By Takehiko Nakao
Manila, March 30, 2018
The GMS Economic Cooperation Program has contributed significantly to this transformation. Since it was established in 1992 as a means to enhance economic relations and promote regional cooperation, its six member countries – Cambodia, China, Laos, Myanmar, Thailand, and Vietnam – have built a platform for economic cooperation that has mobilised almost US$21 billion (K28.1 trillion) for high-priority infrastructure projects. Foreign direct investment in the subregion has surged ten-fold and trade between its countries has climbed from $5 billion to over $414 billion.
But the subregion faces challenges to its prosperity. Further reducing poverty, climate change adaptation and mitigation, energy efficiency, food security, and sustainable urbanisation remain priorities of the programme. Countries also face new challenges, including growing inequalities, rising levels of cross-border migration, and the potential impact on jobs of the digital revolution.
Moreover, the subregion’s countries have agreed to significant commitments under the Sustainable Development Goals and the Paris climate agreement.
There are also emerging opportunities for the subregion, including incorporating new technologies in education, agriculture, health, and finance. The Greater Mekong countries are located at the crossroads of South and Southeast Asia, and hence can benefit from the increased momentum for growth in South Asia.
As the subregion’s leaders gather to chart the future of the economic programme at the 6th GMS Summit in Hanoi on Saturday, it’s a good time to consider how a new generation of initiatives can ensure the programme remains relevant and responsive to the Greater Mekong’s needs.
Stronger ties through innovation
The Hanoi Action Plan and the GMS Regional Investment Framework 2022 (RIF 2022), both of which will be proposed for adoption at the summit, provide a platform for countries to strengthen their cooperation through continual innovation. These two documents will have a sharpened focus on the programme’s strategic goals of enhancing connectivity, competitiveness, and community in the subregion.
Connectivity has been dramatically improved. More than 10,000 kilometres of new or upgraded roads and 3000km of transmission and distribution lines have been added under the programme. This interconnected network of transnational economic corridors is built on 25 years of work to extend the benefits of growth to remote areas. The Hanoi Action Plan calls for the continued expansion of these economic corridors to boost connectivity both between and within countries.
The subregion’s competitiveness is improving through efforts to facilitate transport and trade, enhance agriculture exports, and promote the Greater Mekong as a single tourism destination, after receiving a record 60 million visitors in 2016. Looking ahead, it will be important to continue cutting red tape and remove the remaining barriers to transport and trade.
Finally, communities are being strengthened through cross-border initiatives to control the spread of communicable diseases, expand educational opportunities, protect the Greater Mekong’s rich biodiversity, and mitigate the impacts of climate change.
GMS countries have identified 227 new projects worth about $66 billion under RIF 2022 that will expand economic prosperity by developing cross-border transport and energy infrastructure.
ADB to invest $7 billion
The ADB, which has been the programme’s secretariat since its inception, expects to provide $7 billion over the next five years for a range of projects supporting transport, tourism, energy, climate change mitigation and adaptation, agribusiness value chains, and urban development. This builds on more than $8 billion in financing provided by ADB so far under the programme.
To deliver these projects and make headway on other priorities such as infectious disease control and environmental preservation, strong partnerships are vital. The programme depends on the collaboration of many stakeholders, including local administrations and communities, development partners, academia, and the media.
The Greater Mekong will benefit from strengthened partnerships with other regional and global cooperation platforms, leading to new opportunities for development.
Partnerships with the private sector will also be increasingly important, and it is gratifying to see them deepening through the GMS Business Council, the Mekong Business Initiative, the e-Commerce Platform, GMS tourism and agriculture forums, and the recent Finance Sector and Trade Finance Conference.
I am optimistic that the subregion will meet its challenges and capitalise on emerging opportunities. By working together, the Greater Mekong countries can deliver rapid, sustainable, and inclusive growth for another 25 years and beyond. ADB will continue to be an important and trusted partner in that endeavour.
Takehiko Nakao is president of the Asian Development Bank.