1. ASEAN Community Building: The Countdown to 2015 ASEAN-ADB Engagement
The 8th Asia Economic Forum
17 March 2012
ASEAN Community Building: The Countdown to ASEAN-ADB Engagement
Peter Brimble Deputy Country Director/ Senior Country Economist ADB Cambodia Resident Mission

2. Presentation Outline
Context and content of existing ASEAN-ADB engagement, and recent developments
Building a more focused ADB approach to assist ASEAN realize AEC by 2015:
Subregional programs of GMS, BIMP-EAGA, IMT-GT as building blocs and test beds
Master Plan on ASEAN Connectivity
ASEAN Infrastructure Fund
Planned Regional technical assistance on Trade Facilitation Support for AEC Blueprint

3. Context of ADB-ASEAN Engagement
ADB’s own charter 1996
ADB RCI Strategy (2006):
Pillar 1: Regional and subregional cooperation on cross-border infrastructure and related software; RDs)
Pillar 2: Trade and investment (RDs and OREI)
Pillar 3: Monetary and financial integration (RDs and OREI)
Pillar 4: Regional public goods (RSDD)
ASEAN Charter and “New” SERD (2007), including all ASEAN member countries
ADB Strategy 2020 (2008):
RCI is one of the three complementary strategic agendas, and one of the five core areas of specialization
Institutional and operational goal of RCI activities accounting for at least 30% of all activities by 2020
ADB-ASEAN Secretariat MoU, ;
MoU to be signed this April 4

4. Content ADB-ASEAN Engagement
since
OREI
&
SEFM
ASEAN & ASEAN+3 has been requesting ADB to support their initiatives on regional monetary and financial cooperation
ADB-ASEAN Secretariat MOU (policy dialogue, research, capacity building & institutional strengthening; support for subregional programs; narrowing development gap; support for regional public goods; knowledge sharing & dissemination)
OREI
&
SERD
since late
2000
RSDD
TAs on health and food security
started
2010
OREI
&
SERD
TAs on ASEAN Community; Subregions as building blocks
Proposed New ADB-ASEAN Secretariat MOU for : Focal areas – connectivity (physical & soft), environmental sustainability, financial & capital market integration; EAS process; macroeconomic surveillance; trade & investment; agricultural development through trade facilitation; Crosscutting Theme – narrowing the development gap
SERD
OREI
RSDD

5. New Strategic Focus for ASEAN-ADB
ASEAN: Against backdrop of the global economic crisis and member country vulnerabilities, need for macro rebalancing externally and narrowing development gaps internally
New strategic focus on:
Prioritizing connectivity infrastructure projects and related software
Extending financial & capital market integration;
Environmental sustainability through climate change mitigation and adaptation/disaster risk management issues; and
Results-based approach
Continuing Cooperation on: Economic ASEAN Secretariat process, macroeconomic surveillance, trade and investment, and planned Trade Facilitation Support to AEC Blueprint Implementation
Recent ADB assistance to ASEAN-led Initiatives: Master Plan on ASEAN Connectivity, and ASEAN Infrastructure Fund (AIF);

6. Speeding-Up AEC Opportunities
Establishing new strategic compact between national, sub-regional and regional connectivity
Extending and enhancing physical connectivity to transform transport corridors into economic corridors, and linking to rural areas
Complementing with targeted software from sub-region groupings (e.g. transport and trade facilitation, SPS, and logistics; power purchase agreements), consistent with ASEAN agreements and protocols
Improving sub-national, national and cross-country policy coordination, and strengthening institutions
Engaging all key stakeholders; especially private sector
Borders divide, sub-regions connect, and regions bridge sub-regional and global agendas

7. Subregional Programs and ASEAN
TA: Promoting Links and Improving Coordination Among GMS, BIMP-EAGA, IMT and ASEAN
Improving the strategic and institutional linkages between the subregional groupings and ASEAN
Building blocks
to ASEAN
Test beds for ASEAN
ASEAN
BIMP-EAGA
Linkage with
Initiative for
ASEAN integration
(IAI) - CLMV
GMS
IMT-GT

8. ADB’s Multi-faceted Role in the GMS
ADB worked with the 6 countries of the GMS in launching a program of subregional economic cooperation (GMS Program) in 1992 to enhance their economic relations
Since then, ADB has been the program secretariat and coordinator
Serves as a financial (loans and technical assistance), technical (capacity development), and increasingly a knowledge supporter
An honest broker of subregional dialogue at both political and operational levels, and among stakeholders
As a catalyst by bringing together different participants in the program and helping them reach a consensus
New GMS Strategic Framework, focused on so-called second-generation projects and software

9. The Greater Mekong Subregion (GMS)
People’s Republic of China
Land area: 63,100,000 ha
Population: m.
GDP per capita: US$1,988
(figures for Yunnan and Guangxi only)
The Greater Mekong Subregion (GMS)
in 2011
Myanmar
Land area: 67,658,000 ha
Population: m.
GDP per capita: est. at US$340
Viet Nam
Land area: 32,931,000 ha
Population: m.
GDP per capita: US$1,032
Thailand
Land area: 51,312,000 ha
Population: 65.5 m.
GDP per capita: US$3,893
Lao PDR
Land area: 23,680,000 ha
Population: 6.3 m.
GDP per capita: US$940
The GMS in 2011
Land area: 256,758,000 ha
Population: M
GDP per capita: US$1,477*
With estimates for Myanmar
Data for 2009 from World Bank
Comments on data:
Land area: Data is from Earthtrends.org from 2005 – but land area should not change too much
Population size: Data is from 2011, Source: Database of Earthtrends.org. There could be some issue with the data from MYR as before the pop. Size was 58.5 M, data from earthtrend suggests 50.5 M – no data for Guanxi and Yunnan (census from 2000 says both combined are 87.8) – left the figure with 93.6 M
GDP per capita: Source: World Bank’s World Development indicators, year For MYR no data available. Left old value since ADB Key Indicator does not have any value for KH and MYR in 2009
Since 1992, the countries of the GMS—Cambodia, Lao PDR, Myanmar, Thailand, Viet Nam, and the People’s Republic of China (PRC) (specifically the Yunnan province and Guangxi autonomous region)—have actively participated in a comprehensive program of economic cooperation (the Greater Mekong Subregion Economic Cooperation Program, or the GMS Program).
The GMS is a resource-rich natural economic area bound together by the Mekong River, and a shared culture and history. Its total land area is about the size of Western Europe. Its combined population is a little larger than that of the United States.
Cambodia
Land area: 18,104,000 ha
Population: 15.5 m.
GDP per capita: US$667 9 9

10. Enhancing Connectivity, Competitiveness And Community
Strategic Thrusts
Action Plan
Goals
Vision
Strengthen infrastructure linkages
Transport
Telecommunications
Energy
Environment
Tourism
Trade
Investment
Human Resource Development
Agriculture
Accelerated and sustained economic growth
Reduced poverty & income disparities
Improved quality of life
Sustainable management of environment & natural resources
Facilitate cross-border trade, investment & tourism
More Integrated
Prosperous
Harmonious
Subregion
The GMS Ten-Year Strategic Framework
 The priorities and activities of the GMS Program are currently guided by the GMS Ten-Year Strategic Framework covering the period
The GMS vision is an integrated, prosperous and harmonious subregion.
To achieve this, five strategic thrusts have been identified, namely:
strengthen infrastructure linkages;
facilitate cross-border trade and investment;
enhance private sector participation;
develop human resources and skills competencies; and
protect the environment and promote sustainable use of shared natural resources.
To focus its implementation, the GMS-Strategic Framework specified priority programs in the following priority sectors of cooperation: transport, energy, telecommunications, trade, investment, tourism, environment and human resource development, and agriculture.
Significant progress has been made in pursuing the strategic thrusts and priority initiatives of the GMS Strategic Framework.
Over the years, the GMS Program has accelerated and delivered concrete results. The pragmatic, action-oriented, and results-focused approach of the Program enabled GMS countries to expedite the implementation of high-priority subregional projects and initiatives, particularly in developing subregional infrastructure in transport, power and telecommunications that enhanced the subregion’s connectivity.
The Program also mobilized an increasing amount of financial assistance from development partners and other important stakeholders.
Enhance private sector participation & competitiveness
Develop human resources & skills competencies
Protect environment & promote sustainable use of shared natural resources
GMS Strategic Framework: 10

11. Connectivity GMS Results 1992 [Note: Click 3 times.] Roads
Telecommunications
Power Transmission Line
[Note: Click 3 times.]
The GMS Program has achieved some impressive results. In terms of physical connectivity. much has been achieved in developing roads, power, and telecoms linkages. The cascading map before you shows the progress in GMS infrastructure connectivity since1992, through the current period, and prospectively, to about the middle of this new decade, if all planned projects push through.
In the transport sector in 1992, there were only very few all weather roads in the subregion, which were mostly found in Thailand. Now, the subregional transport corridors are either in advanced stages or largely completed. The GMS Transport Sector Strategy covering the period set the blueprint for subregional transport connectivity through a 9-corridor network. A GMS Railway Strategy has also been prepared recently.
For electric power, in 1992 the only cross-border transmission line was the one linking Lao PDR with Thailand. Since then, new transmission lines and power generation plants that export power have been developed, and this process will continue into the future. Also, cooperation is being broadened to include other energy sub-sectors, such as renewables, and the foundations for future subregional power trade and energy market are being laid down.
In telecommunications, the subregional telecommunications backbone is already in place and the GMS countries are in the advanced stages of developing the GMS Information Superhighway Network. 11 11

12. Connectivity GMS Results 2008 Roads Telecommunications
Power Transmission Line 12 12

13. Connectivity GMS Results 2015 Roads Telecommunications
Power Transmission Line 13 13

14. The GMS Southern Economic Corridor
Inter-Corridor Link
Central Sub-Corridor
Southern Coastal Sub- Corridor
Northern Sub-Corridor
Economically diversified
Endowed with abundant natural and human resources
Has the necessary drivers of economic growth
Linking three key nodes – Bangkok, Phnom Penh, and Ho Chi Minh City
Thailand and Viet Nam strong manufacturing base --- connection in SEC will create business opportunities along SEC for domestic and foreign investors… Northern/southern: agriculture, forestry, fishery production and processing… Thailand and Cambodia million tourists, with Thailand as aviation hub and Cambodia with world class tourist attraction in Angkor Vat… plus coastline along SEC great potential for tourism development… diverse tourism facilities in SEC can facilitate multi-country and circuit tours… easing of border area control and improvement of access of Cambodian goods to world mkt through Bangkok and ports of Eastern seaboard will help generate investment opportunities along SEC, especially in Cambodia… simulation model… three national metropolitan centers and major ports (Bangkok, Phnom Penh and Sihanoukville, Vung Tau…
Much progress in infrastructure; less on software!

15. Master Plan on ASEAN Connectivity
ADB participated in the High-Level Task Force meetings and helped in the review process
ADB drafted a chapter on mobilizing resources for enhancing connectivity in ASEAN
ADB is featured in MPAC in two specific areas: (i) support to subregional cooperation in Southeast Asia; and (ii) as a key partner in mobilizing resources
MPAC includes proposed flagship projects, two of which are ADB energy projects in Indonesia/Malaysia

16. ASEAN Infrastructure Fund (AIF)
New instrument to help resolve paradox of ASEAN; namely massive infrastructure deficits, yet very large amounts of private savings and foreign exchange reserves
Preparation of AIF coordinated by an ASEAN-led High-Level Task Force (Chaired by Malaysia), with assistance on technical financial design, operational structure, and governance framework from ADB
ADB requested to manage the fund [

17. Planned Regional TA on Trade Facilitation Support for AEC Blueprint
Preparation in 2012 of the above technical assistance project
Meet the AEC vision through enhancing transport and trade facilitation, through leveraging activities in the three sub-groupings
Key proposed activities:
Generating baseline data and analytical reports
Capacity development for national single window systems, coordinated border management, strengthening risk management
Assessing hardware and software systems

18. Concluding Thoughts Perceptions of ASEAN:
Check out the website of the ASEAN Mekong Basin Development Cooperation (AMBDC)
Need for ASEAN to:
Support CLMV countries to leapfrog the development gap (in fact perhaps CLM – as V is rumored to be planning to join VIP)
Support members that are lagging in implementing AEC
Ongoing balancing of national interests and regional interests, and also subregional interests

19. Thank You!