The world has witnessed the rise of Asia, but many people are not aware of the transformation that has yet to unfold completely in the Greater Mekong Region.
The area is geopolitically important. It is in the middle of the region stretching from Northeast Asia to South Asia and links to the Indian Ocean, inner China and the East China Sea. It offers a land-corridor alternative to the sea lane through the Strait of Malacca, providing China with direct access to the Indian Ocean.
Thailand, Vietnam, Myanmar, Cambodia and Laos, as well as Guangxi and Yunnan provinces in China, share the vast natural riches of the Mekong River. The sharing of this rich resource, however, has not yet been enough to propel all these countries to prosperity, with many in the region lagging behind in economic development.
If the shared natural resource has not yet succeeded in producing expected results, then perhaps a shared vision will result in a shared success. Such an idea has already been put into action by the Asian Development Bank-led Greater Mekong Subregion (GMS) Programme, which promotes economic development and cooperation among the countries in the region.
Since its inception two decades ago, the GMS Programme has attracted close to US$14 billion (Bt433 billion) in investments and has stimulated a decade-average 7-per-cent growth among GMS economies. In addition, the region has seen improvements in agricultural productivity and a transformation to an open-economy trading region, making the GMS one of the fastest-growing regions in the world.
Although poverty still looms, the region has high development potential, with a total population of about 314 million. Furthering the hope of progress, an integrated strategy of development – the formation of the Asean Economic Community – is anticipated by 2015. In preparation, a strategic framework is being created involving infrastructure developments and the development of economic trade zones in the region.
Thailand is leading the change with its newly formed commitment to “prosper thy neighbour”. Thailand has been keen to share its growth and expertise. The government has pledged about $77 million in aid for infrastructure development and technical assistance for the countries in the GMS.
Whether the progress currently enjoyed by Thailand is an offshoot of the gradual stability of the GMS or vice versa, the issue is not whether the strategic framework shall result in integrated economic development but, rather, what the challenges of such regional progress will be for the countries individually, and Thailand in particular.
Thailand and its unique position in the Greater Mekong Region
Compared with other countries in the world, Thailand definitely has an interesting success story.
Surviving a long history of political chaos, poverty and financial crisis, Thailand has seen its previous status as a “lower-income” economy upgraded by the World Bank to an “upper-middle-income” economy. The country’s road map to growth during the past half-century began with agricultural development that led the transformation into an urbanised economy with high profits from manufacturing.
This growth is likely to continue. The International Monetary Fund predicts that the country’s gross domestic product will expand by 5.5 per cent this year and soar by as much as 7.5 per cent next year, the highest growth among the Asean nations, while the country’s unemployment rate is the lowest in Asia.
A great offshoot of such growth is not just Thailand’s remarkable reduction in poverty but also its switch from being a recipient of international aid to becoming a donor country, with a view of increasing regional and subregional stability and competitiveness through cooperation initiatives.
Believing that capital markets are a key driver of economic development in the region, Thailand has initiated such cooperation initiatives as fostering development in neighbouring countries in the areas of trade, investment and tourism and through infrastructure and trade system collaboration.
Thailand’s commercial banks, for instance, have been pivotal to the economic growth of neighbouring countries. One example is its lending to hydropower projects in Laos. Meanwhile, the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand are offering their technical assistance for the promotion and development of neighbouring capital markets in the GMS, including to Laos, Cambodia and possibly Myanmar.
Thailand has also stamped itself as the tourism hub for the GMS. In the first quarter of this year, there were 463,468 visitors from the four GMS countries of Laos, Vietnam, Cambodia and Myanmar, up 18.48 per cent compared with the first quarter of last year. Thailand now leads in promoting cross-border tourism and raising the GMS as a single tourist destination, as evidenced by roughly 350 delegates from the six GMS member countries coming to Thailand to attend the Mekong Tourism Forum in June.
Thus the technical and financial aid from Thailand has contributed significantly to the growth of the GMS, which helps the positioning of Thailand at a time when global investors are paying more attention to the growth potential of the Mekong region.