Greater Mekong Subregion Economic Cooperation Program
Opening Statement by
Liqun Jin
Vice-President (Operations 1)
Asian Development Bank
12th Ministerial Conference
19 September 2003
Dali City, Yunnan Province, People's Republic of China
His Excellency, Mr. Tang Jiaxuan,
His Excellency, Minister Renqing Jin
Your Excellencies, Ministers from the GMS Countries
Distinguished Delegates
Ladies and Gentlemen
It is indeed an honor to be with you today and to address the 12th Ministerial Conference of the Greater Mekong Subregion Economic Cooperation Program. On behalf of the Asian Development Bank, I wish to express my sincere thanks to the People's Republic of China for hosting this event in this beautiful city of Dali. I wish to thank especially, H.E. Minister Renqing Jin, the Minister of Finance of the People's Republic of China, and H.E. Rongkai Xu, the Governor of Yunnan Province for graciously welcoming us to this 12th Ministerial Conference. Thank you, Your Excellencies, and thank you for the very special arrangements and warm hospitality extended to all of us.
Your Excellency State Councilor Tang, I would like to take this opportunity to express my special appreciation to you for your guidance and support to the GMS. We have been greatly encouraged by the GMS' accelerated momentum during your term of service as Foreign Minister. This reflects your personal attention to this Program.
Your Excellency Minister Jin, in this age of information people do not need to dig deep into records to find out that you started your most brilliant career right in this area more than three decades ago. You have left an indelible mark in the development of Yunnan Province as you moved up all the way to the position of Deputy Governor. While we are honored to share the hospitality extended to you by the local people, we would like to seek your guidance on poverty reduction, and economic and social development of GMS countries as well as the Asia and Pacific region. By 2005, ADB would have provided nearly $1.0 billion to support development in Yunnan Province.
I would appreciate the strong support from Governor Xu, Yunnan for the ever enhanced cooperation between Yunnan Province and the GMS members, and look forward to seeing closer cooperation in the years ahead. You have paid great attention to investment in education, environment, infrastructure development and all the other essentials for sustainable development in this province. We would like you to share your experience with us all.
I also wish to thank the Ministers and Senior Officials of the GMS countries for their presence in this important meeting. We are delighted that a series of ministerial meetings paved the way for the first GMS Summit of Leaders in Phnom Penh, Cambodia in November 2002. At that historic Summit, the GMS Leaders articulated their shared vision of prosperity, equity and dynamism for the region. As the first major event following the Summit, this ministerial meeting provides us with an opportunity to further digest the theme of that Summit, and to continue working hard towards the achievement of this vision.
It is a special honor for me to represent ADB at this important event, barely eight weeks into my position as Vice President of ADB. It is with the greatest of pleasure that I have been involved in GMS program over the last five years or so, and I am very pleased to have the opportunity to continue my association with the GMS program. My perspective needs to change a bit to reflect my new responsibility. But my commitment will never change. I will continue to work with the governments and all other development partners of the GMS countries to bring prosperity to the Mekong region.
- The GMS in Asia's Economic Geography
The international environment faced by GMS countries is markedly different from what it was eleven years ago when the GMS Program was launched. In today's world, challenges abound. On the other hand, more opportunities are coming our way. Building upon their unprecedented transformation over the last three decades, many Asian countries now enjoy a dramatic expansion in trade and capital flows. As for GMS countries, the move to market-based economy has allowed them to take advantage of, and contribute to this transformation. Their productivity has increased, and their products have made to markets both inside and outside the region.
Improving favorable political and economic developments over the past eleven years have created the environment for forging closer economic cooperation among the Mekong countries. During this time, the GMS Program has played a catalytic role in helping the region realize its economic potential. The GMS is strategically located in the heart of Asia. It is a vital "land bridge" between the dynamic economies of East and Southeast Asia. And this "linking" role is reaching out more strongly west to the South Asia region.
With the full commitment of the GMS governments, much has been achieved under the GMS Program. Significant progress has been made in developing stronger transport links, undertaking coordinated approaches to telecommunications and energy investments, facilitating trade, promoting tourism, developing human resources, and promoting sustainable development. ADB shares the GMS countries' pride in these accomplishments.
- A Shared Vision
Excellencies,
The GMS Leaders have a shared vision of prosperity, equity and dynamism for the region. For the vision to become a reality, we need to accelerate our efforts to achieve connectivity, competitiveness and community.
Connectivity, spearheaded by the development of infrastructure linkages, has been broadened into economic corridors to better link infrastructure improvements with enhanced trade, investment and private sector development. If all subregional infrastructure initiatives in Mekong countries are implemented as scheduled, by 2007, all mainland Southeast Asian countries would be landlinked. In tandem with improvements in regional power and telecommunications connections, this enhancement in infrastructure will provide the platform for raising regional economic performance to a higher plane.
Since we are in Dali, I would like to use a specific example about how GMS is helping to improve connectivity. Dali is about half way along the Kunming-Myanmar Corridor, a GMS priority corridor. The ADB-financed Dali-Chuxiong Expressway is open to traffic and ADB will approve a $250 million loan for the Western Road Project within a month. A special feature of this project is the provision of $35 million in concessional cofinancing from AFD of France. We appreciate AFD's decision to expand its operational strategy to include Yunnan Province and Thailand because of their involvement in GMS. These road projects will lower transport costs of doing business in Dali.
All this is extremely encouraging. The rest of the world is, however, not standing still. The globalization process has resulted in a paradigm shift, to which the GMS countries will have to adapt. This new paradigm has defined competitiveness in terms of speed rather than scale, creativity rather than capital, intangible assets--knowledge to be precise--rather than tangible assets. To respond to this paradigm shift, focus on information technology, investment in human capital, and good governance are essential.
The GMS countries must leverage technological innovations to accelerate their progress in the value chain in key areas--agriculture, energy, the sciences, and communications technology. Efforts should be made to push ahead with investment in information and communication technology as a means to improve regional competitiveness. Information Communication Technology has brought about a fundamental change in conducting global trade and finance, and in this sense has made national boundaries less relevant, one way or another.
For countries that are still in the process of transition to market-based economy, the priority is to accelerate the completion of the reform process. Structural reforms in the areas of finance, trade, legal systems, and investment regimes will be critical for sustaining economic growth. Investment in human capital should continue. Good governance practices should be strictly observed to ensure that the Mekong subregion sustains its competitive edge and provides the best investment climate.
Regional competitiveness has a lot to do with the significant role of the private sector. But the private sector will have a hard time thriving without the support of a good public sector. There has been a prevalent belief in the public-private sector partnership. I am very pleased to note that, true to its title, yesterday's Development Partners Meeting engaged with the private sector. This arrangement was made at the request of the GMS Governments. This is a welcome initiative. And it should be set up as a norm that the private sector will be involved more closely in the GMS development process.
An economic community in Asia is not a far-fetched notion. Several cooperation schemes under the ASEAN framework such as AFTA and the ASEAN Investment Area are logical steps in this direction. The GMS should be prepared to eventually form a fully integrated market as it emerges in Asia and integrates itself into the global development process. So long as we work diligently to achieve connectivity and competitiveness, the region will be very well placed to play its part in such an economic community under a broader framework, should it materialize.
- The Challenges Ahead
To move the GMS Program forward, complex challenges need to be addressed by the GMS countries, individually and collectively. At this stage, we see four major challenges that need to be addressed.
First, economic growth must be sustained, both through domestic activity and regional cooperation. For economic growth to be sustainable, it must essentially be pro-poor. Unless development strategies become more responsive to and focused on poverty reduction, inequalities in incomes and opportunities will weaken economic, social and political gains in the region.
Second, there is a need to develop vibrant markets and a strong private sector. The private sector has a big role to play in driving economic growth in the subregion. The indigenous private sector should therefore be developed and strengthened to lay the foundations for competitiveness. Structural reforms and good governance are essential in creating the appropriate policy environment for private sector development and must continue to be an important priority in the GMS.
Third, it is imperative to do a good job in managing and nurturing the Mekong River's unique natural environment. The Mekong River is a force that unites the region. It provides drinking water, irrigation, food, and electricity. Sound management of this vital resource as well as other shared natural resources is an important pre-requisite for sustainable development.
Lastly, the need for resources remains acute. Multilateral development institutions still constitute the major source of financing for implementing national and regional projects. There is a shortage of concessional funds in this subregion. ADB takes this situation very seriously. Our development partners from bilateral and multilateral organizations will participate in a dialogue with us today to have a better assessment of the critical needs of the GMS countries in the course of their development.
While it is necessary to mobilize concessional resources, we should go an extra mile to tap other sources of funding. If we are to realize the ambitious development agenda for the region, we must try our best to access private capital and mobilize increased domestic savings from surplus countries in Asia and the Pacific, especially in the case of financing infrastructure projects.
Excellencies.
We must all take the opportunity of our meeting today to take bold and innovative steps to realize the vision set by the GMS Leaders at their first Summit. The three fundamental building blocks of connectivity, competitiveness and community should make it possible to realize this vision. As economic interdependence and regional integration heightens, we must all the more forge closer ties in the unified pursuit of an integrated and cohesive development strategy for the subregion. This strategy should be able to define the critical areas where connectivity should expand and identify the emerging areas of comparative advantage where competitiveness should be promoted.
The vision of our GMS Leaders should inspire us to make a stronger commitment and work with dedication. We must reaffirm and reinforce the spirit of community that we have already built through our collective actions in the past. With more than a decade of solid achievement behind us, we can all look forward with optimism that we can indeed "make it happen".
I wish us all success in today's deliberations.
Thank you.
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