Catalog

Cooperation Pays, Conflict Doesn't
ADB Review [ December 2004 ]

Confidence and trust are key ingredients of successful regional cooperation, says Rajat M. Nag, Director General of ADB’s Mekong Department. He spoke with Tsukasa Maekawa, ADB Principal External Relations Specialist, on the Greater Mekong Subregion (GMS) Program of Economic Cooperation

By Tsukasa Maekawa, (tmaekawa@adb.org)
Principal External Relations Specialist

What have been the most significant accomplishments of the GMS Program since it started in 1992?

A great deal has been achieved. Perhaps the greatest accomplishment of the GMS Program has been the confidence that it has engendered; confidence in the countries themselves as well as in the strength of the community that has emerged. It is this confidence and trust in each other that has driven the program and brought it to where it is today.

Connectivity has also been a key accomplishment. Investments in road links, fiber optic telecommunication backbones, interconnected power systems, and airports have paid off. For example, the East-West Economic Corridor will link Viet Nam through Lao PDR and Thailand to Myanmar and all the way to the Andaman Sea. We have ensured that the negative social and environmental externalities of the infrastructure projects have been addressed and minimized.

Intraregional trade has grown almost 8 times since 1992. Interregional trade is also beginning to grow as the GMS becomes more competitive. A sense of community is clearly discernible. Seventeen investment projects worth $3.4 billion, and 77 TA projects amounting to $79 million, are either completed or under way in a diverse range of sectors and subsectors.

While connectivity is key in bringing any subregion closer together, we have been quick to recognize that it must be accompanied by investments in easing processes and building capacity. As a result of our focus on these aspects, we have been able to help the GMS countries forge a Cross Border Transport Agreement. We expect that this will dramatically boost the flow of goods, people, and investments across borders and spur growth. Let me say, by way of example, that over 50 foreign companies have already invested in the special economic zone on the Lao PDR-Viet Nam border in the East-West Economic Corridor. In the energy field, the countries have signed an intergovernmental agreement on regional power interconnection and trade. Buying and selling power in ways that benefit all will become increasingly easy. These reforms are transforming a grouping of previously isolated and command-based economies into an integrated and competitive market-based subregion.

To help build capacity in the higher echelons of the GMS governments—capacity that will better lead and manage the challenging GMS development agenda—we are implementing the Phnom Penh Plan for Development Management. It is building tomorrow’s Mekong leaders today—it already has over 280 alumni from the six countries in the first 15 months of its implementation.

What are the challenges?

There are many, not the least of which are resources that are badly needed to fund the large number of programs and projects that the countries have identified and prioritized. Currently, these are conservatively estimated to cost about $10 billion. We have to help the countries find the monies for these projects. I must say that it is very heartening to see the better-off GMS member countries helping their neighbors by financing GMS projects beyond their borders. While this is a beginning, it is not enough. Both the volume and quality of financial resources have to be significantly enhanced. We are working conscientiously on mobilizing partners from outside the region, both public and private.

A second major challenge is to persuade the GMS countries to take a regional perspective and help them harmonize their national priorities with regional priorities. They need to be convinced that what is good for the region is also good for them individually, and that regional and national prosperity are not mutually exclusive. Thinking regionally but investing nationally makes eminently good sense.

The final but most important challenge is that of eliminating poverty. There are about 50 million people still living in poverty in the GMS, including a large number of ethnic minorities. The Millennium Development Goals require that this be halved by 2015. This is perhaps the most difficult challenge and we are constantly exploring better ways to address it.

"The GMS has been witness to one of the most remarkable turnarounds in recent times--from conflict to peace, and growth"

- Rajat M. Nag
Director General, Mekong Department

How are you dealing with the economic gap between the GMS countries?

The critical rationale for the GMS Program is to ensure that no country is left behind. Each country must benefit from the Program and we have to assist the smaller countries to catch up. Though we are promoting economic growth and development in all the countries involved, we have been placing greater emphasis on supporting the relatively less developed countries.

How do you view the role of the GMS Program in regional efforts towards integration?

I think the GMS Program is unique in several ways. It has brought together war-torn countries through an informal dialogue mechanism that has evolved into a market-driven economic cooperation initiative. It has shown that subregional cooperation can work to the benefit of all concerned.

We acknowledge the growing trend towards economic integration in Asia. The GMS Program is playing an active and complementary role in this process. Because of its strategic location, connectivity between GMS countries is also linking it to the region as a whole.

Environmentalists argue that the development of infrastructure such as roads and dams may damage the Mekong river ecological system. How do you respond to that argument?

I think these concerns are valid and we share them. We have to be very sensitive to the environmental impacts of infrastructure development, and I believe we are. Actually, one of the earliest working groups to be set up under the Program was the Working Group on Environment in 1995. All of our projects are thoroughly screened for environmental impacts and mitigation measures. The Strategic Environmental Framework is enabling the GMS governments to better monitor the environmental hot spots in the subregion. As you know, we have recently published the GMS Atlas of the Environment that I hope will promote more informed decision-making on environmental issues in the GMS.

What is the role of NGOs in the GMS Program?

NGOs play a very important role in shaping the GMS Program. I consider the involvement of NGOs and civil society as critical to ensure that relevant issues are brought to the table, that affected people have a forum in which they talk about projects, and that dialogue takes place sooner rather than later.

What are the major agenda items of the Ministerial Meeting in the Lao PDR taking place in December 2004?

I believe we are moving towards a crucial phase of the GMS program where we need to bring in more resources, both intellectual and financial, through greater involvement of our development partners and the private sector. The Vientiane meeting will be critical in pursuing this objective.

I also believe that this Ministerial Meeting will seek to accelerate the Program and demand greater results. One of its key outputs will be a medium-term action plan for the Program with greater focus on critical result areas.

What do you see happening in the GMS in the next decade?

I think that greater connectivity and competitiveness over the next 10 years will dramatically alter the socioeconomic face of the GMS. It will be a more vibrant and dynamic subregion that will serve as a land bridge between the rapidly growing economies of South and East Asia. The incidence of poverty is likely to fall sharply, and I am very hopeful that we will see the emergence of a true community of nations in the GMS.

What are your main messages?

There are two messages that I believe derive from the GMS program. One clearly is that “Cooperation pays, conflict doesn’t.” The GMS has been witness to one of the most remarkable turnarounds in recent times—from conflict to peace, and growth. The other is that confidence and trust are key ingredients of successful regional cooperation. If this paradigm needed proving, the GMS countries have given us the evidence. There is no turning back now.

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