Japan will today urge further investment in physical infrastructure and software development among the Mekong countries as part of an objective to achieve greater connectivity across Asean.
"Since the region is moving towards the Asean Community in 2015, we would like to fully support greater connectivity-building within Asean. But still, the mekong people are facing more challenges, particularly income disparity," said Kimihiro Ishikane, deputy director-general of the Asean and Oceanian Affairs Bureau.
A high-level international conference on the Greater mekong Subregion (GMS) will be held today, co-chaired by Thailand and Japan at the Kempinski Bangkok Hotel. Foreign Minister Kasit Bhiromya and Osamu Fujimura, state secretary for foreign affairs of Japan, will take part, along with representatives of the Asian Development Bank, ESCAP (the United Nations Economic and Social Commission for Asia and the Pacific), the Japan Economic Trade Organisation, the Economic Research Institute for Asean and East Asia, and the Asean Secretariat.
The GMS countries are part of Asean but most of them are still poor. Thailand's annual per capita income is about US$3,500 (Bt110,000), compared with less than $1,000 for Burma, Laos and Cambodia. Vietnam's annual per capita income is slightly above $1,000.
"We need to address this income disparity in the mekong region, otherwise Asean will have a difficult time achieving closer connectivity by 2015," Ishikane said.
The official development assistance programme of Japan has committed to pouring $5.9 billion into the mekong region over three years. But Ishikane said the ODA money was far from sufficient in meeting demand. Private participation was required to embark on further investment in infrastructure such as ports, roads, bridges and other projects.
Physical infrastructure alone is not adequate because there is a need for software development to go with it to ensure connectivity, he said. For example, goods transported from one country to another within the region have to go through complicated and cumbersome cross-border procedures that add up to business or transaction costs. It is important that countries adopt the same software procedures to link the movements of goods and services with the physical infrastructure.
Japan is one of the biggest investors in the GMS. Ishikane said surveys by the Japan Bank for International Cooperation one after another over the past three to four years had found that Japanese executives favoured China as the top destination for investment, followed by India, Vietnam and Thailand. Their reasons for picking these four countries are market potential, competitive wage structure and industrious workforce.
The international conference today will discuss policy options for the completion of the missing transport links within the region, including roads, bridges, railways and ports, and how to manage hardware infrastructure effectively.
The conference will also address software problems to smooth cross-border transport facilitation and regulation within the GMS, especially along the border areas. Finally, it will examine the role of private and public partnership in regional development as a whole.