20-year-old GMS plans new phase of investment

Economy September 13, 2012 00:00


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The Greater Mekong Sub-region development scheme, which celebrates its 20th anniversary this year, is moving |forward with a new generation of investment aimed at strengthen-|ing connectivity, competitiveness and community over the next decade.

The GMS will play a strategic |role in connecting Southeast Asia with South Asia and China, the |Asian Development Bank said |yesterday.

The next generation of investment for GMS projects will be multi-sector schemes involving urban linkages and with a focus on environmental friendliness, said the director of the ADB’s Regional Coopera-tion and Operations Coordination Division, Arjun Goswami.

Multi-sector investment will entail projects that combine urban and tourism development.

“You can have urban development along an economic corridor which promote wastewater treatment and bring tourists to a clean city,” he said.

Established in 1992, the GMS involves cooperation among six countries in the Mekong basin: Thailand, Myanmar, Laos, Cambodia, Vietnam and China’s southern provinces of Yunnan and Guangxi.

GMS countries, as well as partners and the ADB itself, have poured some US$15 billion (Bt464 billion) into infrastructure project development so far.

Participating countries, many of which had just emerged from conflict and war when they grouped together 20 years ago, have benefited from the scheme with average economic growth of 7-10 per cent over the past two decades, Goswami said.

While such impressive growth might not be attributable to GMS projects alone, the scheme has played a significant part, he added.

The poverty level in previously war-torn Cambodia has halved |from 44 per cent of the population 20 years ago to 22 per cent now, while the rate in Laos has declined from 55 per cent to 35 per cent, and the rate in Vietnam from 63 per cent to just 15-17 per cent, said the ADB director.

“Looking at the infrastructure connectivity map in 1992 and 2012 is dramatically different,” Goswami said in a telephone interview from ADB headquarters in Manila. “The road, power and all these [other] connections were not there 20 |years ago.”

The challenge now is how these countries can transform such connectivity, notably the transportation corridor, into genuine economic |corridors for sustainable growth, he said.

The GMS has been successful |in terms of physical connectivity, |but needs to do more in other areas to create and facilitate economic activities along the corridors, he |said.

He cited one key area as the need for countries to forge closer cooperation to facilitate cross-border transportation and trade.

GMS members also require more public infrastructure for urban areas along the corridors, such as wastewater treatment plants and solid-waste management, in order to get private investors to bring money into the corridors, he said.

A major risk for economic-cor-ridor development is climate change and natural disaster, where the |challenge for the GMS is to integrate climate-change adaptation and |mitigation measures into both national and sub-regional development efforts, he said.