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GMS Economic Corridor Development and Trade

GMS Economic Corridor Development and Trade. By Arjun Goswami Director, Regional Cooperation and Operations Coordination Division, Southeast Asia Department Asian Development Bank. Presentation Outline. 1. GMS in a Nutshell 2. The Economic Corridor Approach

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GMS Economic Corridor Development and Trade

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  1. GMS Economic Corridor Development and Trade By ArjunGoswami Director, Regional Cooperation and Operations Coordination Division, Southeast Asia Department Asian Development Bank

  2. Presentation Outline • 1. GMS in a Nutshell • 2. The Economic Corridor Approach • 3. The Hard Infrastructure Component and Investments Impact of Corridor Development • 4. The EWEC: the first GMS economic corridor • 5. The Trade Impact of the EWEC • 6. The Poverty Reduction Impact of the EWEC

  3. GMS Program in a Nutshell • Participating Countries: Cambodia, People’s Republic of China, Lao PDR, Myanmar, Thailand, and Viet Nam • Strategic Priorities: • Vision – a more integrated, prosperous, and harmonious subregion • “3Cs” – Connectivity, Competitiveness, Community • GMS projects – totaled $14 billion as of end-2010

  4. The Economic Corridor Approach Infrastructure is developed in specific geographical areas based on economic potential. Successful economic corridors serve as: • Links to major markets/corridor nodal points; • Arteries of trade, open opportunities for participation in regional and global value chains; • Catalyze private investment; • Provide demonstration effects; • Extend connectivity to remote locations.

  5. Corridor development over time • First round of corridor investments: building the infrastructure base – mainly transport (bulk of GMS projects so far), then extends to other basic infra, e.g., power, telecoms • Subsequent development requires other investments: • Trade and logistics -- logistics facilities and services -- e.g., dry ports/inland container depots, warehouses, border SEZs, inter-modal transport links • Urban development -- utilities (urban water supply, power distribution, ICT), urban sanitation facilities, urban mass transport • Others – investments diversified across sectors in more advanced stages

  6. East-West Economic Corridor VIE: East-West Corridor (Lao Bao-Dong Ha) LAO: East-West Corridor (Phin-Dansavanh) JBIC-assisted 2nd Mekong International Bridge With assistance from the Royal Thai Government JBIC-assisted Hai Van Tunnel Construction and Da Nang Port Improvement

  7. Average Annual Growth Rate of Exports2000-2009 (in %)  Figures are for the year 2000-2008. . Data Source: United Nations Commodity Trade Statistics Database. Growth rates calculated.

  8. Export Performance of Thai–Lao EWEC Border Trade, 1997–2008 Source: EWEC Strategy and Action Plan

  9. Poverty Reduction Impact of the EWEC Benefits from EWEC for Savannakhet Province, Lao PDR: • Travel time and cost savings – e.g., bus trip from border with Viet Nam to Savannakhet reduced from 12 to 3 hrs • New buildings, service and other commercial facilities along Route 9 • FDI: increased from US$18M to US$200M • New income/livelihood opportunities for villagers • Improved access to schools and safe water • Poverty incidence down by 35% in Savannakhet

  10. Thank You For more information: on the GMS Program – visit http://www.adb.org/gms On the midterm review of the GMS strategy – visit http://www.adb.org/documents/reports/mid-term-review-gms/default.asp

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