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Regions and Countries Regional Cooperation Greater Mekong Subregion Publications Proceedings of Ministerial, Forum, and Working Group Meetings Appendix 3 - Opening Statements
Opening StatementsLao People's Democratic Republic By Mr. Mitsuo Sato, President, Asian Development BankExcellencies, Distinguished Delegates and Guests, Ladies and Gentlemen: Welcome to the Eighth GMS Conference on Economic Cooperation, and welcome to the Asian Development Bank. This is an important conference in difficult times, and the Asian Development Bank is pleased to once again act as host - underscoring its strong commitment to regional economic cooperation. Wide representation present at today’s conference clearly indicates the firm commitment of GMS countries to sub-regional cooperation, and strong support for the GMS Program from non-GMS countries and bilateral and multilateral organizations. Your interest and support has been extremely valuable to us, and will continue to be critical to ensuring the success of the GMS Program. The path to success is seldom easy. The Asian financial crisis erupted in mid-1997, with very adverse effects for the region - including GMS countries. The crisis will affect the prospects of the region for the next few years. Clearly, the economic, political and social situation in Asia has changed dramatically. Inevitably, the GMS Program has been affected. However, the Asian crisis clearly demonstrates that there is a strong need for regional cooperation. It is gratifying to know that, despite the current difficulties facing the region, GMS countries, notably Thailand, have not reduced their support for the Program. This reflects great commitment. The task of this Conference is to build on this commitment by developing and endorsing a strategy and work program responsive to the changed economic and social realities facing member countries. This strategy and work program, building on what has already been accomplished, will identify new directions for securing further accomplishments. The GMS Program has been a catalyst for drawing member countries into closer economic ties. The emphasis under the Program on Ministerial Conferences, sector workshops, and other meetings has helped increase trust and goodwill among the member countries, paving the way for agreements on many subregional projects. To date, under the auspices of the Program, ten transport and energy projects - totaling some US $1 billion - have either been implemented or are underway. To cite but one example, completion of the Theun Hinboun hydropower project has been of major importance to Lao PDR and Thailand. ADB has provided $330 million in loan support to these transport and energy projects, and has arranged a further $230 million in co-financing. Also, 24 technical assistance projects have been implemented or are underway, representing a cost of US $ 35 million and many person years of expertise. Protection of the environment, tourism promotion, telecommunications networking, human resource development and other benefits have been the result. The initial successes of the GMS Program have both prompted and facilitated subregional economic cooperation initiatives outside of the Program. But this record of success does not mean that we can continue with "business as usual". The Asian economic and financial crisis has badly upset some comfortable assumptions. Financing for even priority subregional projects is no longer so assured. Nor can it be assumed that foreign direct investment, together with domestic investment, will quickly bounce back to previous levels. In any case, what the Asian crisis has shown is the need for quality investment. The GMS Program has to respond to these new realities and needs. During this Conference you will review ways for ensuring early implementation of priority infrastructure investments, so as to help alleviate the economic and social hardships that so many are now experiencing, and so as to lay the foundation for resumed growth and integration. Further, you will discuss so-called "soft" infrastructure issues. It is increasingly apparent that non-physical impediments to the cross-border movement of goods and people are at least as frustrating and costly as deficiencies in roads, railways and other "hard" infrastructure. Speed of response and clearing of the policy and regulatory web are two ways of strengthening regional activity and competitiveness. A third way is to adopt a more integrated approach to regional cooperation initiatives. It is suggested that serious consideration be given to the creation of economic corridors in the subregion, corridors that will combine improvements in transportation, energy and telecommunications linkages with improvements in policies and procedures for facilitating transborder production and trade flows. The economic corridor approach both extends the transportation network and sharpens the focus. Economic corridors challenge us to create ways of linking major markets, and the policy and procedures that will allow enterprises and trade to flourish within these economic corridors. They also challenge us to create ways whereby subregional and country development programs complement each other, and whereby regional initiatives involving energy, telecommunications, trade, investment, tourism, human resource development and environment concerns are focussed in a spatial manner. Of course, we must also assess the problems associated with economic corridors, including the need for greater coordination among governments. However, economic corridors – if the concept is endorsed by this Conference - would become an important feature of the GMS Program. Excellencies, distinguished delegates and guests, ladies and gentlemen, there is opportunity in adversity. Regional cooperation and globalization are realities that will mature as we enter into the 21st Century. To be sure, the Asian crisis has shown that we must rethink unfettered liberalization, especially regarding the financial sector. But the Asian crisis has not undermined the fundamental merits of regional cooperation and globalization. On the contrary, it has reinforced the need to pull together. The GMS Program is living proof of "where there is a will, there is a way". Bank staff deserve credit, but most of all the member governments deserve credit. It is they that have stayed the course through good times and bad times. I wish the Eighth Ministerial Conference great success. Thank you
By H.E. Mr. Ith Praing, Secretary of State, Ministry of Industry, Mines and EnergyExcellencies Ladies and Gentlemen On behalf of the Cambodian delegation, I would like to express sincere thanks to the Asian Development Bank for hosting the 8th Ministerial Conference on Sub-regional Economic Cooperation. I have the honor and great pleasure to be able to join this important conference. The Government of Cambodia adopts an open door policy to cooperate in all fields with all nations, particularly with countries in the region and with international and regional institutions. I would like to gratefully acknowledge the Asian Development Bank’s prompt and timely assistance to Cambodia through several loans and technical assistance projects. Despite our efforts, GDP dropped in 1997 for the first time since Cambodia’s transition to a market economy. It decreased from 6.5 percent in 1996 to 2 percent in 1997. Inflation which was contained at an annual rate of 5 percent in 1994 and 1995, increased to 9 percent in 1996, remained at this level in 1997 but increased to 17 percent in the first six months of 1998. However, Cambodia is pleased that there is still some progress in the country’s economic, industrial and public sector development. There is expansion of the garment industry and agrobusiness activities. In the mineral resource sector, petroleum agreements for offshore blocks were reached with an international oil company, which is now conducting its seismic survey. I would like also to mention the progress made in the implementation of some donor-assisted infrastructure projects for Cambodia. Negotiations are expected to be conducted in October 1998 on an ADB loan of US$ 40 million for the Phnom Penh – Ho Chi Minh road link of the R1 regional project. Completion is scheduled in 2001. Significant progress has been made on the upgrading of National Road RN6 and RN7 from Phnom Penh to Kampong Cham which is part of project R6 with completion expected in April 1999. The construction of a new bridge over the main Mekong River in Kampong Cham, under grant aid from Japan, is expected to be completed in 2002. The rehabilitation of National Road RN4 to Sihanoukville has been completed. Renovation of the international Pochentong airport is underway. ADB is finalizing a US$ 15 million loan for the upgrade and rehabilitation of Siem Reap airport equipment facilities and communication control system and the Government of Japan has committed to construct an airport terminal. Improvements have also been made to the Phnom Penh ports. It can now handle vessels of up to 6,000 DWT capacity thereby reducing transportation costs. Construction of a new quay of 150 m at Sihanoukville port is under consideration by the government of Japan. As for rail transportation, ADB, World Bank and France have contributed funds to repair the most damaged section of rail link. In order to expand telecommunication services, some 10 percent of the optical fiber link has already been laid along the National Roads from Vietnam and through Phnom Penh, to Thailand under financial support from the German Government. The East Loop Telecommunication project is under study which is scheduled to be completed in November this year. There has been steady progress in the energy sector. Implementation of the Power Rehabilitation Project is contributing to better quality electricity supplies in Phnom Penh and a rapid growth in electricity demand. In relation to the investment requirements to meet demand growth, there has been progress in planning. The National Power Transmission Master Plan sponsored by the World Bank was completed in June 1998. It provides a framework for the development of a national transmission grid to connect large generating units including hydropower stations to population centres. It complements the already completed study by the Mekong River Commission on the combined long-term Sub-regional Generation and Transmission System Development. With Financial support from the ADB and the French Government, the study of Se Kong – Se San – Nam Theun hydropower project is underway and the first stage has recently been completed. Cambodia would also welcome cooperation with ADB in study and development of hydro resources in the West of Cambodia together with gas turbine generation. These were selected in the Master Plan as most feasible for early implementation as part of the development of the national grid. Cambodia also appreciates ADB’s support for development of electricity supplies at the provincial level. Concerning environmental protection and water resource management, I would like to recall the importance of maintaining the viability of the Tonle Sap Lake ecosystems through the development of comprehensive water management and environmental protection strategies. Cambodia appreciates ADB’s support of the development of Cambodia’s infrastructure. Many of the evaluations of infrastructure requirements are reaching a final stage. We would wish to draw on ADB’s experience in developing financial packages to fund the implementation of infrastructure projects. ADB credit for the Cambodian Government’s equity participation in infrastructure projects could play a pivotal role in assembling low cost financial packages. I would mention the Theun Hinboun Hydro Project in Laos as a good example in this regard. In relation to the future, Cambodia realizes the importance to its own economy and people and also to the establishment of full international and regional relations of the achievement of stability in Cambodia. In this context, support of national and international communities and observers enabled Cambodia to conduct a free and fair election. The continuation of support will be important to the formation of the new government. In closing, I wish to reiterate our commitment to promote economic cooperation in the GMS. In doing so, we look forward to working closely with ADB, member Governments, international organizations as well as the private sector towards the common objective of equitable growth and sustainable development of the sub-region. Cambodia very much supports the development of a strategy for the GMS emphasizing economic corridors and rapid development of infrastructure projects. May I wish the conference great success.
By H.E. Mr. Jin Liqun, Vice-Minister of Finance, People's Republic of ChinaMr. Chairman, distinguished delegates, ladies and gentlemen. I have the pleasure to attend, for the first time in my new capacity as Alternate Governor for China, the Eighth Conference on Subregional Economic Cooperation at the headquarters of the Asian Development Bank. On behalf of the Chinese Delegation, I would like to express our sincere thanks to the Bank’s management and staff, as well as the Government and the people of the Philippines for the excellent arrangements for the conference. The GMS program initiated by the ADB in 1992 has made great headway under the auspices of ADB as the regional development institution and thanks to the efforts of all its participating countries, the bilateral support and other multilateral institutions. I look forward to the continued leadership and support from ADB. We hope that major developed countries, particularly the one in this region, will provide tangible and substantial support, financial and otherwise, to our endeavor. Mr. Chairman, the financial crisis, which erupted in July last year, has inflicted a heavy damage to the affected countries. The contagion effect is serious and the repercussions are being felt in other parts of the world. We hold that a secure and stable financial system constitutes the cornerstone for the stability and development of the overall economy. To maintain financial order and prevent financial risks, a country must not only choose the right strategy to develop its economy and keep a rational economic structure, but also strengthen its financial system by consolidating financial regulation and supervision, manage the size and structure of its external debt and open its capital market in a phased-in manner, at a pace permitted by its specific conditions. The financial crisis has also given a severe challenge to the GMS program. How to attract the external resources, including those from the private investors, to finance the subregional projects is a big challenge now. The most important issue for GMS countries is to undertake the necessary economic adjustment and restructuring so as to get back on the fast track of sustainable economic growth. Mr. Chairman, I am pleased to note that the primary discussions of this 8th Conference is the GMS’ new agenda and new direction after the economic crisis broke out. I appreciate the ADB’s timely contribution and flexible approaches. Asia has achieved a miracle – Asian Miracle, a resonant word. Some people are now challenging this concept. They say that the Asian Miracle has disappeared; that Asia has collapsed. Now what is our response? It is admitted that a substantial amount of wealth has been wiped out, because of the financial crisis. But a lot of things remain in this region for everyone to see. The fixed assets we have proudly built have not been wiped out. Our ability to develop as fast as any country in this world has been demonstrated. And this will never be wiped out! We will continue to work together on the basis of equality, mutual respect and mutual benefit. We will demonstrate that working together, we GMS countries will do a great job! Mr. Chairman, I would like to take this opportunity to brief you on China’s current economic situation. The year 1997, an eventful year, witnessed the best macroeconomic performance of China since the launching of our economic reforms and opening up program. We achieved a real GDP growth of 8.8 percent and a low consumer price index of only 2.8 percent. The RMB exchange rate remained stable. Total trade amounted to US$325.1 billion and the balance of payments position remained strong, with a foreign exchange reserve of US$ 139.9 billion at the end of last year. China’s macroeconomic target for 1998 is to achieve an 8 percent growth rate, and inflation rate lower than 3 percent and we will maintain the value of RMB. We are confident that we can attain our objectives in spite of the heavy pressure from the Asian financial crisis, and in spite of the severe natural disasters, one-in-a-century flooding. As a responsible member of this region and the international community, China will continue to contribute to the stability and prosperity in Asia. The Chinese government has successfully completed its restructuring. We cut the size of the government by 50 percent. We are leaner, more efficient and more competent. We in the Ministry of Finance has taken over the responsibility as the lead agency for ADB from the People’s Bank of China and the internal hand over went smoothly. We are looking forward to maintaining the friendly relationship with ADB and its members. In conclusion, may I express our deep appreciation to ADB for the great efforts it has made for the GMS program. I extend my best wishes to all delegations and participants and wish the conference every success. Thank you for your attention.
By H.E. Mr. Phao Bounnaphol, Minister of Communication, Transport, Post and Construction, Lao People's Democratic RepublicMr. Mitsuo Sato, President of the ADB, Excellencies, Distinguished delegates, Ladies and Gentlemen, It gives me great pleasure to once again attend the Conference on the Greater Mekong Subregional Economic Cooperation. First of all, on behalf of the Lao delegation, I wish to express my appreciation to the Asian Development Bank for hosting this important event. Likewise, I also wish to thank the Bank for the gracious hospitality and kind reception accorded to us as well as the excellent arrangement made for the Conference. Mr. Chairman, The Eighth Ministerial Conference of the GMS is convening in the moment of the financial and economic crisis still affecting the Asian region. The contagion effects of the economic crisis in the neighboring countries also impacted Lao PDR. The consumer price index basket combined with the sharp depreciation of the kip contributed significantly inflationary pressures toward until now. This situation explains very well the overall economic downturn and the consequences have led to the sharp falling of the foreign investment, and the postponement of some infrastructure projects in our country. As an immediate action, the Government is implementing several measures aimed at countering the impact by restoring the country’s macroeconomics stability. With this ongoing crisis, there is an urgent need to strengthen our cooperation and promote our regional competitiveness. I find this Conference very timely and appropriate to keep the momentum of the GMS cooperation. A more active participation in the future GMS cooperation by the member countries is therefore much needed and called for. Mr. Chairman, The Lao PDR considers sustainable and equitable development as its over-arching goal. Over the last ten years, our development efforts have gone through three stages namely:
Mr. Chairman, Facing with the economic turmoil, my delegation strongly believes that we should endeavor to enhance and facilitate, first and foremost, trade and investment among ourselves where our region has abundant natural resources. In parallel with having in place the necessary infrastructure, it is urged that unnecessary procedures be streamlined, laws, rules and regulations be harmonized and unnecessary impediments be removed to enable the free flow of goods and people in our region and to create a conducive environment to attract foreign direct investors. These areas, we think, need most urgent attention. We, therefore, believe that they are within our deliberations and responsibilities to make them happen for our mutual benefit. May I take this opportunity to inform the conference that Thailand, Vietnam and the Lao PDR have agreed in principle to move ahead with the Trilateral Agreement on the Facilitation of Goods in Transit and Inter-State aiming to firstly facilitate the movement of goods along the East-West Corridor. The Lao PDR is very pleased to host the first official consultation meeting of the transport experts of the three countries in the late of this year. It is further hoped that this Trilateral Transport Agreement will serve as a model agreement for other GMS Corridors. Mr. Chairman, The Lao PDR has noted with appreciation on the considerable progress of GMS priority projects despite of funding scarcities coupled with the financial crisis in the region. In this connection, I am particularly pleased to inform the Conference on the successful completion of the first GMS hydropower project in our country-the Theun-Hinboun project. Moreover, many projects are now in the implementing stage. May I take to commend the Bank who acts, as the coordinator and catalyst for its tireless effort and assistance to enable GMS member countries to locate funding especially for important GMS priority projects. I would like also to take this opportunity to express our sincere thanks and gratitude to all donor countries and international financial institutions for their valuable assistance to the Lao PDR. In addition to the earlier agreed GMS priority road projects, I would like to propose to include our National Road No. 12 into the East-West Transport Corridor. The Vietnamese and Lao Governments have entered into agreement to jointly develop this linkage for our mutual and regional cooperation. This corridor will provide the Northeastern Thailand the shortest access to the deep seaport in the Eastern Sea Coast of Vietnam. Mr. Chairman, Recognizing the importance of the private sectors since they have both funds and managerial skills, I think, we should also encourage and attract them to participate in our development schemes. We would also like to propose the Bank to support them to get an access to the Bank’s private window if they agree to develop our GMS projects. Within our deliberation to reconsider our existing strategic issues and directions for future undertakings, it is proposed that linkages with other development opportunities to be explored. In this respect, the East-West Transport Corridor should be further developed into the East-West Economic Corridor which will pave the way for greater integration of other economic sectors such as light industries e.g. agroprocessing and manufacturing activities and other productions, trade and investment. Mr. Chairman, In the process of implementing the market oriented economy, the Lao PDR is aiming to graduate from LDC group by the year 2020. During this transition period, the Lao PDR would like to appeal to the Bank to continue its assistance of financing on ADF loan for the domestic physical infrastructure and social development of our country. We should be grateful also if the Bank could consider the Ordinary Capital Resources (OCR) for the subregional projects which are commercially viable. Finally, once again, the Lao delegation would like to express our sincere thanks to ADB and hopes that this Conference will yield a new phase in the development of our GMS economic cooperation. I wish the Conference great success. Thank you for your attention.
By H.E. Brig. Gen. David O. Abel, Minister, Office of the Chairman of the State Peace and Development Council, MyanmarExcellencies, Distinguished Guests, Ladies and Gentlemen It is a great pleasure for me to address once again this 8th GMS Ministerial Conference on Subregional Economic Cooperation representing the Government of the Union of Myanmar. First and foremost on behalf of my delegation and on my own behalf, I would like to express my sincere thanks to the Asian Development Bank for its excellent arrangement for this conference and its warm welcome accorded to us. We have gathered every year to exchange our views and experiences for the achievements in the implementation of the priority projects as agreed upon in the seven selected sectors. In the physical implementation of the priority projects it was found that some projects which have been behind schedule due to financial constraints are facing problems. In the GMS programme at this moment the mobilization of financial resources required for the timely implementation in the respective projects is limited. As far as financial mobilization is concerned we believe that the recipient countries and the potential investors will have to coordinate to implement the prioritized projects on a phase-by-phase basis. In this regard, there is a necessity for us to ensure that our priority projects must have a substantial multiplier effect and impact on the economy and society as a whole among the GMS countries. In view of this, a follow up mechanism with a certain workable timetable for programme and projects being delayed, the GMS countries will have to work out together among the region to provide prudent guidance to the innovation we will adopt in the future programme of our cooperation. Excellencies, Distinguished Guests, Ladies and Gentlemen As you all very well know that the GMS countries are ASEAN members except Yunnan Province and accordingly, the GMS countries have endorsed a set of priority projects in the respective 7 sectors and stressed the importance of close and cohesive cooperation among the member countries for enabling to carry out the implementation of the programme according to the schedule. At the same time, ASEAN countries have their own regional development programme being implemented within the framework of the ASEAN family. As these two programmes have aimed to achieve the development of the GMS programme, it is needless to say that the two programmes has to be linked to avoid overlapping in the implementation. As we all are aware the Asian financial crisis has shaken the roots of the global economic stability more that of South East Asia and East Asia and accordingly many Economists, Financial Experts and Research Institutions have come out with piles of documentation, research papers, recommendations, which of course will be of help to all of us. Help is needed, indeed, nevertheless, we all have exert all our strength and resources to stabilize the economy and finally we do hope we can overcome the problems which we can solve speedily through close cooperation. In Myanmar’s case, we may clearly see that crisis has had only a very little impact on her economy. When Myanmar integrated into the ASEAN Grouping, in 1997 ASEAN countries accounted for 50 percent of FDI and 46 percent of foreign trade with Myanmar. FDI in 1996/97 accounted for US$ 1663.10 million from ASEAN countries. One year later after the financial crisis, i.e. in 1997/98, FDI dropped to US$ 771.19 million, a drop of 53.6 percent. However, when we compare the trade volume with ASEAN countries it increased by 11 percent from 1996/97 to 1997/98. Since the major port on FDI in Myanmar is based on the exploitation of its natural resources it is projected that the FDI base in Myanmar will continue as planned and also enhance the export sector and manufacturing sectors. As regards the trading sector, since the trading items are mainly from the agriculture, marine, forestry, mining, and energy sectors there will be a strong tendency of growth when the new investment in these sectors are coming on-stream in the near future. Now I would also like to touch on the recent economic scenario of Myanmar. Since we had successfully implemented the 4-year plan i.e. 1992-1993 to 1995-1996 whereas average annual growth rate of GDP reached at 7.5 percent against the target of 5.6 percent. This success has laid the foundation for future progress and confidence in the process of present 5-Year Plan starting from 1996/97 to 2000/2001. Despite the recent financial crisis Myanmar could maintain her growth rate at 6.1 percent in the 2 years average i.e. 1996-97 and 1997-98. We are now implementing the third year of 5-Year Plan and accordingly, concerted efforts have been put into motion to enable a strong base in the agriculture sector, with special emphasis on intensive and extensive agricultural production such as paddy, beans and pulses, sugar cane and cotton by improving irrigation system and farm mechanization. I am quite confident that this would help contribute to achieve the 5-Year Plan targets according to the plan. Excellencies, Distinguished Guests, Ladies and Gentlemen Taking this opportunity, I would like to brief you on some of the achievements and status of implementation of the projects in Myanmar being carried out with her own financing programme as well as active participation of the private sector. Road Transport Sector
Water Transport Project Connecting the Thilawa Port Development Project, construction of the Thilawa Container Terminal and the Edible oil terminal have been completed and put into use. The No. 2 Ahlone Wharf and Bo Aung Kyaw Wharf Extension have also been completed and also put into use both by the Public and Private sectors. Apart from the GMS programme, Myanmar is also collaborating with the neighboring countries, vis China, Thailand, Laos, India, United States of America, UN Drug Agencies for the eradication of poppy cultivation and alleviation of drug trafficking in the region. So it could be of great benefit to the countries involved, if the ADB and other financial institutions could render possible assistance linking the existing cooperation scenario in the GMS programme it could be an outstanding international achievement. At this juncture, we would like to urge ADB to play a key catalytic role moving into an outward-looking international recipe for successful cooperation programme in the region. I firmly believe the international community assistance will support not only to alleviate the drug problem but also to help promote the living standard of the entire people in the region. It is indeed, likened to catching "two birds with one-stone." Excellencies, Distinguished Guests, Ladies and Gentlemen Before I conclude, I would like to reiterate again that we should have to work together to cope with our objectives which have at least one point in common that is "a better understanding and more closer cooperation" for better future among the GMS countries. Once again I would like to express our deep appreciation to ADB for sponsoring and organizing this conference and may I wish every one of you all the best and this conference a resounding success. Thank you for your attention.
By H.E. Dr. Supachai Panitchpakdi, Deputy Prime Minister, ThailandPresident Sato of Asian Development Bank Mr. Vice-Presidents Myoung-Ho Shin and Mr. Peter Sullivan, of ADB My Colleague Ministers from the GMS Countries, Ladies, and Gentlemen, I am delighted to have this opportunity to share my thought today with such distinguished delegates from our GMS countries and the team of the Asian Development Bank, who has been giving us continuous support to the GMS cooperation. In fact, without ADB, GMS cooperation could not come this far. And, without such cooperation the world could not have recognized the GMS as a peaceful subregion of opportunity for growth and investment. This Meeting, which brings together ministers from the six member countries of the GMS, is a truly concrete example of what subregional economic cooperation can bring. I do hope that the spirit of cooperation and fruitful discussions as generated during this Meeting will continue for years to come. Let me pay a tribute to our dear friend President Sato who has carefully given the GMS project the necessary support and resources at his disposal. We meet today in the midst of a severe downturn in the economies of the region, to explore the possibility of further strengthening our cooperation in the GMS at the time when the region is experiencing its toughest economic challenges in modern history. The response of our leaders to this crisis has been to reaffirm their commitment to subregional economic cooperation. This means not only keeping the momentum of GMS cooperation on track and strengthening it. A vital part of that cooperation is integrating our economies more closely and more strongly together, while enhancing the subregion's competitiveness and laying down the firm foundation for sustainable development in the long run. Distinguished Delegates, As you are well aware, the economic crisis in Thailand started with a clear signal of financial sector difficulty and negative export growth at the end 1996. Since then, Thailand reached what should be called "the maturity stage" of the crisis, and the IMF package was the inevitable consequence. Mistaken past policies and illusions about the strength of the economy provided costly examples from which other governments, especially in the GMS can learn, and re-think preventive mechanism for the future. The affected countries just like Thailand and our GMS neighboring countries are taking necessary, though painful, steps to resolve the crisis and revitalize our economies. However, the major risks now lie more in the external environment - the risk of higher trade protectionism such as increasing incidence of non-tariff barriers, declining foreign and domestic investment and trade financing, and most importantly, the occurrence of adverse systemic developments in the advanced economies. In the case of domestic policy in Thailand, the government has worked hard to stabilize the economy since we entered the Stand-by program in August 1997. The authorities have strictly adhered to the prescriptions outlined in the package. On the macroeconomic front, tight monetary and fiscal austerity program remains the key to the restoration of the macroeconomy. On financial sector restructuring, considerable progress has been achieved within the strict time frame. As a result of Government efforts, strongly supported by outside financial and technical assistance from the international community like ADB, we have started to see positive signs emerging gradually. We are able to achieve a higher-than-expected degree of economic stability, evidenced by the exchange rate which has been stable at around 40-42 baht to the US dollars; inflation this year is expected to be lower than 9 percent; and there has been a continued current account surplus on a monthly basis since September last year with the surplus expected to exceed 6 percent (10 billion US$) of GDP this year. In addition, a social adjustment program has been designed to create jobs especially in rural areas and help facilitate education and health care for those most vulnerable to the negative impacts from the economic crisis. Carefully relaxing fiscal and monetary policies, and a job creation program, should help improve purchasing power in the Thai economy, which in turn means the ability to purchase from the neighboring countries’ economy. Hopefully, what is good for Thailand in the recovery will support what is good for the GMS as a whole. Ladies and Gentlemen, At this point, I must underscore that we fully understand the need to be frugal with public money during the next several years. Spending on programs and projects will be made with utmost care to maintain our macroeconomic balance. Projects that have high social return will still be given high priority. At the same time, we have to ensure the distribution of development benefits among us and implement long term sustainable development. Sustaining economic growth in the future will require not only improvement in macroeconomic management in an individual country but also more pervasive structural reforms in the GMS countries as a group to allow much greater scope for market-determined resource allocation. Prudent macroeconomic management and continued structural reforms are essential if we are to improve our competitive edge and reposition ourselves effectively in the wake of shifting comparative advantages in the global division of labor. Nevertheless, Thailand's successful implementation would depend not only on our own efforts but also on the external environment. Successful implementation also requires a strong commitment to the long-term vision and directions we have in common. Notwithstanding the permeation of the regional economic crisis, the Royal Thai Government has set aside US$325 million for various programs related to GMS cooperation. Furthermore, the technical assistance strongly supported by ADB to promote the spatial development of 11 border towns of Thailand for connection with neighboring countries, so as to help stimulate the subregion's economy is now underway. In my personal opinion, long-term strengths of Thailand and our GMS countries have not really been diminished by recent economic and financial problems. We are still centrally located in this vibrant region. We continue to convert good relations into meaningful economic relationships among our neighbours. We still have a young and enthusiastic labor force, which is being upgraded. We remain resource abundant countries with a strong agricultural base. An appropriate exchange rate coupled with export and industrial restructuring loans from external sources particularly from ADB will help ensure the revival of our economy. Distinguished Delegates, Ladies and Gentlemen, Correcting and adjusting macroeconomic policies of an individual country is not a necessary step, but it represents a defensive strategy to cope with the crisis. We can do better by aiming to strengthen the GMS Program and turn it into a jointly offensive strategy for the region. Indeed, during the time of crisis I do believe that rather than slowing the GMS activities, we should quicken the process and enhance cooperation. It is difficult for an individual economy on its own to speed up the recovery process or to draw attention from uncertain foreign investors. But if we work together our joint efforts will provide scale economies and increasing attractiveness to all investors concerned. I would like to propose to this Conference certain directives and hope that we can find a common ground to move forward together quickly. First, there is a need to focus more on clear subregional economic opportunities and payoffs, as basis for attracting and sustaining investor interest, and sustaining commitment to subregional cooperation. It is therefore important to establish a much clearer economic relationship between real sector restructuring and expansion and infrastructure projects. It is therefore practical to emphasize the "economic development corridors" concept along the high priority GMS transborder project covering, namely (i) the East-West Corridor (Mawlamyaine - Myawaddi - Mae Sod - Mukdahan - Savannakhet - Dong Ha - Da Nang, (ii) the South-East Corridor (Bangkok - Phnom Penh - Ho Chi Minh City - Vung Tau and, (iii) the North South Corridor via Lao PDR and Myanmar (Chiang Rai - Luang Nam Tha - Kunming and Chiang Rai - Kyaington - Kunming. Along these corridors, transborder production-related investment such as establishment of special border economic zones — covering agro-processing industry, light and value-added manufacturing, which will provide opportunities for exporting to external markets — should be promoted. Our GMS countries can stimulate economic integration through mutual assistance for development of transborder trade and investment. Production-related investment can be divided according to the relative advantages of each country. Thailand will help promote and develop the co-production of raw materials and natural resources. Secondly, to expand trade volume and attract investment we must reduce barriers on trade and investment, especially at this stage, non-tariff barriers should be reduced to the minimal level possible. Meanwhile, non-physical barriers, measures, laws, and regulations, which will facilitate free flow of goods and people, have to be expeditiously harmonized as well. Success depends on the agreement based on mutual contributions according to each country’s advantage, for the mutual economic prosperity in the subregion. Thirdly, to overcome the shortage of funds for development we must re-think and initiate new forms of project financing. We must accept that shortage of funds for development is real and will stay with us for years to come. At this stage, the new schemes of project financing which might combine funds from public, foreign investors, and international financial institutions like ADB could be initiated. This should enhance the role of ADB, as a regional development bank, from operating-based project financing to leading financial consortium. In the next phase of GMS development, new financial initiatives and innovations are vital. Lastly, to ensure success of the GMS in the new direction, the capacity of the GMS unit in each country as well as in the ADB must be strengthened, as GMS cooperation is approaching a more mature stage and coordination becomes more complex. With new tasks and initiatives, there is a need for effective management. I would like to encourage all member countries to strengthen the capability of the GMS unit in each country. Also, I would like to encourage ADB to ensure that there will be enough personnel and resources to lead the GMS into the next phase of development. Distinguished Delegates, Ladies and Gentlemen, Although Thailand is facing fiscal constraints for this year and next year, I can assure you that the Thai Government will do its best to ensure the progress of GMS. Projects that have been committed will have the necessary financial support, and new projects endorsed by this Ministerial Conference will have a high priority in finding funds to implement them as soon as we can. I am confident that all the GMS governments as well as ADB will do their best to accelerate economic cooperation in the GMS. From my experiences, I do believe our GMS economy as a group and the international community especially ADB have meaningful roles to play in achieving successful cooperation, particularly during this economic crisis, which is no longer domestic, nor regional, in nature. These roles can influence not only the pace, but also the direction, of how our economies will evolve. We should set the example of how international cooperation can help alleviate our crisis and yet maintain our vision of open trade and investment commitments. It is therefore of crucial importance for this Eighth Conference on Greater Mekong Subregional Economic Cooperation to produce concrete progress and achievement with clear-cut future plans of action. I am confident that all my colleague ministers share in this view and with ADB’s strong support as usual, our task should not be an insurmountable one. Thank you.
H.E. Mr. Tran Dinh Khien, Vice Minister of Planning and Investment, Viet NamMr. Chairman Excellencies Distinguished Delegates! On behalf of the Vietnam’s Government delegation, I would like to express sincere thanks to the Asian Development Bank (ADB) which has initiated the Greater Mekong Subregional Economic Cooperation program and has continuously expressed great effort to encourage, create favorable conditions for the GMS program so that it can early be realized. Together with the Government of the countries in the subregion, the Government of Vietnam, right at the beginning, has highly appreciated and supported the GMS Economic Cooperation initiative and respects GMS Economic Cooperation idea based on the principle of equality, respecting sovereignty and mutual benefit. At the forums of the previous seven conferences on Subregional Economic Cooperation, the Government of Vietnam has always confirmed strong support for GMS Economic Cooperation Program. GMS Economic Cooperation program has attracted attention, encouragement and multi-faceted of many Governments, bilateral and multilateral and private organizations in the region and in the world, which has created favorable conditions for making preparations and implementation of projects that need large amount of Investment. The support and commitment of the Government of Vietnam are being realized by the activities that contribute to promotion of GMS Cooperation process. Vietnam has taken part in making preparations and ready to negotiate for signing the loan to invest in the top priority project in the transport sector: the project to upgrade – and rehabilitate the road: Bangkok – Phnom Penh – Ho Chi Minh City (project R1). Despite limitation of domestic development resources, the Government of Vietnam has allocated part of the State budget to upgrade the national highway number 9 in the territory of Vietnam which belongs to the East-West Corridor from Thailand – Laos – Vietnam (project R2). Ministries and agencies concerned of Vietnam have actively participated in implementation of GMS Technical Assistance projects and cooperate closely with the international consultants to make preparations for investment projects that Vietnam involved in. Vietnam has completed the Country Report GMS 2020 and has sent to ADB the copy of this report. Realizing the importance of reduction of non-physical barriers to cross-boarder movement of people and goods in the GMS countries, the Government of Vietnam has designated Ministry of Transport to cooperate with internal agencies as well as cooperating with other countries concerned to draft road transport agreement between Vietnam – Lao – Thailand; this draft agreement is now being considered by the countries concerned. In line with the process of regional and international integration, the Government of Vietnam continues implementing renovation process in socio-economic sectors, carrying out the adjusted Law on Foreign Investment, Law on encouragement of domestic investment for the purpose to mobilize maximally resources for investment, ensuring benefit for investors in long period in order to mobilize domestic and foreign investment, improving of procedures in the field of Foreign Direct Investment. A number of provinces, cities and towns, management board of industrial parks and export processing zones are allowed to issue investment license to create conditions for quickly solving bottlenecks in the process of project implementation. Mr. Chairman! Excellencies! Distinguished delegates! Ladies and Gentlemen! Regional Financial and Monetary crisis emerged in the mid of 1997 and has prolonged up to now, which is expanding, then becoming the economic crisis that has caused negative impact on the Asian and the global economies. Vietnam is also not a particular case that could escape from this situation. Negative impacts of the crisis come slowly into our country in comparison with some countries in the region but it has also bring Vietnam’s economy into difficult situation that could not be ignored. In order to cope with that situation, the Government of Vietnam has put forward the action plan, implementing annual socio-economic development plan and has promulgated a number of policies and mechanisms in line with the renovation process as well as satisfying people’s eager, focus on development of agriculture and rural development, industry and state-own enterprise reform; adjust investment structure to achieve higher investment efficiency, solve difficulties in export sector, improve financial and monetary activities, reducing negative impacts caused by the outside crisis and set measures to stabilize people’s lives, especially in the remote, storm-affected areas and ensure social order and security. In front of new difficulties and challenges caused by the regional economic crisis and in order to maintain development impetus of the GMS Economic Cooperation program, we believe that it is necessary to have positive and appropriate measures to escape from this difficult situation, creating conditions to implement the identified priority projects, particularly, the GMS countries and ADB should have expressed greater efforts, and necessary adjustment of GMS Cooperation program needs to be made; list of priority projects should be reviewed, including objectives, content, scope and schedule for preparation and implementation of projects in line with present situation. We believe that, the regional financial and economic crisis can cause serious impacts on socio-economic development, reducing investment ability within several years in the immediate future. However, with the spirit of taking initiatives by the countries in the subregion, we will overcome difficulties and modes of cooperation will bring back common benefits for countries that have similar situation and conditions. The government of Vietnam welcomes the preparation of action plan for the period 1998-2000 and we suggest that three year rolling action plan for the following period continue to be prepared so that the countries in the subregion can early make necessary preparations. However, it is necessary to emphasize the following issues: How to mobilize resources for GMS, how to develop capacity of each GMS country, distribute and effectively utilize of scare resources, it is necessary to pay attention to projects that protect and use rationally water resources and watershed forests, making investment to cooperate and develop technology with the purpose to increase efficiency and competitiveness in the GMS, making investment to expand market and diversify products in the GMS in order to increase trade relation within the GMS countries. The Government of Vietnam suggests following concrete measures needs to be considered:
Mr. Chairman! Excellencies! Distinguished Delegates! Ladies and Gentlemen! With the belief and hope for the success of the GMS Economic Cooperation program and based on the great efforts of the GMS countries and international organizations, especially ADB, the Government of Vietnam once again confirms its support and commitment to take part in implementation of activities of GMS Economic Cooperation program. We would like to express sincere thanks to the Board of Directors as well as staff of ADB, for careful preparations for this important conference for the sake of success of GMS economic cooperation program. We also believe that this Ministerial Conference on GMS Economic Cooperation program will open new chapter and will create new momentum for GMS Cooperation process. We wish the conference great success. Thank you for your attention.
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