Securing Future Prosperity of the Greater Mekong Subregion

Foreign direct investment into the Greater Mekong Subregion has surged tenfold and trade between its countries has climbed to over $414 billion from $5 billion. (Reuters Photo/Chor Sokunthea)

By : Takehiko Nakao | on 4:36 PM March 29, 2018
Category : Opinion, Commentary

Countries in the Greater Mekong Subregion, or GMS, have made stunning progress over the past quarter century. Once plagued by poverty, they are now economic success stories.

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 states – Cambodia, People's Republic of China, Lao People's Democratic Republic, Myanmar, Thailand and Vietnam – have built a platform for economic cooperation that has mobilized almost $21 billion for high-priority infrastructure projects.

Foreign direct investment into the subregion has surged tenfold and trade between its countries has climbed to over $414 billion from $5 billion.

But the subregion faces challenges to its prosperity. Further reducing poverty, climate change adaptation and mitigation, energy efficiency, food security and sustainable urbanization remain priorities of the GMS Program. Countries also face new challenges, including growing inequalities, rising levels of cross-border migration, and the potential impact on jobs of the fourth industrial revolution.

Moreover, GMS countries have agreed to significant commitments under the Sustainable Development Goals and the Paris Agreement on climate change.

There are also emerging opportunities for the region, including incorporating new technologies in various sectors such as education, agriculture, health, and finance. GMS countries are situated at the crossroads of South and Southeast Asia, and hence they can benefit from the increased momentum for growth in South Asia.

As GMS leaders gather this week in Hanoi to chart the future of the program, it's a good time to consider how a new generation of initiatives can ensure the GMS Program remains relevant and responsive to the subregion's needs.

The Hanoi Action Plan and GMS Regional Investment Framework 2022, both proposed for adoption at the summit, provide a platform for countries to strengthen their cooperation through continuous innovation. These two documents will have a sharpened focus on the GMS Program's strategic goals of enhancing connectivity, competitiveness, and community in the subregion.

Connectivity, the first objective, has been dramatically improved. More than 10,000 kilometers of new or upgraded roads and 3,000 kilometers of transmission and distribution lines have been added under the program. These transportation networks have been transformed into an interconnected network of transnational economic corridors, building 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 ongoing efforts to facilitate transport and trade flows, enhance agriculture exports, and promote the GMS 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 to remove 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 subregion's rich biodiversity, and mitigate the impacts of climate change.

GMS countries have identified a new pipeline of 227 projects worth about $66 billion under the GMS Regional Investment Framework 2018-2022. These projects will expand economic prosperity by developing cross-border transportation and energy infrastructure.

The Asian Development Bank, which has been the program's secretariat since its inception, expects to provide $7 billion over the next five years for a range of projects supporting transportation, tourism, energy, climate change mitigation and adaptation, agribusiness value chains and urban development. This builds on more than $8 billion in financing provided by the ADB so far under the program.

To deliver these projects and make headway on other priorities such as infectious disease control and environmental preservation, strong partnerships are vital. The GMS Program depends on the collaboration of many stakeholders, including local administrations and communities, development partners, academia and the media.

The GMS will benefit from strengthened partnerships with other regional and global cooperation platforms, leading to new opportunities for future 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 capitalize on emerging opportunities. By working together, GMS countries can deliver rapid, sustainable and inclusive growth for another 25 years and beyond. The ADB will continue to be an important and trusted partner in that endeavor.

Takehiko Nakao is president of the Asian Development Bank

Show More

 
MORE NEWS