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Greater Mekong Subregion Program

The GMS Economic Cooperation Program began in 1992 and involves Thailand, Vietnam, southern PRC, Laos, Cambodia and Myanmar, the last three being Least Development Countries by UN definition. The backbone is transport corridors, but the program seeks to make them key economic development corridors through investment in infrastructure, facilitation and logistics.

  • The East West Corridor connects Thailand, Laos and Vietnam.
  • The Southern Corridor connects Thailand, Cambodia and Vietnam.
  • The North South Corridor connects southern China through Laos or Myanmar to Thailand.

The strategic thrust of the program is to strengthen infrastructure linkages, to facilitate cross-border trade and investment, to increase private sector participation, to develop labor competencies and to protect the environment in the process. The action plan involves 9 infrastructure and economic sectors with a vision of creating a more integrated, prosperous and harmonious subregion. Thirty-five transport projects have been identified (1992-2005) - 10 road, 8 rail, 10 water, 6 air and 1 institutional. In addition to ADB funding, other donors such as JBIC have also invested in GMS infrastructure.

Non-physical impediments to regional movement are difficult border formalities, restrictive visa requirements and vehicle entry, varying vehicle and driver standards and lack of effective transit regimes. To eliminate these non-physical barriers on the selected routes, the GMS Cross-Border Transport Agreement (CBTA) was negotiated and has now been ratified by all 6 GMS countries. Twenty annexes and protocols have been added on implementing facilitation of cross border movement of goods and persons, a single stop/single window inspection system, harmonization and integration of systems, exchange of traffic rights and transit traffic provisions. The institutional structure for implementing the CBTA is illustrated below.

The tasks are ratification of the annexes and protocols, capacity building, improved border infrastructure, MIS for border management and building good will and trust among members.

The GMS Transport Sector mission statement for 2006 - 2015 is “a well-built, seamless multimodal infrastructure is essential to the facilitation of trade, movement of people and the provision of basic services throughout the whole region.

The Action Plan recommends 31 transport investment projects as well technical assistance for the full implementation of the CBTA, improved infrastructure management, private sector financing of infrastructure, improved transport logistics and training. In addition, the new action plan emphasizes broadening the scope to include economic corridor initiatives:

  • Strengthening other related infrastructure (e.g., power supply, water, sanitation and rural roads)
  • Facilitating trade, investment and tourism
  • Improving trade logistics
  • Achieving sustainable use and conservation of natural resources
  • Developing biodiversity conservation corridors
  • Mitigating negative externalities associated with increased connectivity

A number of studies and presentations highlight the logistics requirements from industry and shippers in the region and pilots carried out under the program that help to structure the proposals for logistics and facilitation objectives. (See Kobayashi, Yoshimoto and Shibasaki below)

There has been accelerated economic growth and reduced poverty since the GMS program was initiated. Poverty, measured as less that US$1 per day as a head count ratio, in Laos dropped from 52.7% to 28.8% between 1990 and 2003. Poverty in Vietnam dropped from 50.7% to 9.7% in the same period.

Obviously a number of factors account for these statistics. Fujimura and Edmonds use a gravity model to demonstrate the inter-relationship among cross-border infrastructure improvements, trade and FDI in the Greater Mekong Sub-region. Ishida assesses the socio-economic factors that affect the success of the proposed economic corridors and the challenges they present to further corridor development. (see below)