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BIMP-EAGA: Turning remote, isolated areas into economic engines

Article | 24 June 2019

For centuries merchants have navigated the bright blue waters of the Sulu and Celebes seas to trade goods. There is a similarly rich history of global commerce for the four countries that share these seas – Brunei Darussalam, Indonesia, Malaysia, and the Philippines – stretching back to the time of the spice trade between Asia and Europe.

Yet in the early 1990s many of the remote, isolated provinces in this region – far from their respective countries’ capitals, and isolated from engines of commerce – were economically disadvantaged. Trade and investment were limited, and were further inhibited by political turmoil affecting many areas.

In 1992, then Philippine President Fidel Ramos had a vision of reviving these centuries-old trade links, forging new economic ties to spark growth in some of these countries’ most marginalized provinces, and providing regions long impaired by strife with better access to viable economic opportunities.

Two years later, in 1994, these four countries joined together to launch the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) initiative.

The program was launched on March 24 in Davao City, and current Philippine President Rodrigo Duterte, who was mayor of Davao at the time, recently reflected on the milestone event.

“For us Mindanaoans, it was a demonstration of confidence in the potential of Mindanao and a bold investment for greater progress and prosperity for the region,” Duterte said.

BIMP-EAGA quickly provided an impetus for growth in the subregion, with new intra-region shipping routes and air links established. The program’s contribution to Mindanao’s growth was particularly dramatic, and by 1997 it had become one of the Philippines’ fastest growing areas, with growth rates surpassing the national average.

Surging trade, tourism and economic growth

This year, as BIMP-EAGA celebrates its 25th anniversary, two of the program’s founding fathers – Malaysia Prime Minister Dr. Mahathir Mohamad, and Brunei Darussalam Sultan Hassanal Bolkiah – are joining Indonesian President Mr. Joko Widodo and Philippine President Duterte at the 13th BIMP-EAGA Summit to reflect on the initiative’s success, and chart a future course for the subregion.

Progress has been impressive. In recent years the subregion has experienced notable economic expansion, with combined gross domestic product reaching $287 billion, merchandise trade surging 21.5%, and tourist arrivals growing 6.6% annually.

ADB first supported BIMP-EAGA in 1996, and has been the program’s Regional Development Advisor since 2003.

“New road projects in Mindanao will help connect isolated communities, and further establish Mindanao as an important gateway for trade and business.”

Jason Rush, ADB BIMP-EAGA

ADB is helping the subregion develop key transport links, including roads in Kalimantan, Indonesia and Mindanao, Philippines, as well as power interconnection projects between the two regions.

“ADB support is making a meaningful difference in BIMP-EAGA,” said ADB’s Jason Rush, who lead the Bank’s support of BIMP-EAGA cooperation. “New road projects in Mindanao will help connect isolated communities, and further establish Mindanao as an important gateway for trade and business.”

 “The ADB-supported Sarawak-Kalimantan power interconnection project is particularly significant, because it’s paving the way towards the realization of the ASEAN power grid,” he added.

Other ADB support includes Green City Action Plans for Kendari, Indonesia and Kota Kinabalu, Malaysia; technical assistance to help countries better implement ASEAN trade agreements’ and studies on the development of Special Economic Zones to help further drive economic advancement in BIMP-EAGA.”

ADB has also helped BIMP-EAGA develop a pipeline of 69 priority infrastructure projects valued at over $22 billion.

Connecting an area that has long suffered from isolation

Connectivity remains at the heart of BIMP-EAGA’s work, and the vast majority of priority infrastructure projects focus on land, sea, and air connectivity, as well as power interconnection projects. Other key pillars include agribusiness, tourism, the environment, and socio-cultural education.

Underlying these objectives is an overarching strategy to mobilize private sector investment to spur prosperity. Under the BIMP-EAGA 2025 Vision, the program is focused on supporting the development of a more competitive manufacturing sector that transitions into higher levels of value-added production; developing the subregion as a “food basket” for Asia, through support for a sustainable agro-industry and fisheries; and positioning BIMP-EAGA as a well-connected,  multi-country tourism destination.

“EAGA's private sector play the crucial role of stirring the sub-region's business climate.”

Datuk Roselan Johor Mohamad, BIMP-EAGA Business Council Chairman for Malaysia

The private sector has been central to BIMP-EAGA since the program’s outset. At the very first Ministerial Meeting in 1994 leaders emphasized the importance of ensuring private sector participation. They also endorsed the establishment of a private sector BIMP-EAGA Business Council.

Today the private sector, represented by the BIMP-EAGA Business Council, is so central to the program’s work that it is even granted “fifth country” status at Senior Officials Meetings, with its Chairman having the same rank as other Senior Officials during policy discussions.

The private sector plays an important role in identifying challenges and solutions to better promote trade, tourism and investment, and also helps identify private sector-led projects that can support the subregion’s development.

On a recent visit to the Philippines, Datuk Roselan Johor Mohamad, BIMP-EAGA Business Council Chairman for Malaysia, encouraged more businesses from the sub-region to participate in inter-EAGA business ventures.

"EAGA's private sector play the crucial role of stirring the sub-region's business climate,” he said, noting new opportunities for collaboration can expand market reach.

Today many exciting initiatives are in motion. Private air carriers are looking into the development of new short-haul flight routes within the subregion, and countries are also exploring new power interconnection possibilities between Borneo and Mindanao.

Looking forward, BIMP-EAGA’s continued economic growth and integration will hinge on its ability to improve all aspects of connectivity – not just roads, rail and ports, but also sound policies supporting development in remote communities.

BIMP-EAGA leaders are fully committed to attracting more infrastructure investment, creating a better enabling policy environment, and supporting the development of more robust trade facilitation measures to spur commerce and improve livelihoods.