Opening statement by ADB Vice-President Stephen Groff at the 21st GMS Ministerial Conference held 1 December 2016 in Chiang Rai, Thailand.
- Despite the global economic downturn starting this decade, the average annual GDP growth of the GMS has been a remarkable 8.4% since 2010.
- Greater connectivity and integration among GMS countries has pushed up per capita GDP, trade, and foreign direct investment.
- The new plan for the GMS until 2020 covers 107 projects with an estimated total cost of US$32.7 billion.
Excellencies, distinguished delegates, ladies and gentlemen:
I am honored to be able to speak with you today at the 21st Ministerial Conference of the Greater Mekong Subregion Economic Cooperation Program.
We appreciate that this is a difficult time for all the people of Thailand, as you mourn the passing of King Bhumibol Adulydej. On behalf of the Asian Development Bank, please accept our most heartfelt condolences for your great loss.
I would like to thank our host, the Royal Thai Government, for all the hard work that has gone into organizing this conference, and for the gracious hospitality that has been extended to all of us. I would also like to extend my special thanks to His Excellency Khun Arkhom Termpittayapaisith, Minister of Transport and GMS Minister of Thailand, for welcoming us, and for chairing our meeting. Minister , I am honored to co-chair this meeting with you.
GMS economic gains
The GMS continues to distinguish itself as one of the most dynamic subregions in Asia. Despite the global economic downturn at the start of this decade, the subregion’s average annual GDP growth has been a remarkable 8.4% since 2010. Per capita GDP has risen by one-third, intra-GMS trade has almost doubled, and intra-GMS foreign direct investment has also nearly doubled during this period. There are many factors underpinning this incredible performance, but we can say with certainty that greater connectivity and integration amongst GMS countries has contributed to this success.
Key achievements under the GMS Strategic Framework
The GMS Program has particularly distinguished itself in delivering significant results on the ground. Over the past five years, consistent with the GMS Strategic Framework, GMS projects and activities have measurably advanced connectivity. Today almost every important road network and bridge comprising the key GMS economic corridors has been completed. Additional proposals are on tap to further expand and extend GMS economic corridors in order to enhance connectivity between all GMS capital cities, major economic centers, and important GMS maritime gateways.
Progress is also being made on the software side of connectivity. Single stop inspections were introduced between Viet Nam and Lao PDR at the Lao Bao-Dansavanh border crossing last year, cutting processing time in half. Single stop inspections will be implemented at other key GMS border crossings in the near future. The GMS Road Transport Permit is also expected to be launched in January 2017, which will further facilitate the cross border movement of vehicles, people, and goods in the subregion.
"The path that the GMS has forged to date has delivered remarkable gains for the subregion and its people. With more daunting terrain still ahead, this Ministerial Meeting must look to break new ground – to embrace new approaches that will better ensure that as we move forward, we are laying a firm foundation for a more integrated, dynamic, prosperous, and inclusive GMS."
A strategy and action plan is being formulated for promoting safe and environment friendly agro-based value chain investments in the GMS that will benefit small-holder farmers, rural women, and small and medium agro-enterprises. Tourism continues to thrive in the GMS, with the success of efforts to market the Mekong subregion as a single tourism destination. I’m also happy to note that the Mekong Tourism Coordinating Office, which is fully financed by GMS countries, is well on its way to becoming a formal inter-governmental organization.
The Coordinating Office is just one of a number of new GMS bodies that have been established over the past decade, including the Environment Operations Center, the Regional Power Coordination Center, and the Greater Mekong Railway Association. All of these bodies are helping to enhance the effectiveness of the GMS institutional structure by promoting specialization, ownership, and a division of functions.
Human Resource Development also continues to move forward in the GMS. A new capacity building program to promote regional connectivity has recently been launched, building on the success of the Phnom Penh Plan for Development Management. This new program will cover not only GMS countries, but also other ASEAN countries members of IMT-GT and BIMP-EAGA, enhancing south-south learning, and the exchange of good practices.
Challenges and opportunities
While the GMS has made impressive strides, and remains economically robust, the increasingly complex global economic landscape in the wake of Brexit, the advent of the ASEAN Economic Community, and the emergence of new regional cooperation initiatives in the region all present the GMS with new challenges. To ensure ongoing inclusive growth and competitiveness it will be more important than ever for GMS economies to work together and remain abreast of the latest trends in technology, knowledge, and innovation.
The challenges are many, but so are the opportunities. The growth of global value chains presents great opportunities for producers, particularly small and medium enterprises along the major GMS economic corridors. With new funds and new multilateral institutions expanding access to infrastructure financing, there are more resources than ever to address the subregion’s substantial infrastructure backlogs. There are also tremendous possibilities for financing regional development by tapping into the region’s vast private savings currently residing in pension, insurance, and equity funds.
The emergence of new regional cooperation initiatives also presents new opportunities for the GMS. The past 25 years has shown us that cooperation amongst neighbors works. The same holds true for different development actors, so let all of us commit to working together to achieve stellar results for GMS nations.
The way forward
As the GMS both enters its 25th year in 2017, and the mid-point of its current 10-year Strategic Framework, it is a good time for us to take stock of what has been achieved, and to map out the way forward.
The GMS Program has a robust pipeline of projects set forth in the Regional Investment Framework and its Implementation Plan. A recent midterm review of the Plan indicates that 52 of the Plan’s 93 projects have already secured over US$ 26 billion in financing. About a third of the investment projects have commenced implementation, and two have been completed. We must now accelerate implementation of the projects set forth in the new Plan, which runs through 2020 and covers 107 projects with an estimated total cost of US$32.7 billion, and which is submitted for the endorsement of this Ministerial Conference.
The economic corridor approach is a cornerstone of the GMS Program, and has proven to be an efficient and effective way of utilizing limited resources. Moving forward the focus of efforts will be on the reconfigured and expanded economic corridors, which are being proposed for endorsement by the Conference, and to better ensure that social inclusiveness and sustainability are high priorities in the development of GMS economic corridors.
And that takes us to the GMS institutional framework. The framework needs further refinement to make it more nimble, and responsive, with better mechanisms to, for example, strengthen multi-sector cooperation. Moving forward we will continue efforts to enhance the framework, while at the same time taking care to strengthen those aspects of the framework that still work well.
The path that the GMS has forged to date has delivered remarkable gains for the subregion and its people. With more daunting terrain still ahead, this Ministerial Meeting must look to break new ground – to embrace new approaches that will better ensure that as we move forward, we are laying a firm foundation for a more integrated, dynamic, prosperous, and inclusive GMS.
The Asian Development Bank has been honored to be your ally throughout the past two and half decades, and you can count on our continued support in the years to come.
Thank you. I wish all of us a productive conference.