Catalog

Connecting People Coast to Coast

A thousand-mile road will link ancient civilizations and promote subregional economic cooperation

By Myo Thant(mthant@adb.org)
Senior Regional Cooperation Economist-GMS

The concept of the economic corridor, with its focus on combining economic activities with geographic space, is a key means of facilitating regional cooperation in the Greater Mekong Subregion - GMS. The concept was first discussed at the Eighth GMS Ministerial Meeting held in Manila in late 1998, during which the assembled ministers chose the East-West Economic Corridor as the initial one to implement.

The Preinvestment Study for the GMS East-West Economic Corridor, which was initiated in early 2000 and completed in early 2001, provides the framework for cooperation on an East-West Economic Corridor land route that stretches for nearly a thousand miles across Myanmar, Thailand, Lao People’s Democratic Republic (Lao PDR), and Viet Nam, between Mawlamyine on the Andaman Sea in Myanmar to Da Nang on the South China Sea in Viet Nam.

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It is the only land route that traverses mainland Southeast Asia on an east-west axis and connects important secondary cities such as Phitsanulok, Khon Kaen, Savannakhet, and Hue as well as Mawlamyine and Da Nang. When combined with ongoing improvements in transport systems on more orthodox north-south alignments, the Corridor provides the potential for bringing in major changes to the subregion.

The six-volume study analyzes five major sectors and identifies more than 70 key projects, policies, and initiatives that are needed to develop the Corridor. These initiatives, which have been agreed upon by the governments of the four countries, resulted from several rounds of fact-findingtrips and workshops. The study notes that when the major transport infrastructure projects that are currently being implemented are largely completed by 2005, the Corridor will play a major role in integrating the GMS countries economically as well as physically. Key infrastructure improvement projects, which are being implemented by various multilateral and bilateral funding agencies, include a second bridge across the Mekong, the improvement of Route 9 in Lao PDR, and the construction of the Hai Van Tunnel on the road between Hue and Da Nang.

The major benefits that can be expected include increased flows of trade and investment, development of secondary cities, regional development of remote border areas, poverty reduction, and more efficient use of economic space, including improved access of inner parts of countries to sea ports.

The Corridor will enable the exploitation of economic complementarities that exist between neighboring countries. In addition to differences in access to natural resources and land, countries have different labor cost structures and access to capital and technology, all of which create the basis for cooperation. Cooperation in agro- industry, from which most people in the subregion derive their employment, will increase through improved processing and trade as well as cultivation of new crops and varieties.

The study notes that the potential for agro-industrial development is extremely high in Myanmar. Industrial activity will be promoted particularly at industrial estates in border areas such as at Mukdahan-Savannakhet, where a new bridge over the Mekong River will be completed in five years. The tourism industry is also likely to play a key role in developing the Corridor given the many major tourism sites yet to be exploited, particularly in the Mawlamyine and Da Nang areas, which have been continuously settled for many centuries and have a rich culture and history. Tourism is also promising, given the relative proximity of the Corridor to existing major tourism destinations such as Bangkok.

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The study notes that the development of the Corridor is a long-term endeavor that will require actions from the participating governments, individually as well as collectively. Increased economic activity can take place only through adopting policies and programs that will reduce the administrative costs of doing business and reduce risk and uncertainty for private investors. As such, the study advocates improving collection and dissemination of trade statistics, and promoting investment opportunities and closer linkages with the private sector, particularly through the GMS Business Forum, which was established in late 2000.

Infrastructure improvement is also needed to provide the physical sinews of the Corridor, and it must be maintained and developed for the Corridor to be sustainable. The infrastructure on the western part of the Corridor particularly requires massive improvement.

Equitable distribution of costs and benefits, which is critical to the long-term development of the Corridor, can only be attained by involving the local people and developing appropriate institutions. The study notes the possibility of establishing in the long run a Corridor Development Commission composed of central and local government officials, private sector represen- tatives, and other stakeholders from all four countries. The task of the Commission would be to ensure sustainable development of the Corridor and serve as a venue for monitoring activities and resolving disputes.

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