GMS 2020: Balancing Economic Growth and Environmental Sustainability International Conference

Opening remarks by Stephen P. Groff, Vice President (Operations 2), Asian Development Bank, Bangkok, Thailand

Honorable Vice Minister(s),
Your excellencies, distinguished guests, colleagues, ladies and gentlemen.

Good morning to you all.

Let me start by first thanking our host country Thailand, and particularly Khun Mingquan, Deputy Permanent Secretary of the Ministry of Natural Resources and Environment for joining me in inaugurating this conference, which assumes special significance in the wake of the unfortunate natural resource disasters Thailand and many GMS countries faced during 2011.

Ladies and gentlemen, I am honored to join, and speak to, this distinguished gathering of Greater Mekong Subregion (GMS) policy makers, sustainable development researchers, practitioners and development partners. We have gathered here to take an objective look at the impressive economic prosperity of GMS over the last decade. More importantly, we are here to deliberate upon the economic development and environmental sustainability challenges GMS countries will face during the coming decade. I believe this GMS2020 conference addresses a critical question confronting not just the Asian but the global development community, namely, how best to bring about a balanced convergence between economic growth and environmental sustainability?

Equally important and opportune is the timing of this conference. GMS leaders at the December 2011 Summit in Myanmar endorsed the GMS Strategic Framework for 2012-2022. This will guide ADB's regional economic cooperation and integration agenda in the GMS for the next decade, but its effective implementation requires state-of-the-art developmental knowledge and know-how. This has to be done in the context of a global economic dynamic of restructuring and rebalancing – indeed, robust growth and increasing economic sophistication in Asia has shifted the axis on which the global economy turns – deeper regional trade and economic and political relationships can unlock the most severe constraints to growth and can help leverage the construction of a more sustainable and inclusive pattern of development. GMS is strategically placed to capture these economic development opportunities. It is in this context I see the conference deliberations and outcomes to be of special relevance as it should enable us to design and deploy knowledge based development strategies and investments.

Let me briefly refresh our memories of what the GMS countries have achieved so far. It is an impressive story. Guided by the now famous GMS brand, articulated through the 3C's - enhancing 'connectivity', increasing 'competitiveness', and achieving a greater sense of 'community,' the GMS has enjoyed a period of sustained and buoyant economic growth over the last decade averaging 6.5%, and as illustrated by the countries' resilience during the recent financial and economic crisis, this growth is based on strong foundations - whether expressed in terms of income, consumption or through composite measures such as the UN's Human Development Index (HDI). In my view, this level of growth and prosperity would not have materialized independent of the GMS economic cooperation program launched by farsighted leaders of the subregion in 1992. Over the last decade, the GMS economic cooperation program has mobilized over $14 billion in completed and planned investments. It has facilitated and delivered multi-modal transport systems, anchored in transport/economic corridors, energy interconnections, and investments in the information superhighway-laying the basis for expanded physical connectivity, enhanced production and employment opportunities, and improved livelihoods.

The new GMS Strategic Framework (2012-2022) focuses on developing "software" to complement the "hardware" achievements. Future development of these economic corridors will depend on deepening and widening of these geographic pathways to align them to the changes in technology demands and trade flows within the region. These "second generation" investments will need to be informed by sound assessment of environmental and natural resources. Optimal and efficient use of environmental and natural resources will ultimately underpin the "competitiveness" of the economic corridors.

All countries in the GMS now face increased competition for resources and rising costs. Growing resource demands worldwide as well as in the GMS are resulting in a growing set of material and ecological constraints – recent volatility in commodity markets and "spikes" in food and energy prices indicates what the future might hold.

Food demand from the Mekong River Basin, for instance, is projected to increase by 20 to 50 percent by 2030. Demands on use of water for food and energy production, as well as domestic and industrial use, is exponentially increasing while ground and surface water sources are depleting and degrading. The management of the food-water-energy nexus will be the most critical challenge of this decade. The challenges are not only technical in nature, but will also call into question the adequacy of our current resource governance, management and fiscal regimes. Climate change only adds to this already complex and complicated policy and practice conundrum.

Sustainability in the 21st century requires investments in smart development – getting more food and industrial output from the same amount of material and energy inputs. It makes business and ecological sense. Stimulating growth through green technology and investments can provide the financing, innovation platform and political attention to begin the process of effecting this transformation – with the emphasis on making growth processes resource-efficient, cleaner, and more resilient without necessarily slowing them. There are existing technologies and practices which need to be disseminated and deployed at a larger scale. For example, precision agriculture, efficient water supply and re-use, and clean (renewable) energy generation fuels and other frontier technologies are already part of the "green" growth agenda in the region awaiting appropriate policy signals and regulatory incentives for "take-off."

Improved fuel efficiency in freight fleets moving across the region would help reduce the cost of logistics, simultaneously reducing carbon intensity of regional and global supply chains and increasing their business performance; in the energy sector, shifting to renewable energy and demand side management, including improving the efficiency of electricity generation and distribution, will help reduce the vulnerability of the region to fuel price fluctuations; in the agriculture sector, the focus could be on moving to less water intensive crops, improved use of biotechnology with lower agro-chemical dependence, and intensification rather than expansion. Urban centers need to be made cleaner and safer by adopting resource saving measures such as rain water harvesting, energy efficiency of buildings, and reducing, reusing and recycling wastes.

It is worth noting here that China is already "walking the talk" in the region - China's fast-growing labor force in renewable-energy generation, is currently estimated at more than 1.1 million people based on investments of over $17 billion - part of a $468 billion investment in greening key sectors by 2015. ADB has also initiated ambitious, catalytic interventions to promote transformational change in clean energy, sustainable energy, integrated natural and water resource management, sustainable transport and climate resilient urban development. Environmentally sustainable growth is a key development agenda - in 2010, for example, ADB approved 50 projects with environmental sustainability, as a key objective, totaling about $4.8 billion – and also representing a 52% increase over 2009 in the number of projects.

As I mentioned earlier, this Conference gives us an opportunity to deliberate on how the food-water-energy nexus should and can drive future economic growth in the GMS – growth that is inclusive and does not compromise ecological infrastructure for current and future generations. The Conference provides us a unique opportunity to take stock of the developmental achievements of the past decade focusing on lessons of success as well as failure, lessons that can guide this journey. I believe our deliberations will bring out how critical water has been and will be to our food, energy and environmental security; we will notice that the economic prosperity of the past decade has come at a high environmental cost, and our current growth pathway is not sustainable. Over the next two days you will collectively take a hard look at our current food, water and energy situation and recommend actions for the future. I am also particularly pleased that we have private sector representatives to showcase technologies and innovations that are environmentally friendly and promote resource efficiencies and reduce wastage. Without private sector participation, our assessments and agenda for the future will not be realized.

We need to chart a pro-poor pro-environment roadmap to 2020. The challenge is to increase efficiencies in resource use, restore and recapitalize the natural resource base, safeguard environmental quality while creating jobs and sustaining economic growth. ADB stands ready to work with GMS countries and development partners to shape a roadmap catalyzing investments for a "greener" development trajectory in the GMS.

I am confident that this conference will provide us insights, and actionable evidence and knowledge for mapping a sustainable and resilient economic future for the GMS.

I wish you all a very successful conference. Thank you.