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Taking a new route to change in the Mekong delta

Amit Baruah

The stage for major conflict in the 1970s and 1980s, the region is now experiencing the benefits of economic linkages.



GREAT POTENTIAL: Trucks waiting for goods to be unloaded at the busy Chiang Saen port in Thailand. — PHOTO: AMIT BARUAH

A NEW world is opening up in the Greater Mekong Subregion (GMS). Trade and transport linkages, backed by massive investment in infrastructure, and coupled with a political will to transform under-developed parts of South-East Asia, are helping to end the region's economic isolation. As evident from the GMS acronym, the mighty Mekong river, which flows through China (Yunnan province), Myanmar, Thailand, Cambodia, Laos, and Vietnam, defines this region.

Not so long ago, the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) — new entrants to the Association of South-East Asian Nations — were considered a drag by the more-developed nations of the ASEAN. All that has begun to change.

Interestingly, this region was also the stage for major conflict in the 1970s and 1980s; and has enjoyed peace only from the decade of the 1990s. Many of the countries now engaged in the GMS programme were also bitter political rivals.

With a population of some 300 million, this was a region ravaged by war. Now, peace is beginning to pay dividends through forging economic linkages between GMS nations. The idea is that investment and free movement of goods and people will help ensure better living standards for 50 million people still living on less than a dollar a day.

ADB assistance

Assisted by the Asian Development Bank (ADB), the GMS programme has identified as many as 11 "flagship" projects that includes the North-South, East-West, and Southern economic corridors, telecommunications backbone development, regional power and interconnection and trading arrangements, facilitation of cross-border trade and investment, enhancing private sector participation and competitiveness, flood control and water resource management ,as well as cross-border tourism development.

Using the Mekong for river transport is a prime example of what the GMS programme can accomplish. Ten years ago, no boats plied the 344-km Qinghong (Yunnan)-Chiang Saen (Thailand) route down the Mekong. Now, the Thais are planning a bigger port close to the existing river port of Chiang Saen. Chiang Saen is a busy river port; all the boats plying the Mekong are Chinese. Their turnaround time is one day. A single boat can carry up to 300 tonnes of cargo in the rainy season and about 150 tonnes in the dry season.

Two-way trade volumes registered at the picturesque port have risen from about $101 million in 2003 to roughly $162 million in the first nine months of 2005. From China come apples, pears, sawn timber, vegetables, garlic, buffaloes, blankets, sunflower, and pumpkin seeds while Thailand exports natural rubber, dried longans (a lychee-type fruit), palmolein, synthetic resin, and petroleum oils to Yunnan.

The six GMS countries are currently engaged in the task of putting in place single-window customs' clearance points at designated border crossings and allowing for easy movement of both people and vehicles.

During a recent visit to the Mae Sai (Thailand)-Tachilek (Myanmar) border point, this correspondent could see that Thai and Myanmar citizens cross easily by using a one-day temporary pass or a longer week-long pass. Goods from this point are flowing through to Yunnan province in China.

Mae Sai-Tachilek is one of the seven pilot points selected under the GMS Cross-Border Transport Agreement (CBTA), which came into force in December 2003, to streamline regulations and reduce non-physical barriers (as the ADB terms it) for single-window customs clearance. By next year, 13 border points in the GMS region are expected to become operational.

"The piloting will cover single-stop and single window inspection, exchange of traffic rights, and mutual recognition of drivers' licences, registration plates and registration certificates," an ADB note stated.

At their July 2005 summit in Kunming, GMS leaders instructed their Ministers to complete the negotiations of the remaining annexes and protocols to the CBTA by the end of 2005. The leaders also promised to take all necessary domestic measures to ensure that the Agreement could be implemented from 2006.

Already, a single-stop, single-window customs clearance system has been put in place in the Dansavanh (Laos)-Lao Bao (Vietnam) border crossing point since June 30 this year.

According to Doan Xuan Thuy, head of the Lao Bao customs office, two-way trade between Vietnam and Laos had increased from $46 million in 2001 to $56 million in the first 10 months of 2005. While Vietnam imported timber and stone from Laos, it exported construction material, farm products, and consumer goods to Laos.

Already, a commercial zone has been set up on the Vietnamese side of the border, giving incentives to industry to locate themselves in the area.

Among others, a Thai tyre manufacturer has set up shop in this commercial zone. Seven hundred jobs have been generated for local people living in this border region of Vietnam and Laos.

According to Mr. Doan, the average time taken for clearing goods had come down to 30 minutes due to the single-window clearance. He told visiting presspersons from India recently that the number of passengers crossing the border point had gone up from 96,000 in 2001 to 132,000 in 2004. "Trucks from Laos can go as far as they want to go into Vietnam as long as they have a transit permit issued by [Lao] authorities. Lao driving licences are also recognised," he said during a briefing at the Lao Bao border point.

Between 1992 (when the GMS programme commenced) and 2005, the ADB has approved $1.4 billion in loans and mobilised another $2.2 billion in co-financing for regional economic projects.

Exciting area

The power sector is another exciting area for cooperation between GMS states. Flowing from an inter-governmental agreement on regional power trade signed in November 2002 at the first GMS summit, a Regional Power Trade Coordination Committee has been set up to advance power trade by harmonising national electricity-generation systems, with eventual inter-connection in mind.

According to the ADB, the idea is to develop a competitive sub-regional electricity market. "This will reduce investments in power reserves to meet peak demand, achieve more reliable supply, reduce operational costs, and increase consumer access to cheaper power," the Bank feels.

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