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ADB Providing $20M to Develop Tourism in Greater Mekong Subregion

News Release | 16 October 2008

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing $20 million for the development of the tourism sector in the Greater Mekong Subregion (GMS) to help create more jobs for the poor while protecting the environment, ethnic groups, and minorities.

The project will benefit nine provinces in Lao People's Democratic Republic (Lao PDR) and five provinces in Viet Nam, which were selected for their high tourism potential and poverty rates. The project areas form part of the priority zone under the GMS Tourism Sector Strategy 2006-2015.

ADB will provide a $10 million loan to Viet Nam and a $10 million grant to Lao PDR to cover most of the project cost of $21.98 million. Viet Nam will contribute $1.11 million and Lao PDR $870,000 to complete the funding requirement.

The project will support the construction of handicraft markets, viewing points, small access roads, walking trails, tourism signages, information and visitation centers, parking areas, small river piers, community lodges, and sanitary facilities.

It will also support preparation of plans for tourism site development and management, training for local communities and private tourism operators, development of marketing strategies and products, and production of tourism manuals.

The project will promote strong and fair partnerships among local governments and communities and the private sector in developing, operating, and maintaining community tourism facilities.

In 2007, the GMS received 25.6 million international tourists, generating $18.85 billion in earnings and providing employment to 3.74 million people. From 1995 to 2007, international tourist arrivals to the GMS rose at a yearly average rate of 8.12%, more than twice the world average. Its share of world tourism rose to 2.9% from 2.2% during the period and its share of the Asia and Pacific region's tourism increased to 14% from 11%.

"The contribution of tourism to the GMS economy has increased significantly in the past decade, creating new opportunities for economic growth and poverty reduction," said Alfredo Perdiguero, Senior Economist of ADB's Southeast Asia Department.

But the fast and unmanaged pace of tourism expansion has prevented many poor from reaping the benefits and limited development to just a few destinations.

New opportunities resulting from the development of transport corridors have also not been fully tapped, while small- and medium-sized businesses have not been able to provide the quality of service demanded by tourists.

Furthermore, the public sector has been unable to ensure the sustainable growth of the sector, while preserving the natural, cultural and urban heritage, which are under threat. The project will contribute to heritage conservation through the development of sustainable tourism that will benefit the poor.

The Greater Mekong Subregion is composed of countries sharing the Mekong River - Cambodia, People's Republic of China, Lao People's Democratic Republic, Myanmar, Thailand and Viet Nam.