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Regional Cooperation Greater Mekong Subregion Publications Proceedings of Ministerial, Forum, and Working Group Meetings Appendix 3 - Report of the Chairman of the Senior Officials' Meeting to the Ministerial Meeting
Report of the Chairman of the Senior Officials' Meeting to the Ministerial MeetingGMS CountriesExcellencies, Distinguished Delegates, Ladies and Gentlemen: It is a great honor and pleasure for me to present the highlights of the Senior Officials' Meeting held last Tuesday, the 11th of January 2000. The Ninth Conference on Subregional Economic Cooperation is especially significant as it is the first for the new millennium. Appropriately, the Conference focuses on future strategies for subregional cooperation in the context of dynamic changes foreseen in the region's economic landscape, and taking into account the impact of the crisis that the region is recovering from. Seven years into the GMS Program, the six countries have moved from establishing physical linkages among them to opening their borders to their neighbors in the Subregion. A key challenge for the Program is to build on past achievements and strengthen the institution and capacities to move subregional cooperation into a higher plane. In our Meeting on Tuesday, Senior Officials noted progress made in each of the eight sectors under the GMS Program. We discussed at length the progress made, recommendations, and suggestions in all eight sectors: transport, telecommunications, energy, human resource development, tourism, the environment, trade, and investment. Individual sector reports, which present in detail the achievements since the Eighth Ministerial Meeting, have been distributed earlier for your Excellencies' perusal and endorsement. In brief, these reports highlight the following major sector-specific issues:
In the interest of time, on behalf of the Senior Officials, I would like to request the adoption of the records of discussion of all the meetings of GMS Forums and Working Groups that have been held since the Eighth Ministerial Meeting. The Senior Officials' Meeting would like to highlight the following sector-specific achievements as well as items that require the attention or endorsement of the Ninth Ministerial Conference. In transport: Two first-tier road projects have advanced further in implementation. Civil works commenced for the Phnom Penh-Ho Chi Minh City Highway late last year under the auspices of a $40 million and $100 million loan to Cambodia and Viet Nam, respectively. ADB approved in December last year loans of $32 million to Lao PDR and $25 million to Viet Nam for upgrading of sections of the East-West Corridor in the respective countries. Various other investments on other components of the East-West Corridor are being made by the Governments of Japan, Thailand, and Viet Nam, and the World Bank, with the coordination of ADB. On the software aspect, I am pleased to note that the Cross-Border Agreement Between and Among the Governments of Lao PDR, Thailand, and Viet Nam was signed on 26 November 1999 in Vientiane, Lao PDR. Annexes and Protocols for this Agreement, as well as for all possible bilateral, trilateral, quadrilateral, and other GMS-wide agreements are being prepared through an ADB technical assistance. During the Senior Officials' Meeting, PRC and Thailand representatives expressed willingness to help facilitate development of the Chiang Rai-Kunming Road Improvement Project via Lao PDR. On this, the Lao delegation requested ADB to provide a TA to review the concession agreement to determine, on a non-committal basis, the most feasible way to facilitate project implementation. On the East-West Corridor project, GMS delegations expressed interest in developing the westward extension of the East-West Corridor. On the Cross-Border Agreement, GMS delegations noted strong support to establishing agreements for the GMS. Lao delegation commenced signing of land transport agreement between Lao PDR and Cambodia in October 1999. The Thai delegation requested ADB's assistance to conduct a feasibility study on the improvement of navigation channel; installation of navigation aids; ports, and facilities improvement. Ministerial endorsement is kindly requested for the following:
In telecommunications: Feasibility study of the East Loop Project was completed in March 1999 through an ADB technical assistance. Development of fiber optic network components of the loop is complete, and interconnection between some of the national systems is underway. A new approach to the development of the GMS telecommunications sector has been endorsed by the Subregional Telecommunications Forum. It involves combining the four previously identified loops into a two-phased project, each comprising components and technical assistance studies that would expedite the development of backbone transmission lines in the GMS. The advantages of a transparent regulatory regime and a stable and secure policy environment in attracting private sector investment in telecommunications development has been recognized. Ministerial endorsement is kindly requested for the following:
In energy: The Se Kong-Se San and Nam Theun River Basin Studies have been completed, with six hydropower schemes selected for more detailed studies under a second phase. A Project Preparation TA for Se San 3 Hydropower Project was approved in July 1999, and a loan for this Project is included in the pipeline for firm loans for Viet Nam in 2000. The feasibility study for the Nam Ngum-Udon Thani 500 kV transmission line, which will bring power from Nam Ngum 2 and 3 to the Thai system, has been completed under an ADB TA. Likewise, a feasibility study was carried out by the Electricity Generating Authority of Thailand (EGAT) for grid interconnection between Nam Theun 2 in Lao PDR and Roi Et 2 in Thailand, the construction of which will commence after the power purchase agreement (PPA) has been signed. The Lao delegation requested ADB's assistance to cover the cost overrun of the Nam Leuk Hydropower Project. The Subregional Electric Power Forum (EPF) has adopted the Policy Statement on Regional Power Trade, which is a major step in formalizing the promotion of subregional power cooperation. The EPF also endorsed the development of a Regional Indicative Master Plan for Transmission Interconnections, which is considered essential in maintaining the momentum of regional cooperation in the power sector. The EPF is now laying the groundwork for the development of a regional power protocol under World Bank sponsorship, to pave the way for a more formal institutional set-up for regional power trading and power pooling. These advances in subregional cooperation in power were achieved as signs of economic recovery in the region began to emerge, pointing to the need for preparation of new load forecasts reflecting improved demand. These also point to the need to focus on project preparation for priority projects to meet additional power requirements in the near term. The environmental aspects of hydropower development will be addressed in an integrated manner to ensure that cumulative impacts are mitigated. This is particularly important for the management of forests and watersheds that could be affected by planned hydropower projects. To further develop energy projects over the medium and long-term, the feasibility of establishing a project preparation fund for energy projects will be examined where public and private funds could be pooled. The ADB could perform the role of funds administrator to ensure neutrality. Ministerial attention or approval is kindly requested on the following:
In the environment:
The Strategic Environment Framework (SEF) Project, which seeks to develop a strategic program for integrating environmental considerations in economic development planning and implementation in the GMS, is now fully underway. It has produced major outputs such as the formulation of the SEF outline, identification of environmentally-sensitive areas (hotspots), and the completion of the study on major bio-diversity conservation considerations. The project on Poverty Reduction and Environmental Management in Remote GMS Watersheds has completed its Phase 1 studies and watershed selection, and the three sites selected will be the subject of prefeasibility and feasibility level investment study. Meanwhile, the project on Management and Protection of Critical Wetlands in the Lower Mekong Basin commenced last December 1999; field offices will be set up soon in Cambodia and Lao PDR, to coordinate preparation of investment proposals for Tonle Sap and Siphandon. PRC and Thailand suggested that this study should cover all GMS member countries. The Subregional Environmental Monitoring and Information System (SEMIS) Project, whose Phase I ended July 1998, resulted in improved capacity of GMS countries to develop, manage, use, and share environmental databases. A follow-up Project, SEMIS II, which was approved December 1999, will provide mechanisms for sharing of information on environmental and natural resources issues in a timely manner for decision making purposes. During the Senior Officials' Meeting, the Working Group on Environment recommended that "economic corridors" be renamed "sustainable development corridors" to clearly signal to all interested parties the intention of the GMS Program to promote sustainable development. The Senior Officials' Meeting noted that cumulative Environmental Impact Assessment (EIA) is a key strategic issue to ensure integrated management of natural resources in the GMS. This has not been stressed in environment program so far, because of GMS focus on regionwide efforts and national programs rather than project level. Along this line, the Senior Officials' Meeting endorsed the adoption of economic-cum-environmental planning methodologies being developed under the GMS regional technical assistance program. A good start would be to immediately undertake this type of planning for the five sustainable development corridors. The need to identify and prepare environmental investment projects within the overall development planning was also noted. The Senior Officials' Meeting underscored that strong coordination is essential in promoting sustainable development within the GMS program. To address this concern, it was recommended that focal points for each sector meet to map out a strategy for improved coordination, and take the lead in this endeavor. To place environmental and development programs on a sound technical foundation, the Senior Officials' Meeting recognized that improved data collection is required. It was recommended that five percent of funding for all projects be devoted to information collection, analysis, archiving and dissemination using a common subregional framework. Following on an earlier recommendation, the Senior Officials' Meeting also shared the view that support for training programs on economic-cum-environmental planning methodologies should be provided, among others. Support should also be provided to translate and publish selected materials in the six major languages of the GMS; train key personnel in computer hardware/software; and ensure quality assurance in environmental laboratories. Ministerial attention or approval is kindly requested for the following:
In HRD: The Project on Strengthening the Capacity for Addressing Health and Education Needs of Ethnic Minorities held a workshop last February 1999, which identified the priority issues to be covered in overcoming the constraints that ethnic minorities face in accessing basic social services. The Project is targeted for completion in August 2000 and will focus on basic education, primary/reproductive health, drug abuse, and HIV/AIDS. A follow-up program on HIV/AIDS, called Preventing HIV/AIDS Among Mobile Populations in the GMS, was approved for ADB funding last December 1999, with cofinancing by the Swedish Government and parallel financing by UNDP. The Project aims to disseminate/mainstream an HIV/AIDS prevention strategy among mobile groups especially affected by improved East-West transport corridor links. A Steering Committee (SC) will be created to guide the Project's implementation and will be composed of officials of participating countries and representatives from concerned international agencies. ADB has written the GMS member countries to nominate one representative each to the SC. The Senior Officials' Meeting noted the concern in the possible increase in illegal migrants as mobility is enhanced in the East-West Transport Corridor. The Senior Officials' Meeting identified the need for examining legal rights of children of illegal migrants. Ministerial attention or approval is requested for the following:
In trade: Following the directive of the Eighth Ministerial Conference, the Inception Meeting of the Trade Facilitation Working Group (TFWG) was held in Bangkok, Thailand in November last year to initiate trade facilitation activities and help in the process of recovery from the Asian economic and financial crisis. The scope of work and issues for consideration by the TFWG that have come out of the country consultations undertaken by ADB and ESCAP were discussed at the Inception Meeting. The Working Group adopted two broad categories of issues: first, issues that are transborder in nature, and second, issues that are within each country's purview but whose resolution would have implications on the rest of the GMS countries. These categories were useful in allowing the GMS countries to sort out issues in accordance with their own institutional capacities, their timetable for liberalization, and their international commitments. On the basis of these, the TFWG agreed to include nine activities in its work program in the following order of priority:
The TFWG agreed to proceed with the immediate implementation of the first four priority activities. The first two activities are receiving support from ESCAP. Activities 3 and 4 are receiving ADB support as part of ongoing activities related to facilitating cross-border movement of goods and people. On activity 4, the Senior Officials' Meeting endorsed the following recommendations of the Ad-hoc Customs Subgroup Meeting for the GMS which was held in parallel with the Senior Officials' Meeting:
Modalities for adhering to cooperation could further be expanded and detailed. The meeting participants have asked ADB to consider TA and finance implications of the proposed cooperation. Other priority activities, in particular, the establishment of a dispute settlement mechanism and the establishment of a payments system in the GMS will be implemented at a later stage but modalities for addressing them in the context of the first four priority projects will be explored. Ministerial endorsement is kindly requested on the agreed-upon priority activities of the TFWG and recommendations made by the Ad-hoc Customs Subgroup. The TFWG should explore modalities for addressing dispute settlement mechanism and payments system within the context of existing priorities. The TFWG was also requested to strengthen coordination with ASEAN. In investment: As in trade, the Eighth Ministerial Conference urged the holding of the Second Meeting of the Subregional Investment Working Group as part of a strategy to help in the process of economic recovery. The Second Meeting, which was held in Kunming, PRC in September last year, developed an operational work program based on the terms of reference that covered the areas of investment promotion, investment facilitation, and regulatory framework for investment. Within these three broad areas, the Working Group identified six key tasks in the following order of priority:
The Working Group agreed on the need to focus on a few low-cost, high-impact projects that can be implemented quickly. It also agreed that investment facilitation should take into account the interrelationship with trade flows across borders. The Senior Officials discussed the important role of the GMS Business Forum in assisting in the overall investment promotion and resource mobilization efforts of the GMS Governments and serving as the venue for addressing investors' concerns in the GMS. The Thai Chamber of Commerce offered to organize and cofinance with ADB the first meeting of the GMS Business Forum. Ministerial endorsement is kindly requested on the following proposals:
In tourism: The Tourism Working Group (TWG) has restructured its work program from a project orientation to a program approach in order to broaden its scale of operations, take on a longer-term perspective, and facilitate the accommodation of new ideas and initiatives. Eight tourism programs have been identified and are progressing in varying degrees, namely: Destination Marketing, Subregional Events, Training, Management of Natural and Cultural Resources, Mekong/Lancang River Tourism Development, Facilitation of Travel, and Village-based Tourism. Destination marketing activities are ongoing with the coordination of the Agency for Coordinating Mekong Tourism Activities (AMTA), and the assistance of the Pacific Asia Travel Association (PATA). The Working Group agreed to establish a marketing task force comprising representatives of the GMS national tourism organizations as a precursor to the establishment of GMS tourism chapters in major destination markets. The Third and Fourth Mekong Tourism Forums were, respectively, held in Kunming, PRC in November 1998 and Vientiane, Lao PDR in November 1999. This annual event facilitates discussion between public and private sectors in tourism and helps raise the profile of the GMS as a tourist destination. ADB technical assistance was provided to conduct basic skills training and Tourism Management courses with the cooperation of the Tourism Authority of Thailand. ADB approved last December a $600,000 regional technical assistance to prepare feasibility study and identify priority tourism infrastructure developments along the Mekong/Lancang River. The Tourism Working Group is developing trial overland tours that could benefit from recent moves by the GMS governments to facilitate cross-border travel. TWG has initiated a Review of Progress and Future Directions of GMS Tourism Sector Initiatives with a view to enhancing the ownership by GMS national tourism organizations (NTOs) in the cooperative program, and strengthening and expanding the role of AMTA. During the Senior Officials' Meeting, the importance of tourism to poverty reduction, consistent with ADB's overarching objective, was highlighted. It was noted that to improve the flow of tourists in the subregion, travel facilitation arrangements, e.g., new air routes and border crossings, are being undertaken by the six GMS countries. The Senior Officials requested ADB/ESCAP support on Mekong Tourism Forum to continue, but to be gradually phased out over the next three-four years. It was noted that strengthening AMTA would require strong commitment from each of the six NTOs. Thailand suggested that the establishment of GMS tourism chapters be reconsidered. Ministerial endorsement is kindly requested on the following proposals:
The Senior Officials' Meeting also considered the framework for the development of the East-West Economic Corridor which is considered a key strategic thrust of the GMS Program. A roundtable discussion on this topic will take place this afternoon to be co-chaired by the Lao PDR delegation. Economic corridors combine improvements in infrastructure with other investments that facilitate and encourage production and trade flows. Besides this, the development framework for the East-West Economic Corridor takes into account intersectoral linkages, particularly with cross-cutting issues of poverty reduction and environmental protection, spatial linkages, and institutional requirements for national and regional planning. A preinvestment study on the East-West Economic Corridor will commence next month under the auspices of ADB technical assistance. The specific objectives of the study are as follows:
The Senior Officials' Meeting supported the Economic Corridor concept and the Preinvestment Study, and expressed commitment to providing assistance to the study. The PRC, Lao and Thai delegations emphasized the need to consider other relevant corridors in the GMS, e.g., North-South Corridor. The need to assess feeder roads related to East-West Corridor has also been raised by the Senior Officials. The Cambodian delegation noted the need for strong local coordination among concerned agencies in order for the "Corridor" concept to be successful. In keeping with the focus of the Conference, which is on future strategies, the Senior Officials' Meeting considered the GMS Program's Agenda for the Future. From the sector reports, the Senior Officials' Meeting noted that considerable progress has been made in advancing subregional priority projects and activities. To build on these achievements, and to sustain the Program's momentum and subregional cooperation processes, the Senior Officials' Meeting agreed that existing medium-term strategies should continue to guide the Program. First, the implementation of priority subregional projects should continue to be accelerated. The required steps for resolving project preparation and implementation issues will be expeditiously addressed. Second, continuing attention will be given to the software aspects of subregional cooperation. The transport, energy, and telecommunications forums have increasingly focused on "software" aspects to improve the policy environment and to stimulate further economic activity. Software initiatives that have been undertaken so far include: (i) facilitation of cross-border movement of goods and people along priority transport routes, (ii) framework and operational requirements for regional power trade, and (iii) policy framework and capacity building for subregional telecommunications Third, the development of physical infrastructure will be linked with production and trade potentials though the development of economic corridors, initially focusing on the East West Corridor which is an advanced stage of implementation. Fourth, resource mobilization efforts will continue and intensify as the process of recovery in the region offer increasing opportunities to gradually restore investor confidence in the GMS. Partnerships with the private sector, in particular, will be promoted and targeted to support priority subregional projects under the Program. The Senior Officials' Meeting shared the view that present strategies remain valid. They urged however, that efforts for further opening the borders should be accelerated. They agreed to consider a time-bound agreement for expanding cross-border agreements for facilitating the movement of goods and people toward a borderless subregion within the first decade of the new millennium. The important milestones are:
Adoption/signing of the framework agreement — 2001 Application and implementation of the agreement — 2005 With the implementation of the GMS Program forging full steam ahead however, new issues and challenges have emerged. The Senior Officials' Meeting appreciated the role played by ADB to promote subregional cooperation and emphasized the need for building national capacities to cope better with the complex issues and process involved in subregional cooperation. In this regard, the institutional mechanisms that have been established under the Program would need to be reviewed, in particular, the role and functions of the GMS Inter-Ministerial Steering Committees and the GMS National Coordinators. ADB was requested to undertake the appropriate consultations with the GMS countries to begin the process of reviewing and strengthening the GMS Program's institutional mechanisms and to present its recommendations to a special meeting of the GMS Senior Officials in mid-2000. Capacity building will have to be taken within the context of improvements in the institutional mechanisms under the Program. National capacities will have to be strengthened to promote better integration between national and subregional projects. National capacities for effective coordination and program and project implementation will also have to be strengthened. The Meeting noted that improving national capacities would enhance the GMS countries' ownership of the Program. The Senior Officials' Meeting requested ADB to undertake a needs assessment for national capacity building and to present the results to a special meeting of the GMS Senior Officials in mid-2000. The Senior Officials' Meeting agreed that planning and programming should be synchronized at both the national and subregional levels. In this regard, they supported the proposal of ADB to formulate a medium-term strategy that would take into account the individual country strategies, and serve as the framework for situating the GMS Program within the larger context of regional cooperation in ASEAN and APEC. Resource mobilization continues to be a central challenge to the GMS Program, involving both official development assistance and foreign direct investments and private sector financing. ADB will continue to coordinate with the donor community to further strengthen collaboration. The feasibility of establishing a regional fund will continue to be discussed. The Ministers' attention and/or endorsement are kindly requested on the following:
A GMS Work Program for 2000-2002 is tabled for the Ministers' consideration. The Work Program consolidates the overall GMS Program Strategy and the work program of the various GMS Forums and Working Groups for the next three years. The six elements of the GMS Program Strategy include: (i) accelerating the implementation of priority subregional projects; (ii) continuing emphasis on the software aspects of subregional cooperation; (iii) developing economic corridors that link infrastructure with production activities; (iv) targeted resource mobilization focusing on partnerships with the private sector and donor cooperation; and (v) strengthening institutional mechanisms under the GMS Program; and (vi) building national capacities for improved coordination, planning and programming, and implementation of subregional projects. During the Senior Officials' Meeting, a number of international organizations including ESCAP and MRC informed of their activities to promote subregional cooperation and offered continued support for the GMS Program, and the Senior Officials' Meeting expressed their appreciation. The Senior Officials' Meeting reaffirmed their commitment to subregional economic cooperation in their countries' pursuit of improved living standards for the peoples of the GMS. They invited donor and regional organizations, and the private sector to form partnerships with the GMS countries in realizing the many opportunities of regional cooperation. As Chairman for the Senior Officials' Meeting, I would like to express my sincere thanks to six national delegations for actively participating in the discussions and constructively shaping the results. In conclusion, I would like to echo the welcoming remarks of President Chino to Your Excellencies and all the participants of this Greater Mekong Subregion: Ninth Conference on Subregional Economic Cooperation. Thank you for your kind attention.
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