1. The World Bank Beyond Infrastructure: Trade and Transport Facilitation in the Greater Mekong Sub-region REGIONAL AND TERRITORIAL DEVELOPMENT: THE WORLD BANK’S EXPERIENCE Matthew Verghis East Asia and the Pacific Region The World Bank European Commission’s “Open Days” Brussels, October 8, 2008

2. The World Bank A diverse (and rapidly growing) subregion – possibilities for trade!

3. The World Bank

4. Trade and transport facilitation can have a significant impact Trade volumes among the GMS countries are low, but high potential and growing rapidly Overland trade is costly despite low tariffs, short distances and GMS roads investment Deficiencies in infrastructure, transit framework and cross-border restrictions contribute to the high costs

5. The World Bank Absence of a transit framework as the overarching issue No regional transit system Transport policies are very restrictive Lack of financial integration for key support services Already significant investment in infrastructure, but remains uneven

6. The World Bank Ongoing WB Support at the Country Level Cambodia: Trade Facilitation and Competitiveness Project (approved June 2005) Lao PDR: Trade Facilitation Project (Board June 2008) Vietnam: Customs Modernization Project (approved October 2005) Vietnam: Transport and Logistics Regulatory Review (2006) Thailand: on-going analytical work on infrastructure and logistics strategies

7. The World Bank Ongoing efforts for trade facilitation in the GMS Two ADB-organized initiatives Cross-border transport agreement (CBTA) Strategic Framework for Action on Trade Facilitation and Investment (SFA-TFI) (At least) two sub-regional efforts ACMECS (Cambodia, Lao PDR, Myanmar, Thailand, Vietnam) Cambodia, Laos, Vietnam Development Triangle Joint Coordination Committee

8. The World Bank Regional TTF project: Status Missions in October 2008 and Feb 2008: – Policy note drafted – All five countries expressed support for Bank involvement in support of CBTA and SFA-TFI – Initial concept was for Cambodia and Laos PDR to borrow, and China, Vietnam and Thailand to partner. – In Vietnam: Customs and MPI asked for a loan – In China: Customs, NDRC and MOFCOM asked for a loan for Yunana and Guangxi. – ADB has requested the Bank to participate, and we have agreed to consider a joint mission if we decide to go forward.

9. The World Bank Regional TTF Project: Components  Supporting the ADB action plan for trade facilitation issues not in the CBTA: – Transit regime support ($3.6 million) – Infrastructure support ($20 million) – Implementation of GMS action plan ($6.8 million)  Total $30.4 million (assuming borrowing by Cambodia, Laos and Vietnam)

10. The World Bank Questions  Should we move forward? Pros: High impact activity, demand for Bank involvement Cons: Complex project (multi agency within each country and five countries), expensive but small project  How should we respond to agency requests for borrowing in Vietnam and China?  How do we respond to the sub-regional initiatives?

11. The World Bank THANK YOU Mverghis@worldbank.org