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Cooperation Works
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It has taken little more than a decade for the countries of the Greater Mekong Subregion (GMS)—Cambodia, People’s Republic of China (PRC), Lao People’s Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam—to share the benefits of better connectivity, more competitive economies, and a greater sense of community.
The GMS is now one of the world’s fastest growing subregions. Progress is reflected in an increase in average gross domestic product (GDP) per capita from about $630 in 1992 to about $900 in 2003 and despite the Asian financial crisis, an annual average increase of 3.5% in GDP per capita.
Nevertheless, the GMS Economic Cooperation Program—an initiative established in 1992 with the support of the Asian Development Bank (ADB) to promote closer economic ties and cooperation among countries sharing the Mekong River—continues to be a work in progress, moving forward in the face of significant challenges.
There are still more than 52 million poor people living in the subregion. The GMS Program emphasizes the “three Cs”—connectivity, competitiveness, and community—to reach out to the poor in the subregion and help them improve their quality of life.
The GMS Program represents a major undertaking in a subregion rich in natural and human resources. The 2.6 million square kilometers of the GMS are home to more than 309 million people. Geographically, the GMS forms a “land bridge” in the heart of Asia, essentially linking East Asia to Southeast Asia; it also has the potential to forge links with South Asia in the west.
The GMS Program is pragmatic in its approach to regional cooperation, focusing on activities and results rather than on rules. It recognizes that each activity cumulatively contributes to the goals of regional cooperation and development. It approaches this through nine priority sectors: transport, telecoms, energy, environment, tourism, trade facilitation, investment, human resource development, and agriculture.
Before regional cooperation could be carried out comprehensively, it was first necessary to build basic trust and confidence among the countries. Thus, the GMS Program started with the objective of having these countries sit down together to discuss shared development constraints and opportunities and leave behind years of internal and external conflict. During that time, ADB mostly provided a platform for regional dialogue and consultation. To date, perhaps the most significant result of regional cooperation is what has been referred to as the “peace dividend”—the stability, peace, and security based on mutual trust and goodwill created by the countries increasingly working together.
The program’s underpinning strategy is to link the countries in the region through infrastructure improvements, overcoming domestic market constraints, and promoting trade and investment. Parallel to this, it aims to develop the necessary “software”—easing rules and processes, building capacity and institutions.
Further, to ensure that its gains are sustainable, efforts are being made to spread the benefits widely, bring stakeholders on board, and minimize the potentially negative social and environmental side effects of growth. This is encapsulated as a succinct articulation of the GMS strategy of connectivity, competitiveness, and community.
Greater connectivity and improved competitiveness through lower trade and nontrade barriers are seen to move the region toward eventually becoming a true economic community. At the same time, efficiency gains resulting from a large and more integrated market, as well as efficiencies in production, will further improve competitiveness.
The GMS Program includes numerous flagship initiatives. Among the most important are the development of three economic corridors that link the subregion: the East-West Economic Corridor (EWEC), the North-South Economic Corridor, and the Southern Economic Corridor. These corridors have been planned around major transport infrastructures that are expected to generate wide-ranging benefits, such as increased trade, investment, and tourism activities.
The EWEC is the most advanced of these corridors. When completed, it will be a 1,500-kilometer artery from Da Nang Port in Viet Nam to the Andaman Sea in the west. Some sectors expected to receive a large boost are agro-industry, light manufacturing, trade, and tourism. In this regard, 50 foreign companies have already invested in the special economic zone located on the Lao PDR-Viet Nam border in the EWEC.
One of the more striking aspects of the “corridor” concept is that its success closely depends on the accompanying “software.” In addition to improving infrastructure, the GMS Program supports policy reform, capacity development, and institutional strengthening. The resulting policy and regulatory agreements play a major role in the success of the program, as epitomized by the Cross-Border Transport Agreement that facilitates the flow of people and goods throughout the subregion. Similarly, the “software” for the power sector includes the Intergovernmental Agreement on Power Interconnection and Trade and the associated Regional Power Trade Operating Agreement.
By 2012, the all-weather roads are expected to allow smooth and efficient travel along the north-south and east-west axes of the subregion. Interconnected power transmission lines will provide increased flexibility and reliability of electricity supply throughout much of the subregion. These actions are expected to bring about accelerated economic growth and a very strong impetus in efforts to reduce poverty for all GMS countries.
The GMS would not have enjoyed the success it has had without engaging in diverse and mutually beneficial partnerships. Since the GMS initiative was launched in 1992, the Government of Japan has been a strong partner of ADB, providing the program with significant support.
Important cofinancing arrangements have also been made with the governments of France, New Zealand, and Sweden. In addition, the GMS Program has also entered into valued partnerships with the United Nations Economic and Social Commission for Asia and the Pacific, World Bank, Mekong River Commission, and World Wide Fund for Nature.
ADB is collaborating with the Food and Agriculture Organization of the United Nations to provide technical assistance to combat the spread of cross-border animal diseases.
At their first summit in 2002, the GMS leaders acknowledged the need for a pool of highly competent and qualified middleand senior-level planners and managers to steer economic and social development. The resulting Phnom Penh Plan for Development Management was launched in October 2002 with ADB assistance. Since then, it has provided high-level training for hundreds of GMS officials.
The GMS is about partnerships, and the private sector has increasingly become an important partner that provides the growing intellectual support and financial resources required for the development of the Mekong Subregion. Consulting and involving the private sector in the GMS has become a standard practice.
In 2004, the Mekong Development Forum in Paris in June, a public-private partnership consultation meeting in Bangkok in September, and the 13th GMS Ministerial Meeting in Vientiane in December served to stimulate the involvement of the private sector in the GMS.
“GMS countries are keenly aware and determined to achieve results on the ground that are both effective and sustainable“
- Rajat M. Nag
Director General, ADB Mekong Department
The results-oriented approach of the GMS Program emphasizes the provision of essential infrastructure in the context of social development and environmental sustainability. As ADB’s Mekong Department’s Director General Rajat M. Nag says, “GMS countries are keenly aware and determined to achieve results on the ground that are both effective and sustainable.”
The next GMS Summit of Leaders, to be held in Kunming, PRC, in July 2005, will be an important opportunity to further deepen partnerships and cooperation among the six GMS countries.
“The success and the high-level collaboration in the GMS have shown the region—and the world—how a resultsfocused approach to subregional cooperation can yield benefits well beyond what could have been achieved by individual country efforts,” says Mr. Nag.
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