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North-South Economic Corridor in GMS Offers Investment Potentials
KUNMING, PEOPLE'S REPUBLIC OF CHINA - Agriculture, tourism, power, logistics and manufacturing sectors in the North-South Economic Corridor (NSEC) of the Greater Mekong Subregion (GMS) offer good investment opportunities. Investments in these areas can complement the infrastructure projects completed in the NSEC and spur movement of vehicles, goods, and people along the corridor.
These sectors were identified in the Strategy and Action Plan for NSEC endorsed at the GMS Ministerial Conference held in Thailand in 2009. NSEC consists of the Kunming-Chiang Rai-Bangkok (Western) Subcorridor, the Kunming-Ha Noi-Haiphong (Central) Subcorridor and the Nanning-Ha Noi (Eastern) Subcorridor.
Central and provincial officials from five countries of the GMS along the NSEC, together with private sector representatives are meeting here from 19 to 20 May to discuss priority issues and further advance development of the NSEC. The meeting is being organized by ADB and supported by the Australian Agency for International Development (AusAID).
The sectors cited for possible private sector investments are agriculture and agro-industry, including food processing and contract farming; resource-based industries, including the processing of mineral and forest products, and energy-related industries; light manufacturing industries, such as clothing, garments, footwear, paper, accessories, and consumer products; construction materials, including cement, iron, and steel; agriculture machinery and equipment; technology-intensive industries, such as automotive parts, electronics, and electronic components; service-based industries, such as tourism and logistics; and cottage industries linked to tourism and involving the participation of local communities.
"The NSEC can be considered a natural economic corridor, because the multimodal transport and infrastructure network in the subregion has a north-south orientation," said Pradeep Srivastava, Senior Regional Cooperation Specialist of the Southeast Asia Department in the Asian Development Bank (ADB) At the same time, the wide diversity in topography, natural resources, structure of production, wages, levels of income, and other factors along the NSEC provide many complementarities that could be viably pursued, Mr. Srivastava added.
NSEC serves as the main land route for trade between the PRC's Yunnan Province and Thailand, and provides an important land link opening up sea access to landlocked Yunnan Province. It is also a direct trade conduit between southern PRC and northern Viet Nam. NSEC is well positioned to serve as a gateway for ASEAN-PRC trade which is expected to expand rapidly with the implementation of the ASEAN-PRC free trade agreement. NSEC's links extend northward—beyond Yunnan Province and Guangxi—to the rest of the PRC and southward—beyond Thailand—to Malaysia, Singapore, and the rest of ASEAN.
Australia is a key partner in the development of the economic corridors in the GMS. Through AusAID, Australia is providing more than $346 million for critical infrastructure and trade projects in the GMS. This will help increase economic integration, access to markets and basic services, as well as providing employment opportunities for poor people in the subregion.