11 June 2015 Kunming, Yunnan Province People s Republic of China REVISITING THE GMS ECONOMIC CORRIDOR STRATEGIES AND ACTION PLANS

Transcription

1 11 June 2015 Kunming, Yunnan Province People s Republic of China REVISITING THE GMS ECONOMIC CORRIDOR STRATEGIES AND ACTION PLANS

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3 REVISITING THE GMS ECONOMIC CORRIDOR STRATEGIES AND ACTION PLANS Discussion Paper Prepared for the 7th Economic Corridors Forum Kunming, Yunnan Province People s Republic of China 11 June 2015

4 Linked Documents 1. Download Updated Action Plans for GMS Economic Corridor Development (as of March 2015) at gms/strategy 2. Download Strategy and Action Plan for the Greater Mekong Subregion East-West Economic Corridor at publications/strategy-and-action-plan-greater-mekong-subregion-east-west-economic-corridor 3. Download Toward Sustainable and Balanced Development: Strategy and Action Plan for the Greater Mekong Subregion North- South Economic Corridor at 4. Download Sharing Growth and Prosperity: Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor at Disclaimer This paper was prepared to serve as a basis for discussions at the 7th GMS Economic Corridors Forum. The views expressed in this paper are those of the author and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. Copyright 2015 How to reach us: GMS Secretariat Southeast Asia Department Asian Development Bank Fax: gms@adb.org Download this paper at:

5 Contents I. Introduction... 1 II. Strategies and Action Plans for GMS Economic Corridor Development... 3 Need for Strategies and Action Plans (SAPs)... 3 Process and Steps in Formulating the SAPs... 4 Key Elements of the SAPs: Strategic Frameworks and Action Plans... 5 III. Review of Implementation of the SAP... 9 Overall Assessment... 9 East-West Economic Corridor (EWEC) North-South Economic Corridor (NSEC) Southern Economic Corridor (SEC) IV. Lessons Learned V. Conclusions and Recommendations List of Tables Table 1. Original and Amended Alignment/Configuration of the NSEC and SEC... 5 Table 2. Summary of Strategic Frameworks of the EWEC, NSEC and SEC... 8 Table 3. Summary of Status of Implementation: EWEC, NSEC and SEC Action Plans List of Figures Figure 1. Agreed Alignment of EWEC, NSEC and SEC... 6 Figure 2. Strategic Framework... 7 Introduction iii

6 Abbreviations ADB Asian Development Bank CBEZ cross-border economic zone CDC communicable disease control CEP Core Environment Program BCI Biodiversity Conservation Initiative DP Development Partner EWEC East-West Economic Corridor FRETA Freight and Transport Association GMS Greater Mekong Subregion GMS-SF GMS Strategic Framework HRD human resource development Lao PDR Lao People s Democratic Republic NSEC North-South Economic Corridor PPP public private partnership PRC People s Republic of China RETA regional technical assistance RIF Regional Investment Framework SAP Strategy and Action Plan SEC Southern Economic Corridor SEZ special economic zone TTF transport and trade facilitation iv Revisiting the GMS Economic Corridor Strategies and Action Plans

7 I. Introduction Strategies and Action Plans (SAPs) for the Greater Mekong Subregion (GMS) East- West Economic Corridor (EWEC), 1 North-South Economic Corridor (NSEC) and Southern Economic Corridor (SEC) were prepared between 2008 and 2009 to help guide, coordinate and integrate multisector initiatives to develop these corridors. 2 The formulation of the SAPs roughly coincided with the establishment of the Economic Corridors Forum (ECF) in June 2008, which reinforced the central role of economic corridor development in the GMS Program. The SAPs for the EWEC and NSEC were endorsed at the 15th GMS Ministerial Conference (MC) held on 19 June 2009 in Petchaburi, Province, Thailand, while the SAP for the SEC was endorsed at the 16th MC held on 20 August 2010 in Hanoi, Viet Nam. This paper revisits the rationale and key elements of the three SAPs, and broadly assesses the degree to which they were implemented. It indicates which sectors and initiatives have progressed well, and which are lagging behind. It also identifies lessons learned, and suggests possible directions for the future, with the aim of helping to strengthen economic corridor development approaches in the GMS. This review is not intended to be an evaluation of the efficiency, effectiveness and impact of the SAPs as a whole, as that exercise would require more extensive analysis. Section II provides the context in which the SAPs were formulated, focusing on why the SAPs were needed, the process and steps taken in their formulation, and the key elements of the SAPs. Section III presents a brief overall assessment of the SAPs implementation. Section IV discusses the lessons learned in the formulation and implementation of the SAPs. Section V offers some concluding observations and recommendations. 1 A comprehensive pre-investment study was prepared for the EWEC in 2001, so the SAP for the EWEC consisted mainly of stocktaking, update and refinement of the pre-investment study. See ADB Pre-investment Study for the Greater Mekong Subregion East-West Economic Corridor. Manila. 2 ADB Strategy and Action Plan for the Greater Mekong Subregion East-West Economic Corridor; Toward Sustainable and Balanced Development: Strategy and Action Plan for the Greater Mekong Subregion North-South Economic Corridor; and Sharing Growth and Prosperity: Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor. Manila. Introduction 1

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9 II. Strategies and Action Plans for GMS Economic Corridor Development Need for Strategies and Action Plans The economic corridor approach to subregional development was adopted by GMS countries at the 8 th GMS Ministerial Meeting held in Manila in 1998, during which the EWEC, NSEC and SEC were designated as priority economic corridors. It was not until 10 years later, however, that steps were taken to prepare SAPs for the EWEC, NSEC and SEC. 3 Prior to the SAPs, GMS activities were based mainly on sectorspecific strategies and action plans. As activities progressively expanded along these corridors, GMS countries increasingly felt the need to have SAPs or road maps for corridor development. The preparation of the SAPs represented a first attempt to integrate multisector activities and projects for the development of GMS economic corridors. By 2008, several investment projects to improve transport links along the economic corridors had been completed or were nearing completion. Although these investments helped enhance physical connectivity and establish operational transport corridors, it was recognized that additional efforts would be needed to transform them into economic corridors. Under the economic corridor approach, programs and projects in priority sectors of the GMS Economic Cooperation Program, including transport, energy, tourism, environment and human resource development, would focus on the same geographic area(s) to maximize development impact. The development of economic corridors is a complex and long-term process, and the building of cross-border transport links is only one initial stage. Economic corridor development requires careful planning and close coordination of infrastructure investments and related measures to promote and support business opportunities, create employment and increase incomes along and around the corridors. SAPs for the GMS economic corridors have addressed these needs by: (i) operationalizing a multisectoral approach to economic corridor development; (ii) concentrating efforts, improving coordination, and ensuring effective and sustained implementation of economic corridor development initiatives; (iii) mobilizing necessary financial and technical resources from public and private sources for economic corridor development projects; and (iv) broadening the support for GMS economic corridor development among various stakeholders especially at the local level. 3 See footnote 1 for the case of the EWEC. Strategies and Action Plans for GMS Economic Corridor Development 3

10 Process and Steps in Formulating the SAPs National and corridor-level consultation meetings and workshops were held for each corridor as part of the SAP formulation process. The participation of various stakeholders at the provincial level, including private sector representatives, informed the SAP formulation process, helped promote GMS economic corridor development, and promoted cooperation amongst neighboring provinces along the economic corridors. At the outset, it was necessary to confirm the alignment and configuration of the three economic corridors, including their areas of influence. 4 Based on the country consultations, certain changes in the alignment and configuration of the NSEC and SEC were adopted for the purpose of preparing the SAPs. The EWEC alignment remained unchanged. 5 Table 1 compares the original alignment and configuration of the NSEC and SEC with the alignment and configuration used in their respective SAPs. The majority of the amendments were made in the SEC, where two subcorridors and an intercorridor link were added to the original corridor, which had only one route. The agreed alignment and configuration of EWEC, NSEC and SEC are shown in Figure 1. The subsequent preparation of the SAPs involved the following steps: (i) determining the basic demographic, physical and socioeconomic characteristics of the economic corridor areas (population and land area; natural resources; labor force and employment; income level and economic structure; cross-border trade; foreign direct investment; tourism; and infrastructure); (ii) assessing the development potential of and investment opportunities in these areas; (iii) identifying the comparative advantages and complementarities among the national components of the corridors; (iv) examining the constraints and challenges in developing the corridors; and (v) ascertaining opportunities for cooperative efforts to develop the corridors. 6 4 A corridor s area of influence may include a neighboring province or locality that is not traversed by the main road links along a corridor. One example is Oudumxay Province in Lao PDR, which was included in the area of influence of the NSEC even though it is not traversed by the Kunming-Bangkok via Lao PDR sub-corridor. 5 The extension of the SEC from Bangkok to Dawei, Myanmar was proposed by ECF-3 in June 2011 and endorsed by the 17th Ministerial Conference in August There may be a need to review the alignment of the EWEC, possibly extending the Myanmar section up to Yangon, and adding a route to Hanoi using the 3rd International Mekong Bridge between Nakhon Phanom (Thailand) and Thakhek (Lao PDR) on the eastern section of the EWEC. This will enhance the economic potential of the EWEC with the inclusion of two growth drivers (Hanoi and Yangon). Moreover, Yangon is presently not part of the three economic corridors. 6 For the EWEC, these steps were taken earlier through the Pre-investment Study for the Greater Mekong Subregion East-West Economic Corridor, which was completed in See footnote 1. 4 Revisiting the GMS Economic Corridor Strategies and Action Plans

11 Table 1. Original and Amended Alignment/Configuration of the NSEC and SEC Original Before Guangxi Zhuang Autonomous Region (Guangxi) joined GMS: Kunming-Chiang Rai-Bangkok via Lao PDR or Myanmar Kunming-Hanoi-Haiphong After Guangxi joined GMS: Kunming-Chiang Rai-Bangkok via Lao PDR or Myanmar Kunming-Hanoi-Haiphong Nanning-Hanoi-Haiphong North-South Economic Corridor Amended Kunming-Chiang Rai-Bangkok via Lao PDR or Myanmar (Western Subcorridor) Kunming-Hanoi-Haiphong (Central Subcorridor) Nanning-Hanoi via Pingxiang in the PRC and Dong Dang in Viet Nam, or via Fangcheng and Dongxing in the PRC) and Mon Cai in Viet Nam (Eastern Subcorridor) Bangkok-Phnom-Penh-Ho Chi Minh City-Vung Tau Southern Economic Corridor Bangkok Phnom Penh Ho Chi Minh City Vung Tau (Central Subcorridor); Bangkok Siem Reap Stung Treng Rathanakini O Yadov Pleiku Quy Nhon (Northern Subcorridor); Bangkok Trat Koh Kong Kampot Ha Tien Ca Mau City Nam Can (Southern Coastal Subcorridor) Sihanoukville Phnom Penh Kratie Stung Treng Dong Kralor (Tra Pang Kriel) Pakse Savannakhet (Intercorridor Link, which connects the three SEC subcorridors with EWEC) Key Elements of the SAPs: Strategic Frameworks and Action Plans Strategic Frameworks for the three economic corridors were formulated based on the results of the country consultations and workshops, and the analysis of the information indicated in paragraph 9, above. Using the strategic framework for the NSEC as an example, Figure 2 demonstrates the links between the vision and goals of NSEC development, strategic objectives, and key sectors involved in the implementation of the strategy. A summary of the Strategic Frameworks for the development of the EWEC, NSEC and SEC is shown in Table 2. The Strategic Frameworks for the EWEC, NSEC and SEC were translated into Action Plans containing specific, time-bound projects and measures to achieve their objectives, and mechanisms for monitoring and evaluation. These Action Plans provided the following information for each proposed project and measure: (i) result or output expected; (ii) indicators of progress and performance; (iii) agency or body responsible for implementation, (iv) time frame Strategies and Action Plans for GMS Economic Corridor Development 5

12 Figure 1. Agreed Alignment of EWEC, NSEC and SEC 6 Revisiting the GMS Economic Corridor Strategies and Action Plans

13 Figure 2. Strategic Framework Vision Ultimate Goals Objectives Focal Sectors Dynamic, wellintegrated Engine for socioeconomic development Attract investment Gateway for ASEAN-PRC trade Generate higher income Increase employment opportunities Reduce income disparities Improve living conditions Address social and environmental concerns Strengthen physical infrastructure Facilitate crossborder trade and transport Promote investment Address human resource constraints Enhance institutional arrangements Environment Infrastructure Trade and transport facilitation Investment promotion Human resource development Institutional development or target date for completion; and (v) current status of the project or measure. The Action Plans included projects and measures that were being implemented, or planned to be initiated, within the SAP periods ( for the NSEC, for the EWEC, and for the SEC). They included not only projects supported by ADB but also those by other Development Partners (DPs). The major sources of project information were (i) the Vientiane Plan of Action for the GMS covering (the predecessor of the GMS Regional Investment Framework (RIF) and the GMS RIF Implementation Plan); (ii) the GMS Development Matrix covering ongoing and planned activities of DPs and related subregional initiatives in the GMS, such as the Ayeyarwaddy-Chao Phrya-Mekong Economic Cooperation Strategy (ACMECS); (iii) ADB s Regional Cooperation Operations and Business Plans; and (iv) investment plans of GMS countries. Strategies and Action Plans for GMS Economic Corridor Development 7

14 Table 2. Summary of Strategic Frameworks of the EWEC, NSEC and SEC EWEC NSEC SEC An economic corridor that brings prosperity and well-being to all people in the corridor area. Vision A dynamic, progressive and wellintegrated corridor, able to attract domestic and foreign investments, functioning as a gateway to ASEAN-PRC trade, and contributing to increased employment and incomes, and poverty reduction in the GMS. A dynamic and prosperous corridor that improves the well-being of the people and ensures that development is inclusive and sustainable. Enhance connectivity Ensure social and environmental sustainability Empower the private sector Reduce poverty Strategic Thrusts/Objectives Mainstream measures to deal with social and environmental concerns Strengthen infrastructure and facilities Promote and facilitate crossborder trade and transport Promote and facilitate investment in key sectors and industries in the corridor Establish and enhance institutional mechanisms for planning, coordinating and implementing NSEC initiatives and for expanding public-private partnership Strengthen infrastructure and connectivity Promote and facilitate trade and investment Address social and environment concerns Enhance private sector participation. Focal Sectors Infrastructure Environment Infrastructure Trade and investment HRD (health and training) Trade and transport facilitation Tourism Infrastructure Investment promotion and facilitation (agriculture, agroindustry, manufacturing, tourism, logistics) Agriculture and Agro-industry Trade and transport facilitation Skills development and migration Private sector development Investment promotion and Environment facilitation (agriculture, agroindustry, manufacturing, tourism, logistics) Social development and Institutional development Private sector participation environment Guiding Principles Led by private sector Public sector as catalyst and facilitator Pragmatic and results-oriented Effective integration of less developed areas Close coordination with development partners and related subregional initiatives 8 Revisiting the GMS Economic Corridor Strategies and Action Plans

15 III. Review of Implementation of the SAPs The Action Plans accompanying the Strategic Frameworks for the three economic corridors were combined into SAPs, and formulated in such a way as to readily allow periodic monitoring and updates. Two new column were added to the Action Plan matrices indicating the status of the implementation of individual projects and measures as of June 2011 and March 2015, compared to their status in June 2008 for the NSEC and June 2009 for the EWEC and SEC, which were the approximate dates when final drafts of the SAPs were completed. 7 March 2015 is around two years after the end of the period covered by the SAPs for the EWEC and NSEC, and around one year after the end of the period covered by the SAP for the SEC. This makes it possible to (i) assess the status of the implementation of Action Plans after the end of their planning periods; and (ii) identify which focal sectors had advanced well, and which ones had fallen behind. Information on the status of the implementation of projects and measures in the Action Plans was culled from the proceedings and reports of the GMS working groups, GMS Business Forum, corridor-specific symposia or conferences, ADB project progress and completion reports, files of the GMS team at ADB, and relevant studies dealing with various aspects of the GMS Program. There are some projects for which information is lacking or needs confirmation. GMS countries are requested to provide feedback on the status of these projects, so updated information can be incorporated in the review. Overall Assessment The proportion of completed and ongoing projects and measures relative to the total number of projects and measures in the Action Plans can be taken as an indicator of the degree to which the Action Plans have been implemented. Based on this yardstick, the EWEC shows the most progress with an 83% implementation rate, while the SEC and NSEC both have rates around 72%. The latter may improve to a certain extent, as updated information on several pending projects is obtained. The higher implementation rate of the EWEC can be partly explained by the smaller 7 See Updated Action Plans for GMS Economic Corridor Development (as of March 2015) which has been prepared as an Appendix to this Discussion Paper and can be downloaded at Review of Implementation of the SAPs 9

16 number of projects in the EWEC Action Plan. The NSEC and SEC Action Plans contain twice as many projects and measures as the EWEC Action Plan, largely due to the fact that the NSEC and SEC have multiple subcorridors, in contrast to the EWEC s unitary alignment. This difference is particularly pronounced in the infrastructure sector, where the EWEC has only 10 projects, compared to 29 for the NSEC and 22 for the SEC. It is important to note that at least 70% of all projects in the SAPs have been implemented, which shows that significant progress has been made in implementing the SAPs and in developing the corridors. This has been made possible by close cooperation among the GMS countries together with development partners. Many other development partners were involved besides ADB. They include multilateral institutions such as the World Bank and several United Nations agencies, and bilateral agencies such those in Australia, Finland, France, Netherlands, Norway, New Zealand, Japan, Republic of Korea, Sweden and Switzerland. There has also been increasing South-South cooperation among the GMS countries, with the PRC, Thailand and Viet Nam providing development assistance to other GMS countries. Road (and bridge) projects in the Action Plans of all three economic corridors have progressed very well. The most notable of these are (i) the 4 th Mekong International Bridge (Houaxay- Chiang Khong), which opened in December 2013; (ii) the Mekong Bridge at Neak Loueng in Cambodia, which was opened in April 2015; and (iii) the Noi Bai-Lao Cai Expressway, which was opened in However, there are 10 infrastructure projects each in the NSEC and SEC Action Plans that are still pending, especially in the rail and power sectors. The progress in implementing environmental and social projects is also noteworthy, with all of the environment projects in all three corridors either completed, or ongoing. Tourism projects in all of the economic corridors are also progressing well. All of the proposed tourism projects in the EWEC Action Plan have been completed, while 8 of the 9 tourism projects in the NSEC, and 6 of the 9 projects in the SEC have either been completed or are ongoing. In the logistics sector, the establishment of the GMS Freight and Transport Association (FRETA) has been a particularly notable development, and will help facilitate action on other proposed projects and measures (e.g., the establishment of a logistics information platform and the preparation of business plans for the development of a logistics industry in the GMS). The establishment of FRETA was proposed at the Investment and Business Dialogue during the 3 rd GMS Summit in 2008, and was included as a priority measure in the Action Plans of the three economic corridors. There are some gaps in measures involving investment promotion and facilitation, transport and trade facilitation (TTF), and expansion of private sector participation in the three economic corridors, which indicates that more efforts are needed in these areas. With regards to TTF, Subproject 2 of the Regional Technical Assistance on Support for Implementing the Action Plan for Transport and Trade Facilitation in the GMS (item iii, para. 15), which was approved in 2014, is expected to refine and strengthen the approach to TTF along the economic corridors. 8 8 ADB. RETA 8748, Support for Implementing the Action Plan for Transport and Trade Facilitation in the Greater Mekong Subregion (Subproject 2), approved on 28 October 2014 and financed by Australia. Subproject 1 of the RETA, which was also financed by Australia, was completed on 31 July There are also three other technical assistance programs financed by Japan to improve customs procedures and regulations, and strengthen partnership with the private sector along the economic corridors. 10 Revisiting the GMS Economic Corridor Strategies and Action Plans

17 The implementation status of projects and measures in the Action Plans for the EWEC, NSEC and SEC is summarized in Table 3. Results are summarized by focal sectors and implementation status (i.e., completed, ongoing or pending ). Pending projects and measures are those which (i) have not yet been acted upon; (ii) are new initiatives included in the Regional Investment Framework (RIF) Implementation Plan, ; and/or (iii) require updated information. East-West Economic Corridor The EWEC Action Plan has five strategic thrusts: (i) improving the business environment; (ii) promoting trade, investment and tourism; (iii) alleviating poverty; (iv) enhancing connectivity; and (v) protecting the environment. The status of the implementation of measures under each of these thrusts is summarized below. 9 There were 36 projects and measures in the EWEC Action Plan, of which 20 had been completed, 10 were ongoing, and 6 were pending as of March The pending projects were mainly in trade and investment, and agriculture and agro-industry. Improving the business environment The strategic thrust toward improving the business environment has 4 measures, 3 of which have been acted upon through ADB regional assistance (RETA) projects as of March Of these, 2 have been completed training programs for small and medium-sized enterprises (SME) and mapping of value chain opportunities for SMEs along EWEC. The RETA which indirectly addresses the need for business development centers for SMEs was approved in 2014 and is still ongoing, with a target completion date of The proposed establishment of an SME Development Fund is still pending. In this regard, the establishment of national schemes similar to those of the Thai Credit Guarantee Corporation has been suggested as an initial step. Promoting trade, investment and tourism Of the 14 measures for the strategic thrust of promoting trade, investment and tourism, 12 have been acted upon. Of these, 8 have been completed (preparation of Cross Border Transport Agreement implementation manuals, EWEC tourism projects, establishment of FRETA, and improving farmers livelihood through rice information technology in Thai and Vietnamese EWEC areas). Two measures are ongoing, and 2 have been included in the GMS Regional Investment Framework Implementation Plan for The 2 measures that have not been acted upon to date are the review of investment incentives, and synthesis of pro-poor agricultural development. 9 For details, see Updated Action Plans for GMS Economic Corridor Development (as of March 2015). See footnote 7. Review of Implementation of the SAPs 11

18 Table 3. Summary of Status of Implementation: EWEC, NSEC and SEC Action Plans Focal Sectors No. of Projects or Measures Completed Ongoing Pending* Completed and Ongoing/No. of Projects (%) East-West Economic Corridor Infrastructure of which: Roads Trade and investment Tourism Agriculture and agro-industry Social development Environment Total North-South Economic Corridor Environment Health Infrastructure of which: Roads Rail Transport and trade facilitation 6 0** Investment promotion/facilitation of which: Logistics Tourism Manufacturing Capacity building and institutional 10 0** development Total Southern Economic Corridor Infrastructure of which: Roads Rail Power Transport and trade facilitation 8 0** Investment promotion/facilitation of which: Logistics Tourism Agriculture Health, skills development and migration Environment Private sector participation 7 0** 6 1 Total * Includes projects/measures included in the RIF Implementation Plan ( ) and those on which updated information is needed. ** Some activities have been completed, but overall efforts are continuing. Individual projects not specified in the Action Plans (e.g., name of RETAs). 12 Revisiting the GMS Economic Corridor Strategies and Action Plans

19 Alleviating poverty There are 5 projects under this strategic thrust, of which 3 have been completed, and two are ongoing. The completed projects cover the control and prevention of HIV/AIDS, and Phase I of the communicable disease control (CDC) project. The ongoing projects are Phase II of the CDC project and capacity building for HIV/AIDS prevention. Enhancing connectivity Of the 10 projects under the strategic thrust toward enhancing connectivity, 5 have been completed, and 4 are ongoing. Planned upgrading of EWEC roads in Thailand and Viet Nam has been substantially completed. Three of the ongoing projects are in Myanmar (road projects), and 1 is in Viet Nam (seaport development). The proposed Savannakhet railway line has not yet been acted upon. Protecting the environment There are 3 projects under this strategic thrust. Some of the planned activities have been completed, but others are continuing in order to ensure the sustainability of the interventions results. Phase I of the Core Environment Program (CEP) Biodiversity Conservation Initiative (BCI) was completed in 2012, while Phase II is ongoing. The CEP is also continuing to address the two other measures involving strategic environmental assessments, and realization of lowcarbon freight corridors. North-South Economic Corridor The NSEC Action Plan has six major thrusts: (i) mainstream measures to deal with social and environmental concerns; (ii) strengthen physical infrastructure and facilities; (iii) facilitate crossborder transport and trade; (iv) promote and facilitate investment in key sectors and develop industrial clusters; (v) address human resource constraints; and (vi) enhance institutional mechanisms and expand public-private partnerships. The status of the implementation of measures under each of these thrusts is summarized below. 10 There were 75 projects/measures in the NSEC Action Plan of which 35 had been completed, 19 were ongoing and 21 were pending as of March The pending projects were mostly in rail transport, investment promotion and facilitation, and capacity building and institutional development. 10 For details, see Updated Action Plans for GMS Economic Corridor Development (as of March 2015). See footnote 7. Review of Implementation of the SAPs 13

20 Mainstream measures to deal with social and environmental concerns There are 6 projects listed under environment concerns, of which 4 have been completed (including conduct of SEA for NSEC, environmental protection in Golden Quadrangle, 11 and Phase I of the CEP-BCI, promotion of renewable energy in NSEC areas), and 2 are ongoing. Follow-on projects and measures are being implemented for the completed projects, including Phase II of the CEP-BCI. There are 5 projects listed under social concerns, of which 4 have been completed, including HIV/AIDS prevention and control, and Phase I of the CDC Project; and 1 project (promotion of road safety) is ongoing. Phase II of the CDC Project is ongoing with a target completion date of Strengthen physical infrastructure and facilities The road component under this strategic thrust has 16 projects, of which 5 are in the Western sub-corridor, 8 are in the Central Subcorridor, and 3 are in the Eastern Subcorridor. In the Western Subcorridor, all 5 projects, including the 4 th Mekong International Bridge between Houaxay and Chiang Khong, have been completed. 12 In the Central Subcorridor, all 8 projects have also been completed, including the Lao Cai-Noi Bai Expressway, as of March Two of the projects in the Eastern Subcorridor (Hanoi-Lang Son and Ha Long-Moncai) have not yet been implemented, but are included in the RIF Implementation Plan for commencement in Updated information on the third project (upgrading of Fangchenggang-Dongxing highway to an expressway) is needed. There are 8 rail projects, 2 of which have been completed as of March 2015 (Yen Vien-Lao Cai railway upgrading, and signaling and telecommunications improvement between Lao Cai and Hanoi). 14 Updated information on the status of the other railway projects is required. There are three water transport projects, 2 of which have been completed. 15 No action has been taken so far on the third project (Study of the Use of the Red River for Subregional Transport). The single project in telecommunications is reported as completed, but needs reconfirmation. With regard to border facilities, some improvements have been made in major border crossings along NSEC routes. Facilitate cross-border transport and trade There are 6 measures listed under this strategic thrust foremost of which is the implementation of the Cross Border Transport Agreement (CBTA) in NSEC border checkpoints. Work is continuing on the Action Plan for Transport and Trade Facilitation in the GMS, supported by Subproject 2 of RETA 8748 (paragraph 16), which is aimed at (i) strengthening transit operations; (ii) expanding transport and traffic rights; and (iii) developing subregional logistics systems for more competitive services. No action has been taken to date on 3 of the proposed measures under this objective, i.e., establishment of a system for the regular monitoring and reporting of 11 This covers border areas in the PRC, Lao PDR, Myanmar and Thailand. 12 Completion of the Mohei-Simao Road and Highway 1020 (Chiang Khong-Chiang Rai) Project to be confirmed. 13 Completion of the project roads in Yunnan Province financed by the PRC to be confirmed. 14 Subject to confirmation from Viet Nam. 15 Completion of 2 nd port on Chiang Saen, Kok/Mekong River and Laem Chabang Phase 2 (C and D Container Terminals) to be confirmed. 14 Revisiting the GMS Economic Corridor Strategies and Action Plans

21 cross-border trade in NSEC, specification of transit charges, and adoption of suitable financial settlement mechanisms covering border trade. Promote and facilitate investment in key sectors and develop industrial clusters The 3 measures under investment promotion are being implemented, while only 2 of the 5 measures under business information have been acted upon. One of the two measures proposed to promote investment in manufacturing has been acted upon by individual NSEC countries, while no action has been taken on the other. In logistics, 4 of the 6 measures have been implemented, foremost of which is the establishment of the GMS Freight and Transport Association (FRETA) in No action has been taken on the establishment of a logistics information platform and preparation of business plan for logistics development in the NSEC. In tourism, 9 of the 10 listed measures have either been completed or are ongoing. In the promotion of special economic zones (SEZs) and industrial clusters, a study on the establishment of a pilot cross-border economic zone between Pingxiang (PRC) and Dong Dang (Viet Nam) was completed. The promotion of industrial clusters along the NSEC, especially agro-industrial zones, is included in the RIF Implementation Plan for , while promotion of linkages among SEZs in the NSEC is partly being addressed through the Urban Development Strategic Framework for the GMS. 16 Address human resource constraints One of the 3 measures in the public sector has been completed (capacity building for local communities that have potential tourism assets under their stewardship), one is ongoing (conduct of seminars on TTF for local officials of border provinces), and one needs follow-up. Training programs for specific labor skills are being conducted by individual NSEC countries, while networking of training institutes in the NSEC is being pursued by the Mekong Institute, Khon Kaen University, and Phnom Penh Plan for Development (PPP). 17 Enhance institutional mechanisms and expand public-private partnerships There are 7 measures listed under this strategic thrust for enhancing institutional mechanisms for implementing NSEC initiatives and expanding public-private partnership for NSEC development, of which 6 are being implemented. One proposed measure, i.e., the organization of an NSEC grouping of chambers of commerce along the NSEC has not yet been acted upon. The conduct of capacity building programs for local institutions in the NSEC and promotion of public-private partnership in infrastructure projects is being undertaken by individual NSEC countries. 16 ADB Greater Mekong Subregion Urban Development Strategic Framework, Manila. This is expected to be endorsed at the 20 th GMS Ministerial Conference later in Networking with PPP was pursued until March Review of Implementation of the SAPs 15

22 Southern Economic Corridor The SEC Action Plan has four major thrusts: (i) strengthen infrastructure and connectivity; (ii) promote and facilitate trade and investment; (iii) address environmental and social concerns; and (iv) enhance private sector participation and public-private sector collaboration. The status of the implementation of measures under each of these thrusts is summarized below. 18 There were 81 projects/measures in the SEC Action Plan of which 27 had been completed, 32 were ongoing and 22 were pending as of March The pending projects were mostly in power, and investment promotion and facilitation. Strengthen infrastructure and connectivity For roads in the Central Subcorridor, there are 2 projects. Of these, one is completed: the Mekong Bridge at Neak Loueng, which was inaugurated in April The other project (Bien Hoa-Vung Tau Expressway) is awaiting approval. 19 In the Northern Subcorridor, there are 3 road projects, of which 2 have been completed and one is still to be acted upon (upgrading of the road from the Cambodia-Viet Nam border to Quy Nhon) as of March In the Southern Coastal Subcorridor, 2 projects have been completed and one is nearing completion as of March Of the two rail projects, the one in Cambodia has been partly completed, while the other in Viet Nam (HCMC-Loc Ninh) is included in the RIF pipeline. One of the water transport projects (Laem Chabang Phase 2) has been completed. Updated information is needed for the other two water transport projects. There are 6 power projects, of which 2 (transmission line projects in Cambodia and Viet Nam) have been completed, and one (transmission line between Lao PDR and Cambodia) is being considered for ADB financing. The power generation projects in Cambodia and Viet Nam require updated information. There are 2 projects for improving border facilities one is ongoing, while the other one is still to be acted upon. More information on the telecommunications and air transport projects is needed to make an assessment on their progress. Promote and facilitate trade and investment There are 8 measures under trade promotion and facilitation, 4 of which are being addressed by the TTF program of action (various aspects of CBTA implementation, customs facilitation, training for CBTA and trade facilitation initiatives) and one through an ADB-funded investment project (Sanitary and Phytosanitary Handling [SPS] handling) 20 as of March One is ongoing and 2 are still to be acted upon (adoption of amicable and efficient means of financial settlement of cross border trade in the SEC and regular monitoring of cross border trade). Under investment promotion, 2 have been completed and one is under consideration or being implemented by individual SEC countries. Under business information, 2 of the 4 measures have been partially 18 For details, see Updated Action Plans for GMS Economic Corridor Development (as of March 2015). See footnote To be confirmed. 20 Loans and grants to Cambodia, Lao PDR and Viet Nam for Trade Facilitation: Improved Sanitary and Phytosanitary Handling in Greater Mekong Subregion Project totaling $36.86 million. The Cambodia and Lao PDR portions were approved on 26 June 2012, while the one for Viet Nam was approved on 20 November Revisiting the GMS Economic Corridor Strategies and Action Plans

23 addressed (preparation of SEC business directory and website) while 2 remains to be acted upon. Of the two projects in agriculture, phase 1 of the first project (promotion of contract farming) has been completed, while phase 2 is ongoing. The second project (rural renewable energy) is ongoing. Updated information on the third project (productivity improvements of cash crops) is needed. In logistics, there are 4 measures, one of which has been implemented (establishment of FRETA) and 3 are ongoing. There are 9 projects in tourism, of which 2 have been completed. Four have been conducted as part of continuing activities, while 2 are included in the RIF Implementation Plan, (improvement of access road and tourist facilities). No updated information is available for the 9 th project ( Green Triangle ). On SEZs, there are 4 measures which are being addressed on a continuing basis. Address environmental and social concerns On environment, there are 5 projects, of which 2 have been completed (strategic environmental assessment for SEC and Phase I of CEP-BCI), and 3 are ongoing as part of continuing activities. There are 12 projects addressing social concerns, of which 6 have been completed, including phase 1 of the CDC project, and 3 are ongoing as part of continuing activities. Updated information on the 12 th project (cooperation program among vocational/training institutes) is needed. Enhance private sector participation and public-private sector collaboration To promote private sector participation, 7 measures have been included in the Action Plan, 6 of which are being addressed on a continuing basis and in many cases, by individual SEC countries. The proposed GMS SME Development Fund has not yet been established, but the possibility of adopting the Thai Credit Guarantee Corporation model has been proposed as an initial step. Review of Implementation of the SAPs 17

24

25 IV. Lessons Learned The SAP formulation and implementation process provided a framework to focus on the development of the EWEC, NSEC and SEC. It helped in operationalizing a multisector approach, and in providing a clearer spatial dimension to GMS development. Together with the ECF, the process also provided a platform for the involvement of local authorities in the GMS Program, and in the development of economic corridors. However, the SAPs may have contributed even more to economic corridor development if not for certain factors, including: (i) The focus and attention on the SAPs was not fully sustained, as emphasis shifted to the development of project pipelines for the GMS Regional Investment Framework (RIF) after ECF-3 in Lao PDR in June Before this time, there was growing momentum in implementing the SAPs, starting with an extensive discussion of the SAPs at ECF-2 in Cambodia, followed by the conduct of corridor-specific symposia for the EWEC, NSEC and SEC, which culminated in ECF-3. The implementation of the SAPs was not discussed in ECF-4 and ECF-5, but the need to refocus attention on the SAPs was agreed upon in ECF-6. (ii) The SAPs were not widely communicated and disseminated to all stakeholders, especially at the local level. There was an effort to prepare summaries of the SAPs, but these were not translated and disseminated in all of the required languages. (iii) There was limited monitoring, review and updating of the Action Plans. While an attempt was made in 2011 to review the implementation of the Action Plans, the results of the review were not tabled for discussion in ECF-4 and ECF-5. (iv) A proposal to establish a monitoring system for assessing the progress in developing EWEC, NSEC and SEC was discussed in ECF-3, but no follow up action was taken for its implementation. Despite the aforementioned factors, it is important to note that the SAPs should be considered to be macro-planning frameworks to guide and focus multisector projects and activities along the corridors, rather than micro-implementation plans along specific sections of the corridors. As experience shows, treating the SAPs as implementation plans runs up against many difficulties and constraints, and translating the SAPs into more realistic and achievable implementation plans covering specific sections of the corridors is perhaps the most practicable approach. Lessons Learned 19

26 Several lessons can be learned from the experience in the formulation and implementation of the three SAPs, which are important for preparing implementation plans along specific sections of the corridors. These lessons include the following: (i) The participation of local authorities is valuable not only to ensure ownership, but also because of their extensive knowledge of the development potential and needs of their respective areas and communities. They can also lend a realistic perspective to proposed projects and activities. (ii) Implementation of the strategies and action plans requires sustained focus and attention to ensure their effective implementation and relevance. (iii) It is necessary to build constituency and support the implementation of strategies and action plans through continuing communication and information dissemination at the national and local levels to promote ownership and participation. (iv) Action plans need to be living documents, with regular monitoring, review and updating being an integral part of their implementation. 20 Revisiting the GMS Economic Corridor Strategies and Action Plans

27 V. Conclusions and Recommendations On the whole, the formulation and adoption of the SAPs for the EWEC, NSEC and SEC contributed positively to efforts to transform transport corridors into economic corridors. More specifically, the SAPs helped in (i) providing multisector and spatial elements to the GMS Program, which complemented the sector approach in the Program; (ii) articulating the vision and goals of EWEC, NSEC and SEC development and the means to achieve these goals and vision through specific projects and measures; and (iii) facilitating the participation of local authorities in economic corridor development. Although the planning timeframes of the SAPs covered only the period up to 2012 and 2013, the SAPs generally remain valid and relevant today. Accordingly, in addition to retaining the strategic frameworks of the SAPs, the following are recommended: (i) Prepare section-specific corridor concept plans initially for selected pilot areas, which can be subsequently replicated and used as a basis for fine tuning economic corridor development strategies and action plans. (ii) Refine the Action Plans by reducing the number of projects to selected high-priority projects, including those to be identified in the section-specific corridor concept plans. (iii) Monitor and update the Action Plans, utilizing the monitoring system for the RIF Implementation Plan to the extent possible. It has not been possible for this review to ascertain the efficiency of the SAPs in delivering the outputs of the projects and measures in the Action Plans, their effectiveness in achieving expected outcomes and impact, and their overall contribution to the development of the economic corridors. 21 In particular, the latter will require an evaluation of the individual and 21 There have been evaluation studies of various aspects of the GMS Program. See for example: ADB Greater Mekong Subregion: Maturing and Moving Forward. Manila; ADB Sector Assistance Program Evaluation for the Transport and Trade Facilitation Sector in the Greater Mekong Subregion--Time to Shift Gears, Manila; ADB Sector Assistance Program Evaluation of the Energy Sector in the Greater Mekong Subregion. Manila; ADB Sector Assistance Program Evaluation of the Tourism Sector in the Greater Mekong Subregion. Manila; ADB Greater Mekong Subregion: Tourism Sector Assessment, Strategy and Road Map. Manila; Ministry of Foreign Affairs, Finland Greater Mekong Subregion Core Environmental Programme and Biodiversity Corridors Initiative Evaluation of Phase I and Appraisal of Phase II ; and SIDA GMS Core Environmental Program/Biodiversity Corridors Initiative Evaluation Report. Conclusions and Recommendations 21

28 collective impact of the projects and measures in the SAPs. Nevertheless, it is worthwhile to note that at least 70% of all projects and measures in the Action Plans have been implemented, suggesting that strong foundation for the development of the EWEC, NSEC and SEC has been established, which future efforts can build upon. 22 Revisiting the GMS Economic Corridor Strategies and Action Plans

29 Revisiting the GMS Economic Corridor Strategies and Action Plans Strategies and Action Plans (SAPs) for the Greater Mekong Subregion (GMS) East- West Economic Corridor (EWEC), North-South Economic Corridor (NSEC) and Southern Economic Corridor (SEC) were prepared between 2008 and 2009 to help guide, coordinate and integrate multisector initiatives to develop these corridors. The formulation of the SAPs roughly coincided with the establishment of the Economic Corridors Forum (ECF) in June 2008, which reinforced the central role of economic corridor development in the GMS Program. This paper revisits the rationale and key elements of the three SAPs, and broadly assesses the degree to which they were implemented. It indicates which sectors and initiatives have progressed well, and which are lagging behind. It also identifies lessons learned, and suggests possible directions for the future, with the aim of helping to strengthen economic corridor development approaches in the GMS. About the Greater Mekong Subregion Economic Cooperation Program The Greater Mekong Subregion (GMS) is made up of Cambodia, the People s Republic of China (PRC, specifically Yunnan Province and Guangxi Zhuang Autonomous Region), the Lao People s Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam. In 1992, with assistance from the Asian Development Bank (ADB) and building on their shared histories and cultures, the six countries of the GMS launched a program of subregional economic cooperation the GMS Program to enhance their economic relations, initially covering the nine priority sectors: agriculture, energy, environment, human resource development, investment, telecommunications, tourism, transport infrastructure, and transport and trade facilitation. GMS Secretariat Southeast Asia Department Asian Development Bank Fax: gms@adb.org Web address: