties resulting from the economic crisis. Mr. Chino stressed the importance of globalization and integration while at the same time reminding of the need to direct the benefits of cooperation to sustainable development in all its dimensions — economic, social, environmental and cultural. Mr. Chino stated that the Bank has adopted a holistic approach to development through assistance programs focusing on poverty alleviation, environmental protection, improved governance, and social development. He emphasized that the overarching goal of development is the elimination of poverty, and regional cooperation should contribute to this goal. Initiatives in transportation, telecommunication, and energy can help contribute to this objective by overcoming the isolation of remote areas, supplying electricity, and enabling industry and education to proceed hand in hand. To ensure the effectiveness of regional cooperation, the cooperation of the business community is essential. Regional and national institutional mechanisms also need to be strengthened.

In his opening remarks, H.E. Mr. Chhay Than, Minister, Ministry of Planning, Kingdom of Cambodia, announced that economic stability was restored in the country in 1999 and policy reforms are being rigorously implemented. He cited the important progress in subregional transport projects, in particular, the implementation of the Phnom Penh-Ho Chi Minh City Highway Project, for which an ADB loan of $40 million has been provided to Cambodia. He endorsed the policy on regional power trade, and cited several bilateral power trade agreements already in place with Thailand, Viet Nam, and Lao PDR. A fiber optic transmission link to the Thai and Vietnamese borders has also been completed and operational since May 1999. He cited the progress of subregional environmental projects and noted important milestone dates for their completion. He recognized that cooperation with the international community will be an important factor in attracting foreign investments, which under existing laws in Cambodia, is not restricted to any sector, and allows the import of skilled labor that are not available domestically. He expressed appreciation for ADB's continuing support of the GMS Program and suggested that priority be given to poverty alleviation in the rural areas, watershed improvements, and feeder roads traversing subregional roads.

H.E. Mr. Jin Liqun, Vice Minister, Ministry of Finance, People's Republic of China, lauded the Asian economies' rebound in 1999 from the throes of the economic crisis. A robust recovery has restored job opportunities, increased domestic and overseas investments, and enhanced market confidence even exceeding pre-crisis levels. More important than these, however, countries have become more knowledgeable in managing a modern economy and adaptive to a changed environment. The PRC, for one, has learned to reduce its susceptibility to a crisis by keeping the banking sector in order, maintaining an appropriate exchange rate regime, and establishing social safety nets. International economic cooperation with APEC, ASEAN 10 + 1, and the GMS played an important role in the process of recovery. Cooperation in the GMS, in particular, will complement the country's Overall Strategy for Developing the Western Part of China, which includes Yunnan Province. Now that the GMS Program has reached implementation stage, financing will even be more vital. He urged the ADB to intensify its collaboration with bilateral and other multilateral organizations in support of priority subregional projects. He also welcomed the participation of the private sector in the GMS Program. For its part, PRC will be willing to provide support in project identification, feasibility studies, and co-financing within the established framework of GMS cooperation.

H.E. Mr. Phao Bounnaphol, Minister, Ministry of Communications, Transport, Posts, and Construction, Lao PDR, affirmed that the post-crisis challenges for Lao PDR remain formidable in the course of transition to a market system. The country needs time to regain its momentum and increase its focus on developing sound banking and investment regulations. The Lao Government remains committed to the GMS Program and has recently taken important steps to open its borders when it signed the cross-border agreement for facilitating the movement of goods and people in the GMS. He requested for ADB's continuing support for Lao PDR in the energy sector, in particular, for the Nam Leuk hydropower project, and a 500 kV transmission line interconnecting Lao PDR and Viet Nam. He reaffirmed Lao PDR's interest to serve as focal point for the GMS Business Forum, citing the important role of public-private sector partnership under the GMS framework.

In his opening statement, H.E. Brig. Gen. David Abel, Minister, Office of the Chairman of the State Peace and Development Council, Myanmar, stated that the two most important challenges facing the GMS are poverty alleviation and sustainable development. He reaffirmed Myanmar's commitment to priority projects identified under the GMS Program framework and cited progress in several road projects despite the absence of international support. Myanmar is also considering accession to seven UN conventions related to cross-border movement of goods and people, although this will have to be studied in the context of increasing the risk of transport of dangerous goods by land. He proposed the expansion of economic corridor development to include routes covering Myanmar and the People's Republic of China to further enhance the benefits of the East-West Corridor. He emphasized that the fight against narcotic drugs is a top national priority for Myanmar. A masterplan to totally eradicate poppy cultivation has been launched and peace agreement signed with ethnic leaders. However, while the promotion of substitute crops has successfully curbed opium and heroin production, a new form of danger has emerged in synthetic drugs smuggled from neighboring countries. He stressed the importance of cooperation with neighboring countries in dealing with this menace. He expressed the hope that the GMS Program would continue to bring peace and prosperity in the region in the twenty-first century.

H.E. Dr. Supachai Panitchpakdi, Deputy Prime Minister, Kingdom of Thailand, cited both the accomplishments and shortcomings of the Program. He attributed the 30 percent increase in cross-border trade largely to enhanced cooperation among the GMS countries. He urged follow-on activities in the areas of trade facilitation and harmonization and standardization of customs procedures to further improve the trade and investment environment in the GMS. Thailand, for its part, will continue to take steps to open up its borders through bilateral agreements with neighboring countries on land transport. He discussed several shortcomings of the Program and called for improvements to further accelerate the process of cooperation and integration. Rather then pursuing a long list of projects and issues on the GMS agenda, he suggested to focus on two or three high impact, mutually beneficial projects in each sector that will yield concrete results. For the East-West Corridor, he urged the GMS countries to consider special trade and investment policies to enhance the competitiveness of the area, undertake human resources development at the enterprise level, and strengthen the technological base. Improvements in macroeconomic management are also essential for productivity, technology, and human resources development. To encourage long-term private sector investments in the GMS, a special financing facility should be established that would combine public and private sector funds, with ADB providing the lead role in the financial consortium. He stressed the importance of strengthening national capacities for subregional cooperation as the GMS Program moves into a more complex and mature stage.

H.E. Mr. Tran Xuan Gia, Minister, Ministry of Planning and Investment, Socialist Republic of Viet Nam, recalled that since the Eighth Ministerial Conference, Viet Nam has gradually recovered from the impact of the economic crisis and has now started to regain its momentum. Implementation of priority subregional projects involving Viet Nam continue to make progress, thus building confidence in the future of subregional cooperation. He expressed the hope that the development of the East West Corridor will help the plight of poor communities located along the route on the Vietnamese portion. The West-East Corridor under the Hanoi Plan of Action is a complementary initiative that will help improve the socioeconomic conditions of the people. Presently, several investment projects are underway along the Corridor, funded from both domestic and foreign sources, and bilateral and multilateral donors. He underscored the need for closer coordination between the Government and various funding sources to ensure complementarity of investments. He expressed the hope that the GMS program would continue to play an important role in contributing to the overall prosperity of the region.

Session II: Taking Stock and Preparing for the New Millennium

The Report of the SOM presented by Mr. Iwasaki, ADB, included the following: (i) the progress made, recommendations, and suggestions in all eight priority sectors of the Program since the Eighth Conference on Subregional Economic Cooperation (the Eighth Conference); (ii) strategic thrusts of the GMS Program, namely, economic corridors, opening borders, institutional strengthening and capacity building, integrated planning, resource mobilization, and donor coordination; and (iii) the GMS Indicative Work Program for 2000-2002. The Report of the SOM is attached as Appendix 3.

The Conference endorsed the Report of the SOM. As recommended, the Conference agreed to adopt the records of discussion of all the meetings of the GMS Forums and Working Groups that have been held since the Eighth Ministerial Meeting. The Conference expressed support to the recommendations contained in the Report of the SOM.

Mr. Toru Tatara, ADB, presented the milestones of the GMS Program since its inception in 1992. During the pre-crisis period (1992-1997) of the Program, a pragmatic approach was adopted that was considered activity-based and results-oriented focusing on basic infrastructure. The Program was premised on the assumption that external financing is available for subregional projects, including those from the private sector. The Program did not endeavor to form a trade block, and subregional activities can proceed even if not all six GMS countries are involved.

The post-crisis period starting in 1997 brought about significant changes in the Program. The key assumptions being considered are that there are tighter financial flows to emerging economies and that investors are more cautious due to perception of high risk in the region, in general. Given this, the Program requires careful strategic planning, necessitating prioritization and sequencing of activities. The Asian financial crisis has prompted the GMS Governments to make a strategic refocus, through, for example, the adoption of the economic corridor concept that aims to further develop the GMS through a cross-country initiative. Mr. Tatara highlighted the importance of resource mobilization, from both public and private sources, to support the ever-increasing needs of the Subregion.

Mr. Filologo Pante, Jr., ADB, provided a prospective overview of the GMS Program focusing on future strategic issues and challenges. There are two broad challenges facing the GMS Program, namely, the need to accelerate the momentum of subregional cooperation, and the need to sustain cooperation over the longer term. On accelerating momentum, the Eighth Conference agreed on a four-pronged strategy: (i) advancing implementation; (ii) focusing on regulatory or "soft" aspects of cooperation; (iii) developing economic corridors; and (iv) targeted resource mobilization. In relation to "soft" aspects, the opening of borders within the GMS has been an important strategic thrust of the Program. In this regard, Mr. Pante underscored the need for the Conference to adopt a timetable as regards the finalization, signing, and implementation of a GMS-wide framework agreement governing the movement of goods and people across borders. Related to this, there is also a need to facilitate the signing and implementation of the quadripartite agreement among the PRC, Lao PDR, Myanmar, and Thailand on commercial navigation in the Upper Mekong/Lancang River.

On sustaining cooperation, Mr. Pante identified three key activities that the Program should focus on, namely: (i) strengthening institutional arrangements for subregional cooperation; (ii) national capacity building for subregional cooperation; and (iii) preparing a medium-term GMS Strategic Framework that incorporates a vision for subregional cooperation for the long-term. Given the increasing complexity and expanding activities of the GMS Program, there is a need to strengthen the present institutional mechanisms for coordinating the Program to become more effective. In building national capacity for subregional cooperation, possible areas to focus on include: (i) coordination/monitoring of subregional projects and activities; (ii) integration of national and subregional priorities and/or projects; (iii) evaluation of subregional projects; and (iv) conduct of broad-based consultations, including with other stakeholders of the GMS Program. In preparing a GMS Strategic Framework, it is important that the GMS Program is linked to the ongoing process of economic restructuring in the six countries, as well as to sustained growth that would lead to poverty reduction. The Framework should also address the following key issues: (i) mobilizing technical and financial resources; (ii) integrating subregional cooperation with national development priorities; (iii) coordinating the GMS Program with other initiatives such as ASEAN and APEC; and (iv) determining priorities among subregional projects. In mobilizing public sector resources, there is need to strengthen collaboration among donor agencies. To mobilize private sector investment/financing, the GMS Program needs to: (i) ensure that countries continue to provide and improve their respective domestic investment environment; (ii) explore the establishment of a subregional financing facility; and (iii) convene, as soon as possible, the GMS Business Forum.

The Conference noted the presentations of Mr. Tatara and Mr. Pante. The Conference presented the following views, comments, and suggestions: (i) to sustain its credibility and recognizing the difficult circumstances facing the GMS, the Program should focus on projects that would bring the greatest impact to the Subregion; (ii) the roles and responsibilities of agencies involved in the GMS National Coordinating Committees in each country should be further clarified and delineated to better translate principles into action; (iii) given the importance of private sector participation in the GMS Program, it is important to activate the GMS Business Forum to serve as a venue to inform the private sector of the needs of the GMS and to serve as a mechanism where public-private partnerships could evolve; (iv) regional programs for each country should be harmonized with national programs and donor assistance should be well coordinated to enhance complementarity of development efforts; (v) PRC, Lao PDR, and Thailand are working on expediting the North-South Corridor, i.e., the Chiang Rai-Kunming Road Project via Lao PDR; and (vi) water transport development, e.g., the Upper Lancang/Mekong River Commercial Navigation Improvement, should be given due attention, in addition to road transport.

Session III: Strategic Thrusts of the GMS Program

Development of the East-West Economic Corridor

The Session on "Development of the East-West Economic Corridor" was co-chaired by Mr. Math Sounmala, Permanent Secretary, Ministry of Communications, Transport, Posts, and Construction, Lao PDR. A presentation on this topic was made by Mr. Myo Thant, Senior Programs Officer, Division 3, Programs Department (West), ADB. Mr. Nihal Amerasinghe, Deputy Director, Programs Department (West), ADB served as Lead Discussant for the ensuing ministerial roundtable discussion.

Economic corridors combine improvements in infrastructure with other investments that facilitate and encourage production and trade flows. The development framework for an economic corridor takes into account intersectoral linkages, particularly with cross-cutting issues of poverty reduction and environmental protection. Mr. Myo Thant, ADB, reported on progress to date regarding the ADB-supported preinvestment study on the East-West Economic Corridor. He indicated the components of the economic corridor including: (i) the spatial dimensions, (ii) the required infrastructure, (iii) the industrial estates or towns/cities involved, and (iv) the policies, regulations, and agreements needed to foster economic activity in the designated corridor -- which involves some of the poorest parts of the GMS.

The Conference noted the presentation of Mr. Myo Thant. The Conference presented the following views, comments, and suggestions: (i) a feasibility study on urban development should be included in the East-West Economic Corridor Project; (ii) the Project must be comprehensive to cover all potential activities within the contiguous area to spur development; (iii) the design of the Project should consider, and possibly integrate, the results/findings of other relevant studies and programs; (iv) integration of the East-West and North-South Corridors should be explored; and (v) in order to adopt an integrated approach to regional cooperation, major corridors should be complemented by small towns' corridors.

Mr. Nihal Amerasinghe, ADB, Lead Discussant for this Session, explained that the East-West Economic Corridor is a "trailblazer" initiative of the GMS Program. As the GMS Program rogressed from preparation to implementation stage, the Corridor concept has expanded from a purely transportation initiative to one that included economic activities that enable member countries to maximize opportunities through regional cooperation. Since the private sector is expected to serve as an engine of growth in the Corridor, the legal framework would be critical, together with the necessary customs and tariff structures. While ongoing efforts are focused on infrastructure development for the Corridor, the promotion of an enabling environment for private sector participation should also be given due attention.

Opening Borders for Free Movement of Goods and People

The Session on "Opening the Border for Free Movement of Goods and People" was co-chaired by H.E. Brig. Gen. David Abel, Minister, Office of the Minister of the State Peace and Development Council, Myanmar. Mr. Thomas F. Jones, Senior Project Economist, Transport and Communications Division, ADB, gave the presentation on the GMS program for the opening of borders and promoting integration of markets in the subregion. Mr. Preben Nielsen, Deputy Director, Infrastructure, Energy, and Financial Sectors Department (West), ADB, served as Lead Discussant for the ensuing ministerial roundtable discussion.

In his presentation, Mr. Jones noted the means by which the GMS Program promotes closer economic ties and economic cooperation among the GMS countries, and these are: (i) encouraging trade and investment among the GMS countries; (ii) realizing or enhancing development opportunities; (iii) resolving or mitigating cross-border problems; and (iv) meeting common resource and policy needs. He then discussed the progress made to date in facilitating cross-border traffic and enumerated the milestones achieved in this area. Among the most significant are as follows:

1. In 1996, ADB funded a TA on Mitigation of Non-Physical Barriers to Cross Border Movement of Goods and People to identify the extent of cross-border movement restrictions and recommend approaches to overcome them.
2. The Third Meeting of the Subregional Transport Forum recommended that a Framework Agreement for GMS be crafted.
3. A regional TA was approved by ADB in 1997 to craft this Framework Agreement; this was completed November 1998, and was discussed by three countries (Lao PDR, Thailand, and Viet Nam) in December 1998 in Bangkok, in which 40 out of 44 articles were agreed on.
4. The remaining four articles were clarified/ negotiated in succeeding months, culminating in the signing of the Trilateral Agreement by the Transport Ministers of the three countries in Vientiane last 26 November 1999.

In July 1999, ADB approved a TA to help with the preparation of bilateral, multilateral, and GMS-wide framework agreements. The TA will also help in the preparation of Annexes and Protocols for the existing bilateral agreement between Cambodia and Viet Nam, and the existing trilateral agreement among Lao PDR, Thailand, and Viet Nam. This work is expected to be largely completed over the next two years.

The Conference noted the presentation of Mr. Jones. In the ensuing ministerial roundtable discussion, the Ministers agreed that opening of borders will enhance economic cooperation. They noted that while the preparation and development of the Protocols and Annexes are confronted with vast challenges, these could bring opportunities and benefits through enhanced development potentials in the region. The Ministers also praised the report and affirmed their support for the cross-border initiative. It was noted that there would be unified agreements on the transit of goods and people.

Mr. Preben Nielsen, ADB, Lead Discussant, emphasized the equal importance of opening borders and adoption of cross-border agreements. He also stressed the importance of customs procedures and harmonized cross-border arrangements to maximize the potential of regional cooperation.

Strategic Environment Framework

The Session on the "Environmental Strategic Framework" was co-chaired by H.E. Mok Mareth, Minister, Ministry of Environment, Cambodia. Mr. Robert J. Dobias, Senior Environment Specialist, ADB, and Mr. Kirk Talbott, Senior Expert, Conservation International, gave presentations on the strategic environmental framework (SEF) for the GMS. Mr. Warren Evans, Manager, Environment Division, Office of the Environment and Social Development, ADB served as Lead Discussant for the ensuing ministerial roundtable discussion.

In their presentation, Mr. Dobias and Mr. Talbott underscored the importance of early integration of environmental considerations in development planning. They mentioned the need to support and widely apply economic cum environmental planning methods being developed under the ADB-funded regional technical assistance to formulate the SEF in order to avoid increased project costs and ecological damage. The conduct of economic cum environmental planning studies for the planned economic corridors, and the further development and application of cumulative environmental assessment were recommended. They pointed to the problems faced in attaining sustainable development in the GMS. The "hotspots" approach within the SEF, as well as potential "hotspots" in the GMS were presented. A "hotspot" is defined as a relatively functioning ecosystem that is potentially threatened by development activities. Together with the identification of the "hotspots", an analysis will be conducted of the key issues, and management approaches for developing technical, policy, and institutional recommendations for the "hotspots" within the SEF.

The Conference noted the reports of Mr. Dobias and Mr. Talbott. In the ensuing roundtable discussions, the following views, comments and suggestions on the presentations were made: (i) there is support for incorporating environment considerations in development planning; (ii) GMS governments should face up to the challenge of pursuing development without compromising the environment; (iii) assistance is needed for studying ways to protect the Mekong river; (iv) the protection of critical wetlands is important; and (v) funding should be allocated for information collection, archiving, and maintenance.

Poverty Reduction and the Role of Regional Cooperation

The session on "Poverty Reduction and the Role of Regional Cooperation" was co-chaired by H.E. Tran Xuan Gia, Minister, Ministry of Planning and Investment, Viet Nam. Mr. Clifford Brent Dark, Senior Programs Officer, Programs Department (West), Division 3, gave the presentation on the poverty reduction strategy and the role of regional cooperation in poverty reduction. Mr. Yoshihiro Iwasaki, Director, Programs Department (West), ADB, served as Lead Discussant for the ensuing ministerial roundtable discussion.

In his presentation, Mr. Dark reported on ADB's Poverty Reduction Strategy to reduce extreme poverty in the region. He explained that this overarching objective of ADB has entailed a radical shift in policy. The three pillars of this new policy strategy are: (i) pro-poor sustainable economic growth, where regional cooperation is an important aspect and where there is a need to enhance poverty intervention for rural development; (ii) social development, which includes activities to enhance health and nutrition services, improving the status of women, and social protection; and (iii) good governance through decentralization and wider community and stakeholder participation. He noted that ADB will take on a more country-focused approach, working closely with governments and stakeholders to succeed in the implementation of the strategy. In relation to the GMS Program, Mr. Dark outlined the potential initiatives that could be undertaken within the purview of the Program. These are: (i) to profile the problem; (ii) to extend subregional infrastructure projects to reach acutely poor areas; (iii) to extend subregional HRD, tourism, and environmental projects to reach extreme poverty areas; and (iv) to reinforce the economic recovery momentum. For ADB's part, the design for every ADB-assisted project for the GMS shall consider the poverty reduction objective.

The Conference noted the presentation of Mr. Dark. The Ministers agreed that poverty is indeed a pressing issue in the GMS, and affirmed their commitment to combating poverty. While commending ADB for stressing the poverty issue in the GMS Program, the Ministers noted that the GMS countries and the ADB could cooperate further in emphasizing the human development component of projects and realign project structures to effectively address the poverty problem.

Mr. Iwasaki, ADB, Lead Discussant for the Session, observed that social development gains in the region continue be fragile, deteriorating within 18 months since the crisis started in 1997. He noted the important linkage between social dimensions and structural reforms in addressing poverty issues, citing evidence that financial sector reforms can have significant impact on the poor. The benefits of globalization can only be meaningful if adverse social consequences are mitigated. Mr. Iwasaki further underscored the importance of stable economic growth, and enjoined the GMS countries to enhance their respective economies' readiness in dealing with internal and external shocks. He endorsed the best practice aproach in addressing social issues, particularly regarding poverty programs, to ensure that the adverse social effects of shocks are avoided. He noted that subregional cooperation efforts could effectively cushion the adverse effects of globalization. He encouraged GMS countries to meet regularly to discuss the human development, income distribution, poverty reduction and environmental implications of their development programs.

Session IV: Views from Partners

The Session on "Views from Partners" was co-chaired by H.E. Jin Liqun, Vice Minister, Ministry of Finance, PRC. The following paragraphs summarize the statements of the representatives of various donor agencies and international organization who spoke during this session.

Association of Southeast Asian Nations (ASEAN) Secretariat

Mr. Honorio R. Vitasa, Assistant Director, Infrastructure and Tourism Unit, ASEAN, noted that ASEAN is an interested party in the GMS Program, and that ASEAN has similar priority concerns. The Program is an important building block that could effectively hasten ASEAN's economic integration. Sectoral initiatives under the Program enjoy high-level commitment from the participating countries. ASEAN is addressing common concerns in the transport facilitation of goods, the build-up of a regional highway, rail and information infrastructure networks, the promotion of electric power trade and interconnection, strengthening of ASEAN tourism promotion and investment, and the West-East Corridor development initiative. He reaffirmed ASEAN's readiness to cooperate with ADB in pursuing mutually beneficial programs by, among others, regularly touching base with the GMS Unit and sharing technical information and experience as well as intensifying coordination at the program or project levels.

Belgium

Mr. Meyers Theo, Trade Counselor of the Belgian Embassy in Manila reported that Belgium's relationship with countries in the region is purely on a bilateral basis. He cited that among the four priority countries in Asia, three are in the GMS, i.e., Cambodia, Lao PDR and Viet Nam. Belgium's assistance, consisting of grants, is focused on the soft sectors – health, education, water supply and sanitation, food security, human resource development, gender and environment. He reported that Belgium has three partners in the region – the MRC, ADB and the ASEAN. For ADB, Belgium TA funds are concentrated for assistance in priority sectors to Cambodia, Lao PDR and Viet Nam.

International Finance Corporation - Foreign Investment Advisory Service (FIAS)

Mr. Andrew Proctor, Regional Program Manager, FIAS, expressed his appreciation for having been invited to attend as an observer to the Conference. He reported that FIAS is part of the World Bank; it is a joint facility of the International Finance Corporation and the World Bank. FIAS co-sponsored the Inception Meeting of the Subregional Investment Working Group (SIWG) in December 1995. As a co-sponsor of the Inception Meeting, FIAS has remained an interested supporter in the four years since that meeting. FIAS was pleased to note the outcome of the Second Meeting of the SIWG, in particular, the well-specified action plan and a resolve to implement it. FIAS looks forward to an active role in assisting with the implementation of the SIWG action plan.

Japan

Mr. Mamoru Umemoto, Director, Development Finance Division, International Bureau, Ministry of Finance, Japan, underscored the importance accorded by the Government of Japan to the GMS. The Japanese Government has established a special interest rate system to promote infrastructure projects in the region involving more than two countries. An example of this is the Second Mekong International Bridge Project, for which the Japanese Government has provided yen loans. In addition, the Japanese Government is cooperating in the development of the East-West Corridor, which is considered one of the Subregion's flagship project. He expressed the Japanese Government's willingness to continue providing assistance to the GMS and expressed the hope that ADB could enhance its leadership role in the GMS Program.

Mr. Hidehiro Yokoo, representative of the AMEICC Secretariat, Japan Overseas Development Corporation, Bangkok, explained the history of AMEICC and presented its activities in the subregion. Ongoing activities include: (i) Third Country Training Program, under which ASEAN and the Government of Japan cooperate to train people from new ASEAN member countries using the facilities and resources provided by the Association of Technical Scholarship of Japan; (ii) comprehensive cooperation for policy planning of SMEs/Sis promotion and their effective implementation in ASEAN countries through, among other things, supporting the establishment of the SMEs evaluation system and strengthening the function of SMEs' financial institutions and organizations; and (iii) establishment of the Working Group on the West-East Corridor Development whose work program focuses on soft infrastructure development.

Mekong River Commission

Mr. Joern Kristensen, Chief Executive Officer, Mekong River Commission (MRC) Secretariat presented the activities of the MRC. He noted that the implementation of the Water Utilization Program (WUP) is considered to be the highest priority of the MRC in the coming years, as announced during the MRC Council Meeting in 1999. WUP is conceived a long-term program with the aim to develop, implement and maintain the rules for water utilization and Inter Basin diversification between the four member countries of the MRC. The two upper riparian countries, the People's Republic of China and Myanmar would be invited to participate. He encouraged the formulation of policy guidelines through a technical assistance for providing access to relevant databases among agencies concerned with the GMS. He shared his view of transforming the MRC into a center of knowledge and expertise to assist with the coordination of development of the water and related resources in the Mekong River Basin. To this end, he underscored the need to improve planning and coordination and constant dialogue among concerned agencies.

United Nations Agencies

Ms. Ricarda Rieger, Deputy Resident Representative, UNDP Manila, reported that the UN, for decades now, has consistently worked toward poverty eradication through programs on the soft sectors like the environment, gender and HIV/AIDS. She encouraged the use of UNDP's Human Development Report, which is produced annually, as a reference for related studies. She reported on UNDP's linkage with the MRC and its predecessors through technical assistance and other operational activities in the region. She expressed UNDP's readiness to cooperate with other agencies.

Mr. Ravi Ratnayake, Chief, Trade Policy Section, International Trade and Economic Cooperation Division, UN ESCAP, reported on ESCAP's activities in the GMS. These include: (i) organization of a subregional seminar on "Promoting Women in Small Businesses" held in Ho Chi Minh City, Viet Nam in October 1998; (ii) cooperation with ADB in the implementation of the regional technical assistance to the GMS for the mitigation of nonphysical barriers to cross-border movement of goods and people; and (iii) conduct of a Training Workshop on Interpretation and Analysis of Demographic Data on Gender Dimensions of Population and Development. In the area of trade and investment and private sector development, ESCAP, in close coordination with ADB and other donor agencies has been working under three different networks, namely: (i) the Forum for the Comprehensive Development of Indochina, (ii) the Advisory Assistance to Industry and Export Promotion, and (iii) the GMS Trade Facilitation Working Group. Under these initiatives, ESCAP has formulated a comprehensive approach to business sector development in the GMS, which is called the Hi-Fi Plan (Hhuman resource development, Institutional capacity building, Facilitation measures, and Investment promotion). ESCAP will continue to provide assistance to the GMS countries in implementing the project ideas endorsed by the Trade Facilitation Working Group, particularly in developing a project on human resource development and capacity building in the area of trade facilitation.

Mr. Hideo Nakanashi of UNIDO, Investment and Technology Promotion Office (ITPO) in Tokyo, Japan, reported that UNIDO is extensively involved in industrial programs and has recently refocused its direction to a new scheme called the New Business Plan. The Plan is an integrated program to support industrialization in UNIDO member countries. UNIDO has launched 30 country programs, but only two are in the GMS, i.e., Thailand and Lao PDR. He reported that the first regional office of UNIDO to be located in Bangkok, Thailand, will be opened soon. The establishment of the regional office is aimed at better coordinating the needs and activities of UNIDO at the regional level. UNIDO is hopeful that it could formulate a regional program to support regional concerns and to cooperate with the industries in the region.

Response from Co-Chairperson

H.E. Mr. Jin Liqun, PRC, Co-Chairperson of this Session noted that Asia is a fast developing region. Being densely populated, the region attaches great importance to poverty reduction alongside economic development. He noted that the GMS Program has provided impetus to development in the region. Because of its immense externalities, the GMS Program could serve as a model for regional cooperation. The observers are not just observers in the real world and the Governments are not just recipients of contributions; both should work toward the achievement of a better quality of life in the region.

Consideration and Adoption of the Joint Ministerial Statement

The Conference reviewed the joint ministerial statement entitled, "Conference Ministerial Statement: Opening Borders and Working Together." The adopted statement is attached as Appendix 4.

Closing Session

H.E. Brig. Gen. David Abel, Head of Myanmar Delegation, delivered the closing remarks on behalf of the six country delegations. He noted that the theme of the Conference -- Opening Borders -- was appropriate and highly appreciated by the participants. He expressed satisfaction that the meeting was conducted in a most transparent manner and with open-minded spirit. He expressed confidence that if the GMS program continues to be packaged well, it could contribute to a general improvement in the quality of life in the region. He also expressed the hope that with the focused discussion that has just transpired at the Ministerial Conference, the GMS Program could successfully move ahead. He acknowledged the efforts of the member Governments, the observers, and ADB staff for making the conference a fruitful one.

In his Closing Statement, Mr. Myoung-Ho Shin, ADB, expressed great appreciation and honor for hosting a most successful Conference. He emphasized four major points that could greatly facilitate further success of the GMS program: (i) the opening of borders would bring about more progress, and the GMS Governments must commit to accelerate cooperation in this area; (ii) there is a need to accelerate improvement of institutional arrangements at the national and subregional levels in order to reinforce the support to regional cooperation; (iii) private sector participation must be enhanced as it is an effective partner in regional endeavors; and (iv) all stakeholders should collaborate to make the GMS Program more effective.