GREATER MEKONG SUBREGION REGIONAL COOPERATION AND ECONOMIC CORRIDOR DEVELOPMENT
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1 GREATER MEKONG SUBREGION REGIONAL COOPERATION AND ECONOMIC CORRIDOR DEVELOPMENT Pinsuda Alexander Asian Development Bank May 31, 2016 Bangkok, Thailand 1
2 Presentation Outline 1. Overview of the Greater Mekong Subregion (GMS) Cooperation Program 2. Transport Corridors and Economic Corridors in the GMS 3. Activities and Investments to Support Cross-Border Development Corridor Section Specific Concept Plans GMS Corridor Towns Development Projects
3 GMS Economic Cooperation Program Founded in 1992 with assistance from the Asian Development Bank (ADB) to enhance economic cooperation in the subregion. Countries: Cambodia, People s Republic of China (Yunnan and Guangxi Autonomous Region), Lao PDR, Myanmar, Thailand, and Viet Nam Strategic Priorities: o o Vision a more integrated, prosperous, and harmonious subregion 3Cs Connectivity, Competitiveness, Community
4 GMS Economic Cooperation Program GMS projects: Mobilized over $17.8 billion as of December 2015 since Approximately one third country-financed, one third ADB-financed, one third financed by other development partners. Program Sectors: Transportation Transport and Trade Facilitation Energy Agriculture Environment Human Resource Development Urban Development Tourism Information and Communications Technology Other Multi-Sector Programs (ex. economic corridor development)
5 5
6 GMS TRANSPORT & ECONOMIC CORRIDORS
7 Developing Economic Corridors is a Strategic Priority for the GMS Transform 9 priority transport corridors into economic corridors to boost cross-border trade and investment and to stimulate jobs and growth. 7
8 Corridor Development Approach Adopted early in GMS, 1998 Response to maximizing impact of typically limited resources available for regional projects (barely 10% of ODA) Transport corridors provide backbone for Regional Cooperation Initially transport links; subsequently focus on improving software and infrastructure investments for urban development Cluster regional projects and activities along corridors or at nodal centers on the corridors Catalyzing other investment from within and outside region Facilitates prioritization of regional projects and coordination of national projects with regional implications Infrastructure has been developed in specific geographical areas based on economic potential. Establishment of the Economic Corridors Forum (ECF) in 2008 forum for promoting/coordinating economic corridor development. ECF-8: Phnom Penh, Cambodia; 3-4 August
9 VIE: East-West Corridor (Lao Bao-Dong Ha) LAO: East-West Corridor (Phin-Dansavanh) With assistance from the Royal Thai Government JBIC-assisted 2nd Mekong International Bridge JBIC-assisted Hai Van Tunnel Construction and Da Nang Port Improvement 9
10 North-South Economic Corridor Upgrading completed in Completed Upgrading with assistance from Japan; in good condition Completed with ADB assistance Upgraded with Govt financing Completed in 2013 with financing from PRC, Thailand and ADB 4th Mekong international bridge completed Expressway completed in2014 with ADB assistance Multi-phase Ha Noi-Lang Son Expressway 10 10
11 Mostly 4-lane highways; not a constraint to crossborder traffic. Upgrading completed ADB and Japan assistance. GMS Southern Economic Corridor Upgrading of a section in Cambodia (70 km) completed with assistance from Viet Nam; financing requested for remaining sections. Upgrading completed with PRC assistance. Mostly 4-lane highways; not a constraint to crossborder traffic In good condition Upgrading completed in 2007 with Thailand, Korea, World Bank and ADB assistance. Upgrading completed with ADB and Japan assistance. Upgrading completed by with ADB, Korean, and Australian assistance. Mekong bridge completed in 2015 with financing from Japan
12 GMS Corridor Alignment Study (2016) Conditions for Extension and/or Realignment Major economic centers part of and linked along the corridor Corridors are linked to maritime gateways Corridor alignment match current and projected trade flows. Findings and recommendations to be presented at ECF in Phnom Penh in August
13 Southern Economic Corridor In 1999 (before upgrading road) - Travel time: 9-10 hours; - Cross-border trade at Moc Bai Bavet: $ 10 mil. USD In 2013 (both hardware and software are implemented) - Travel time reduced to 5-6 hours; - Cross border trade: $ 708 mil. USD; - Moc Bai Border Economic Zone: 41 projects, with total investment of $ 270 mil. USD and 3,000 jobs created Source: Viet Nam Ministry of Transport, at ECF6
14 Southern Economic Corridor The repair and maintenance of National Highway 2 and other key roads in Cambodia helps businessmen like Mr. Chhay in Kampot Province to import goods more easily from neighboring Viet Nam and quickly distribute his products nationwide. It was reliable energy supply that made the development of this special economic zone possible. The energy we re getting from EDC is roughly 50% cheaper that power from diesel generators, so now we can attract business and create jobs. Bat Trang SEZ Deputy Director
15 Developing GMS Economic Corridors 1. Requires a multi-sector approach to maximize the economic and social benefits of physical infrastructure: a. Cross-border and Special Economic Zones b. Corridor Town Development c. Logistics Centers and Dry Port Facilities d. Agro-processing Zones and Market Centers 2. Requires private sector participation to: a. Identify investment opportunities b. Contribute to project financing c. Create viable public-private partnerships
16 CORRIDOR SECTION SPECIFIC CONCEPT PLANS
17 We are committed to continue our joint efforts to transform the GMS transport corridors into economic corridors... Implementation of the SAPs should focus on selecting priority sections along the corridors which offer the greatest potential for attracting investment and yielding long-term development benefits. For these corridor sections, the identification of investment needs and opportunities should draw upon inputs from provincial and local government officials, the private sector and community residents. -GMS Leaders at the 5 th GMS Summit; Bangkok Thailand December 20, 2014
18 Three Pilot Locations Along Major Economic Corridors NSEC: Jinghong, PRC-Luang Namtha, Lao PDR EWEC: Mae Sot, Thailand Myawaddy, Myanmar SEC: Bavet, Cambodia- Moc Bai, Viet Nam
19 Economic Corridors Section Specific Concept Plans Objectives 1. Initiated planning processes for conceptual development plans focused on three prioritized subsections of the GMS Economic Corridors 2. Developed Section Specific Concept Plans for these pilot economic corridor sections a. Consultations and participants included: national and local government officials, the private sector, and local communities.
20 Review Assess Methodology for Preparing Section Specific Concept Plans Review of past SAPs and other corridor development activities Review RIF IP for priority investment projects along the corridor sections Establish cross-border Planning Task Force Conduct consultations and surveys for area assessments Hold 2-day regional workshops for SWOT analyses and the development of concept plans Synthesis & Implementation Link concept plans with regional development and national development plans Leverage concept plans to promote current and future GMS projects
21 Key Inputs and Tools Cross-border Planning Task Forces Multi-sector SWOT analyses (Strengths, Weaknesses, Opportunities, Threats) Spatial Multi-Criteria Assessments (SMCAs) Linkages with other ongoing projects and GMS priority projects
22 Workshop 1: Southern Economic Corridor Planning Task Force Workshop Moc Bai, VIE- Bavet, CAM Border Area 22
23 Justification for a Border Node at Moc Bai/ Bavet Volume of cross border trade increasing Growth in export industries Emerging tourism Critical mass of activity Faster access of people and goods to/from HCMC and PP
24 Key Planning Objectives Proposed Measures Decongest and upgrade border area Streamline cross border customs procedures and improve infrastructure Create new border post Restructure Key Urban Industrial Area Cluster industries in specific area Achieve economies of scale in utility infrastructure Achieve Better Life-Work Balance Introduce more housing and services Achieve better land use distribution Segregate industrial-related traffic and uses Upgrade tourism area Introduce buffer areas Introduce controlled access on new road infrastructure Reduce travel times from/to border area Introduce planned expressway and possible future rail links Complement existing regulatory role of border with pro-active facilities to support cross border trade and investment Build on critical mass of Government services to include trade and investment advice centres Develop logistical and trade facilitation centre Initiate joint export processing zone
25 Introduce trade and investment support Reduce travel times to/from border Achieve better land use distribution Decongest border area Achieve better life/work balance Restructure industrial area
26 Workshop 2: East West Economic Corridor Planning Task Force Workshop Mae Sot, THA- Myawaddy, MYA Border Area 26
27 Industrial Zone? Industrial Zone? Bridges (4)- MoC and JICA Trade hub?
28 Mae Sot-Myawaddy SWOT- Economic Drivers & Competitive Industries Strengths Located near TH-MYA border, EWEC, and NSEC crossroads, and not far from Yangon; good condition highways to Bangkok Abundant natural resources and shared cultural history Local attractions for investment and tourism include airport (MS-Yangon flights?), discovered pagoda in Hpa-An Strong border trade, business-2-business relationships, and Myanmar has good knowledge of Thai market Strong GDP growth (>20%) in Mae Sot Thailand (Tak) has the policy to support development in Myawaddy Complementarities: cheaper raw materials esp. agricultural products- in Myanmar; technology and skilled labor from Thailand Flat land availability; planned SEZs Weaknesses High cost of travel, freight charges (no insurance), unstable security, and unreliable service on Myanmar side Underdeveloped infrastructure; no international financial institutions Complicated government procedures Far from raw material sources and provincial capitals Lengthy/cumbersome process (3 months) to bring in labor from Myanmar to Thailand and costly visa; Not enough skilled labor from Myanmar; transient labor; insufficient training facilities; human capacity shortfalls Border security issues and illegal activities Unbalanced and undervalued trade Shortage of public services (esp. health) on Myanmar side Land assigned for refugee camps
29 EWEC Corridor Section Plan: 1. Planned or new infrastructure development Completion of Myawaddy-Kawkareik road 2 nd Thailand-Myanmar Friendship bridge and secondary border crossing Thailand s SEZ plans in Tak province 2. Expansion of Mae Sot Airport 3. Preservation of agricultural lands to the south and commercial opportunities to the north 4. Joint management of resources : river resource management cross-border power trade labor flows 29
30 EWEC Corridor Section Plan: Initial Findings
31 Workshop 3: North South Economic Corridor Planning Task Force Workshop Luang Namtha, Lao PDR- Jinghong, PRC
32 II. ແຜນພ ດທະນາ Development ດ ານຊາຍ ແດນ Border ສປ ຈນ Plan 2. ເຂດການຄ າ ແລະ ການ ບ ລການ Trade and Service area ສປປ ລາວ ຂສພ ບເຕ ນແດນງາມ 1640 ເຮ ກຕາ Boten DanNgarm Special Economic Zone 1640 hectares ເສ ນທາງ R3 ເຂດທ ອງ ທ ຽວ Tourism area 1. ດ ານພາສ Customs 3. ເຂດສາງພ ກ-ຄ ຽນຖ າຍສ າ ນຄ Transit area 32
33 Border cooperation zone MOU signed between governments of PRC and Lao PDR. Private concessionaire to develop 24 sqkm. border zone. Lao PDR MPWT also developing logistics plan for ICD at Nateuy. Need to look at the broader rea beyond only the direct border zone.
34 Initial Observations from the Workshops 1. Need to Leverage Strong Business-to-Business Relationships. Continue public-private dialogue and private-private dialogue to enhance trade and investment in the ECs. Myanmar UMFCCI and Thailand s Chamber of Commerce have signed an MOU for cooperation in four key areas and plan to meet every two to six months to monitor progress 2. Need to Address Transnational Issues. Communicable disease control, cross-border energy demand, establishment of a single stop inspection and customs control area, and flood control require strong coordination at the local and the national level. 3. Need to Strengthen Cross-Border and Inter-Agency Coordination. Cross-border cooperation is constrained by different languages and multiple institutions on both sides for Spatial Planning. 34
35 GMS URBAN DEVELOPMENT: CORRIDOR TOWNS & ECONOMIC ZONES
36 GMS Urban Development Strategic Framework ( ) Endorsed by GMS Ministers at the 20 th GMS Ministerial Conference, September 2015 Three Strategic Pillars Pillar I: Planning and Development of Key Urban Centers Pillar II: Planning and Development of Border Areas Pillar III: Capacity Development in Urban Planning and Management
37 GMS Corridor Towns Development Projects 1. Multiple phase investment projects in towns along GMS corridors. Projects in Cambodia, Lao PDR, Viet Nam, and Myanmar. 2. Investments such as: Solid waste management Wastewater Drainage Riverbank protection Town center enhancement Access roads Urban recreation River port rehabilitation
38 GMS Corridor Towns Development Project
39 Second GMS Corridor Towns Development Project
40 3 rd CTDP Third and Fourth GMS Corridor Towns Projects 4 th CTDP (planned) Lao PDR and Cambodia Towns TBD
41 Regional Technical Assistance: Capacity Building for Economic Zones in Border Areas Output 1: Overall assessment and prioritization of three border areas for development Output 2: Institutional and capacity development program to develop detailed Joint Border Action Plans Output 3: Next phase of Corridor Towns Development Project
42 Next Steps Implementation of Corridor Towns Development Projects Implementation of Technical Assistance program(s) Other Ways to Support Cross Border Planning and Investment? Infrastructure for border crossing points; hardware and software (transport and trade facilitation) Business support services, especially SMEs but also cross border investors Expanded multi-sector development (eg. tourism infrastructure) Support for subregional logistics and trade centers Local economic development programs PRC- Lao PDR: MOU for private sector developer in Boten-Mohan Economic Cooperation Zone
43 KEY POINTS 1. The GMS transport and economic corridors build connectivity and major infrastructure building blocks for trade, investment, and economic opportunities in the GMS. 2. Multi-sector Corridor Section Specific Concept Plans introduce spatial planning and serve as a foundation for integrated, crossborder development. 3. GMS Corridor Towns Development Projects develop urban infrastructure in new growth nodes to deepen and expand benefits of the GMS corridors.
44 THANK YOU
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