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Geert van der Linden
Vice President
Asian Development Bank

Forum on Economic Cooperation of Beibu Gulf Rim
Nanning City, Guangxi Zhuang Autonomous Region of China
20-21 July 2006

Excellencies, distinguished participants, ladies and gentlemen:

It is a great pleasure to join esteemed Governors, Ministers and Forum sponsors in welcoming you to this important event. The Asian Development Bank (ADB) is honored to be a partner in this initiative. We see regional economic cooperation and integration as an important way to raise investment levels, improve financial stability, generate jobs and support poverty reduction.

East Asian economies are, of course, integrating at a rapid pace. Perhaps the best evidence for this is the growth in intraregional trade from less than 35% of all trade in 1980 to 54% in 2003. The recent proliferation of free trade agreements (FTAs), including the ASEAN-China FTA, reflects the desire of many countries to further deepen economic integration.

While this trend is encouraging, it is important that the process of integration be managed effectively if all countries are to benefit. ADB is committed to supporting such efforts, with an emphasis on four key pillars: (1) cross-border infrastructure and associated software, (2) trade and investment, (3) money and finance, and (4) the provision of regional public goods.

With regard to cross-border infrastructure, we have provided significant support on a subregional basis for physical connectivity and harmonization of rules and procedures – primarily in the Greater Mekong Subregion, but also in South and Central Asia.

To support effective trade and investment integration, we are presently conducting a major study on economic cooperation between East Asia and South Asia, which also looks at investment flows and policy, and another on the impact of free trade agreements on business in Asia.

We continue to assist ASEAN and ASEAN+3 efforts to strengthen financial and monetary integration. These include the ASEAN Economic Surveillance Process, the Chiang Mai Initiative for liquidity management and the Asian Bond Market Initiative, intended to mobilize the region’s large savings for investment in Asia.

And, we have introduced a range of initiatives to assist countries’ cooperative efforts to provide regional public goods – or, put another way, to manage the negative aspects of regional integration, such as cross-border heath threats, environmental degradation, trafficking of humans and drugs, and natural disasters. Earlier this year, for example, we established a $38 million regional fund to help prepare the region for a possible Avian flu pandemic.

As you can see from these examples, regional cooperation and integration can take many forms. As the Beibu Gulf Rim initiative moves forward, it may be useful to look at the highly successful GMS program, which offers a possible model for future efforts.

If there are two factors that define the GMS program, they are: country ownership, and pragmatism. Strong country leadership, supported by a well-functioning regional coordination mechanism, ensures that regional initiatives reinforce poverty reduction strategies and that regional agreements are implemented at the national level. Pragmatism ensures that results are achieved through pilot-testing and phased implementation.

The GMS countries, which include Cambodia, China’s Yunnan and Guanxi provinces, Lao People’s Democratic Republic, Myanmar, Thailand and Viet Nam, have made significant progress in achieving the shared vision of a subregion free of poverty. In addition to improving physical connectivity, GMS members have significantly reduced policy and regulatory impediments to cross-border transport and trade. As a result, foreign direct investments have tripled since 1992, total exports have grown six-fold, and intra-regional exports have grown more than 10-fold. Most importantly, the proportion of people living on less than $1-a-day has fallen dramatically, from 33 percent in 1990 to 15 percent in 2002. The GMS program is truly an inspiring success story, creating better lives for the poor and a strong sense of community.

Based on their experience, the ASEAN and GMS countries have much to contribute to economic cooperation in the Beibu Gulf Rim. In particular, Guangxi could serve as a platform to synergize the various regional cooperation initiatives, while reinforcing China’s Western Region Development Strategy for balanced development and poverty reduction.

Ladies and gentlemen: It’s been said that “Coming together is a beginning. Keeping together is progress. Working together is success.” With this in mind, let me close by congratulating all of you on taking these important first steps, and wishing you all the best in your cooperative endeavors.

Thank you for your attention.