STRATEGY and ACTION PLAN for the GREATER MEKONG SUBREGION SOUTHERN ECONOMIC CORRIDOR Sharing Growth and Prosperity

Sharing Growth and Prosperity STRATEGY and ACTION PLAN for the GREATER MEKONG SUBREGION SOUTHERN ECONOMIC CORRIDOR Sharing Growth and Prosperity

ISBN 978-92-9092-054-0 Publication Stock Number RPT101729

Cataloging-In-Publication Data

Asian Development Bank. Sharing growth and prosperity: Strategy and action plan for the Greater Mekong Subregion Southern Economic Corridor. Mandaluyong City, Philippines: Asian Development Bank, 2010.

1. Development. 2. Greater Mekong Subregion. 3. Southern Economic Corridor. I. Asian Development Bank.

The views expressed in this report are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB), its Board of Governors, or the governments they represent.

ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use.

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Notes: In this paper, “$” refers to US dollars. Figures and tables without sources are the results of the work on the Strategy and Action Plan.

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For orders, contact Department of External Relations Fax +63 2 636 2648 [email protected] Contents

Abbreviations vi

Introduction 1 Background 1 Role and Objectives of the Economic Corridor Approach 1 Need for Strategy and Action Plan 3 Scope 3

The Southern Economic Corridor 5 Composition 5 Configuration 7 Possible Extensions 8

Overview of Southern Economic Corridor Areas 9 Population and Land Area 9 Natural Resources 12 Labor Force and Employment 15 Income Level and Economic Structure 17 Cross-Border Trade 18 Foreign Direct Investment 20 Tourism 23 Infrastructure 25

Development Potential and Opportunities 31 Overview 31 Comparative Advantages and Complementarities 32 Investment Opportunities 34 Opportunities for Cooperation 36

Challenges and Constraints 40 Impediments and Constraints 40 Key Challenges 42

Strategy for Southern Economic Corridor Development 45 Development Vision, Goals, and Objectives 45 Guiding Principles and Approaches 45 Measures to Achieve Objectives 47 Geographic Focus of Strategy 51 iv Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Implementing the Strategy 53 Action Plan 53 Institutional Mechanisms and Arrangements 54 Financing 55 Monitoring, Evaluating, and Updating the Strategy and Action Plan 58 Southern Economic Corridor Action Plan Matrix 60

Appendix A: Basic Information on the Southern Economic Corridor National Components 87 Cambodia 87 Lao People’s Democratic Republic 110 Thailand 118 Viet Nam 124

Appendix B: Key Goals of National Development Plans and the Role of Southern Economic Corridor Development 140

Appendix C: Tasks of Key Greater Mekong Subregion Institutions in Southern Economic Corridor Development 141 Greater Mekong Subregion Institutions 141 Terms of Reference of the Economic Corridors Forum 144 Terms of Reference of the Governors Forum 147

Appendix D: Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan 149

Bibliography 158

Tables and Figures

Tables

Table 1: Distances between Major Points in the Southern Economic Corridor 6 Table 2: Population in the Southern Economic Corridor 9 Table 3: Incidence of Poverty in Southern Economic Corridor Areas 10 Table 4: Unemployment Rates in Southern Economic Corridor Areas 16 Table 5: Per Capita Gross Provincial Product in Southern Economic Corridor Areas 17 Table 6: Summary of Southern Economic Corridor Action Plan 53 Table 7: Financing the Southern Economic Corridor Strategy and Action Plan 56 Table 8: Proposed Initial Set of Indicators 59

Figures

Figure 1: Greater Mekong Subregion Economic Corridors 2 Figure 2: Southern Economic Corridor 5 Figure 3: Population and Land Area of Southern Economic Corridor National Components as Percentage of Total Southern Economic Corridor 10 Contents v

Figure 4: Population and Land Area of Southern Economic Corridor National Components as Percentage of Country 11 Figure 5: Southern Economic Corridor Cross-Border Trade, 2007 19 Figure 6: Status of Southern Economic Corridor Roads 26 Figure 7: Southern Economic Corridor Strategy and Action Plan at a Glance 46 Figure 8: Border Nodes in the Southern Economic Corridor 52 Figure 9: Greater Mekong Subregion Organizational Framework 54 Figure 10: Funding Requirements of the Southern Economic Corridor Strategy and Action Plan 56 Abbreviations

ADB – Asian Development Bank ASEAN – Association of Southeast Asian Nations CBTA – cross-border transport agreement ECF – Economic Corridors Forum EDC – Electricité du Cambodge EWEC – East–West Economic Corridor FDI – foreign direct investment GDP – gross domestic product GMS – Greater Mekong Subregion GMS–BF – GMS Business Forum GPP – gross provincial product km – kilometer km2 – square kilometer Lao PDR – Lao People’s Democratic Republic LFPR – labor force participation rate NSEC – North–South Economic Corridor PPTA – project preparatory technical assistance PRC – People’s Republic of China SAP – strategy and action plan SEC – Southern Economic Corridor SEZ – special economic zone SFAP – Strategic Framework and Action Plan SPS – sanitary–phytosanitary Introduction

Background

he economic corridor approach to subregional development was adopted by the Greater Mekong Subregion (GMS) countries during the eighth GMS ministerial Tmeeting, held in Manila in 1998, to help accelerate the pace of subregional economic cooperation. Three priority GMS economic corridors were identified during that meeting: the East–West Economic Corridor (EWEC), the North–South Economic Corridor (NSEC), and the Southern Economic Corridor (SEC) (Figure 1). The development of these corridors was subsequently designated as a flagship initiative under the Ten-Year GMS Strategic Framework endorsed by the leaders of GMS countries during the first GMS summit, held in Phnom Penh, Cambodia, in 2002. At the third GMS summit, held in Vientiane, Lao People’s Democratic Republic (Lao PDR), in March 2008, GMS leaders stressed the need to redouble efforts to transform transport corridors into economic corridors and maximize benefits from improved physical connectivity in the subregion.

Role and Objectives of the Economic Corridor Approach

The role of economic corridors in GMS development is reflected in the joint statement of the eighth ministerial meeting, which declared that “GMS member countries will create economic corridors linking the subregion to major markets; nodal points within these economic corridors will serve as centers for enterprise development; economic corridors will be an expansion of key transport corridors so as to enhance economic activities and benefits, and over the longer term to build on the potential of the subregion as a land bridge serving the People’s Republic of China [PRC], Southeast Asia, South Asia, and East Asia.”

The development of economic corridors1 is expected to help achieve the vision of GMS as a prosperous, harmonious, and integrated subregion by providing increased connectivity, enhanced competitiveness, and a greater sense of community. It supports the strategic thrusts of the Ten-Year GMS Strategic Framework, namely: (i) strengthening infrastructure links; (ii) facilitating cross-border trade, investment, and tourism; (iii) enhancing private sector participation and competitiveness; (iv) protecting the environment and promoting the sustainable use of shared natural resources; (v) and developing human resources and skills competencies. From a broader perspective, the development of GMS economic corridors offers a means for

1 An economic corridor is not simply a connection between points A and B. The movement of people and goods can originate from and end at any intermediate point between points A and B. The effect of an economic corridor also goes beyond the main route or “line.” It extends to the areas that can be accessed, or areas whose access to major economic centers could be improved, through the connection between points A and B. 2 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Figure 1: Greater Mekong Subregion Economic Corridors

98 o 00'E 108 o 00'E

GREATER MEKONG SUBREGION N ECONOMIC CORRIDORS

0 50 100 200 300

Kilometers

National Capital City/Town Road North– South Economic Corridor River Provincial Boundary

International Boundary Kunming Boundaries not necessarily authoritative. YUNNAN PROVINCE Ruili PEOPLE'S REPUBLIC o o 24 00'N OF CHINA GUANGXI ZHUANG 24 00'N Muse AUTONOMOUS REGION PEOPLE'S REPUBLIC OF CHINA

Hekou Nanning Lao Cai Lang Son Pingxiang Mohan HA NOI Boten Hai Phong Tachileik LAO Mae Sai MYANMAR Houayxay PEOPLE'S Chiang Khong DEMOCRATIC REPUBLIC NAYPYIDAW VIET NAM

VIENTIANE Nam Phao Cau Treo

Nong Khai Yangon Mae Sot Dansavanh Myawaddy Mukdahan Lao Bao THAILAND Kaysone Phomvihane

Gulf of Martaban Chongmek Wang Tau East– West Economic Corridor BANGKOK Aranyaprathet Veun Kham Poipet Dong Kralor

Tonle Sap CAMBODIA

Chan Yeam Hat Lei PHNOM PENH Southern ANDAMAN SEA Economic Corridor Gulf of Thailand Bavet Moc Bai Ho Chi Minh City

o o 10 00'N 10 00'N

o 98 00'E 108 o 00'E

Source: ADB. Introduction 3

the less-developed member countries of the Association of Southeast Asian Nations (ASEAN) to catch up with the more economically advanced member countries and to reinforce the market integration process that is increasing in East Asia.

Operationally, the economic corridor approach is aimed at (i) extending the benefits of improved transport links to remote and landlocked locations in GMS, which have been disadvantaged by their lack of integration with more prosperous and better located neighboring areas; (ii) providing a spatial focus for GMS activities, with the backbone, growth centers, and nodal points serving as catalysts to the development of surrounding areas; (iii) opening up many opportunities for various types of investment from within and outside GMS; (iv) enhancing the effect of subregional activities through the clustering of projects; (v) serving as a mechanism for prioritizing and coordinating investment among neighboring countries; and (vi) generating tangible demonstration effects.

Need for Strategy and Action Plan

Under the economic corridor approach, programs and projects in priority sectors of the GMS Economic Cooperation Program, such as those in transport, energy, tourism, and human resource development, are focused on the same geographic space— the GMS economic corridors—to maximize development effect while minimizing development costs. Several projects designed to improve transport links along the SEC have been completed in the past few years, thus enhancing physical connectivity among the national components of the corridor. Although these investments have helped establish an operational transport corridor, much more efforts are needed to transform the SEC into a full-fledged economic corridor.

The development of an economic corridor is a complex and long-term process, and the building of transport links is only the initial stage. Economic corridor development requires careful planning and close coordination of infrastructure investments and related measures to promote and support business opportunities along the corridors. The formulation and implementation of a strategy and action plan—a road map—for the development of the SEC addresses this need by (i) operationalizing a multidimensional approach to economic corridor development; (ii) sharpening the focus, improving coordination, and ensuring effective and sustained implementation of SEC initiatives; (iii) mobilizing financial and technical resources from public and private sources; and (iv) broadening the support for SEC development among various stakeholders, especially at the local level.

Scope

This report presents the key elements of a proposed strategy and action plan for the development of the SEC. It is organized into seven chapters. The introductory chapter provides a brief background on the role and objectives of the economic corridor approach in GMS development and explains why a road map is needed to promote the development of these corridors. Chapter 2 presents the spatial configuration and composition of the SEC. Chapter 3 summarizes the basic demographic, physical, and 4 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

socioeconomic characteristics of SEC areas to provide the context for its development. Chapter 4 discusses the comparative advantages and development potential of SEC areas, whereas Chapter 5 identifies the factors holding back SEC development and indicates the challenges facing such development.

Chapter 6 sets out a strategy for the SEC, indicating the vision, goals and objectives, operational principles, and approaches for its development, based on the discussions in Chapters 3 through 5. Chapter 7 discusses the mechanisms for implementing the strategy, which involves an action plan comprising specific, time-bound initiatives, institutional arrangements, financing requirements, and systems for monitoring and evaluating progress. 5

The Southern Economic Corridor

Composition

The SEC comprises the following subcorridors and intercorridor link connecting major towns and cities in the southern part of GMS (Figure 2):

(i) the Bangkok–Phnom Penh–Ho Chi Minh City–Vung Tau subcorridor (Central Subcorridor); (ii) the Bangkok–Siem Reap–Stung Treng–Rathanakini–O Yadov–Pleiku–Quy Nhon subcorridor (Northern Subcorridor); (iii) the Bangkok–Trat–Koh Kong–Kampot–Ha Tien–Ca Mau City–Nam Can subcorridor (Southern Coastal Subcorridor); and (iv) the Sihanoukville–Phnom Penh–Kratie–Stung Treng–Dong Kralor (Tra Pang Kriel)–Pakse–Savannakhet Intercorridor Link, which links the three SEC subcorridors with the East–West Economic Corridor.

Figure 2: Southern Economic Corridor

Source: ADB. 6 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

The SEC covers (i) six provinces in the eastern region of Thailand, including Bangkok, Chantaburi, Chonburi, Rayong, Sakaew, and Trat; (ii) four zones across 21 provinces and municipalities in Cambodia, including the Phnom Penh zone (Phnom Penh), the Tonle Sap zone (Bantey Meanchey and Siem Reap), the Mountain zone (Stung Treng and Rattanakiri), and the Coastal zone (Koh Kong and Kampot); (iii) four regions in Viet Nam, including the Southeast region (Ho Chi Minh City and Ba Ria–Vung Tau Province), the Central Highland region (Gia Lai Province), the South Central Coast region (Binh Dinh Province), and the Mekong River Delta region (Kien Gian and Ca Mau provinces); and (iv) six provinces in the southern Lao PDR, including Attapeu, Champasack, Khammouane, Saravane, Savannakhet, and Sekong. Table 1 shows the distances between major points along the routes in the SEC.

Table 1: Distances between Major Points in the Southern Economic Corridor (km)

Subcorridor Origin–Destination Distance Central Subcorridor Bangkok–Vung Tau (RN5) 944 Bangkok–Aranyaprathet/Poipet (Thailand– Cambodia border) 313 Poipet–Bavet/Moc Bai (Cambodia–Viet Nam border) 502 Moc Bai–Vung Tau 129 Bangkok–Phnom Penh (RN5) 520 Phnom Penh–Ho Chi Minh City 255 Poipet–Siem Reap 156 Siem Reap–Phnom Penh 314 Northern Subcorridor Bangkok–Quy Nhon 1,609 Bangkok–Aranyaprathet/Poipet (Thailand– Cambodia border) 313 Poipet–O Yadov/Le Than (Cambodia–Viet Nam border) 1,049 Le Than–Quy Nhon 247 Bangkok–Siem Reap 355 Southern Coastal Bangkok–Nam Can 1,000 Subcorridor Bangkok–Klong Yai/Ko Khong (Thailand– Cambodia border) 416 Ko Khong–Lork/Ha Tien (Cambodia–Viet Nam border) 301 Ha Tien–Nam Can 283 Intercorridor Link Sihanoukville–Savannakhet 1,149 Sihanoukville–Phnom Penh 230 Phnom Penh–Kratie 315 Kratie–Dong Kralor (Tra Pang Kriel)/Veun Kham (Cambodia–Lao People’s Democratic Republic border) 197 Veun Kham–Savannakhet 407

RN5 = Route No. 5. Source: Transport ministries of Southern Economic Corridor countries. The Southern Economic Corridor 7

Configuration

Central Subcorridor

From Bangkok, the Central Subcorridor traverses Sakaew Province in Thailand and crosses into Cambodia through the Aranyaprathet–Poipet border gate. In Cambodia, it passes through Sisophon and goes to Phnom Penh via two routes. The first is via Route No. 5, which crosses the provinces of Banteay Meanchey, Battambang, Pursat, Kampongchnang, and Kandal before reaching Phnom Penh. The second is via Route No. 6, which passes through Siem Reap, Kompong Thom, Kompong Cham, and Kandal provinces before reaching Phnom Penh. From Phnom Penh, this subcorridor follows Route No. 1 and goes through Svayrieng Province down to the Bavet–Moc Bai border gate between Cambodia and Viet Nam. From Moc Bai, this subcorridor goes to Ho Chi Minh City via National Road No. 22, after which it connects with National Road No. 51, passing through four provinces in Viet Nam: Tay Ninh, Ho Chi Minh City, Dong Nai, and Ba Ria–Vung Tau.

Northern Subcorridor

The alignment of the Northern Subcorridor is similar to that of the Central Subcorridor from Bangkok to Siem Reap in Cambodia, where it then branches off eastward and passes through Stung Treng, Mondulkiri, and Rattanakiri provinces before reaching the O Yadov–Le Thanh border gate between Cambodia and Viet Nam. From the Le Thanh border gate, this subcorridor runs eastward via National Road No. 19 to Pleiku in Gia Lai Province and ends in Quy Nhon in Binh Dinh Province in the central region of Viet Nam.

Southern Coastal Subcorridor

The Southern Coastal Subcorridor also starts from Bangkok, then runs southward, passing through Chonburi, Rayong, Chantaburi, and Trat, where it crosses into Cambodia at the Klong Yai–Cheam Yeam border gate. In Cambodia, this subcorridor traverses Koh Kong and Kampot provinces, mostly via Route No. 48, up to the Preak Chak (Lork)–Ha Tien border gate between Cambodia and Viet Nam. The subcorridor then traverses Kien Giang Province and Ca Mau Province in Viet Nam’s Cuu Long River Delta and ends at Ca Mau Cape, going via National Road No. 80 from Ha Tien to Rach Soi, via National Road No. 63 from Rach Soi to Minh Luong to Bay Sang, via the coastal road from Bay Sang to Ca Mau City, and via National Road No. 1 from Ca Mau City to Ca Mau Cape.

Intercorridor Link

The Intercorridor Link starts from Sihanoukville in Cambodia and passes through Kompong Speu, Phnom Penh, Kandal, Kompong Cham, Kratie, Mondulkiri, and Stung Treng before reaching Dong Kralor (Tra Pang Kriel) at the Cambodia–Lao PDR border. In the Lao PDR, it follows Route No. 13, traversing the southern Lao PDR provinces of Champasack, Saravane, Savannakhet, and Khammouane, connecting the three SEC subcorridors to the EWEC in Savannakhet. 8 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Possible Extensions

The SEC can be extended from Bangkok to the deep seaport in Dawei (Tavoy) on the western coast of Myanmar. The distance from the Thailand–Myanmar border is only around 100 kilometers (km), and there already are ongoing projects for the development of the Tavoy port and the Kantchanaburi–Tavoy access road, with financial assistance from the Thailand government and the private sector. This will substantially reduce the shipping distance from Bangkok to South Asia and Europe through the Indian Ocean, which at present involves navigating around the Gulf of Thailand and the Strait of Malacca. There is potential to mobilize investment along the Bangkok–Dawei extension from such sources as India, Japan, the Republic of Korea, and the PRC, as well as cofinancing with Thailand. The other extension, involving the Intercorridor Link, is the route from Savannakhet to Vientiane, Luang Prabang, and Luang Namtha, where it links up with the NSEC. This will complete the main loops between the northern and southern parts of GMS and will eventually create an integrated network of economic corridors. Finally, a more direct route can be opened from the Lao PDR to Ho Chi Minh City through Cambodia, which is shorter than the current route through Phnom Penh. 9

Overview of Southern Economic Corridor Areas

Population and Land Area

he combined population of SEC provinces in the four countries is 40.5 million, of which 40.2% is in Viet Nam, 29.5% is in Cambodia, 24.4% is in Thailand, and T5.9% is in the Lao PDR (Table 2). The population in the Central Subcorridor is slightly more than 27 million, which is more than twice the population in the Northern and Southern Coastal Subcorridors and more than three times the population in the Intercorridor Link (Figure 3). SEC provinces in the four countries have a total land area of 304,681 square kilometers (km2), of which 49% is in Cambodia, 27% is in the Lao PDR, 15.5% is in Viet Nam, and 8.5% is in Thailand. The Intercorridor Link has the largest land area (141,089 km2) and the Southern Coastal Subcorridor has the smallest (46,419 km2).

The incidence of poverty in SEC areas is highest in the Lao PDR (39%) and Cambodia (37.3%), both of which have poverty rates more than three times higher than that of Viet Nam (11%) and five times higher than that of Thailand (6.8%). Among SEC subcorridors, the incidence of poverty is highest in the Intercorridor Link (38.4%) and the Northern Subcorridor (25.4%). Poverty incidence in the Central and Southern Coastal Subcorridors is around 15% (Table 3).

Table 2: Population in the Southern Economic Corridor

Lao People’s Democratic Subcorridor Cambodia Republic Thailand Viet Nam Central 9,227,000 – 7,374,000 10,601,000 Northern 1,882,000 – 7,374,000 2,745,000 Coastal 960,000 – 9,362,000 2,946,000 Intercorridor 6,110,000 2,386,000 – – All SEC provinces 11,978,000 2,386,000 9,894,000 16,292,000 Total, country 14,000,000 5,874,000 – – SEC provinces as % of total SEC 29.5 5.9 24.4 40.2 SEC provinces as % of total country 85.5 40.6 15.5 19.1

SEC = Southern Economic Corridor. Note: Data are for Cambodia, 2005; the Lao People’s Democratic Republic and Thailand, 2006; Viet Nam, 2007. Statistics provided by the respective countries (see Appendix A for details). 10 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Figure 3: Population and Land Area of Southern Economic Corridor National Components as Percentage of Total Southern Economic Corridor (%) 90

50 (%) 40

0 Cambodia Lao PDR Viet Nam Thailand

Polation Land ea

Lao PDR = Lao People’s Democratic Republic. Source: Country sources.

Table 3: Incidence of Poverty in Southern Economic Corridor Areas (%)

Lao People’s Democratic Subcorridor Subcorridor Cambodia Republic Thailand Viet Nam average Central 35.8 – 7.7 1.7 15.1 Northern 48.9 – 7.7 19.7 25.4 Coastal 26.8 – 5.0 11.8 14.5 Intercorridor 37.9 39.0 – – 38.4 Average, all Southern Economic Corridor provinces 37.3 39.0 6.5 11.0 – Whole country 34.7 33.5 11.2 14.8 –

Note: Data are for Cambodia, 2003–2004; the Lao People’s Democratic Republic, 2002–2003; Viet Nam, 2005; Thailand, 2006. Statistics provided by the respective countries (see Appendix A for details).

Thailand

SEC areas in Thailand have a population of 9.8 million, which represents 15.5% of the country’s total population (Figure 4). The population in the other provinces is comparatively smaller, ranging from 240,000 people in Trat to 1,169,000 people in Overview of Southern Economic Corridor Areas 11

Figure 4: Population and Land Area of Southern Economic Corridor National Components as Percentage of Country (%)

(%) 40

0 Cambodia Lao PDR Viet Nam Thailand

Polation Land ea

Lao PDR = Lao People’s Democratic Republic. Source: Country sources.

Chonburi. With a population of 6.8 million, Bangkok is the most densely populated area, with a population density of 4,360 people per km2. This contrasts with the population density in other areas along the SEC in Thailand, which ranges from 74 people per km2 in Sakaew to 268 people per km2 in Chonburi. The incidence of poverty in SEC provinces is relatively low, averaging 6.8% compared to the national average of 9.5%. The incidence of poverty in Bangkok and Chonburi is the lowest, averaging just 1.5%, whereas that in Trat and Sakaew is the highest, averaging 13.1%. The literacy rate is 95.6% in these provinces, reaching 98% in Chonburi and Bangkok.

Cambodia

Cambodia’s SEC provinces have a population of nearly 12 million, or 85.5% of its total population. With the exception of Phnom Penh, these provinces are sparsely populated, having as few as 9 people per km2 in Stung Treng. Phnom Penh has the highest population density in the country, with 3,597 people per km2. The majority of the population in SEC provinces (70%–90%) lives in rural areas. The incidence of poverty is lowest in the Southern Coastal Subcorridor (26.8%) and highest in the Northern Subcorridor, especially in Stung Treng, Mondulkiri, and Rattanakiri, where more than half of the population (52%) lives below the poverty line. This is far above the incidence of poverty for the whole country (34.7%). Phnom Penh has the lowest incidence of poverty in the country (5%). The literacy rate is highest in 12 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Kompongcham, Phnom Penh, Stung Treng, and Battambang (averaging 90%) and lowest in Ratanakiri, Mondulkiri, Siem Reap, and Kompongchnang (56%–65%).

Viet Nam

The combined population of SEC provinces in Viet Nam is 16.3 million, representing 19.1% of the country’s total population. The population density in these provinces is 1.3 times greater than the national population density. The literacy rate in these provinces is relatively high, exceeding 90%. The incidence of poverty in these provinces (11%) is lower than the average for the whole country (14.8%). The Central Subcorridor, which has the largest population among the three subcorridors (10.6 million), traverses highly urbanized areas, including Ho Chi Minh City, and has an urban population comprising 63.6% of the total population in the subcorridor. Incidence of poverty in the Central Subcorridor (1.7%) is much lower than the incidence in the Northern Subcorridor (19.7%) and the Southern Coastal Subcorridor (11.6%). Around three-quarters of the people in the Northern Subcorridor and the Southern Coastal Subcorridor live in rural areas.

Lao People’s Democratic Republic

The six southern Lao PDR provinces in the SEC have a combined population of 2.4 million, which is slightly over 40% of the country’s population. Champasack and Savannakhet have the highest population density, at 40 people per km2, whereas Sekong and Attapeu have the lowest, at 11 people per km2. More than three-quarters of the population of SEC provinces in the Lao PDR lives in rural areas and is engaged mainly in subsistence agriculture. The incidence of poverty in the six provinces (almost 40%) is higher than for the whole country (33.5%), with the lowest incidence being in Champasack (18.4%). The educational level among the population aged 6 years and above is extremely low; only 15% completed basic primary schooling in 2005. Among the six provinces, the literacy rate in Champasack (82%) is higher than for the whole country (73%) and is the highest among the six provinces. The literacy rate in the other provinces is far below the national average, particularly in Saravane and Sekong (61%).

Natural Resources

Thailand

SEC provinces in Thailand (Chantanaburi, Chonburi, Rayong, Sakaew, and Trat) are located in eastern Thailand, which is characterized by short mountain ranges interspersed by river basins that drain into the Gulf of Thailand. There is ample agricultural land, particularly suitable for fruit cultivation and production, fisheries, and marine resources, as well as natural tourism assets such as forests, waterfalls, and long, white sandy beaches, making tourism a strong part of the region’s economy. Furthermore, the region’s coastal location has been a major factor in the industrial development of the eastern seaboard that, as an industrial hub and center for export- oriented industries, has played a key role in Thailand’s economy. Overview of Southern Economic Corridor Areas 13

Chonburi and Rayong provinces, in addition to Chachoengsao and Samut Prakan, make up the eastern seaboard. The location and characteristics of the harbor in south Chonburi Province has made the port in Laem Chabang the largest in Thailand and reportedly the 20th busiest in the world as of 2008. Rayong Province comprises mostly low coastal plains and several of its islands are popular tourist destinations. Chantaburi Province, together with neighboring Trat Province, is the center of gemstone mining, especially for rubies and sapphires. Tropical fruits are one of the main agricultural products of the province. For instance, the province accounted for around 45% of Thailand’s durian production and 27% of world durian production in 2000. Besides being well known for gemstone mining and trading, Trat Province has the second- largest island in Thailand (Ko Chang), which together with more than 40 smaller islands forms part of the Mu Ko Chang Marine National Park. Its white-sand beaches, clear waters, and fresh marine resources are important assets.

Cambodia

SEC areas in Cambodia are blessed with abundant and diverse natural resources. Its two dominant topographical features are the Mekong River and the Tonle Sap Lake. The Mekong flows about 315 km through Cambodia before continuing on, via the Mekong Delta in southern Viet Nam, to the South China Sea. The sediment deposited during the Mekong’s annual wet-season flooding renders this area’s agricultural land very fertile. The Tonle Sap Lake is linked to the Mekong at Phnom Penh by a 100 km channel, which is named after the lake. The Tonle Sap is one of the world’s richest sources of freshwater fish. The center of Cambodia, around the Tonle Sap and the upper Mekong Delta, comprises low-lying, expansive, and active floodplains of lacustrine alluvial origin. The plain around Tonle Sap Lake is a well- developed lacustrine floodplain, flat and featureless, with fine-textured sediment. The formation of colluvial–alluvial plains is important in most rice-growing areas in Cambodia, particularly in Battambang, Banteay Meanchey, Siem Reap, and parts of Kompong Cham, Kompong Thom, Pursat, and Svay Rieng.

Cambodia’s dry forests are located in Mondulkiri Province in the eastern part of the country. These forests are one of the World Wildlife Fund’s important protected areas, known as the Mondulkiri Protected Forest. Dry forest consists of long-life, large tropical hardwood trees that can grow up to 30 meters in height. Many of these trees are prized for their timber. Despite years of war and isolation, Cambodia’s dry forests are still relatively intact and provide homes for one of the largest and most diverse mammal communities in Asia. The connection of these forests to one of the important Mekong River tributaries, the Srepok River, makes the whole area one of the most outstanding habitats in the region for large waterbird populations. The Srepok River is unique in the Greater Mekong area because it boasts subpopulations of at least 140 Mekong fish species and hosts an immense diversity of aquatic life. The river also is an important source of food and water for the local people.

In 2004, exploitable oil and natural gas deposits were found beneath Cambodia’s territorial waters, the result of offshore exploration in Block A within Cambodia waters. Although commercial extraction is yet to begin, interest in oil and gas has increased recently. In addition to oil and gas, geological surveys have shown that Cambodia has significant potential mineral resources such as bauxite, coal, gold, iron, precious stones, and other resources. Mining activities during the past 3 years have involved 14 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

the production of sand and crushed stone for the construction materials industry. Other minerals, such as clay, gold, iron ore, limestone, and salt, were reported to have been produced in Kompongcham, Mondulkiri, Phreah Vihear, Rattanakiri, and the coastal provinces. The mineral industry is still in an early stage of development. Most mining companies are small-scale quarries that produce construction materials such as limestone, sand, and other aggregates.

Viet Nam

By and large, SEC areas in Viet Nam are not as rich in natural resources as those in Cambodia and the Lao PDR. The Central Subcorridor is generally flat, with only a small rocky mountain in the Tay Ninh and Ba Ria–Vung Tau provinces. Oil and gas are the most economically valuable natural resources in Ba Ria–Vung Tau Province. Its oil production accounts for around 90% of oil production in Viet Nam and its production of gas accounts for about 16% of the country’s total production. Agricultural land represents 54% of the total land area in the subcorridor; around 60% of this land is suitable for industrial and commercial crops such as cashew nuts, rubber, and sugarcane. Ba Ria–Vung Tau Province includes zones suitable for fisheries exploitation and some beach areas that can be developed for tourism purposes. There is good potential for developing the deep seaport in Vung Tau as the main terminal for the whole southeast region.

Natural resources are quite rare in the Northern Subcorridor, with the exception of limestone used to produce building materials. Nearly 80% of the total land area in this subcorridor is agricultural and forest land. Agricultural land in Gia Lai Province is suitable for the cultivation of industrial crops such as coffee, rubber, and sugarcane. In Binh Dinh Province, almost 60% of the total cropland area is used for the production of food crops, mainly rice and corn. Forestry resources are abundant in this subcorridor, especially in Gia Lai Province, with an annual timber harvest of approximately 200,000 cubic meters (m3). More than 100,000 tons of seafood is obtained from the coastal zones of Binh Dinh Province. Like the Northern Subcorridor, the Southern Coastal Subcorridor is generally flat. The majority of the land in the subcorridor is used for agriculture and forestry production, with agricultural and forest land accounting for two-thirds of the total land area of the subcorridor. Agricultural land is used mainly for rice production and shrimp and prawn cultivation. The subcorridor has the largest shrimp production area in Viet Nam. Of the 13 provinces in the Mekong Delta region, Kien Giang is one of the two provinces that has limestone for building materials production.

Lao People’s Democratic Republic

The southern region of the Lao PDR is richer in natural resources than the northern part of the country. This region is mostly a hilly plateau with more moderate slopes than in the northern part of the country, and the soil is more fertile and less acidic. The plains of this region are the largest producer of rice and other lowland crops in the Lao PDR. Champasack and Savannakhet have abundant arable land. The most fertile soil is in the Bolaven Plateau, which has a mild climate and the highest seasonal rainfall (an average of 2,578 millimeters per year). Around 16.8% of the land area in Champasack was agricultural in 2007. Most of these land areas are devoted to rice and the production of cash crops such as cashew nuts, coffee, fruits, jatropha, rubber, and tea. Out of more than 328,300 hectares (ha) of arable land, 83% had Overview of Southern Economic Corridor Areas 15

been cultivated in 2007; traditional rice cultivation accounted for 31% of the total; and coffee plantations for around 10%. The pattern of agricultural production in Savannakhet is similar to that in Champasack, with a large part of the land area being devoted to traditional rice cultivation. Recently, agriculture activity in these two provinces has moved toward plantation-type production.

The Lao PDR is well endowed with several mineral resources, such as base and precious metals, and industrial and construction materials. Many mineral deposits have been found in Champasack, including barite, bauxite, copper, iron, lead, and peat. Six exploration projects, covering 139,035 ha, are ongoing under concession arrangements involving domestic investors and investors from the PRC. Likewise, Savannakhet has various kinds of minerals with good potential for industrial development, such as copper, gold, granite, gypsum, salt, silver, and minerals for the construction materials industry. There is considerable potential for the discovery of other mineral resources, with mineral deposits having been found on only around 7.5% of the total land area and only 7.2% of the latter having been used for production. The government is promoting further exploration for coal, copper, gemstones, gold, iron ore, lead, potash, tin, and zinc.

Forest resources are still abundant in the southern part of the Lao PDR. Champasack has the greatest forest cover in this region. Forest resources are one of the sources of income in the area, supplying wood and nontimber forest products such as amomum, medicinal herbs, rattan, resins, and tree barks. Three national biodiversity conservation areas, totaling 4,700 km2 (30.4% of the provincial land area), are located in this province. The Lao PDR has one of the newest and most comprehensive protected- area systems in the region. Established in 1993, the system of national biodiversity conservation areas, which was estimated to cover 12.3% of the total land area in 2001, now covers 15.1% of the total land area, reflecting an increasing concern for environmental protection and management in the country. This is vital for the Lao PDR, where most inhabitants live in the countryside, and forests represent a source of food, medical herbs, and additional income. The government has designated national biodiversity conservation areas in various parts of the country, 11 of which are in the southern provinces. This reflects the ecologically sensitive nature of the southern provinces, which will require utmost care when planning development of the SEC.

Labor Force and Employment

The labor force participation rate (LFPR) is highest in Cambodia (74.6%), followed by the rate in Thailand (72.3%), and the Lao PDR (66.6%). Although the LFPR in the SEC provinces in Cambodia (73.2%) is also the highest among the SEC national components,2 the LFPR in the SEC provinces in the Lao PDR (70.3%) is higher than that in the SEC areas in Thailand (62%). The average LFPR in the SEC provinces in the Lao PDR is higher than that of the whole country, whereas the LFPR in SEC provinces

2 The LFPR for SEC provinces in Cambodia is assumed to be the average of the LFPR in other urban areas and rural areas, as recent LFPR estimates are not available at the provincial level. Labor force data for Thailand are for 2007, whereas those for Cambodia and the Lao PDR are for 2005. 16 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table 4: Unemployment Rates in Southern Economic Corridor Areas (%)

Lao People’s Democratic Subcorridor Subcorridor Cambodia Republic Thailand Viet Nam average Central 6.5 – 1.2 4.8 4.2 Northern 10.0 – 1.2 4.6 5.3 Coastal 8.3 – 0.4 5.1 4.6 Intercorridor 9.1 0.7 – – 4.9 Whole country 5.3 1.4 1.4 5.1 –

Note: Data are for Cambodia, 2003–2004; the Lao People’s Democratic Republic and Viet Nam, 2005; Thailand, 2007. Statistics provided by the respective countries (see Appendix A for details).

in Cambodia is about the same as that of the whole country. In the case of Thailand, the average LFPR for SEC provinces is lower than that of the whole country. The average LFPR of women in all SEC areas is around 60.0%, with the highest rate in Cambodia (69.5%), followed by the Lao PDR (66.4%) and Thailand (50.5%).

The average unemployment rates in SEC subcorridors do not vary widely, ranging from 4.2% in the Central Subcorridor to 5.3% in the Northern Subcorridor (Table 4). However, there are significant differences in unemployment rates among the national components of the subcorridors. The unemployment rate in SEC provinces in Thailand (an average of less than 1%) is the lowest in SEC areas. The low unemployment rate in SEC provinces in the Lao PDR (also less than 1%) reflects the fact that around 80% of employment is in the form of self-employment in the agriculture sector. SEC provinces in Cambodia have the highest unemployment rates, with the rate in the Northern Subcorridor reaching 10%. SEC provinces in Viet Nam have a lower unemployment rate than SEC provinces in Cambodia. Kompong Speu, Kompongchang, Sihanoukville, and Svayrieng have the lowest unemployment rates (3% or less), whereas Kandal, Phnom Penh, and Stung Treng have the highest unemployment rates in SEC areas in Cambodia (more than 10%). In Viet Nam, the unemployment rate is highest in Binh Dinh, Ca Mau, and Ho Chi Minh City (more than 5%), and lowest in Dong Nai and Gia Lai (around 4%). The average unemployment rate in SEC areas in Cambodia is higher than that in the whole country, whereas the rate in SEC areas of the Lao PDR, Thailand, and Viet Nam are lower than in the respective countries as a whole.

The average monthly wage rate of $30 to $45 in Viet Nam is slightly higher than that in Cambodia ($25 to $30).3 In Lao PDR, the monthly average wage rate ranges from $30 to $50. In contrast, workers in eastern Thailand, where the main activities are in industry and tourism, can earn an average of $100 to $130 per month. If benefits

3 Prime Ministerial Decree No. 03/2006/ND-CP raised minimum monthly salaries for unskilled and manual laborers from $45 to $55 in Ha Noi and Ho Chi Minh City, from $40 to $50 in the suburbs of these cities, and from $35 to $45 in all other areas. Overview of Southern Economic Corridor Areas 17

and other allowances are included, the cost of labor in Thailand could go up to $300 per month.4

Income Level and Economic Structure

The economies of Cambodia, the Lao PDR, Thailand, and Viet Nam differ significantly from one another in terms of their overall level of economic development and their economic structures. In 2007, Viet Nam had a per capita gross domestic product (GDP) of $812. Cambodia’s per capita GDP was $625, the Lao PDR’s was $522, and Thailand’s was $3,400. Although SEC provinces in the four countries broadly reflect national characteristics, there are several differences among them and between the provinces within each national component. In terms of per capita gross provincial product (GPP), Thailand’s provinces are easily the wealthiest part of the SEC, with a per capita GPP of five to seven times the prevailing levels in SEC areas of Cambodia, the Lao PDR, and Viet Nam (Table 5). Per capita income levels also vary considerably among different provinces within the same national area. Despite these differences in income levels, the basic economic structures in most of the three SEC areas are broadly similar, with agriculture and agriculture-processing activities accounting for the major part of economic output. Exceptions are the highly industrialized areas in Thailand, such as those in Chonburi and Rayong, and in Viet Nam, such as those in Ho Chi Minh City and Ba Ria–Vung Tau Province.

Table 5: Per Capita Gross Provincial Product in Southern Economic Corridor Areas ($)

Lao People’s Democratic Subcorridor Subcorridor Cambodiaa Republic Thailand Viet Nam average Central – – 5,501 2,321 2,816 Northern – – 5,501 538 2,221 Coastal – – 9,954 793 3,790 Intercorridor – 419b – – 522c Average, all Southern Economic Corridor provinces – 419b 6,985 1,217 – Per capita gross domestic product 625 522 3,400 812 –

Note: Gross domestic product and gross provincial product figures are for 2007. Statistics provided by the respective countries (see Appendix A for details). a Gross provincial product figures are not available for Cambodia. b Excludes Khammouane and Sekong. c Uses per capita gross domestic product as a proxy for per capita gross provincial product in the Intercorridor Link in Cambodia.

4 Motoyoshi Susuki. 2009. Feasibility of the Industrialization Strategy of the Lao PDR. PowerPoint presentation on Expansion of Production Networks into the Less Developed ASEAN Region: Implications for Development Strategy. 18 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

In Thailand, the industrial sector accounts for 61.2% of GPP in Chonburi and nearly 80% of GPP in Rayong. These two provinces have the highest per capita GPP in the SEC areas in Thailand, with that in Rayong reaching $24,310 and that in Chonburi reaching $11,275. In contrast, Chantaburi, Trat, and Sakaew, where agriculture predominates, have a per capita GPP ranging from $1,581 to $2,635. In Cambodia, economic growth has occurred mainly in urban areas, particularly in Phnom Penh and the tourist gateway Siem Reap. The service sector accounts for the largest share, representing 44% of GDP, followed by agriculture at 30% and industry at 26% of GDP. In Viet Nam, the industry sector has the largest share of GDP, at 42%, followed by services at 38% and agriculture at 20% of GDP. Industry predominates in Ho Chi Minh City, where it accounts for 46.4% of GPP, as well as in Dong Nai (57.7% of GPP) and Ba Ria–Vung Tau (89.1% of GPP). Ho Chi Minh City, Dong Nai, and Ba Ria–Vung Tau also have the highest per capita GPP in SEC areas of Viet Nam, reaching $2,085 in Ho Chi Minh City; $1,139 in Dong Nai; and $7,424 in Ba Ria–Vung Tau. Per capita GPP in other SEC provinces in Viet Nam, where agriculture predominates, ranges from $471 in Gia Lai Province to $865 in Tay Ninh Province.

Cross-Border Trade

Cambodia and Thailand

Border trade along the SEC takes place both formally and informally.5 Data on formal cross-border trade between Cambodia and Thailand shows that total cross-border exports from Thailand to Cambodia rose from $49.7 million in 1996 to $933 million in 2007, representing an increase of 30.5% per year.6 The Aranyaprathet border checkpoint (Central Subcorridor) accounted for about half of the total cross-border exports from Thailand to Cambodia, followed by the Klong Yai border checkpoint (Southern Coastal Subcorridor), with about one-third. Around two-thirds of the total cross-border exports from Thailand to Cambodia have taken place in the Central and Southern Coastal Subcorridors of the SEC (Figure 5). The major exports from Thailand include cement, chemical fertilizers, engines, livestock feeds, motorcycles and parts, petroleum, textiles, and woven fabrics. The largest export is motorcycles and parts.

Total cross-border imports to Thailand from Cambodia fluctuated from $39.5 million in 1996 to $46.5 million in 2007, representing an annual average growth rate of 1.5%. The Aranyaprathet border checkpoint accounted for two-thirds of the total cross- border imports to Thailand from Cambodia, and the Klong Yai border checkpoint accounted for one-fifth. The major products imported by Thailand through the border include corn feeds for livestock, metal wastes, ready-made clothing, soybean grain, tapioca, and used clothing. The balance of trade has consistently been in favor

5 There are no reliable estimates of informal trade. The Ministry of Industry and Commerce of the Lao PDR estimates informal trade to be two-thirds of total trade with Thailand and one-quarter of total trade with Viet Nam. Other estimates place informal trade between Thailand and the Lao PDR at between one-third and half of formal trade, and trade between Cambodia and Viet Nam at 20%–30% of formal trade. 6 Cross-border trade covers only formal trade and is defined as trade conducted through land borders, as contrasted to trade conducted through seaborne and airborne transport. See: C. Krainara. 2008. Cross- Border Trade and Commerce in Thailand: Policy Implications for Establishing Special Border Economic Zones. PhD dissertation, Asian Institute of Technology, Bangkok, Thailand. Overview of Southern Economic Corridor Areas 19

Figure 5: Southern Economic Corridor Cross-Border Trade, 2007 ($ million)

LAO THAILAND PEOPLE’S DEMOCRATIC REPUBLIC

CAMBODIA

VIET NAM

Note: Data on cross-border trade between Veun Kham and Dong Kralor (Tra Pang Kriel) is not available. of Thailand, with exports 20 times greater than imports in 2007, which suggests great potential to increase Cambodia’s exports to Thailand. Improved agricultural productivity and a more diversified production structure in Cambodia will greatly help realize this potential.

Cambodia and Viet Nam

Cross-border trade between Cambodia and Viet Nam increased from $79.2 million in 2005 to $163.3 million in 2007, representing an annual average growth rate of 45.1%. Cross-border exports from Cambodia almost tripled between 2005 and 2007, whereas cross-border imports from Viet Nam expanded by 35.7% annually over the same period.7 Cross-border trade has taken place mainly in the Central Subcorridor, with the value of trade through this subcorridor accounting for nearly three-fourths of total trade through the three subcorridors. Bavet–Moc Bai is the largest international border crossing between Cambodia and Viet Nam. Total trade through this crossing more than doubled from 2005 to 2007, with the increase being

7 Numbers based on the reports of the border authorities at the Moc Bai, Le Thanh, and Ha Tien border crossings in Viet Nam. Total trade figures are from International Monetary Fund, Direction of Trade Statistics Yearbook (Washington, DC. 2007). 20 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

accounted for mainly by the growth in exports from Cambodia. Imports from Viet Nam through this border increased one and a half times and exports more than tripled during this period. Exports from Viet Nam to Cambodia include building materials, liquid gases, office supplies, paper products, and vegetables. Exports from Cambodia to Viet Nam include cashew nuts, rice, and tobacco.

Lao People’s Democratic Republic and Thailand

The largest trading partner of the Lao PDR is Thailand, which accounted for an average of nearly three-fourths of trade with GMS countries from 2000 to 2007. Viet Nam is also a significant trade partner of the Lao PDR, although not as dominant as Thailand. Viet Nam’s trade with the Lao PDR accounted for an average of 14.4% of trade with GMS countries in 2000–2007, with a clear upward trend after 2000. Thailand has consistently registered a surplus in its trade with the Lao PDR, with cross-border exports amounting to nearly five times the imports from the Lao PDR in 2007. Cross-border trade between Thailand and the Lao PDR has taken place mostly through the Nongkhai–Tha Nalaeng and Mukdahan–Savannakhet border checkpoints, with around 50% of cross-border exports conducted through Nongkhai– Tha Nalaeng and 55% of imports passing through Mukdahan–Savannakhet. In terms of commodities traded, the Lao PDR exports natural resource–based products and imports capital goods, foodstuffs, raw materials, and other basic goods. Exports of minerals and other natural resource–based products such as copper, electricity, gold, gypsum, iron ore, and silver accounted for more than 64% of total trade in fiscal year 2007.

Share of Cross-Border Trade to Total Trade

The share of cross-border trade to total trade between Cambodia and Thailand increased substantially from 1996 to 2007. Cross-border exports as a percentage of total exports from Thailand to Cambodia expanded from just 13.8% in 1996 to 68.2% in 2007. Similarly, the share of cross-border imports to total imports from Cambodia to Thailand rose from 85.4% in 1996 to 97.5% in 2007. In contrast, the share of trade conducted by sea and air as a proportion of total trade between the two countries has generally declined over time. Cross-border trade between Cambodia and Viet Nam also has been substantial, accounting for around two-thirds of total trade in 1996–2007. These figures reflect the SEC’s growing importance in trade between Cambodia and Thailand and between Cambodia and Viet Nam, a result of improved physical connectivity, which has enabled the exchange of a wider range and larger volumes of goods. Trade facilitation and logistics development will be essential to supporting this development.

Foreign Direct Investment

Thailand

Foreign direct investment (FDI) has continued to play an important role in Thailand’s development. FDI approvals amounted to $14.2 billion in 2005, $9.9 billion in 2006, and $21.6 billion in 2007. The major foreign investors are from the European Union (EU); Hong Kong, China; Japan; Singapore; Taipei,China; and the United States (US), Overview of Southern Economic Corridor Areas 21

with the largest investments being made in services and infrastructure, followed by electronics and electrical products, metal processing, agriculture, chemical products, and light industries. Most of the FDI is directed to the southern seaboard of Thailand, along the SEC.

Eastern Thailand is strategically located and thus has experienced significant deep seaport, industrial estate, and tourism development, with FDI playing a major role in such development. One of the few deep sea harbors in Thailand where industrial estates are located is in Laem Chabang, in the south Chonburi Province. The industrial estates in Chonburi comprise the Bang Pa Kong Industrial Estate, the Bo Win Industrial Estate, the Laem Chabang Industrial Estate, and the Pin Tong Industrial Estate. Those in Rayong are the Amata City Industrial Estate, the Eastern Industrial Estate, the Eastern Seaboard Industrial Estate, the Map Ta Phut Industrial Estate, the Padaeng Industrial Estate, and the TS 21 Industrial Estate.

In addition to attracting foreign investment, Thailand’s enterprises have dynamically pursued outward investment over the past few years to avoid the increasing internal competition and achieve greater profitability. Cambodia, the Lao PDR, and Viet Nam are among the attractive destinations for Thailand’s investment. The availability of labor at lower wages has been a major factor in this development.

Cambodia

FDI in Cambodia increased from $235 million in 2001 to $2.6 billion in 2006. The government has continued to make progress in legal and regulatory reform, and the adoption of a new concession law in 2007 is expected to result in increased investment, particularly in infrastructure. In addition to reforms introduced to make Cambodia World Trade Organization compliant, the country has rapidly adopted many laws that cover a wide range of areas, including commercial enterprises, negotiable instruments, commercial arbitration, secure transactions, concessions, and insolvency. From 1994 to the first half of 2008, a total of 1,404 projects with a combined registered capital of $5.2 billion, fixed assets of $19.3 billion, and equities of $17.8 billion were approved. The largest investments were made in tourism (42%), followed by industry (27%), services (25%), and agriculture (6%). The biggest investors are from Malaysia, the PRC, and the Republic of Korea. Other foreign investors are from the EU; Hong Kong, China; Japan; Singapore; Taipei,China; Thailand; and the US.

Many subdecrees and regulations have been enacted in the past few years, including the subdecree on special economic zones (SEZs). Cambodia promulgated regulations on the establishment and management of SEZs in December 2005. In the following year, Cambodia established a board for SEZs at the Council for the Development of Cambodia. The government has approved the establishment of 19 SEZs, which include zones in Phnom Penh, Sihanoukville, and along the Viet Nam and Thailand borders. Many SEZs are located at the borders because investors are expected to come mainly from the other side of the border. These investors will, therefore, be able to produce in Cambodia at a lower price and sell more competitively in such markets as the EU and the US. Investors in Cambodia also prefer to locate in border areas because of the ability to import electricity from Viet Nam and Thailand. A serious limitation of Cambodia in its bid to attract FDI is the lack and high cost of electricity. 22 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Most of the SEZs in the Cambodian component of the SEC are located along the Central Subcorridor, which is also the most developed among the subcorridors.

Viet Nam

FDI in Viet Nam has increased significantly in the past decade. Investment approvals reached $12 billion in 2006, which is four times the amount approved in 2002. The total registered FDI in Viet Nam amounted to $96.6 billion from 1988 to 2007, averaging around $5 billion per year. The major foreign investors are from the EU; Japan; the Republic of Korea; Singapore; Taipei,China; and the US. Almost one-half of the total FDI was in manufacturing, with real estate a distant second (12.2%). Other sectors with relatively significant shares are transport, storage, and communications (8.7%); hotels and restaurants (7.3%); mining and quarrying (6.7%); construction (5%); and agriculture and forestry (3.5%). In terms of location, 41.4% of FDI was made in the SEC’s Central Subcorridor, half of which went into Ho Chi Minh City. FDI in the Northern and Southern Coastal Subcorridors amounted to only 4.6% and 0.3% of total FDI in Viet Nam, respectively.

According to the Ho Chi Minh City government, the city is the most important economic center in Viet Nam, accounting for a large part of Viet Nam’s economy. Some 300,000 businesses, including many large enterprises, are involved in high- tech industries, light industries, construction, building materials, and processing of agricultural products. Many FDI projects are in high-tech industries, services, and real estate. Currently, the city has 15 industrial parks and export-processing zones: the Binh Chieu Industrial Park, the Cat Lai Industrial Park, the Hiep Phuoc Industrial Park, the Ho Chi Minh City automobile mechanical industrial complex, the Le Minh Xuan Industrial Park, the Linh Trung 1 Export Processing Zone, the Linh Trung 2 Export Processing Zone, the Phong Phu Industrial Park, the Saigon High-Tech Park, the Tan Binh Industrial Park, the Tan Tao Industrial Park, the Tan Thoi Hiep Industrial Park, the Tan Thuan Export Processing Zone, the Tay Bac Cu Chi Industrial Park, and the Vinh Loc Industrial Park.

Lao People’s Democratic Republic

Since the implementation of “open” trade and investment policies, the Lao PDR has become a viable destination for FDI, particularly in the industry and service sectors. FDI from 2003 to 2007 averaged $1.2 billion per year, with the major foreign investors coming from neighboring countries such as the PRC, Thailand, and Viet Nam. In the near future, it is expected that the Lao PDR will experience larger investments from neighboring countries and other East Asian countries, particularly in natural resource–based industries. At the provincial level, Savannakhet and Champasack are popular investment locations due to their rich natural resources, with nearly 40.0% of the total FDI being made in Savannakhet and 22.7% in Champasack. For example, Lane Xang Minerals has increased its investment in Savannakhet to expand copper exploration and production. Champasack is expected to see the same surge in investment because the provincial government has approved several exploration projects involving foreign investment.

More recently, relatively large foreign investments have been made in hydropower and mining, averaging 53% of total FDI in hydropower and 10% in mining. Due to Overview of Southern Economic Corridor Areas 23

the abundance of agricultural land, fertile soil, and low-cost labor, agriculture is also becoming an attractive sector for investors from neighboring countries with an average of around 12% of total FDI. Champasack and Attapeu provide good opportunities for investment in cash crops and industrial tree plantation crops, such as cassava, jatropha, palm, and rubber. The rich historical, cultural, and natural setting is boosting investment in the service sector, especially in the tourism industry. Champasack is establishing industrial parks covering 2,284 ha in three districts located around Pakse. The government also has established the Savannakhet–Seno Special Economic Zone in Savannakhet Province, covering 954 ha and comprising four zones. Site A, which is located next to the new Mekong bridge between Savannakhet and Mukdahan, targets the service sector (e.g., residential areas, border control facilities, and shopping and marketing centers), whereas Site B targets logistics- related ventures.

Tourism

Tourism is one of the most important sectors in the development of the SEC in particular and of GMS countries in general. Tourism has a wide range of backward and forward links with the service industry (e.g., hotels, restaurants, and travel agencies) and a large number of small and medium-sized enterprises catering to the requirements of the tourism industry. The SEC has tourist attractions, many of which can be further developed and linked together in a “tourism corridor.”

Thailand

Tourism is playing an increasing role in terms of foreign exchange earnings, job creation, and business development in Thailand’s service sector, especially in the light of the global economic crisis. A number of countries have adopted tourism as a tool for economic recovery and development, given the sector’s advantage of being primarily local resource based and its comparatively low dependence on imported goods. Tourist arrivals in the SEC’s Thailand provinces total 23.1 million, with most of the tourists visiting Bangkok (13.3 million visitors), Chonburi (6.5 million visitors), and Rayong (1.9 million visitors). As a major tourist destination for domestic (7.1 million) and international visitors (16.0 million), Thailand can help increase the number of tourists visiting Cambodia and Viet Nam through the SEC.

Cambodia

Cambodia, with its rich culture, history, and natural attractions, continues to attract an increasing number of tourists to the country, with international tourist arrivals doubling from 2004 to 2007 and the number of tourist arrivals breaching the 2 million mark for the second time in 2008. More than half (55.6%) of international tourists in 2007 visited the Angkor complex in Siem Reap, with the rest visiting Phnom Penh and other destinations. Around two-thirds of the visitors arrived by air (41.6% in Phnom Penh) and one-quarter arrived by land. Only a small percentage of visitors traveled by boat. Earnings from tourism in 2007 increased by 33.5% over 2006, reaching $1.4 billion. Domestic tourism is also quite significant with the number of domestic tourists increasing by 15.5% from 2006 to 6.7 million. The most popular destinations among domestic tourists are Phnom Penh and the coastal areas, especially Kampot and Sihanoukville. 24 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Cambodia’s coast is still underdeveloped and underutilized for the purpose of tourism and thus the development and planning of coastal tourism should be strongly encouraged. Coastal tourism activities initially may be based in and around the Koh Kong area because there are existing facilities in the coastal area of the province and further developments have already been planned. Trat Province also could be a center for tourism in this region, together with Koh Kong. With its 52 islands as tourist destinations, development and improvement of coastal and multimodal transport links as well as establishment of higher-quality hotel accommodation will be the key to the success of the whole scheme. In the Northern Subcorridor, many places in Mondulkiri, Rattanakiri, and Stung Treng provinces can be visited and promoted as ecotourism destinations.

Viet Nam

Cultural tourism and ecotourism are two major priorities in transforming tourism into a spearhead of Viet Nam economy. Developing ecotourism and cultural tourism has contributed to the conservation of resources, the natural environment, biodiversity, and cultural values, and has helped increase the income of local communities and promote their overall development. Tourist arrivals in Viet Nam totaled 4.2 million people in 2007, an increase of almost 20% from 2006. The majority of visitors in 2007 came from Japan, the PRC, the Republic of Korea, and the US.

Tourist attractions in the provinces traversed by SEC subcorridors in Viet Nam are generally diversified, including marine tourism (Vung Tau), ecotourism (Ca Mau), landscape tourism (Ha Tien), ethnic–cultural tourism (Gia Lai), and historic monument tourism (Ho Chi Minh City and Tay Ninh). The number of visitors to these areas increased by an average of 17.5% annually from 2005 to 2007, with the fastest growth in the number of visitors occurring in the Central and Northern Subcorridors. Ho Chi Minh City had the largest number of visitors in 2007, at 3.3 million, followed by Kien Giang Province (2.5 million) and Ba Ria–Vung Tau Province (2 million). The visitors to the three economic subcorridors are largely domestic visitors, especially people living along the border areas and engaged in cross-border trade. Foreign visitors accounted for only around one-fifth of all visitors to the three subcorridors, although their number has been increasing recently. Ho Chi Minh City is the most popular destination among foreign visitors, who represent around half of all visitors to the city.

Lao People’s Democratic Republic

Tourism is relatively new, having started only one and a half decades ago, but it has grown significantly to become the country’s major source of foreign exchange earnings, after the mining sector. Around 80%–90% of tourists make short visits to historical and cultural centers in Vientiane and Luang Prabang. Future tourism development will require diversification into new products and attractions, especially in the southern part of the country. SEC provinces are promoting tourism development in their respective areas based on their uniqueness in culture, history, scenic landscape, and rich tropical forests. The major attractions in these provinces include early-20th-century, French-style architecture and ecotourism in the national protected areas of Khammouane Province, trekking and wildlife viewing in the national biodiversity conservation areas of Savannakhet Province, the Tad Lo waterfall and ethnic villages on the Bolaven Plateau in Saravane Province, the Khone waterfall Overview of Southern Economic Corridor Areas 25

and ancient temples in Champasack Province, river trips and ethnic villages in Sekong Province, and ethnic villages and parts of the Ho Chi Minh Trail in Attapeu Province.

Infrastructure

Transport

Road Transport

Road transport in SEC areas in Thailand is very convenient, with a four-lane road from Bangkok to the Trat and Sa Kreaw provinces and a two-lane road from Trat City to Hat Lek on the border between Thailand and Cambodia. According to Thailand’s Ministry of Transport, these roads are considered to be in good condition. Cambodia’s provinces along the Thailand border are becoming an increasingly popular gateway from Hat Lek in eastern Thailand, due in part to the access to the port and the beach resort town of Sihanoukville. Although this was previously a grueling journey by boat and pickup on rough roads using small ferries at river crossings, a new road built with financial assistance from the Government of Thailand has greatly improved access. The first stage of this project, in 2002, involved the construction of a 1.9 km toll bridge across the Kah Bpow River, providing road access from the Thailand– Cambodia border to the town of Krong Kaoh Kong.

Many road sections in SEC subcorridors in Cambodia have been or are being upgraded, including sections of Route No. 5 and Route No. 6 between Sisophon and Phnom Penh in the Central Subcorridor, and sections of Route No. 66 between Siem Reap and Stung Treng in the Northern Subcorridor (Figure 6). The construction of a bridge across the Mekong River in Neak Loueng, which will significantly reduce travel time from Phnom Penh to Ho Chi Minh City, has been proposed for Japanese government financing. In the Southern Coastal Subcorridor, a new sealed road (National Route No. 48) was completed from Krong Kaoh Kong to Sre Ambel in 2007, and four bridges on the river crossings along this route were opened in May 2008. A 15 km section of Route No. 33 to the border with Viet Nam at Preak Chak (Lork) will be upgraded with financial assistance from Asian Development Bank (ADB) and the Government of Australia.8

Most roads in SEC subcorridors in Viet Nam are national roads, but the roads in the Northern and Coastal Subcorridors are in generally poor condition and do not meet the requirements for the socioeconomic development of these subcorridors. The majority of these roads are categorized as class 4 under Viet Nam’s road classification system. The section from the Cau Mau provincial border to Cau Mau Cape represents a major missing link in the Southern Coastal Subcorridor; presently there is only an earth or stone road in some sections, and no road at all in some segments. As mentioned, ADB and the Republic of Korea are providing financial assistance to upgrade the road between Binh Thai and Cau Mau City.

8 ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Loans Kingdom of Cambodia and Socialist Republic of Viet Nam: Greater Mekong Subregion Southern Coastal Corridor Project. Manila. Proposed loans of $82 million, with cofinancing from the Government of Australia for $33.5 million and the Government of the Republic of Korea for $50 million. 26 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Figure 6: Status of Southern Economic Corridor Roads

o 104 00'E 107 o 00'E LAO Upgrading completed by 2009– Upgrading of 70km section completed by 2010–Viet Nam ADB/Japan PEOPLE’S Ayutthaya THAILAND DEMOCRATIC Feasibility study REPUBLIC (realignment) completed

Mekong River Aranyaprathet Poipet Phanom Seeking Sarakham Sisophon Siem Reap funding

Chonburi Stung Treng Completed in TonleCompleted in 2007 Sap 2005 CAMBODIA

12o 30'N Sattahip 12o 30'N

G u l f o f T h a i l a n d Patheay Completed by 2009 Kompong Cham In good Loc Ninh condition N Bien Long VIET NAM 0 20 40 6080 100 Sre Ambet Neak Loeung Kilometers Moc Bai Svay Rieng Bien Hoa Bavet Kampot Ho Chi Minh City Completed in 2008– Sihanoukville (Saigon) Thailand, WB, ROK Bridge over Ha Tien Mekong to be National capital financed by Japan Vung Tau (2010-2014) City/Town Upgrading completed Can Tho in 2004 Airport 9 o 00'N Southern economic corridor Upgrading completed 9o 00'N by 2010–ADB Main road Secondary road Mouth of Ca Mau Railway Mekong River International boundary Boundaries are not necessarily authoritative. Nam Can o 104o 00'E 107 00'E

ADB = Asian Development Bank, ROK = Republic of Korea, WB = World Bank.

The Lao PDR still lacks physical transport links within and among its provinces. Only 13% of the country’s 36,800 km road network is paved.9 The government, thus, faces the dual task of improving the existing network, particularly in the rural areas, and expanding physical connectivity among various parts of the country, including the links between urban and rural areas. Only 9.3% of the total road length (25,675 km) in Savannakhet is tarred and concreted. Champasack has only half the road length of Savannakhet, but more than 30% is tarred. The ADB-supported Champasack road improvement project (Vang Tao to Veun Kham, totaling 194 km) was completed in 2005, and the remaining 8 km to the Lao PDR–Cambodia border was completed in April 2008.

Rail Transport10

There are two railway lines in Cambodia. The Northern Line (386 km) runs from Phnom Penh to Banteay Meanchey Province in the Central Subcorridor and the Southern Line (264 km) runs from Phnom Penh to Sihanoukville in the Intercorridor Link. The train mainly carries heavy fuel oil for generators, cement, and rice on the inbound service to Phnom Penh, and wood and stones on the outbound service to

9 According to the Lao PDR Ministry of Public Works and Transportation, 4,811 km were tarred, 12,572 km were graveled, and 19,448 km were classified as earth roads in 2008. 10 A review of the GMS railway sector is being conducted to design a unified subregional railway development strategy that addresses both the environmental issues and the need for more efficient modes of freight transport. Overview of Southern Economic Corridor Areas 27

Sihanoukville. Presently, part of the rail network is not operational because the route between Phnom Penh and Poipet as well as between Sisophon and Poipet (close to the Thailand border) were badly damaged during the civil war. The railway track between Phnom Penh and Sihanoukville is usable but sometimes unreliable. ADB is providing financial assistance to Cambodia for a railway rehabilitation project to upgrade services and improve reliability, including increasing the service speed to 50 km per hour.11

The main railway line from Bangkok to Ho Chi Minh City is part of the Singapore– Kunming Rail Link, an ASEAN flagship project. There are missing links between Poipet and Sisophon in Cambodia (48 km), between Phnom Penh and the Viet Nam border near Loc Ninh (254 km), and between Loc Ninh and Ho Chi Minh City (129 km) in Viet Nam. The PRC has financed a feasibility study on establishing the section from Phnom Penh to Loc Ninh. The Viet Nam government has completed a prefeasibility study for the component linking Loc Ninh to Ho Chi Minh City, which came up with an estimated project cost of $75 million. Completing the Bangkok–Ho Chi Minh City railway connection requires extensive rehabilitation and/or new construction of the line from Poipet at the Thailand–Cambodia border to Ho Chi Minh City.

Water and Air Transport

SEC development requires not only improvement of road transport but also complementary water and air services. Thus, the planned transport development in the SEC includes the linking of three national metropolitan centers—Bangkok, Ho Chi Minh City, and Phnom Penh—to the major port cities of Laem Chabang (connecting with Bangkok), Vung Tau (connecting with Ho Chi Minh City), and Sihanoukville (connecting with Phnom Penh). Improvement of the port facilities and services in Phnom Penh and Sihanoukville in Cambodia, and in Thi Vai–Vung Tau in Viet Nam, are being undertaken to better handle both national and subregional cargo traffic. The development of secondary airports in the SEC also is envisioned. This involves upgrading the Pakse airport in the southern Lao PDR to support the promotion of a subregional tourism loop comprising the United Nations Educational, Scientific and Cultural Organization’s (UNESCO) World Heritage sites and upgrading the Rattanakiri and Stung Treng airports in Cambodia, which form part of the ADB-assisted Mekong Tourism Development Project.

Two of the three subcorridors in Viet Nam have a water transport system. The Central Subcorridor has an inland waterway from Vung Tau to Ho Chi Minh City and Dong Nai Province on the Dong Nai River. This is an important domestic waterway for transport in the southeast region of Viet Nam. The Southern Coastal Subcorridor has an inland waterway connecting Nam Can district to Ca Mau City and onward to Rich Gia City.

In Cambodia, water transport is available from Phnom Penh to Siem Reap through the Mekong River in the Central Subcorridor. Phnom Penh Port, which is a river port, was used only for general cargo in the past but now has been upgraded to handle

11 ADB Loan 2288–GMS: Rehabilitation of the Railway in Cambodia Project, approved on 13 December 2006 for $42 million, with cofinancing from the OPEC (Organization of the Petroleum Exporting Countries) Fund for International Development and the Government of Malaysia for $15.8 million. 28 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

containers. Together with a multipurpose terminal, it will serve as a logistics and supply base for the emerging oil and gas industry in Cambodia. In the Northern Subcorridor, the waterway runs from Phnom Penh to Stung Treng and from Stung Treng to Kompongcham. In Kampot Province in the Southern Coastal Subcorridor, there are two ports—a small port in Kompongkandal and a medium-sized port in Koh Toch. There is a deep seaport in Sihanoukville and some private ports in the Intercorridor Link.

Because the Lao PDR is landlocked, water transport is limited to inland water and river transport. The existing water transport route on the Mekong River is from Vientiane to Pakse (Champasack), with a navigable length of 860 km. Further navigation to Cambodia is impossible due to the Khone Pha Pheng waterfall. Most trade and transport of people and goods between the two countries takes place across the Mekong River, but this has been declining in volume since the completion of the two bridges across the Mekong in Vientiane and Savannakhet. Only 18% of the goods and 2% of the passengers transported use inland water or river transport in the Lao PDR.

Air transport is currently one of the least developed but most important modes of transport in the Lao PDR. Only 12 of 51 airports have paved runways (1,524 km); 39 other airports have unpaved runways. The airports in Vientiane and Luang Prabang are the only ones that can accommodate Boeing 737–type airplanes. The four main airports, located in Luang Prabang, Pakse, Savannakhet, and Vientiane, are managed directly by the Lao Aviation Authority. Although all four were recently upgraded to cope with increasing demand, particularly from tourism, they need to be further upgraded and expanded to accommodate larger aircraft. One Boeing 737, four MA-60s, and other smaller aircraft presently provide regional and domestic flight services.

Presently, only the airports in Vientiane and Luang Prabang can handle regional and domestic traffic and provide basic customs, immigration, and quarantine services. Along with airports in Vientiane and Luang Prabang, four new routes have been opened recently: Pakse–Bangkok, Pakse–Siem Reap, Pakse–Phnom Penh, and Savannakhet–Bangkok. A Savannakhet–Da Nang route is in the planning stage. The rapid development of the international tourist industry requires that the Lao PDR gradually expand and improve its airport facilities, including runways, terminal buildings, equipment and supply, and airport services. The Government of Thailand has extended a soft loan to the Government of the Lao People’s Democratic Republic to upgrade Pakse Airport to accommodate Boeing 737–type airplanes.

Power

The power situation in the Thailand component of the SEC is good, and power in Viet Nam and the Lao PDR are adequate, although there remains a need to reach more villages in the Lao PDR and Viet Nam components. The power supply situation in Cambodia is poor—electricity in many border towns is supplied by neighboring countries. However, Cambodia has substantial hydropower potential, which could be developed to relieve power supply constraints.

The Generating Authority of Thailand is responsible for generating, transmitting, and distributing electricity to consumers throughout Thailand. Within the Thailand Overview of Southern Economic Corridor Areas 29

component of the SEC, there are five major substations, the largest being a 230– 115–22–kilovolt (kV) substation in Chantaburi. Elsewhere, there are 115–22 kV substations at Trat and Watana Nakhon (Sra Kaew). The distribution system is very comprehensive, reaching even the border villages. In anticipation of power trading with neighboring Cambodia provinces, the Provincial Electricity Authority is constructing 22 kV transmission lines to selected border locations.

Cambodia’s electricity supply comes from 22 small, isolated power systems, most are diesel generators. There is no high-voltage transmission system outside Phnom Penh, so the country’s electricity supplies are mostly isolated, unreliable, and in poor condition. Generation capacity is generally well below demand, so most would-be consumers must install and operate individual diesel-fueled and automotive-battery units. In several cases, the power supply along SEC subcorridors in Cambodia is provided by neighboring countries such as Viet Nam and Thailand. For instance, in the provincial town of Battambang, the power supply is imported from Thailand through the Poipet border gate and managed by the Electricité du Cambodge. In the Kamrieng, Phnom Preuk, and Sampov Loun districts of Battambang Province, the power supply also is imported from Thailand and managed by a private company.

All SEC subcorridors in Viet Nam are connected to the national power grid. Presently, the national electrical network completely serves the urban areas but reaches only 80% of the rural areas in the three subcorridors. Viet Nam supplies power to the following border areas in Cambodia: Bavet, a district of Svayrieng Province in the Central Subcorridor, located on the border adjacent to Viet Nam’s Tay Ninh Province; Ponhea Krek, a district of Kampongcham Province in the Central Subcorridor and the Intercorridor Link; Memot, a district of Kampongcham Province; and Kampong Trach, a district of Kampot Province in the Southern Coastal Subcorridor, located near Cambodia’s border with Viet Nam.

Although the Lao PDR is an electric power–exporting country, not all households in the Lao PDR have access to electricity. Only 41.7% of all villages are connected to the national transmission network. The state-owned enterprise, Electricité du Lao, is the main electricity provider. There is a plan to expand the electric power network in the country, but its implementation is constrained by lack of financing. Except for Sekong and Attapeu, more than half the villages in SEC provinces in the Lao PDR have access to electricity.

Telecommunications

Telecommunication services are adequate in Thailand and along the Central Subcorridor in Viet Nam. Substantial improvements are needed in Cambodia and, to a certain extent, in the Lao PDR. In Viet Nam, facilities in the provinces along the Northern and Southern Coastal Subcorridors require further upgrading.

The upgrading of telecommunication services in Cambodia will be an important element in the development of the SEC and the promotion of economic activity in the country. Telephone density in Cambodia is only 3%, one of the lowest densities in Southeast Asia. The current telecommunication network is inadequate for business activities that require heavy data transfer over the internet. Cambodia has only two fiber-optic cable lines, at Poipet (on the Cambodia–Thailand border)–Phnom Penh–Bavet (on the Cambodia–Viet Nam border) and at Sisophon–Siem Reap. Other 30 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

main cities are connected through wireless communication technologies, which have limited access capacity. Mobile telephones account for about 90% of the market, with only 10% of users covered by fixed telephones. Maintenance costs for mobile telephone users are low due to the prepaid card system, whereas fixed-line users have higher costs and less reliability, due to cable accidents. The fixed telephone network infrastructure has remained undeveloped because private investors find the present market situation to be unattractive.

Telecommunication services in the Lao PDR have grown significantly during the past decade in terms of number of service providers and users. The number of fixed-line and mobile phone subscribers increased by 36.2% annually. The annual growth rates were 34.1% in Champasack and 25.2% in Savannakhet. In 2007, the telephone density was 201 per 1,000 inhabitants for the whole country; 180 per 1,000 inhabitants for Savannakhet; and 139 per 1,000 inhabitants for Champasack. As of the end of 2007, 93.4% of the total telephone capacity was being used by 1,711,850 subscribers.

Telecommunication services also have expanded rapidly in three SEC subcorridors in Viet Nam. This has helped ensure reliable communications among the regions and areas in the country. The number of telephone subscribers in the three subcorridors grew by 21.4% annually from 2000 to 2007, with an average annual increase of 19.6% in the Central Subcorridor, 27.5% in the Northern Subcorridor, and 32.5% in the Southern Coastal Subcorridor. The number of telephone subscribers per 100 people in the subcorridors increased from 7.2 in 2000 to 24.9 in 2007, or by three and a half times during this period. Nevertheless, there is still much room for improvement, especially in the Northern and Southern Coastal Subcorridors. 31

Development Potential and Opportunities

Overview

he SEC has considerable potential and excellent prospects for development, as it has the key ingredients to effectively integrate economic activities within Tthe corridor. The SEC is economically diversified in terms of income and economic structure, natural resource endowments, and labor markets, giving rise to many complementarities that could be pursued to promote its development. These complementarities provide a good base for the development of production networks that may be plugged into global value chains. The corridor has the necessary drivers of growth, including established markets, an agricultural and industrial base, and world- class tourism assets. With the appropriate physical, policy, and institutional framework, the SEC could very well be a primary generator of economic growth in GMS.12

Thailand and Viet Nam have a strong manufacturing base in the Central Subcorridor, specifically on the eastern seaboard of Thailand (in Chonburi and Rayong) and in Ho Chi Minh City and Vung Tau in Viet Nam. The industrial heartland of Thailand, which includes Bangkok and the eastern seaboard, is becoming a dominant region for heavy industries in Southeast Asia. The connection of these two manufacturing hubs will create many business opportunities along the SEC for both domestic and foreign investors. On the other hand, the Northern and Southern Coastal Subcorridors have advantages in agriculture, forestry, and fisheries production and processing, which also provide many investment opportunities in the SEC. Manufacturing enterprises can be promoted in areas where supply chains and logistics can be efficiently operated, with the effort being spearheaded by FDI in special economic zones in designated areas. Supply chain and logistics management would involve joint ventures with foreign investors, including investors from Thailand, in many supporting industries.

Thailand and Cambodia can attract more than 20 million tourists, given that Thailand is an aviation hub in Southeast Asia and Cambodia has a world-class tourist attraction such as Angkor Wat. In addition, the coastline along the SEC has good potential for tourism development, which can help create employment and raise incomes in the communities along the Southern Coastal Subcorridor, especially in SEC areas in Cambodia and Viet Nam. Indeed, increased connectivity along SEC subcorridors can facilitate the development of multicountry and circuit tours of its diverse tourism resources.

12 The relative effectiveness of the SEC, the EWEC, and the NSEC are analyzed in: M. Ishida. 2005. Effectiveness and Challenges of Three Economic Corridors of the Greater Mekong Subregion. Chiba, Japan: Institute of Developing Economies (IDE); and 2007. Evaluating the Effectiveness of GMS Economic Corridors: Why Is There More Focus on the Bangkok–Hanoi Road than the East–West Corridor? Chiba, Japan: IDE. 32 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Comparative Advantages and Complementarities

There are differences and similarities among SEC subcorridors and among the national components of these subcorridors in terms of their state of development and their comparative advantages, giving rise to many complementarities and opportunities.

The major strengths of the Thailand component include its high-level infrastructure development and services, skilled labor force, strong management capacity, dynamic private sector, good technological base, well-established export-oriented manufacturing activities (particularly in skill-intensive industries), and strategic location in the Gulf of Thailand for deep seaport and industrial estate development. However, there is a growing shortage of unskilled labor, with the monthly average wage being around three to four times higher than in Cambodia and the Lao PDR.

The Cambodia component has the advantages of abundant agricultural land, water resources, forestry and fishery reserves, mineral resources (including oil and gas), world-renowned tourism assets such as those in Siem Reap and Phnom Penh, a large supply of unskilled workers, and coastal areas and scenic landscapes suitable for tourism development. However, the education and skills of the country’s labor force are still relatively low, and infrastructure, especially power supply, is inadequate.

The Viet Nam component has abundant agricultural land, forest and marine resources with substantial fishery reserves, mineral reserves (especially oil and gas), a strong science and technology base, a highly educated and skilled labor force, a strong industrial base, and major tourist attractions such as those in and around Ho Chi Minh City and the Mekong Delta.

The Lao PDR component also has abundant natural resources, including agricultural land, forests, minerals, water resources with substantial hydropower potential, an ample supply of unskilled labor, and a diversity of culture and landscapes. It is strategically located, connecting the SEC to the EWEC and, further northward, to the PRC. Like the Cambodian component, however, the education and skills of workers in the Lao PDR are still low, and infrastructure facilities and services require substantial improvement. Nevertheless, the relatively young population of Cambodia and the Lao PDR means that there is a growing labor force and an expanding consumer market that would support SEC development.

Central Subcorridor

This subcorridor is the largest among the four subcorridors and is the most developed region in Cambodia, with a labor force that is relatively more educated and skilled than the labor force in other subcorridors. The economy of this subcorridor has been growing rapidly and is expected to continue to do so in the future. The two international airports in Cambodia are located in this subcorridor, at Phnom Penh and Siem Reap, which also have the most attractive tourist destinations in the country. Almost all of the provinces in the subcorridor have abundant resources for agriculture development, especially for the cultivation of cassava, rice, rubber, sugarcane, and beans. Many garment factories have located their production bases in this subcorridor, Development Potential and Opportunities 33

particularly in Phnom Penh and Kandal Province. With a per capita GDP that is higher than for Viet Nam as a whole, the subcorridor is expected to maintain a high rate of economic growth in the coming years. This subcorridor is close to the Cuu Long Delta region, which is rich in natural resources for agricultural production. The areas around the Cuu Long Delta region are suitable for the development of processing industries and for supplying industrial products to rural areas in this region.

Northern Subcorridor

The areas traversed by this subcorridor in Cambodia are rich in water, forest, and mineral resources (e.g., bauxite in Mondulkiri). It has many areas with large potential for hydropower development, particularly in Rattanakiri and Mondulkiri. The potential for ecotourism development in this subcorridor is very promising. In Viet Nam, this subcorridor has a low population density and relatively large agricultural and forestry land areas that are suitable for industrial tree plantations and commercial crops such as coffee, rubber, sugarcane, and beans. It also has marine resources and has the potential to be a major seaport serving the provinces in the Tay Nguyen region of Viet Nam and the southern Lao PDR. Binh Dinh Province can develop fisheries industries and supply marine products to the Tay Nguyen region, whereas Gia Lai Province can focus on timber-processing industries and production of livestock such as cattle and buffalo.

Southern Coastal Subcorridor

Hydropower development in Koh Kong and tourism development in coastal areas are the key opportunities in the areas traversed by this subcorridor in Cambodia. This subcorridor is engaged mainly in agricultural production and has a large agricultural labor force. Among SEC areas of Viet Nam, the Kien Giang and Ca Mau provinces have advantages in the development of rice production and fisheries. There are prominent landscapes with good potential for tourism development. The eastern and western parts of the Kien Giang and Ca Mau provinces have access to the sea and a long coastline, providing an advantage in developing marine and marine product–processing industries.

Intercorridor Link

This subcorridor includes a coastal area (Sihanoukville) that has white sand, beautiful beaches, and islands. It has a deep seaport in Sihanoukville and many SEZs are located along the subcorridor. There are mineral resources such as oil and gas in the Gulf of Thailand, in the vicinity of Sihanoukville. There also is potential for hydropower development, especially in Kratie and Mondulkiri. The areas covered by the SEC in the Lao PDR have abundant fertile agricultural land and forest areas that, combined with a relatively low labor cost, provides a competitive edge in the production of cash crops such as coffee, fruit, rice, tea, and other agricultural products, as well as in the processing of agricultural and forest products. Investors can be granted long-term land concessions to further reinforce this advantage. The presence of minerals and abundant water resources in this region also is a major strength, making it suitable for investment in mineral-processing industries and power generation. 34 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Although SEC areas share broad similarities, several important complementarities also are evident, namely

materials; facilities.

Investment Opportunities

The sectors and subsectors shown below have been identified as providing good opportunities for investment in SEC subcorridors, considering the comparative advantages and complementarities of SEC areas in the four countries. Although most investment opportunities are relevant to all of the subcorridors, there is some room for each of the subcorridors to emphasize certain activities.

Central Subcorridor

training, and business services. !" #&'" * & storage, and warehousing). # and services such as hotels, resorts, restaurants, tour operations, transport services, rest areas, and recreational facilities. < > sugarcane, beans, and processed food products. ? electrical appliances, garments, household wares, plastics, and wooden furniture, in addition to sugar, biochemicals, and other light manufacturing industries. < and cassava. Development Potential and Opportunities 35

Northern Subcorridor

\^" &_`'" \" hotels, resorts, restaurants, tour operations, transport services, rest areas, and recreational facilities. < > products such as acacia, eucalyptus, and rubber, and commercial crops such as coffee, sugarcane, and tea. ?" {" |"

Southern Coastal Subcorridor

\^" resorts, restaurants, tour operations, transport services, rest areas, and recreational facilities. < processed food products. ?}~ industries. < and ethanol from sugarcane.

Intercorridor Link

}&'" <> rice, rubber, tapioca, tea, and fruits and vegetables. ?" !&'" &'" {" hotels, resorts, restaurants, tour operations, transport services, rest areas, and recreational facilities. 36 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Opportunities for Cooperation

The comparative advantages and complementarities among SEC areas also suggest certain opportunities for subregional cooperation to promote SEC development.

Agriculture and agro-industry, including livestock production, fisheries, and forestry. Promoting multicountry production and processing links can relieve raw material supply constraints, raise productivity, expand value- adding activities, and improve capacity utilization and marketing. The realization of benefits from SEC development will require the promotion not only of subregional agro-industrial production on the basis of the comparative advantage of SEC components but also development of the subregional competitive advantage as a whole. This can be achieved by assisting each of the national areas to (i) identify and develop commercially viable agro-industrial projects, including subcontracting arrangements; (ii) facilitate the combination of different factors of production across national boundaries;13 (iii) pursue suitable policies (“software” aspects) to establish appropriate trade and investment regimes and accelerate human resources development efforts; and (iv) implement public investment programs (“hardware” aspects) to address physical infrastructure requirements. Manufacturing. Promoting multicountry production networks that take into account differences in skills, wage differentials, natural resource endowments, and access to capital and technology. The opportunities for manufacturing collaboration among the national areas of the SEC emerge from the comparative advantages of each national component and the economic complementarities among them. The opportunities in light manufacturing industries in the SEC can be classified as (i) natural resource–intensive industries such as agricultural, forestry, and mineral products processing, including production of alternative energy such as ethanol and biodiesel; (ii) unskilled labor–intensive industries such as production of garments and apparel; and (iii) human capital– and technology-intensive industries such as the production of electronics, medical products, pharmaceuticals, plastics, and rubber. These industries can be further classified into those having immediate or short-term potential and those having medium-term to long-term potential, which depends on the evolving labor supply-and-demand situation and wage rates among SEC national components, among other elements. Cross-border investment and trade. Facilitating cross-border investment and trade (including transshipment of exports and imports) by simplifying and streamlining regulations and procedures. Although SEC trade will undoubtedly be motivated by the inherent differences among the geographic areas that make up the corridor, it is equally clear that trade will be driven by the desire of businesspeople to exploit economies of scale and various gains from specialization. The

13 For instance, the transfer of agriculture technology across the borders from Thailand and Viet Nam can help improve agriculture productivity in Cambodia and the Lao PDR. Development Potential and Opportunities 37

proposed initiatives in this area of cooperation are (i) establishment of an SEC trade and investment information system; (ii) development of regional marketing facilities; (iii) implementation of a trade valuation system at customs checkpoints, including training of personnel for implementing such a system; (iv) institutionalization of traditional informal trade; and (v) enhancement of mechanisms to facilitate small and medium-sized enterprise exporters’ access to working capital. Tourism development. Developing tourism products that combine and link two or more countries. The overall goal of tourism development and cooperation in the SEC is to make tourism a significant and sustainable contributor to economic growth, employment, foreign exchange earnings, and poverty reduction in the areas along the corridor while minimizing adverse social and environmental impacts. The completion of improvements in transport infrastructure along the SEC will boost the realization of the SEC’s vast tourism potential. Neighboring SEC provinces in Cambodia, the Lao PDR, Thailand, and Viet Nam can coordinate the development and promotion of their respective areas as tourist destinations, focusing on ecotourism and cultural and heritage tourism. The initiatives proposed within the framework of the ongoing GMS cooperation program in tourism include (i) joint promotion, marketing, and product development; (ii) facilitation of travel; (iii) creation of tourism infrastructure and related facilities; (iv) development of private sector–driven, community-based tourism models; and (v) capacity building. Joint promotion, marketing, and development of tourist attractions in the SEC are important to raising the awareness of such attractions in potential niche markets. Cross-border economic zones and industrial estates. Establishing cross- border economic zones involving Cambodia, the Lao PDR, Thailand, and Viet Nam, and improving the planning, management, and marketing of existing and planned industrial estates.14 The development of cross-border economic zones can help SEC countries, such as Cambodia and the Lao PDR, create employment, transfer technology, and generate foreign exchange. However, it will be necessary to carefully plan and coordinate the creation of these zones to address matters such as location, taxes and tariffs, logistics and utilities, import and export procedures, and raw materials and parts supply. The products that have been identified for production in many of the industrial estates or zones are mostly natural resource–intensive products and unskilled labor–intensive products, with a relatively smaller number of human capital– and technology-intensive products. The manufacturing of most natural resource– and unskilled labor–intensive products does not require very sophisticated facilities but only basic infrastructure that normally can be provided most efficiently in industrial estates. To assess

14 See: T. Tsuneishi. 2005. The Regional Development Policy of Thailand and Its Economic Cooperation with Neighboring Countries. Chiba, Japan: IDE; and 2008. Development of Border Economic Zones in Thailand: Expansion of Border Trade and Formation of Border Economic Zones. Chiba, Japan: IDE. 38 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

the opportunities for establishing industrial infrastructure in SEC areas, it is necessary to clearly differentiate among the various types of integrated industrial facilities that are needed in the SEC, and their functions and characteristics. The most basic facility is an industrial estate that enables manufacturing for both export and domestic markets. Export-oriented firms can qualify for bonded-warehouse types of schemes that give them tax and duty privileges. The zone also should permit nonmanufacturing, value- adding activities such as grading, sorting, bulk breaking, consolidation, branding, repacking, and simple assembly operations that normally are performed in a free trade zone setting. Transport, power, and telecommunications. Improving coordination in transport planning and investment, pursuing power development and trade,15 rationalizing and upgrading telecommunication services, and mainstreaming environmental considerations in major infrastructure projects. The general strategy for developing competitive advantage is to improve logistical support to reduce the transaction costs for traded goods. This strategy requires a broad definition of infrastructure. The initial focus is on physical infrastructure, specifically transport, power, and telecommunications. This has to be subsequently expanded to include the basic services needed to provide such infrastructure. Because of the importance of cross-border trade, this definition needs further extension to include trade in transport services, power, and telecommunications. Because new sources of financing are needed to fund infrastructure and facilitate trade, financing services also must be included in corridor infrastructure. In recognition of the rapidly evolving role of information technology in manufacturing and trade, the corridor’s infrastructure requirements should include various forms of data interchange, especially e-commerce via the internet. Environmental considerations are a major concern in GMS and should be an integral part of the process of planning and implementing major subregional infrastructure projects. Skills development and migration. Improving the skills profile of the SEC’s Lao PDR and Cambodia components and addressing migration issues that have, at times, clouded bilateral relations. Although wage differentials among SEC countries, especially between Thailand and Cambodia and between Thailand and the Lao PDR, would be a motivation for cross-border investment, this may not be immediately feasible on a major scale because the education and skill levels of workers in the Cambodia and Lao PDR components are still low. Improvement in primary and secondary education, adult education, and vocational training, as well as cross-border recognition of education and skills, will be necessary to enable these countries to maximize the benefits of closer subregional integration. Cooperative efforts among SEC countries can complement national programs to address this need.

15 There are many opportunities for investment in hydropower development and power interconnection and trade among neighboring countries in the SEC, which can be realized through cooperation. This is particularly true in Cambodia, where the supply of electric power falls substantially short of the demand despite the existing potential for hydropower development. Development Potential and Opportunities 39

Another issue requiring joint action among SEC countries concerns the movement of labor, which includes such issues as illegal entry or illegal workers, security, infectious diseases, human trafficking, and poor labor conditions. The resolution of many of these issues will benefit both the sending and the receiving countries. For instance, counterflows of remittances, if properly channeled, could be a major source of local subregional investment. Cross-border migration is particularly heavy on the Thailand–Cambodia border. A significant portion of the incomes of these migrant workers is remitted to their place of origin, whether through informal channels or in kind, such as in the form of gold and jewelry. In the medium and long terms, the development of the SEC could induce migrant workers, who may have absorbed new skills or established contacts, to return to their places of origin and invest in their local economies. 40

Challenges and Constraints

Impediments and Constraints

he realization of the SEC’s full potential requires that certain impediments and constraints be addressed to improve the corridor’s competitiveness and to Tmake possible the integration of economic activities along the corridor. These impediments and constraints include both “hardware,” or physical infrastructure, requirements of economic corridor development and “software” aspects, such as policies, rules and regulations, procedures and standards, institutional arrangements and mechanisms, and activities aimed at developing nonphysical assets (e.g., capacity- and institution-building and management and control systems). The factors regarded as major impediments to and constraints on SEC development are discussed below. Because these factors are closely interrelated, it is necessary to take a coordinated approach to dealing with them.

Physical Infrastructure

There are differences in the availability and quality of infrastructure among SEC national components and among SEC subcorridors, with the Thailand component having the highest level of infrastructure development and the Cambodia and Lao PDR components having the lowest level. A critical constraint on the development of SEC provinces in Cambodia and the Lao PDR is the lack and poor state of physical infrastructure and facilities, especially of feeder roads connecting to the main transport routes. Limited storage and warehousing facilities, information technology equipment, and communication facilities also represent major bottlenecks. As mentioned previously, a major problem in Cambodia is the lack and unreliability of the electricity supply. In the urban areas of SEC countries, rapid growth in urbanization and industrialization has outpaced the provision of the necessary infrastructure, thus resulting in many bottlenecks. Among the subcorridors, infrastructure is most developed along the Central Subcorridor. There remain missing road links in both the Northern and Southern Coastal Subcorridors; segments in the Cambodia component of the Northern Subcorridor and the Viet Nam component of the Southern Coastal Subcorridor have very poor or nonexistent roads. Border-crossing facilities, especially along the Cambodia–Lao PDR border traversed by the Intercorridor Link, are undeveloped. Facilities at the Aranyaprathet–Poipet border checkpoint are not adequate to handle the volume of traffic, resulting in congestion and substantial delays.

Policies, Regulations, Procedures, and Standards

A major impediment to the efficient flow of people and goods in SEC subcorridors is the delay in the implementation of the cross-border transport agreement (CBTA). Specifically, there is an urgent need to implement arrangements involving the Challenges and Constraints 41

exchange of traffic rights under the CBTA.16 Cambodia, the Lao PDR, Thailand, and Viet Nam are all signatories to the GMS CBTA. The CBTA is a compact and comprehensive multilateral instrument that covers in one document all the relevant aspects of cross-border transport facilitation, including (i) single-stop/single-window customs inspection; (ii) cross-border movement of people; (iii) transit traffic regimes; (iv) requirements that road vehicles must meet to be eligible for cross-border traffic; (v) exchange of commercial traffic rights (i.e., the ability of vehicles in one country to be operated in the neighboring country’s territory); and (vi) infrastructure issues such as road and bridge design standards, road signs, and signals. The CBTA will apply to selected and mutually agreed-upon routes and points of entry and exit in the signatory countries.

To allow for the early identification of implementation-related issues and demonstrate the efficacy of the CBTA, GMS ministers agreed at their 12th meeting in 2003 to carry out pilot testing of the CBTA at 7 of the 17 agreed-upon border-crossing points along 3 of the 11 agreed-upon routes. In the SEC, the pilot CBTA implementation is to be carried out at the Poipet–Aranyaprathet and Bavet–Moc Bai border checkpoints along the Central Subcorridor. This is to be done on the basis of bilateral memoranda of understanding between Cambodia and Thailand, signed in 2005, and between Cambodia and Viet Nam, signed in 2006. However, pilot CBTA implementation has yet to commence. A related bilateral road transport agreement, signed by the governments of Cambodia and Viet Nam in Ha Noi in October 2005, allows the exchange of commercial traffic rights between the two countries on a limited basis, thereby helping address the issue of time-consuming and costly transshipment of cargo at the border areas. The bilateral road transport agreement has been in effect since September 2006, and the current quota of vehicles allowed to cross borders has been increased from 40 per day to 150 per day. A similar agreement between Cambodia and Thailand, which was attached to the memorandum of understanding on pilot implementation at the Poipet–Aranyaprathet border checkpoint, was signed by the two during the third GMS summit but has not yet been implemented. A related agreement, signed by Cambodia and Thailand on the sidelines of the second Economic Corridors Forum (ECF) in Phnom Penh in September 2009, is expected to accelerate the exchange of traffic rights and address the current problem of transshipment that is causing bottlenecks in cross-border trade between the two countries.

Human Resources

There are two concerns involving human resources. The first is the availability, skill level, and mobility of labor in SEC areas. Cambodia and the Lao PDR have ample supplies of labor at low wages, which could complement the tightening labor market

16 Clearing border formalities at the Bavet–Moc Bai border crossing takes less than an hour, given the current low cross-border traffic, but it takes almost 5 hours, on average, to transship goods at the no-man’s zone because the exchange of traffic rights between Cambodia and Viet Nam has yet to apply to cargo trucks. The Aranyaprathet–Poipet border crossing is heavily congested with high volumes of border crossers and commercial vehicle traffic. Based on a time-release study conducted in December 2005, the total elapsed time for exports to Cambodia from Thailand averaged almost 405 minutes, with processing time averaging 67 minutes. The elapsed time is high due to congestion at the existing border facility, largely brought about by the transshipment rules, which require unloading and reloading of cargo at the border area. 42 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

in the Thailand component of the SEC. However, the low level of education and skills in Cambodia and the Lao PDR is impeding the pursuit of this complementarity. Workers in the subcorridors, especially in the coastal and mountainous areas of the Northern and Southern Coastal Subcorridors, have low levels of skills and knowledge and are unable to apply advanced technology and management practices to raise productivity or improve competitiveness. Policies and measures affecting labor migration also are inadequate. The second concern has to do with the low level of awareness, knowledge, and skills of officials carrying out transport and trade- facilitation measures. There is a substantial gap in this area, which requires the concerted training and capacity development of officials at the border areas, in the provinces, and in the capitals of SEC countries.

Institutional Factors

Weak coordination among agencies involved in transport, trade, and investment facilitation at both the central and local levels is a major issue. There also is a lack of connection between the higher levels and the operational levels of government. These issues have contributed to problems and delays in implementing agreements already adopted and ratified, including those in the CBTA. The involvement of local authorities and communities in developing the SEC has been inadequate. Mechanisms to effectively promote and support private sector participation in economic corridor development also have been deficient. The ECF was established in June 2008 to help improve coordination of GMS Economic Cooperation Program measures to develop economic corridors, institutionalize the involvement of local officials, and reinforce efforts to expand the participation of the private sector in economic corridor development. The ECF is a new mechanism that needs to be supported to ensure its effectiveness.

Internal and Bilateral Issues

There are also some internal (national) and bilateral issues involving social, economic, security, and political matters that may slow down the implementation of measures to develop the SEC. For instance, there are persistent questions regarding delineation of some border areas that need to be satisfactorily resolved before border-area development projects can be fully implemented.

Key Challenges

There are two principal challenges in SEC development: (i) how to fully integrate the less-developed areas of the SEC with the more-developed areas so that they can obtain meaningful benefits from the development of the corridor, and (ii) how to effectively address social and environmental concerns during SEC development.

Integrating Development of Less-Developed Areas

There is a wide variation of income and poverty levels among the national components of the SEC as well as among SEC subcorridors. Thus, a principal challenge is to achieve balanced development of SEC areas, with the less-developed countries significantly moving up the income ladder and not simply serving as transit zones. This requires Challenges and Constraints 43

the integration of the less-developed national components into the more-developed ones and, similarly, the integration of the less-developed subcorridors—the Northern and Southern Coastal Subcorridors—into the more-developed Central Subcorridor. The Intercorridor Link will play an important role in this process. Efforts in this direction will have to deal with certain problems inherent in the less-developed areas of the SEC, including (i) inadequate physical infrastructure, (ii) low incomes that cannot support a higher level of investment and production, (iii) remoteness from the major economic and population centers, (iv) the presence in some SEC provinces of ethnic minority groups that use low levels of production technology and continue to practice shifting cultivation and nomadic living, and (v) low population density over widely dispersed residential areas.

Addressing Social and Environmental Concerns

Although the development of the SEC is expected to bring benefits to the local populace in terms of increased trade and investment and greater income-generating opportunities, there are potential undesirable consequences for the SEC and the people residing in the corridor and surrounding areas. These are already being experienced and need to be addressed effectively. Such consequences include the following:17

Social Impact

Displacement of local communities. Many subregional infrastructure projects require the relocation and resettlement of local inhabitants, causing their displacement and changes in their economic, social, and cultural situations. The effect of such displacement could be particularly severe among marginalized groups, such as residents of small and remote rural communities. Spread of communicable diseases. The increased mobility of people, arising from improvements in physical connectivity, could lead to the spread of communicable diseases, such as HIV/AIDS and avian flu. Reports show the emergence of HIV/AIDS hot spots along GMS economic corridors following the increase in itinerant populations such as workers, drivers, and tourists in once-isolated rural communities. Trafficking of women and children and illegal trade. Improved mobility and access may exacerbate the trafficking of women and children in border areas. Activities involving illegal trade in goods and wildlife also may increase. Increased land prices. Land prices around road construction sites tend to rise due to speculation and expected increase in demand. This increases the vulnerability of small landowners, who may be prematurely enticed into selling or may be dispossessed of their property, particularly in areas where land rights are not properly defined or enforced. Increased incidence of accidents. Road construction and expansion along the corridor may result in increased accidents, which could cause the loss of

17 Mekong Institute. 2006. Papers and Proceedings of the Second Regional Policy Formulation Meeting on Social and Environmental Impacts of Economic Corridors. Khon Kaen, Thailand, 18–20 September. 44 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

life or community assets such as cows and water buffaloes, or damage to property.

Environmental Impact

Deforestation and loss of biodiversity. Large subregional infrastructure projects and increased mobility of people and goods may create opportunities for the rapid exploitation of natural resources along the corridor. For example, road upgrading and expansion could lead to deforestation and loss of biodiversity by facilitating logging and transport of timber along the corridor. Land clearing for industrial and commercial purposes, due to increased demand and economic opportunities, also could result in deforestation and biodiversity loss. Environmental degradation. Expanding industrial and economic activities along the corridor could lead to pollution and waste disposal issues or failure of ecosystem service functions such as carbon sequestration, water flow regulation, and nutrient dispersal in affected areas. Pollution is already a major concern in SEC population centers such as Bangkok, Ho Chi Minh City, Phnom Penh, and the Ba Ria–Vung Tau and Dong Nai provinces.

Social and environmental concerns in the SEC involve not only the negative effect of SEC programs and projects but also the broader issues affecting the overall sustainability of the SEC. In this regard, climate change is a critical issue with important implications for food security and the lives of the people in affected areas. Cambodia, Thailand, and Viet Nam have the most vulnerable areas in the SEC due to their long coastlines and the important role of agriculture in their economies. The potential effects of climate change on these areas include loss of agricultural land due to rising sea levels, falling crop yields, increasing frequency and intensity of typhoons and natural disasters, and decreasing groundwater quality.18 In particular, an increase in sea levels would seriously affect areas in and around the Mekong Delta in Cambodia and Viet Nam. Besides potentially submerging large tracts of land currently devoted to agriculture production, an increase in sea levels also could increase salt intrusion into the Mekong Delta. Such effects would have serious consequences for habitat and for the livelihoods of a large number of people living in these areas.19 It will be necessary not only to consider and implement adaptation measures but also to take climate change into account during project design and development.

18 ADB. 2009. The Economics of Climate Change in Southeast Asia: A Regional Review. Manila. 19 An ADB–International Center for Environmental Management study has been conducted, in partnership with the Ho Chi Minh City People’s Committee, to help the city respond to climate change. The study examines climate change threats and their effect on areas, communities, and sectors, and recommends adaptation options. Ho Chi Minh City has been identified as a city at high risk from the effects of climate change. See ADB. 2009. Final Report: Ho Chi Minh City Adaptation to Climate Change. Manila. Strategy for Southern Economic Corridor Development

Development Vision, Goals, and Objectives

he vision for the SEC is to create a dynamic, prosperous economic corridor that increases the well-being of the people in the corridor, while ensuring that its Tdevelopment is inclusive and sustainable. It will serve as an engine of economic growth and social development in the southern part of GMS. Based on this vision, the goals of SEC development are to create jobs, increase incomes, reduce poverty, and improve the living conditions of the people in the corridor and the surrounding areas.

To realize this vision and these goals, the objectives of the strategy and action plan (SAP) for SEC development are to (i) strengthen infrastructure and connectivity among the areas in the corridor, (ii) promote and facilitate trade and investment based on the underlying and evolving complementarities and comparative advantages of SEC areas, (iii) address social and environmental concerns during SEC development, and (iv) enhance mechanisms for promoting private sector participation and public– private sector collaboration in the development of the SEC. These objectives will be achieved through closer cooperation among the national components of the SEC in areas such as agriculture and agro-industry, manufacturing, cross-border trade and investment, tourism, transport, power and telecommunications, environment, and skills development and migration. Special attention will be given to spreading to the people in the provinces and local areas of the corridor the benefits of SEC development and to advancing the “software” aspects of economic corridor development, the implementation of which has fallen behind progress in addressing physical infrastructure constraints. Figure 7 summarizes the main elements of the SEC’s SAP.

Guiding Principles and Approaches

Implementation of the SAP for SEC development will be guided by the following basic principles and approaches:

# public sector establishing a conducive policy and regulatory environment, providing basic infrastructure and utilities, and facilitating cooperation among SEC countries and areas. development plans and priorities of SEC countries. (Appendix B shows the key goals of these plans and the contribution of SEC development to their achievement.) 46 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Figure 7: Southern Economic Corridor Strategy and Action Plan at a Glance

Sharing Growth and Prosperity: A Strategy and Action Plan for the Southern Economic Corridor

A dynamic and prosperous economic corridor that improes the welleing of the people in the ision Southern Economic Corridor and ensures that deelopment is inclusie and sustainale

Goals Create os increase incomes reduce poerty and improe liing conditions in the corridor

Strengthen Promote and facilitate Address social and Enhance priate sector ecties infrastructure and trade and inestment enironment concerns participation connectiity

easures to easures to Social: measures to easures to address missing facilitate and upgrade laor sills promote dialogue lins support cross deal with negatie increase connect rural areas order transport effects and address inolement of to primary agreement migration issue chamers of Southern Economic implementation Enironment: commerce Corridor roads promote inestment measures to improe access to strengthenepand in agriculture and maintain longterm funding Action plan utilities power agroindustry sustainaility and promote pulic telecommunications manufacturing address negatie priate partnership and water tourism and effects and climate proects improe order logistics change facilities promote deelopment of crossorder economic ones and industrial clusters

measures measures measures measures illion million million million

ed y priate sector Guiding Pulic sector as catalyst and facilitator Pragmatic and results oriented principles Effectie integration of less deeloped areas Close coordination with related framewors and initiaties

> share in the benefits of SEC development. < to realize early results on which further successes may be built. ~~ bottom–up approaches should be employed together with top–down approaches. activities, in view of financial and human resource constraints. Strategy for Southern Economic Corridor Development 47

and with other frameworks and initiatives focused on the development of SEC areas (e.g., the Ayeyawaddy–Chao Phraya–Mekong Economic Cooperation Strategy; ASEAN, especially the Initiative for ASEAN Integration, the ASEAN Mekong Basin Development Cooperation, and the various ASEAN–Japan cooperation programs and projects; and the Emerald Triangle Cooperation Framework involving Cambodia, the Lao PDR, and Thailand).

Measures to Achieve Objectives

Strengthen Infrastructure and Connectivity

Many deficiencies remain in the infrastructure in SEC areas, especially in Cambodia and the Lao PDR, which constrains connectivity and investment in agro-industry, manufacturing, tourism, and other service industries. Although many road sections along the SEC have been improved, especially along the Central Subcorridor, there still are important missing links in the Northern and Southern Coastal Subcorridors for which further infrastructure investment is needed. The construction of a bridge across the Mekong River in Neak Loueng, Cambodia, in the Central Subcorridor is necessary to resolve the bottleneck there. In addition to these missing links, there also is a need to connect rural areas to the primary roads to improve access to the main corridor routes and enable these areas to benefit from the development of the corridor. Other important infrastructure requirements include developing multimodal transport links and providing power, water, and telecommunications in SEC areas that have poor or nonexistent services. Key measures include

~ to reduce travel time and increase carrying capacity, safety, and reliability; and to support priority agriculture, industry, and tourism projects in the corridor; ^ to facilitate the clearing of formalities at border checkpoints; and & ' telecommunication services in underserved, poorly served, or unserved areas in the corridor.

Promote and Facilitate Trade and Investment

The promotion and facilitation of trade and investment in the SEC entails measures to improve the competitiveness of the SEC for investment and exports, which in turn requires the reduction of transaction costs, including production, transport, 48 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

and distribution costs.20 The objective is to increase and diversify trade not only within the SEC but also among GMS countries and with the rest of the world. The development of transit trade will be important in facilitating access to large markets in Southeast, East, and South Asia, using the most efficient routes and means of transport. Investment promotion will cover not only cross-border investment but also investment coming from non-GMS countries. Emphasis will be on agriculture, agro-industry, manufacturing, tourism, and logistics. Efforts also will be taken to develop industrial clusters and value chains in the corridor and surrounding areas on a complementary basis. Key measures include components related to trade facilitation, investment promotion, agriculture and industry, tourism, and logistics.

Trade Facilitation

\ #< provisions (especially the exchange of traffic rights) and modernizing border checkpoint management. > inspection, risk management, and the use of information and communication technology, and facilitating transit arrangements in coordination with ASEAN-related initiatives. the central and local levels. > and border officials to raise awareness, knowledge, and skills in transport and trade facilitation. centers in strategically located areas in the corridor.

Investment Promotion

opportunities. about the SEC, including a prospectus on business opportunities in the key sectors and subsectors in SEC subcorridors. documentation requirements covering investment in SEC areas. and other permits, including setting up one-stop centers for approving investment applications, and institution/capacity building to support the operations of these centers.

20 A comprehensive set of measures has been proposed to more effectively implement trade and transport facilitation measures in GMS. See: ADB. 2009. Strategy and Work Program for Transport and Trade Facilitation in the Greater Mekong Subregion. Manila. Strategy for Southern Economic Corridor Development 49

Agriculture and Industry

| countries. |} planning, management, and marketing of existing and proposed zones. small and medium-sized enterprises in SEC areas by upgrading production standards, management, and marketing, and developing the link of small and medium-sized enterprise production processes with existing large enterprises. | industrial expansion and relocation.

Tourism

road shows focused on key SEC tourist attractions. destinations in the corridor. |} the private sector in the corridor through programs such as skills training for the tourism industry and the setting of standards for facilities and services. roads, power, water, and other utilities.

Logistics

| foreign participation, where possible and applicable, including cross-border investment in logistic-related services. skills in logistics concepts, operations, and development in SEC national components with less-developed logistic services. ?"

Address Social and Environmental Concerns

Three social aspects of SEC development present special concerns. The first is the need to upgrade labor skills in the Cambodia and Lao PDR components of the SEC, which is necessary to take full advantage of complementarities in labor supply and wages and to enhance the competitiveness of the corridor. The second is the need for cooperation among SEC countries in adopting policies and regulations that will benefit and safeguard the interests of sending and receiving countries and at the same time ensure the welfare of migrant workers. The third requires a proactive 50 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

approach to address the possible negative effects of SEC development, such as the spread of communicable diseases, the increase of drug and human trafficking, and the displacement of local communities. The broad objective in terms of environmental concerns is to institute measures to maintain the long-term sustainability of SEC development, which includes action to effectively address the negative consequences of climate change and of major SEC programs and projects, such those involving tourism, industry, and infrastructure development. Key measures are as follows:

Social Concerns

less-developed areas of the corridor, such as those in Cambodia and the Lao PDR. ~ surveillance, public awareness, and response. {<" | trafficking of women and children. educational and training institutions located in SEC areas. \ marginalized groups. |>> the SEC.

Environmental Concerns

information systems and other tools, and considering these findings and recommendations when developing the SEC. is pursued in a sustainable manner. and protection of natural resources in SEC areas, especially within national protected areas and environmental hot spots in the corridor. | agricultural production and living conditions, especially in and around the Mekong Delta.

Enhance Private Sector Participation and Public–Private Sector Collaboration

Although the private sector is expected to serve as the primary engine of growth in SEC development, many factors have prevented this from being realized. First, the environment for private investment, in terms of the requisite infrastructure, policy, and regulatory framework in many SEC areas, is not conducive to greater private Strategy for Southern Economic Corridor Development 51

sector involvement. The access to financing for cross-border investment, particularly for small and medium-sized enterprises, also is still limited. The private sector in the Cambodia and Lao PDR components of the SEC is still underdeveloped compared to the sector in Thailand and Viet Nam. A closer collaboration between the public and private sectors in the SEC will be necessary to address factors of concern to the private sector. Key measures include

SEC through various means, including discussions at the subregional level (e.g., the GMS Economic Corridors Forum and the GMS Business Forum) and the national and provincial levels; of commerce in the development of the SEC, including closer cooperation between the chambers of commerce of border provinces; and investment funds; and various public–private sector modalities.

Geographic Focus of Strategy

In terms of geographic focus, emphasis will be given to the major nodes within the SEC (Figure 8), the development of which is expected to radiate to the surrounding areas and through the main axis, or backbone, of the subcorridors. The presence of major growth centers in the SEC—Bangkok, Ho Chi Minh City, and Phnom Penh—will help drive this process. These nodes include the following:

Gateway nodes: Bangkok, Laem Chabang, Sihanoukville, and Vung Tau; Border nodes (towns on the two sides of the border): Aranyapraphet–Poipet and Bavet–Moc Bai in the Central Subcorridor; Klong Yai–Koh Kong and Preak Chak (Lork)–Xa Xia in the Southern Coastal Subcorridor; O Yadov– Le Thanh in the Northern Subcorridor; and Dong Kralor (Tra Pang Kriel)– Veun Kham in the Intercorridor Link; Interchange node (intersection between the SEC and the EWEC): Savannakhet; and Other nodes: Capitals of provinces traversed by SEC subcorridors.

The focus of interventions in the short and medium terms will be primarily on the border nodes along the SEC because they represent a major impediment to the movement of people, goods, and services, thus limiting production and trade exchanges;21 because they are natural enclaves, where it is possible to introduce

21 A simulation of the dynamics of location of population and industries in East Asia concluded that border costs play a significant role in the location of population and industries, and that physically connecting subregions is not sufficient to facilitate cross-border trade and investment. See: S. Kumagi et al. 2008. The IDE Geographical Simulation Model: Predicting Long-Term Effects of Infrastructure Development Projects. Chiba, Japan: Institute of Developing Economies. 52 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

a range of services to promote production and trade and where there is sufficient existing demand to justify private sector participation; and because many areas between the major border nodes have relatively low population densities and insufficient demand at this time. These interventions will include both “hardware” and “software” aspects of economic corridor development. As bottlenecks in the border areas are resolved, it is expected that the increased flow of trade and investment along SEC subcorridors will create economic opportunities in other SEC nodes and will catalyze their development. Nonetheless, special programs, such as the development of secondary and tertiary roads connecting rural areas to the main corridor routes, will be necessary to extend benefits to the less-developed areas of the corridor.

Figure 8: Border Nodes in the Southern Economic Corridor

To nan Lao People’s Democratic Republic

aan aanna To a Nan To on an Thailand

n am

on ao anaa ao Tan ano To Non o

Cambodia nom n a on a o a o on o C n C

ano a Tn o Viet Nam To n Ta o no

a o

o To Nam Can 53

Implementing the Strategy

Action Plan

he strategy for the development of the SEC is translated into an action plan containing specific, time-bound measures to achieve its goals and objectives. TCovering a 5-year period (2009 to 2013), the action plan for SEC development shows the following information for each of the objectives of the strategy: (i) the result or output expected, (ii) the indicators of progress and performance, (iii) the agency or body responsible for implementation, (iv) the time frame or target date for completion, and (v) the current status of the objective. It includes both measures that presently are being implemented and measures that are planned or proposed to be initiated within the 2009–2013 time period. The action plan matrix is given at the end of this chapter; a summary is presented in Table 6.

Table 6: Summary of Southern Economic Corridor Action Plan

Cost Number of estimate Objective Sector or activity measures ($ million) 1. Strengthen 1.1 Transport 15 1,615.4 infrastructure and 1.1.1 Roads 8 1,461.4 connectivity 1.1.2 Rail 2 148.0 1.1.3 Water transport 3 TBD 1.1.4 Air transport 2 6.0 1.2 Power 5 902.4 1.3 Telecommunications 1 10.0 1.4 Border Facilities 3 35.0 2. Promote and 2.1 Trade and transport facilitation 7 11.4 facilitate trade and 2.2 Investment promotion 28 339.7 investment 2.2.1 Southern Economic Corridor– wide investment promotion 3 0.3 2.2.2 Business information 4 0.2 2.2.3 Promotion of investment in priority sectors/subsectors Agriculture 3 50.1 Tourism 9 195.6 Logistics 5 1.1 Special economic zones and industrial clusters 4 91.5 3. Address social 3.1 Environmental concerns 6 287.9 and environmental 3.2 Social concerns 12 114.3 concerns 4. Enhance private 4.1 Private sector participation 5 0.9 sector participation 4.2 Public–private partnership 1 0.1 and public–private sector collaboration

TBD = To be determined. 54 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Figure 9: Greater Mekong Subregion Organizational Framework

NATIONAL SUBREGIONAL

Public Sector Private Sector Public Sector Private Sector

ead of Government eaders Summit

Central Minister hamber of Ministerial ommerce Level esponsible level conomic GMS a and ndustry for GMS onference usiness orridors Forum Forum F

Senior Governors fficial Senior Forum ational fficials oordinator Meeting

oncerned Ministries gencies Forums o rking Groupb Local Provincial Provincial GMSF Level Governments s haptersc

GMS = Greater Mekong Subregion. a Deputy Prime Minister in certain cases. b Forums and working groups could adopt respective work programs focusing on GMS priority corridors. c Prooposed.

Institutional Mechanisms and Arrangements

The implementation of the strategy and action plan (SAP) for SEC development will require substantial resources and close coordination of activities within the national components of the SEC and among existing GMS institutions. Such institutions include the GMS ministerial meetings, senior officials’ meetings, forums, and working groups; the GMS Business Forum (GMS–BF); and supporting GMS bodies such as the GMS Environment Operations Center, the Mekong Tourism Coordination Office, and national transport facilitation committees. In June 2008, GMS countries established the Economic Corridors Forum (ECF) in accordance with the directives given by GMS leaders at the third GMS summit. A Governors Forum, constituted under the ECF, is envisioned to increase and institutionalize the involvement of local authorities in economic corridor initiatives. The roles and tasks of GMS institutions, including the ECF, are summarized in Appendix C. Figure 9 shows the overall GMS organizational framework and indicates how the ECF fits into this framework.

The establishment of the ECF was a response to a significant gap in the institutional mechanisms necessary to coordinate and accelerate GMS economic corridor development. The ECF will serve as the main advocate and promoter of GMS economic corridor development. Its more specific functions are to

GMS economic corridor development; ? areas along the economic corridors; Implementing the Strategy 55

GMS economic corridors; and sector, and collaboration between the public and private sectors in GMS economic corridor development.

The ECF is a standing body dealing with economic corridor development within the GMS organizational framework. Next to the leaders summit, the GMS ministerial-level conference remains the highest policy-making and coordinating body under the GMS Economic Cooperation Program. The ECF will review the progress of implementation of the SEC’s SAP and will recommend actions to resolve major policy and implementation issues. These recommendations will then be considered by the GMS ministerial meeting, senior officials’ meeting, forums, and working groups, and appropriate actions will be taken by the concerned ministry or agency in GMS countries in accordance with agreements reached among them.

Financing

The implementation of the SAP will require approximately $3.3 billion over the next 5 years, or an average of $660 million per year (Table 7).22 This amount is less than the estimated financial requirements of the NSEC strategy and action plan ($5 billion) but more than that of the EWEC strategy and action plan ($1.5 billion). The largest cost component is for infrastructure, which comprises about three-quarters of the total. Roughly two-thirds of the estimated cost of infrastructure is for transport projects. Of the non-infrastructure components, investment promotion and facilitation measures account for the largest share (45%), followed by those for environment (38.2%) and social concerns (15.2%). Investment promotion and facilitation measures include programs and projects involving specific sectors, such as agriculture, tourism, and logistics (Figure 10).

In terms of funding commitments, around 46% of the total estimated cost has secured financing in the form of either actual or indicative commitments. The funding gap—those measures for which funding is still being or will be sought—is around $1.8 billion, or slightly over half of the total cost. Among the action plan components, environment, social, and transport and trade facilitation measures have the highest level of funding, with commitments or indicative commitments reaching nearly 100%. This is followed by investment promotion and facilitation measures, which have a 49.1% commitment or indicative commitment rate, and infrastructure, with a 36.5% commitment or indicative commitment rate. The unfunded amount for infrastructure includes two large power projects and a road project that are suitable for public–private partnership arrangements. Without these projects, the unfunded part of the SEC would be around $250 million. More than half of SEC transport projects (53.3%) have commitments or indicative commitments. There still are no funding commitments for measures to promote private sector participation. To effectively implement the action plan, it will be necessary to ensure that the indicative

22 Cost estimates for some projects in the action plan are not available. 56 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table 7: Financing the Southern Economic Corridor Strategy and Action Plan ($ million)a

Cost estimates With Funding Program/ indicative being/to be project component Total Committed commitment sought Infrastructure 2,562.8 498.8 460.0 1,604.0 Of which transport 1,615.4 436.4 425.0 754.0 Transport and trade 11.4 0.8 10.5 0.1 facilitation Investment promotion/ 338.7 155.0 11.4 172.3 facilitation Environment concerns 287.9 270.4 17.0 0.5 Social concerns 114.3 114.3 0.0 0.0 Promotion of private 1.0 0.0 0.0 1.0 sector participation Total 3,316.1 1,039.3 498.9 1,777.9

a See Appendix D for details.

Figure 10: Funding Requirements of the Southern Economic Corridor Strategy and Action Plan Implementing the Strategy 57

commitments are translated into firm commitments and that funding is secured for the unfunded programs and projects.

The traditional sources of finance for GMS projects have been the participating governments as well as multilateral and bilateral development institutions. However, financing from these sources is substantially short of the requirements. Accordingly, future efforts should increase funding not only from traditional sources but also from nontraditional sources, especially the private sector. Moreover, greater efforts are needed to achieve closer coordination and integration of SEC programs and projects with related initiatives, such as those under ASEAN, the Ayeyawaddy– Chao Phraya–Mekong Economic Cooperation Strategy, the Emerald Triangle Cooperation Framework, the Japan–Mekong Cooperation Program, and GMS development partners. In this regard, a mini development partners meeting, focusing on the SEC and involving key development partners in the area, is proposed to be held in 2010 to coordinate activities and generate support for SEC development.

Although there has been private sector financing of some GMS power and transport projects, there remain many opportunities for private sector participation in GMS infrastructure projects through various public–private partnership schemes. More efforts are needed to promote such partnerships in the SEC, such as the establishment of frameworks and approaches to make infrastructure ventures more attractive to the private sector. These include measures to offset or mitigate investors’ commercial and sovereign risks in these undertakings.23 More generally, achieving a more conducive business environment will be important.

Private sector investors need to tap various sources to finance their projects. Traditional bank lending may meet the requirements of relatively small commercial and industrial projects, although special facilities may be needed to finance small and medium-sized enterprises.24 For larger projects involving public–private partnerships, private investors need to tap other sources of financing. Some possible ways of raising funds for these projects include (i) corporate bond issues; (ii) debt and/or equity financing from ADB’s private sector window or the International Finance Corporation, an affiliate of the World Bank; (iii) cofinancing arrangements between commercial banks, ADB, and the World Bank; (iv) funding from bilateral development agencies, such as the Japan Bank for International Cooperation, which is engaged in both public and private sector lending; and (v) credits from industrial country export credit agencies, which are increasingly financing transactions without the need for government counter guarantees. It will be necessary to provide the private sector with more information about these possible funding sources, including how they can avail themselves of these opportunities.

23 A regional guarantee facility has been proposed to promote private sector investment in GMS. Envisioned as a mechanism for reducing country risks, this proposed facility would issue guarantees and risk-mitigation services to investors, contractors, exporters, and traders operating in GMS. The proposal is still under consideration by the GMS Subregional Investment Working Group. 24 A GMS small and medium-sized enterprise development fund has been proposed to improve small and medium-sized enterprises’ access to financing for working capital, pre- and post-shipment export financing, and export credit insurance. The GMS–BF also has been studying the feasibility of establishing a pre-shipment export finance guarantee organization and a shippers’ performance guarantee organization. 58 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Innovative financing measures can be considered to bridge the shortfall of public financing of environmental investments. For instance, payment for ecosystem service mechanisms must be explored. Without development of sufficient, tangible incentives to mitigate economic pressures, the fragmentation of natural landscapes, loss of habitat and ecosystem functions, and deterioration of environmental services will likely result in increased costs to both urban and rural economies. Strengthening emerging environmental services markets offers great potential to address these issues. The payment for ecosystem service approach is being piloted in the Dong Nai watershed in Viet Nam. Moreover, forest protection for erosion and flood control in Viet Nam has been pursued together with measures to increase production of coffee and other high-value crops.

Monitoring, Evaluating, and Updating the Strategy and Action Plan

One of the tasks of GMS forums and working groups will be to monitor the implementation of the SAP for the SEC (as well as for the EWEC and the NSEC), with the assistance of the GMS secretariat and national coordinators. The following actions are envisaged to be taken by GMS forums and working groups after approval of the SAP by SEC countries: (i) inclusion of the relevant component of the SAP in a forum’s respective work program (for example, the Subregional Transport Forum would take care of the transport component of the action plan, the Working Group on Tourism would extract the tourism component of the action plan, and so on);25 and (ii) discussion of the progress in implementing the SAP. The proceedings and reports covering the implementation of the SAP will be collated and synthesized by GMS secretariat and submitted to the senior officials’ meeting, the ministerial meeting, and the ECF.

Implementation of the SAP will be reviewed periodically and adjusted as appropriate and necessary. The results of the strategic environmental assessment of the SEC will be taken into account during such review, revision, and updating. Monitoring and evaluation of the SAP will examine not only the progress in delivering outputs (e.g., kilometers of roads improved or number of individuals trained) but also the progress toward achieving the desired effects, outcomes, and results. Reporting on the first set of indicators is fairly straightforward; these are compiled as part of project progress reports. Obtaining data on the second type of indicators is more difficult due to the lack of timely, consistent, and comprehensive statistics.

To establish a monitoring and evaluation system for SEC development, it is proposed that SEC countries initially agree upon a relatively small number of quantitative indicators of effects, outcomes, and outputs, after which baseline data covering these indicators will be established and data will be collected, compiled, and reported periodically. The proposed monitoring system initially can be implemented on a pilot

25 This process would be interactive, with initiatives on the EWEC, the NSEC, and the SEC identified by GMS ministers, senior officials, and the ECF (top–down), with the GMS forums and working groups (bottom–up) forming part of the SAPs for these economic corridors. Implementing the Strategy 59

basis, after which the number of indicators would be expanded.26 To start with, the set of indicators shown in Table 8 is recommended.

After they are approved, these indicators will form part of the monitoring and evaluation system for SEC development, together with the output indicators emanating from various SEC programs and projects. Certain statistics, such as those on incidences of poverty, may not be available on an annual basis because SEC countries have varying schedules and time frames for collecting such information. Nevertheless, what is important is to be able to agree on and establish a workable tracking system, even with a limited coverage. Further progress can be made as experience is gained. In this regard, the inclusion of environmental performance indicators has been proposed. However, SEC countries need prior agreement on the indicators to be included in the monitoring and evaluation system, due to the sensitive nature and large number of these indicators.27

Table 8: Proposed Initial Set of Indicators

Aspects to be monitored Proposed quantitative indicators Impact Poverty incidence in Southern Economic Corridor (SEC) provinces/subcorridors Per capita gross provincial product in SEC provinces/ subcorridors Outcomes/results Cross-border trade at the main border checkpoints Volume of traffic at the main border checkpoints Processing time for passengers and freight at the main border checkpoints Tourist arrivals in SEC provinces Approved/registered investment in border special economic zones Foreign direct investment in SEC provinces Outputs Data from project monitoring reports (e.g., kilometers of roads or railway constructed, upgraded, or rehabilitated); percent completion of civil works; number of training courses, programs, or workshops conducted; number of trainees; number and type of promotional fairs and meetings organized; studies completed (many of these can be obtained from the reports of Greater Mekong Subregion forums and working groups on the implementation of their respective strategies and action plans)

26 Qualitative analysis will supplement the use of quantitative indicators to come up with a fairly comprehensive report on progress in achieving expected results. 27 Environmental performance assessment at the subnational level is being undertaken through the GMS Environment Operations Center as part of the Biodiversity Conservation Initiative to identify environmental trends within the SEC and to assess the effectiveness of measures under this initiative and of sector environmental assessment interventions being implemented within the corridor. 60 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Road upgrading 92.6% completed. Detailed design of the bridge Funding under review. from Government of Japan being discussed Viet Nam is seeking potential investors Target Date Target Time Frame/ 2006–2010 (road); 2010–2013 (bridge) 2009–2011 being sought Funding To be determinedTo Government of Bodies Agencies/ Implementing Ministry of Public and Transport, Works Cambodia Ministry of Public and Transport, Works Cambodia Ministry of Transport, Ministry of Transport, Viet Nam; private sector through a build–operate–transfer scheme Progress/ Indicators Performance Performance Percent completion of Percent road upgrading and bridge construction completion of Percent rehabilitation works Percent completion of Percent expressway Expected Outcomes/Results Travel time from Travel to the Phnom Penh Cambodia–Viet Nam border substantially reduced Section of Northern Subcorridor that requires substantial rehabilitation improved, facilitating travel along the subcorridor Travel between the Travel two nodes in Viet Nam improved in terms of time and convenience Penh–Neak Loueng road Penh–Neak and construction of Mekong bridge at Neak Loueng Siem Reap–Preah Vihear–Stung Treng section (Road No. 66) expressway Measures/Programs/ Projects 1.1 Transport 1.1.1 Roads Central Subcorridor Improvement of Phnom Northern Subcorridor Rehabilitation of the Tau Bien Hoa–Vung Southern Economic Corridor Action Plan Matrix Strengthen Infrastructure and Connectivity Implementing the Strategy 61 Status/ Remarks million), and continued on next page from the Cambodia and Viet Nam governments Ongoing, with financial assistance from Asian Development Bank (ADB) ($82 million), Australia ($33.5 the Republic of Korea ($50 million) Target Date Target Time Frame/ 2008–2010 Ongoing with funding 2009–2012 (Cambodia); 2009– 2014 (Viet Nam) To be determinedTo Proposed Bodies Agencies/ Implementing Ministry of Public and Transport, Works Cambodia Ministry of Public and Transport, Works Cambodia; Ministry of Viet Nam Transport, Ministry of Transport, Ministry of Transport, Viet Nam Progress/ Indicators Performance Performance Percent completion of Percent road improvement completion Percent of rehabilitation works and bridge construction Percent completion of Percent upgrading continued Expected Outcomes/Results Travel time from Travel to the Stung Treng Cambodia–Viet Nam border reduced from Cambodia Travel to Viet Nam along the Southern Coastal Subcorridor facilitated Travel from the Travel Cambodia–Viet Nam border to Quy Nhon facilitated Stung Treng–Rattanakiri Stung Treng–Rattanakiri Section (Road No. 66) km of Road No. 33 in Cambodia to border with Viet Nam, and 93.6 km of national highways 80 and 63, including construction of two bridges across Cai Be and Lon rivers (Phase I) kilometers (km) of class 4 to class 3 road from Cambodia–Viet Nam border to Quy Nhon Measures/Programs/ Projects Improvement of the Southern Coastal Subcorridor Rehabilitation of 15 Upgrading of 250 Strengthen Infrastructure and Connectivity 62 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Included in ADB indicative pipeline for 2009–2011 ($100 million); cofinancing ($30 million) being sought. Listed in the Vientiane Plan of Action as Southern Coastal Phase II Corridor, assistance from ADB; loan of $110 million included in 2009 pipeline, covering sections of the Southern Economic Corridor (SEC) and the Economic East–West Corridor (EWEC). Listed as Greater Mekong Subregion (GMS) Highway Expansion Project in the Vientiane Plan of Action Target Date Target Time Frame/ To be determined To To be determinedTo With financial Bodies Agencies/ Implementing Ministry of Transport, Ministry of Transport, Viet Nam Ministry of Transport, Ministry of Transport, Thailand Progress/ Indicators Performance Performance Percent completion of Percent rehabilitation works Percent completion of Percent upgrading continued Expected Outcomes/Results Travel from Ca Mau Travel City to Ca Mau Cape facilitated Travel along the Travel Thailand section of the Southern Coastal Subcorridor improved in terms of time and convenience Nam section under Phase I to Ca Mau City, Nam Can, and Ca Mau Cape (Phase II) section of the Subcorridor from two- divided lane to four-lane highway standard Measures/Programs/ Projects Extension of the Viet Upgrading of Thailand Strengthen Infrastructure and Connectivity Implementing the Strategy 63 Status/ Remarks continued on next page assistance from ADB ($42 million), OPEC (Organization of the Exporting Petroleum Countries) Fund for International Development ($13 million), and the Government of Malaysia ($2.76 million) of China (PRC) is financing a feasibility study for Cambodia section; prefeasibility study for Viet Nam section completed with estimated cost of $75 million Target Date Target Time Frame/ 2008–2010 Ongoing, with financial To be determinedTo Republic The People’s 2009–2011 Proposed Bodies Agencies/ Implementing Ministry of Public and Transport, Works Cambodia Ministry of Public and Transport, Works Cambodia; Ministry of Viet Nam Transport, Ministry of Public and Transport, Works Cambodia Progress/ Indicators Performance Performance Percent completion Percent of rehabilitation/ reconstruction of line; achievement of mainline speed of at least 50 km per hour Completion of feasibility studies for the two sections of the line; negotiation/ finalization of financing arrangements; commencement of construction Delineation of project scope; conduct of prefeasibility/ feasibility study; finalization of financing arrangements; commencement of civil works continued Expected Outcomes/Results Railway system in Cambodia fully operational; safety and efficiency increased; competitiveness of railway increased; road damage and accidents due to movement of heavy cargo reduced Railway link between Cambodia and Thailand completed, thus making operational the route to from Kunming Singapore Use of the Mekong River for transport maximized; travel from in the Lao Khone Falls Democratic People’s Republic (Lao PDR) to Cambodia made possible through use of intermodal facilities of the railway in Cambodia (600 km for rehabilitation; 48 km for reconstruction) line from Phnom Penh line from Phnom Penh to Viet Nam border at Loc Ninh (254 km) and from Loc Ninh to Ho Chi Minh City (129 km) and port improvements on the Mekong River and for access to the port in Siem Reap; development of intermodal terminal at Khone Falls Measures/Programs/ Projects 1.1.2 Rail Rehabilitation Construction of railway 1.1.3 Water transport 1.1.3 Water Channel, navigation, Strengthen Infrastructure and Connectivity 64 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Mekong Tourism Mekong Tourism Development Project Bank for International Cooperation (JBIC) financing from the Government of Thailand Proposed Target Date Target Time Frame/ 2009 of ADB-assisted Part 2009 Ongoing, with Japan 2006–2011 Proposed. Funding Target completion Target date is 2009 Bodies Agencies/ Implementing Ministry of Public and Transport, Works Cambodia Ministry of Transport, Ministry of Transport, Viet Nam Ministry of Transport, Ministry of Transport, Thailand Ministry of Public and Transport, Works Cambodia Progress/ Indicators Performance Performance Completion of airport upgrading Completion of rehabilitation works Completion of construction of C and D terminals Completion of upgrading and extension s ’ continued Expected Outcomes/Results (UNESCO) World (UNESCO) World Heritage Sites promoted and supported Capacity and efficiency of port increased Additional capacity installed at Laem Chabang port, improving its ability to handle increased freight volumes Jets the size of Boeing 737s accommodated, facilitating travel to Sihanoukville from Japan, the Republic Singapore, of Korea, Thailand, and Viet Nam Promotion of subregional tourism loop comprising the United Nations Educational, Scientific and Cultural Organization rehabilitation construction of C and D container terminals extension of Sihanoukville Airport Rattanakiri and Stung airports in Treng Cambodia Measures/Programs/ Projects port Tau Vung Laem Chabang, Phase 2 1.1.4 Air Transport Upgrading and Upgrading of Strengthen Infrastructure and Connectivity Implementing the Strategy 65 Status/ Remarks continued on next page financing from ADB ($20 million) and JBIC ($22.3 million) Bank (International Development Association [IDA]) financing, together with EDC (IDA) financing with EDC and Electricité du Lao being sought Target Date Target Time Frame/ 2010 Ongoing, with To be determinedTo World Possible To be determinedTo Bank World Possible Bodies Agencies/ Implementing Electricité du Cambodge (EDC), Cambodia EDC, Cambodia; Electricity of Viet Nam EDC, Cambodia; Electricité du Lao, Lao PDR Electricity of Viet Nam 2013–2015 Proposed. Financing Progress/ Indicators Performance Performance Installation of transmission line Installation of transmission line and construction of the power stations Installation of transmission line Completion of feasibility study; finalization of financial package; commencement of construction continued Expected Outcomes/Results Availability and reliability of power supply improved in Kampot and Sihanoukville Electricity imported from Viet Nam; Cambodian villages electrified along the route Electricity imported from the Lao PDR; availability and reliability of power supply in areas along the route improved Electricity supply to Ho Chi Minh City and surrounding areas, including industrial zones, increased 220-kilovolt (kV) link between Kampot and Sihanoukville 115 kV line from Tay 115 kV line from Tay Ninh in Viet Nam to and Kompongcham Kratie in Cambodia, including two 115 kV power stations 115 kV line from Ban Hat in the Lao PDR in to Stung Treng Cambodia construction of Nhon 4 Combined Trach Project Cycle Power (720-megawatt [MW]) Measures/Programs/ Projects 1.2 Power line: Transmission line: Transmission line: Transmission study and Feasibility Strengthen Infrastructure and Connectivity 66 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Proposed. Financing being sought There is existing interconnection between Telecoms Cambodia and of Thailand. Telecoms Upgrading to be undertaken upon completion of technical station survey at Poipet Target Date Target Time Frame/ Target date for Target commissioning of hydropower plant is 2017 2009–2010 Project is ongoing. Bodies Agencies/ Implementing Ministry of Industry, Ministry of Industry, and Mines Energy, EDC, Cambodia Communications ministries in Thailand and Cambodia Progress/ Indicators Performance Performance Completion of feasibility study; finalization of financial package; commencement of construction Completion of upgrading of fiber network continued Expected Outcomes/Results Power supply Power situation in and Stung Treng surrounding areas improved; Cambodian system at the area connected to the Viet Nam grid Information and communications technology facilities and services in the SEC areas in Thailand and Cambodia improved project (200 MW), including 220 kV transmission line to and Viet Stung Treng Nam border where it interconnects with Viet Nam grid Superhighway Network Phase 2, Thailand–Cambodia component: expansion of fiberoptic network at Aranyaprathet– border checkpoint Poipet from 12- to 24-core Measures/Programs/ Projects II hydropower Sre Pok 1.3 Telecommunications GMS Information Strengthen Infrastructure and Connectivity Implementing the Strategy 67 Status/ Remarks To be implemented To under the proposed GMS Corridor Town Development project, which is in the ADB loan pipeline for 2011 Cambodia and the Lao PDR leading to the respective borders were completed in 2007 with a loan from the PRC. The Lao PDR has reclassified the border crossing as an international border gate Target Date Target Time Frame/ 2011 (project approval); implementation period to be determined 2009–2011 The road sections in Bodies Agencies/ Implementing Concerned ministries/ agencies and provincial authorities in Cambodia, Thailand, and Viet Nam Concerned ministries and agencies in Cambodia and the Lao PDR Progress/ Indicators Performance Performance Construction and/or improvement of local roads and bridges, drainage, flood control, water and sanitation facilities, public markets, bus terminals, and other logistical support facilities completed Construction of office buildings and installation of necessary equipment completed continued Expected Outcomes/Results Access of people and business enterprises to basic urban infrastructure and services increased; economic development of border areas enhanced; congestion relieved and services improved, resulting in faster crossing times, especially for freight traffic Ability of border offices to handle clearance procedures and requirements improved improvement of border facilities at Aranyaprathet–Poipet between Cambodia and Thailand Bavet–Moc Bai between Cambodia and Viet Nam facilities at Na Nuk Kien Piy Kan (Lao PDR)–Tra (Cambodia), linking National Road No. 7 in Cambodia to National Road No. 13 in the Lao PDR Measures/Programs/ Projects 1.4 Border Facilities Central Subcorridor Expansion and Intercorridor Link Construction of border Strengthen Infrastructure and Connectivity 68 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Continuing. ADB is supporting the implementation of in pilot the CBTA border checkpoints. Priority is on the following border checkpoints: Cambodia– Poipet, Aranyaprathet, Thailand; Bavet, Cambodia–Moc Bai, Viet Nam Initial focus on the Central Subcorridor; to cover officials at the central and local levels, including those in border areas Target Date Target Time Frame/ Time Frame/ 2009–2013 (Central Subcorridor); 2010–2013 (Southern Coastal Subcorridor); 2011–2013 (Northern Subcorridor) 2009–2013 Implementing Agencies/Bodies Ministries of transport, finance; trade; health; customs, immigration, quarantine; and other concerned border control authorities of SEC countries Ministries of transport; finance; trade; health; customs, immigration, quarantine; and other concerned border control authorities of SEC countries Progress/ Indicators Performance Performance Volume of cross- Volume border traffic; processing and waiting times at borders, number of trucks examined, and extended reduction of transshipment requirements Number of training programs and workshops implemented; number of personnel trained Expected Outcomes/Results Freer and faster cross- Freer border movement of people, goods, and vehicles; increased cross-border trade, including transit trade Increased skills and capacity among personnel implementing CBTA and trade facilitation measures Trade and transport facilitation Trade key provisions of the cross-border transport agreement (CBTA), especially facilitation of exchange of traffic rights and modernization of border management (includes information dissemination; simplification, harmonization, and rationalization of forms and procedures; facility border-crossing improvements) building for implementing CBTA and trade facilitation initiatives Measures/Programs/ Projects 2.1 Implementation of Training/capacity Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 69 Status/ Remarks continued on next page Initial focus on the Central Subcorridor, to be closely coordinated with related Association of Southeast Asian Nations initiatives be implemented To under the proposed; improved SPS Handling in GMS Cross-Border Trade project, which is in the ADB loan pipeline for 2011 Proposed Proposed; could be pursued on a pilot basis using as a model the bilateral payment agreement between Thailand and Malaysia entered into in 2002 Target Date Target Time Frame/ Time Frame/ 2009–2013 2009 (project preparatory technical assistance 2011 (loan) [PPTA]); 2009–2013 2010–2013 Implementing Agencies/Bodies Border agencies in SEC countries led by customs authorities Inspection and quarantine ministries and agencies; local authorities Local authorities in SEC areas; private sector Monetary authorities, ministries of trade and finance of NSEC countries Progress/ Indicators Performance Performance Single-window inspection implemented; risk management and information technology techniques applied; customs transit system established Sector analysis of SPS capacities completed; proposal for capacity development prepared; project aimed at developing capacities and initiating risk-based system prepared Plans for setting up wholesale markets or distribution centers prepared and implemented Agreement among SEC countries to consider modalities of financial settlement to facilitate cross-border trade; negotiation, conclusion, and implementation of bilateral payment agreements continued Expected Outcomes/Results Streamlined system and processes for customs inspection at border checkpoints, including those for transit trade Risk-based system of SPS inspection designed and applied; diagnostic and testing capacities strengthened; academic training for managing SPS promoted (Cambodia and the Lao PDR) Common wholesale markets or distribution centers established in major border areas Suitable arrangements for financial settlement of cross-border transactions in the NSEC implemented including single- window inspection, risk management, use of information technology, and handling of transit trade handling of sanitary– phytosanitary (SPS) requirements in GMS cross-border trade (Cambodia, the Lao PDR, and Viet Nam) wholesale markets or distribution centers in major border areas to facilitate and support trading activities and efficient arrangements for financial settlement covering cross-border trade in the North–South Economic Corridor (NSEC) Measures/Programs/ Projects Customs facilitation, Improvement of Setting up of common Adoption of amicable Promote and Facilitate Trade and Investment Trade Promote and Facilitate 70 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page cover major border checkpoints only, especially along the Central Subcorridor Continuing. May be undertaken separately or together with GMS-wide investment forums or missions Continuing. May be undertaken separately or together with GMS investment forums Proposed. Identified by the SEC strategy and action plan (SAP) study team based on the consultation meetings Target Date Target Time Frame/ Time Frame/ 2009–2013 Proposed. Initially to 2009–2013 2009–2013 2009–2013 Implementing Agencies/Bodies Trade ministries and Trade statistical agencies of SEC countries Greater Mekong Subregion Business (GMS–BF); Forum industry and trade ministries, investment ministries/agencies, and chambers of commerce and industry (CCIs) of SEC countries; local authorities industry and GMS–BF; trade ministries and CCIs of SEC countries; local authorities Industry ministries and investment agencies of SEC countries; local authorities; GMS–BF Progress/ Indicators Performance Performance List of required data prepared; system for collection and compilation designed and put in place; initial or baseline data established At least one investment forum or foreign mission conducted annually One investment and trade fair organized once every 2 years Diagnostic analysis of existing procedures and requirements completed; action plan for streamlining formulated, agreed to, and implemented continued Expected Outcomes/Results System for tracking cross-border trade established and operational, with regular reports prepared/ disseminated Increase in domestic and foreign investment in SEC areas Increase in domestic and foreign investment in SEC areas Procedures and requirements for approval of proposed investments in SEC areas simplified and streamlined SEC-wide investment promotion and facilitation system for the regular monitoring and reporting of cross- border trade in the SEC investment forums within SEC countries and road shows in major foreign business centers investment and trade fairs investment approval procedures in SEC areas Measures/Programs/ Projects Establishment of a 2.2 Investment promotion 2.2.1 Conduct of SEC Organization of SEC Streamlining of Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 71 Status/ Remarks continued on next page Proposed. Identified by SEC SAP study team Proposed. Identified by SEC SAP study team Proposed. This can be a subset of GMS-wide business Identified directory. by SEC SAP study team This can be part of the GMS–BF website. Identified by SEC SAP study team Target Date Target Time Frame/ Time Frame/ 2009–2013 2009–2013 2009–2013 2010–2013 , trade, and Implementing Agencies/Bodies Industry ministries and investment agencies in SEC countries; local authorities; GMS–BF Industry tourism ministries and agencies in SEC countries; CCIs in SEC areas; local authorities; GMS–BF CCIs of SEC GMS–BF, countries GMS–BF Progress/ Indicators Performance Performance Compendium of investment policies and regulations in SEC areas prepared, published, and disseminated Prospectus prepared, published, and disseminated Business directory compiled, published and disseminated SEC website design completed; SEC website established and maintained continued Expected Outcomes/Results Information on investment policies, regulations, and procedures in SEC areas readily and widely available Business opportunities in SEC areas identified, compiled, and disseminated Business directory made widely available to prospective investors Availability of and access to information on SEC through electronic media improved Business information applicable investment policies and regulations, including procedures for investment approval in SEC areas prospectus of business opportunities in SEC areas business directory providing names and addresses of manufacturers, traders, tourist operators, and service providers in SEC areas together with the products and services they offer website providing basic information on SEC with hyperlinks to the GMS and GMS–BF websites Measures/Programs/ Projects 2.2.2 Compilation of Preparation of a Preparation of an SEC Development of an SEC Promote and Facilitate Trade and Investment Trade Promote and Facilitate 72 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks million loan each continued on next page Findings of related study of the GMS Group Working on Agriculture will be used to guide activities promoting contract farming in SEC areas will evaluate PPTA the feasibility of cross-border contract farming of energy crops, and other small and medium-sized processing facilities. Project is included in ADB’s loan program for 2011 with a $20 for Cambodia and Viet Nam and a grant of $10 million to the Lao PDR Target Date Target Time Frame/ Time Frame/ 2009–2013 2010 (project preparatory technical assistance [PPTA]); 2011 (loan) Implementing Agencies/Bodies Agriculture and trade ministries of SEC countries; GMS Group on Working Agriculture Agriculture ministries of SEC countries Progress/ Indicators Performance Performance Stronger policy support for cross- border contract farming provided; number and size of contract farming arrangements increased Marginal land areas utilized for biofuel production; agriculture waste utilized to generate both energy and soil productivity; number of processing facilities and biogas units established in rural communities; and effectiveness of carbon credit schemes implemented continued Expected agriculture waste carbon credit Outcomes/Results Practice of cross- border contract farming expanded in SEC areas; sustainable technologies promoted; farmers’ organizations strengthened; social responsibility among firms promoted Increased investment resulting in (i) expansion of areas for intercropping of biofuel and food crops; (ii) processing facilities established at community and regional levels; (iii) recycling facilities and biogas units established; (iv) new alternative energy source used instead of fuel wood; (v) biofuel policies and standards established; and (v) schemes implemented for rural households/ communities support for cross-border contract farming Renewable Energy for Cambodia, the Lao PDR, and Viet Nam Measures/Programs/ Projects 2.2.3 Promotion of investment in priority sectors/subsectors Agriculture Promotion of and Regional Project on Rural Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 73 Status/ Remarks continued on next page bilateral project between Cambodia and Thailand under the Ayeyawaddy– Chao Phraya– Mekong Economic Cooperation Strategy (ACMECS) Can be part of GMS–BF website. Identified by SEC SAP study team Continuing. A symposium on logistics development in GMS was held Yunnan Kunming, Province, on 6 June 2009, in conjunction with the Kunming Fair Trade Target Date Target Time Frame/ Time Frame/ 2010–2013 Proposed as a 2009–2013 2010–2013 Implementing Agencies/Bodies Agriculture ministries of Cambodia and Thailand GMS–BF in coordination with concerned ministries and agencies in SEC countries GMS–BF in coordination with concerned ministries and agencies in SEC countries Progress/ Indicators Performance Performance Qualified seeds more widely used; increase in yields Prospectus indicating business opportunities in the logistics industry in SEC countries, including related policies and programs for its development, prepared and disseminated At least one annual seminar or forum on logistics industry development in SEC countries continued Expected Outcomes/Results Supply of cash crops for domestic consumption increased; quality of cash crops upgraded, thus improving prospects of exports to Thailand Increased awareness; interest and investment in logistics industry in SEC countries Information regarding investment opportunities in the logistics industry in SEC countries disseminated to prospective investors improvement of cash crops (castor bean, maize, potato, sesame, soybean) in selected SEC provinces (Battambang, Kong, Kampot, Koh Pursat) logistic information platform forums on the logistics industry in the SEC Measures/Programs/ Projects Productivity and quality Logistics Establishment of a GMS Conduct of seminars and Promote and Facilitate Trade and Investment Trade Promote and Facilitate 74 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Proposed. May be undertaken by the proposed GMS Transport Freight Association Proposed by the Business and Investment Dialogue at the third GMS summit. Financing being sought to refine earlier study and help establish the association a tourism marketing and promotion plan the includes development of the Explore Mekong website, preparation of promotional materials, attendance at international trade/ tourism fairs, and revival of the Mekong Forum, Tourism starting in Cambodia in 2010 Target Date Target Time Frame/ Time Frame/ 2009–2013 2010–2013 2009–2010 MTCO has prepared Implementing Agencies/Bodies Transport and Transport industry ministries and investment ministries/agencies of SEC countries; GMS–BF GMS–BF Mekong Tourism Mekong Tourism Coordination Office (MTCO); tourism ministries and marketing agencies of SEC countries; private sector tourist associations and operators Progress/ Indicators Performance Performance Review of policies affecting investment in the logistics industry completed; recommendation adopted and implemented of reference Terms association drafted; organizational meeting held; association activities initiated Joint promotion and marketing program formulated and implemented; attendance in key international trade/ tourism fairs; increase in the number of visitors to SEC destinations continued Expected Outcomes/Results Reduced or eliminated barriers to entry of investment in the logistics industry in SEC countries Transport Freight Association established and actively promoting policies and measures for the development of the logistic industry in SEC countries Increase in the number of visitors to SEC tourist destinations affecting investment in the logistics industry in SEC countries Association Transport and marketing program focusing on SEC tourist destinations Measures/Programs/ Projects Review of policies Establishment of Freight Tourism Joint tourism promotion Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 75 Status/ Remarks continued on next page Proposed Proposed. Identified by SEC SAP study team This is being pursued as an ACMECS initiative Target Date Target Time Frame/ Time Frame/ 2009–2013 2009–2013 2009–2013 Implementing Agencies/Bodies MTCO; GMS–BF; MTCO; GMS–BF; tourism ministries and marketing agencies of SEC countries; private sector tourist associations and operators and tourism Transport ministries of SEC countries Concerned ministries and agencies of Cambodia and Thailand Progress/ Indicators Performance Performance Tourism facilities and Tourism services upgraded and/or developed Access roads requiring improvement or construction identified; program for access-road upgrading and/or construction prepared and implemented Completion of inception phase; implementation of experimental approach and system; completion of evaluation phase continued Expected Outcomes/Results Increased investment to upgrade existing or develop new tourist destinations and facilities Improved access to major tourist destinations in SEC areas to and within Travel GMS facilitated to improve existing and develop new tourist destinations and facilities in SEC areas, including hotels, rest areas, and tourism information centers improvement of access roads to major tourist destinations in SEC areas project on single GMS visa scheme between Cambodia and Thailand Measures/Programs/ Projects Promotion of investment Construction and/or Implementation of pilot Promote and Facilitate Trade and Investment Trade Promote and Facilitate 76 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page ADB funded; ongoing; completed in the Lao PDR 2008; improvement of Rattanakiri and airports, Stung Treng and environmental improvement in Siem Reap, are included in this project Ongoing. ADB funded group from Working the three countries has been established; funding request to the United Nations Development Programme/World Organization Trade pending since 2006 Target Date Target Time Frame/ Time Frame/ To be completed To in 2009 2009–2013 2009–2013 Nam PDR, and Implementing Agencies/Bodies Tourism, transport, Tourism, and environment ministries of Cambodia, the Lao Viet Nam authorities Tourism of the Lao PDR and Viet authorities Tourism of Cambodia, the Lao PDR, and Thailand; MTCO Progress/ Indicators Performance Performance Completion of high- priority tourism- related infrastructure (secondary airports and access roads to tourist sites) and environmental improvement projects Construction of access roads and other support facilities (e.g., parking lots, ticket booths, walking trails) completed; managers trained and sites promoted among Travel participating provinces facilitated, tourist destinations in the provinces developed and marketed, and tourist personnel trained in community-based ecotourism continued Expected Outcomes/Results High-priority tourism- related infrastructure improved; sustainable tourism development promoted infrastructure Tourism and access to major tourist attractions upgraded; skills for marketing sustainable and community-based tourism projects improved; small-scale tourism facilities, such as village roads and market sites, developed development Tourism in the zone promoted and facilitated Nam) Development Project covering Cambodia, the Lao PDR, and Viet Nam Development Project (the Lao PDR and Viet “Emerald Triangle” tourism zone (Cambodia, the Lao PDR, and Thailand) Measures/Programs/ Projects Mekong Tourism Sustainable Tourism Development of the Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 77 Status/ Remarks continued on next page Proposed. The roads on the main route of the subcorridor are being upgraded or rehabilitated (see 1.1.1) Ongoing; inaugural meeting held in October 2007; with partial support from ADB-supported Mekong Tourism Development Project; financing from other sources being sought include the Poipet include the Poipet Kong and Koh industrial estates in Cambodia, which have been initiated as ACMECS projects and the Sihanoukville export processing project. Financing is being sought Target Date Target Time Frame/ Time Frame/ 2010–2013 2010–2013 2010–2013 Specific projects Nam; MTCO PDR, and Implementing Agencies/Bodies Tourism authorities Tourism and tourist operators in Cambodia, Thailand and Viet authorities Tourism and tourism operators in Cambodia, the Lao Viet Nam Industry, finance, Industry, trade, and investment ministries and agencies of SEC countries; local authorities; private sector Progress/ Indicators Performance Performance Tourism products for Tourism the area developed and marketed, including medium- end hotels and resorts, water transport services, and caravan tours Master plan prepared; tourism products for the area developed and marketed Facilities, utilities, Facilities, and services in priority SEZs provided and/or upgraded; management and operational procedures established continued Expected Outcomes/Results Tourism potential of Tourism coastal areas along the subcorridor developed “Green Triangle” promoted and developed as a major tourist destination Investments in border areas promoted and facilitated through the provision of necessary facilities, utilities, and services and infrastructure along the Southern Coastal Subcorridor in the “Green Triangle” (Cambodia–Lao PDR– Viet Nam development triangle) economic zones (SEZs) in border areas and joint development of border economic zones Measures/Programs/ Projects Development of tourism development Tourism Special economic zones and industrial clusters Establishment of special Promote and Facilitate Trade and Investment Trade Promote and Facilitate 78 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks Proposed. Identified by SEC SAP study team Proposed. Identified by SEC SAP study team Proposed. Identified by SEC SAP study team Target Date Target Time Frame/ Time Frame/ 2010–2013 2010–2013 2010–2011 Implementing Agencies/Bodies Industry, finance, Industry, trade, and investment ministries and agencies of SEC countries; local authorities; SEZ administrators in SEC areas; GMS–BF; CCIs of SEC countries trade, and Industry, investment ministries and agencies of NSEC countries; local authorities; GMS–BF; CCIs of SEC countries trade and Industry, investment ministries and agencies of NSEC countries; local authorities; GMS–BF; CCIs of NSEC countries Progress/ Indicators Performance Performance Seminars and meetings held; links among SEZs established; cooperation programs initiated Study of feasibility of establishing clusters in specific industries conducted; promotional measures initiated Study of possible pilot projects completed and discussed by concerned authorities and stakeholders continued Expected Outcomes/Results Industrial estates and SEZs operating at higher level of efficiency and capacity industrial Feasible clusters identified and promoted pilot Possible projects for cross- border supply chain development identified and promoted management, and marketing of existing and planned industrial estates and SEZs in the SEC clusters along SEC (e.g., agro-industry or resource-based production zones in selected areas in the SEC involving links in production, processing, and marketing) projects for cross-border supply chains involving agricultural and small and medium-sized enterprises in SEC areas Measures/Programs/ Projects Improving the planning, Promotion of industrial Study of possible pilot Promote and Facilitate Trade and Investment Trade Promote and Facilitate Implementing the Strategy 79 Status/ Remarks continued on next page Proposed Ongoing. Cluster 4 under EOC’s Strategic Environment Assessment of Sector Strategies project Proposed. Included in ADB’s pipeline for lending and grant products for 2010; for this project is PPTA in ADB’s pipeline for nonlending products and services in 2009 Ongoing Target Date Target Time Frame/ Time Frame/ To be determined To 2009–2013 2009 (PPTA); 2110 (loan) 2009–2013 Implementing Agencies/Bodies GMS Working Group GMS Working on Environment (WGE); Environment Operations Center (EOC) WGE; EOC WGE; EOC; agriculture, natural resources, and environment ministries of the three countries EOC Progress/ Indicators Performance Performance SEA covering SEC areas completed and considered in update of SEC strategy and action plan and Workshops training programs held on the subject at national and subregional levels; technical reports prepared Biodiversity Conservation Initiative activities in selected critical landscapes of the three countries scaled up, using results of pilot projects Study completed; recommendations discussed in workshops and seminars; action plan to address risks formulated Expected Outcomes/results Environmental protection and management practices and approaches strengthened to ensure sustainable development of the SEC Environmental protection and management practices and approaches strengthened to ensure sustainable development of the SEC Environmental protection and management practices and approaches strengthened to ensure sustainable development of the SEC Risk of specific geographic areas identified and possible responses formulated assessment (SEA) of the SEC to SEA, Biodiversity Conservation Initiative, and Environmental Assessment Performance Conservation Corridors for poverty reduction and watershed protection (Cambodia, the Lao PDR, and Viet Nam) climate change related risks (the Lao PDR and Viet Nam) Measures/Programs/ Projects 3.1 Environmental concerns Strategic environmental Integrated approach GMS Biodiversity Scoping and mapping of Address Environmental and Social Concerns 80 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page Ongoing, with financial assistance from ADB Proposed. Included in ADB’s loan pipeline for 2010 Included in ADB’s lending pipeline for 2011 Target Date Target Time Frame/ Time Frame/ Targeted to be Targeted completed in 2009 2009 (PPTA); 2010 (loan) 2008 (PPTA); 2008 (PPTA); 2011 (loan) Implementing Agencies/Bodies Health ministries of the three countries Health ministries of the three countries Agriculture, natural resources, and environment ministries of the four countries; local authorities of SEC areas Progress/ Indicators Performance Performance Ability to respond to epidemics and outbreaks strengthened; coverage of prevention and care of selected communicable diseases in vulnerable populations improved; policies, know-how, standards, and coordination among the three countries improved Comprehensive management plan prepared; integrated structural and nonstructural measures implemented Ability to respond to epidemics and outbreaks strengthened; coverage of prevention and care of selected communicable diseases in vulnerable populations improved; know-how, policies, standards, and coordination among the three countries improved continued Expected Outcomes/results Vulnerability of Vulnerability affected communities to adverse effects of floods and drought reduced Vulnerability to Vulnerability the spread of communicable diseases reduced to Vulnerability the spread of communicable diseases reduced risk management and mitigation (Cambodia, the Lao PDR, and Viet Nam) Control Project (Phase I) (Cambodia, the Lao PDR, and Viet Nam) Control Project (Phase II) (Cambodia, the Lao PDR, and Viet Nam) Measures/Programs/ Projects GMS flood and drought 3.2 Social concerns Communicable Diseases Communicable Diseases Address Environmental and Social Concerns Implementing the Strategy 81 Status/ Remarks continued on next page Ongoing; project also covers the PRC; supported by the for Cooperation Fund Fighting HIV/AIDS in Asia and the Pacific, established at ADB with support from the Government of Sweden is being funded by the Government of Australia Target Date Target Time Frame/ Time Frame/ Targeted to be Targeted completed in 2009 2008–2011 Ongoing. Project Implementing Agencies/Bodies Health and infrastructure authorities of participating countries Transport and health Transport ministries of the three countries Progress/ Indicators Performance Performance Package of Package interventions prepared, including monitoring and evaluation framework, harmonized implementation arrangement options, and core principles and approaches; guidelines covering the interventions prepared and disseminated Specific HIV/AIDS interventions before, during, and after construction in ADB-financed projects in GMS economic corridors implemented; assessment of HIV/ AIDS risks associated with enhanced border crossing under the conducted CBTA continued Expected Outcomes/results Improved knowledge base, practices, and institutional mechanisms for the effective implementation of HIV/AIDS interventions in association with infrastructure projects Risks of spread HIV/AIDS along GMS economic corridors, arising from infrastructure projects, reduced and managed effectively the Infrastructure Sector (Cambodia, the Lao PDR, and Viet Nam) in infrastructure projects in GMS economic corridors (Cambodia, the Lao PDR, and Viet Nam) Measures/Programs/ Projects HIV/AIDS Prevention and Mitigating HIV/AIDS risks Address Environmental and Social Concerns 82 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks continued on next page There is an ongoing ADB regional technical assistance 6448 covering (RETA) GMS and South Asian countries that supports the Coordinated Mekong Ministerial Initiative against Trafficking in partnership with the UN Inter-Agency Project on Human in GMS Trafficking be funded under To 7275: ADB RETA Implementing the GMS Human Resource Development (HRD) Strategic Framework and Action Plan (SFAP) be funded To 7275: under RETA Implementing the GMS HRD SFAP Target Date Target Time Frame/ Time Frame/ 2009–2013 2009–2010 2009–2011 Implementing Agencies/Bodies Labor, interior, and interior, Labor, tourism ministries of GMS countries Group GMS Working on Human Resource Development (WGHRD) GMS WGHRD; ministries of education Progress/ Indicators Performance Performance Training for local Training and subregional officials on human trafficking and safe migration conducted; community-based vulnerability monitoring and referral systems implemented in association with ADB- assisted GMS projects that are expected to accelerate cross- border mobility of people Social impact assessments in selected locations along the economic corridors completed, including effect of financial crisis on poor and marginalized groups endorsed Framework by governments continued Expected Outcomes/results Strategies and measures for preventing human trafficking and promoting safe migration in GMS developed and implemented Findings used to improve current and future projects along the corridors GMS technical and vocational skills recognition framework for three key skills developed and piloted trafficking and safe migration concerns for women and children into regional cooperation assessments in specific locations along the economic corridors a framework for the mutual recognition of technical and vocational skills in GMS Measures/Programs/ Projects Integrating human Social impact Developing and piloting Address Environmental and Social Concerns Implementing the Strategy 83 Status/ Remarks continued on next page To be funded To 7275: under RETA Implementing the GMS HRD SFAP be funded To 7275: under RETA Implementing the GMS HRD SFAP Proposed. Identified by SEC SAP study team Proposed. Identified by SEC SAP study team Target Date Target Time Frame/ Time Frame/ 2009–2011 2010 2010–2013 2010–2013 Implementing Agencies/Bodies GMS WGHRD; labor ministries; International Labour Organization; International Organization for Migration (IOM) GMS WGHRD; labor ministries; International Labour Organization; IOM GMS labor and education ministries and training institutes of SEC countries; CCIs of SEC countries institutes Training in SEC areas; HRD agencies in NSEC countries Progress/ Indicators Performance Performance Workshops, training Workshops, courses conducted Studies, consultations conducted Basic needs assessment and review of existing training programs in SEC areas completed; training programs formulated and implemented (number of training programs conducted and trainees) Network of training institutes and centers in SEC areas identified and established; program of cooperation formulated and implemented continued Expected Outcomes/results Labor management improved Standard regional employment contract adopted Skill levels and employability, especially of labor in less-developed areas of the SEC, enhanced Collaboration among vocational training institutes in SEC areas in curriculum development, training of trainers, and management developed and enhanced migration management in GMS employment contract for technically skilled migrant workers in GMS in basic skills competencies; basic tourism skills; agro- industry management, including marketing; and small and medium-sized enterprise management and financing among vocational training institutes in SEC areas, including conduct of exchange programs Measures/Programs/ Projects Improving labor Standard regional programs Training Cooperation program Address Environmental and Social Concerns 84 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks To be implemented as To part of the Corridor Development Towns Project in the ADB loan pipeline for 2011 (see Section 1.4) Target Date Target Time Frame/ Time Frame/ 2010 (PPTA); 2010 (PPTA); 2011 (loan) Implementing Agencies/Bodies Water supply agencies Water of Cambodia and the Lao PDR; concerned provincial authorities of Viet Nam Progress/ Indicators Performance Performance Water and sanitation Water facilities in major border towns constructed or rehabilitated; water and sanitation services improved continued Expected Outcomes/results Availability of and access to water supply in major border towns expanded; sanitation situation improved sanitation (Cambodia, the Lao PDR, and Viet Nam) Measures/Programs/ Projects supply and Water Address Environmental and Social Concerns Implementing the Strategy 85 Status/ Remarks SEC continued on next page Proposed. Identified by SEC SAP study team May be conducted under the auspices of the Economic Corridors Forum in the form of an annual or semiannual dialogue A proposed business development support facility in Savannakhet may be a useful model to consider for other locations in the Target Date Target Time Frame/ Time Frame/ 2010–2013 2010–2013 2010–2013 Implementing Agencies/Bodies GMS–BF; national and GMS–BF; provincial CCIs of SEC countries concerned GMS–BF; ministries of SEC countries; provincial CCIs of SEC countries GMS–BF Progress/ Indicators Performance Performance Meeting among provincial CCIs in SEC border provinces held; cooperation and collaboration on specific areas initiated meetings Periodic held among public and private sector representatives of SEC countries to discuss SEC issues and concerns Promotional measures and policy support programs identified, formulated, and implemented (e.g., in technology, management, financing, marketing, linking up with production and supply chains) Expected Outcomes/Results Coordination and collaboration among the private sector in SEC provinces established and improved Improved public– private sector collaboration on SEC matters; more active involvement of the private sector in the planning and implementation of SEC initiatives Increase in the number and operations of small and medium-sized enterprises in SEC areas provincial CCIs in the SEC, initially among those in the border provinces mechanisms for interaction, exchange of information, and coordination between the public and private sectors on SEC issues and concerns promotional measures and policy support for small and medium-sized enterprises in SEC areas Measures/Programs/ Projects 4.1 Private sector participation Cooperation among Establishment of Implementation of Enhance Private Sector Participation and Public–Private Sector Collaboration Enhance Private Sector Participation 86 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor Status/ Remarks Funding being Funding sought. Proposed by the Business and Investment Dialogue participants during the third GMS summit Continuing. Identified by SEC SAP study team by SEC SAP study team Target Date Target Time Frame/ Time Frame/ 2009–2013 2010–2013 2010–2013 Proposed. Identified Implementing Agencies/Bodies GMS–BF GMS GMS–BF; secretariat and national coordinators Infrastructure ministries of SEC countries; GMS–BF continued Progress/ Indicators Performance Performance Study for establishment of the fund completed; agreement reached and initial steps taken to establish the fund Meetings and seminars conducted to present and discuss information about possible financing sources, including the terms and conditions, procedures, and requirements for accessing financing from such sources Workshops and road Workshops shows conducted to present key GMS transport and other infrastructure projects and invite private sector participation in same Expected Outcomes/Results Availability of and access to financing improved, including working capital, pre- and postshipment export financing, and export credit insurance Access of the private sector to various sources of financing expanded and improved Increased public– private partnerships in the development of transport and other infrastructure in SEC areas small and medium-sized enterprise development fund to the private sector on possible sources of financing for commercial and infrastructure projects private partnerships in the development of transport and other infrastructure, logistics, and support services in SEC areas Measures/Programs/ Projects Establishment of a GMS Provision of information 4.2 Public–private partnership Promotion of public– Enhance Private Sector Participation and Public–Private Sector Collaboration Enhance Private Sector Participation Appendix A Basic Information on the Southern Economic Corridor National Components

Cambodia

Table A1: Population and Land Area

Population Rural Poverty Total Land area density population Literacy incidence Provinces/Cities population (km2) (persons/km2) (%) rate (%) (%) Subcorridor 1 9,277,468 82,101 113 – – – Banteay Meanchey 577,770 6,679 87 – 74.4 42.8 Battambang 998,896 11,622 86 89.7 87.5 42.8 Pursat 360,440 12,692 28 – 70.5 42.8 Kompongchnang 475,014 5,521 86 – 66.4 42.8 Kandal 1,235,385 3,537 349 – 77.7 32.1 Phnom Penh 1,043,000 290 3,597 – 88.8 4.6 Siem Reap 755,000 10,299 73 – 64.5 42.8 Kompongthom 569,060 13,814 41 – 70.8 42.8 Kompongcham 1,802,546 9,799 184 – 90.6 32.1 Svayrieng 513,000 2,966 173 95.6 79.5 32.1 Prey Veng 947,357 4,883 194 – 61.7 – Subcorridor 2 1,882,390 61,173 31 – – – Siem Reap 755,000 10,299 73 – 64.5 – Stung Treng 111,734 12,016 9 78.3 92.7 42.8 Mondulkiri 706,000 14,288 49 – 61.2 52.0 Rattanakiri 138,804 10,782 13 84.7 55.9 52.0 Preah Vihear 170,852 13,788 12 – 61.2 – Subcorridor 3 960,312 16,369 59 – – – Koh Kong 305,000 11,160 27 77.8 76 26.8 Kampot 619,559 4,873 127 91.7 73.6 26.8 Kep 35,753 336 106 – 63.3 – Subcorridor 4 6,110,893 58,909 104 – – – Sihanoukville 305,000 868 351 – 76 26.8 Kompong Speu 598,880 7,017 85 – 70.8 52.0 continued on next page 88 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A1: continued

Population Rural Poverty Total Land area density population Literacy incidence Provinces/Cities population (km2) (persons/km2) (%) rate (%) (%) Phnom Penh 1,043,000 290 3,597 – 88.8 4.6 Kandal 1,235,385 3,537 349 – 77.7 32.1 Kompongcham 1,802,546 9,799 184 – 90.6 32.1 Kratie 308,348 11,094 28 74.5 83.8 52.0 Mondulkiri 706,000 14,288 49 – 61.2 52.0 Stung Treng 111,734 12,016 9 78.3 92.7 52.0 Total of the 21 provinces 11,978,518 168,323 71 – – – Whole country 14,000,000 181,035 77 – 74.4 34.7

Note: Cambodia’s provinces have their respective provincial towns or capital. The areas outside of the provincial towns are rural in character. Only a few of the provinces (Battambang, Kampot, Kratie, Rattanakiri, and Stung Treng) provided data on rural population. The proportion of people living in the provincial towns ranges from 10% to 30% of the population in the provinces, so the rural population in the provinces can be surmised to be anywhere from 70% to 90% of the population of the provinces. The exception is Phnom Penh which has a large urban population.

Source: Cambodian Investment Board; Council for the Development of Cambodia provincial offices; Ministry of Planning; National Institute of Statistics of Cambodia; Poverty incidence is from Kingdom of Cambodia Ministry of Planning and United Nations Development Programme, Cambodia Human Development Report 2007: Expanding Choices for Rural People (Phnom Pehn: Ministry of Planning and UNDP Cambodia, 2007). Appendix A: Basic Information on the Southern Economic Corridor National Components 89

Table A2: Income Level and Economic Structure

Per capita Structure of production (%) gross Provinces/ provincial Agriculture Industry Services Unemployment Cities product ($) rate (%) Subcorridor 1 Banteay Meanchey – – – – 8.0 Battambang – – – – 6.3 Pursat – – – – 3.5 Kompongchnang – – – – 3.1 Kandal – – – – 11.9 Phnom Penh – – – – 12.6 Siem Reap – – – – 4.6 Kompongthom – – – – 8.2 Kompongcham – – – – 4.3 Svayrieng – – – – 2.1 Prey Veng – – – – – Subcorridor 2 Siem Reap – – – – 4.6 Stung Treng 638 – – – 18.6 Mondulkiri – – – – 69.9 Rattanakiri 549 55.1 7.2 37.7 6.5 Preah Vihear – – – – – Subcorridor 3 Koh Kong – – – – 9.3 Kampot – – – – 7.3 Kep – – – – – Subcorridor 4 Sihanoukville – – – – 9.3 Kompong Speu – – – – 2.8 Phnom Penh – – – – 12.6 Kandal – – – – 11.9 Kompongcham – – – – 4.3 Kratie 513 – – – 4.0 Mondulkiri – – – – 69.9 Stung Treng 638 – – – 18.6 Whole country 625 30.0 26.0 44.0 5.3 Source: Cambodia Ministry of Planning provincial offices; National Institute of Statistics of Cambodia. 90 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A3: Labor Force Participation Rate (%)

Whole Other urban Male/Female country Phnom Penh areas Rural areas Both sexes 74.6 60.8 69.5 77.0 Male 78.9 65.1 73.1 81.4 Female 70.7 56.7 66.0 73.0

Sources: National Institute of Statistics of Cambodia; Cambodia Ministry of Planning 2006 yearbook.

Table A4: Production of Main Agriculture Crops by Subcorridor, 2005–2006

Cultivated Harvested Yield Production Subcorridors area (ha) area (ha) (tons/ha) (tons) Rice Subcorridor 1 1,782,628 1,759,758 27 4,291,162 Subcorridor 2 282,305 278,784 10 511,394 Subcorridor 3 133,652 108,871 8 376,236 Subcorridor 4 497,043 488,420 22 1,408,426 Maize Subcorridor 1 67,471 47,265 29 165,179 Subcorridor 2 2,848 2,807 17 9,820 Subcorridor 3 1,647 1,642 6 2,777 Subcorridor 4 23,379 19,234 22 46,700 Cassava Subcorridor 1 26,800 26,743 131 514,299 Subcorridor 2 1,861 1,798 48 18,935 Subcorridor 3 744 744 28 4,843 Subcorridor 4 21,954 21,946 84 416,902 Sugar Cane Subcorridor 1 4,028 4,027 189 76,228 Subcorridor 2 1,160 1,160 96 19,376 Subcorridor 3 931 931 54 19,673 Subcorridor 4 2,006 2,006 147 43,074 ha = hectare. Source: Cambodia Ministry of Agriculture, Forestry, and Fisheries. Appendix A: Basic Information on the Southern Economic Corridor National Components 91

Table A5: Production of Rice by Province, 2005–2006

Provinces/ Cultivated Harvested Yield Production Cities area (ha) area (ha) (tons/ha) (tons) Subcorridor 1 1,782,628 1,759,758 27.7 4,291,162 Banteay Meanchey 205,432 203,165 2.1 420,843 Battambang 238,760 236,320 2.6 603,221 Pursat 91,770 91,717 2.2 197,797 Kompongchnang 119,818 119,721 2.1 257,188 Kandal 97,375 96,955 3.6 348,234 Phnom Penh 6,059 6,059 3.6 22,088 Siem Reap 189,032 189,032 1.7 324,470 Kompongthom 156,074 153,185 2.1 321,534 Kompongcham 219,512 215,548 2.9 633,720 Svayrieng 148,819 148,719 1.8 264,213 Prey Veng 309,977 299,337 3.0 897,854 Subcorridor 2 282,305 278,784 10.0 511,394 Siem Reap 189,032 189,032 1.7 324,470 Stung Treng 23,014 21,430 2.6 56,331 Mondulkiri 15,949 14,914 1.8 26,796 Rattanakiri 23,147 22,750 1.8 40,197 Preah Vihear 31,163 30,658 2.1 63,600 Subcorridor 3 133,652 108,871 8.3 376,236 Koh Kong 9,110 8,995 2.3 21,044 Kampot 121,621 96,955 3.6 348,234 Kep 2,921 2,921 2.4 6,958 Subcorridor 4 497,043 488,420 22.3 1,408,426 Sihanoukville 12,040 12,000 2.8 33,600 Kompong Speu 85,106 85,013 2.2 188,770 Phnom Penh 6,059 6,059 3.6 22,088 Kandal 97,375 96,955 3.6 348,234 Kompongcham 219,512 215,548 2.9 633,720 Kratie 37,988 36,501 2.7 98,887 Mondulkiri 15,949 14,914 1.8 26,796 Stung Treng 23,014 21,430 2.6 56,331 ha = hectare. Source: Cambodia Ministry of Agriculture, Forestry, and Fisheries. 92 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A6: Production of Maize by Province, 2005–2006

Provinces/ Cultivated Harvested Yield Production Cities area (ha) area (ha) (tons/ha) (tons) Subcorridor 1 67,471 47,265 28.1 165,179 Banteay Meanchey 3,167 3,167 3.0 9,554 Battambang 39,233 23,135 4.7 108,018 Pursat 404 404 3.2 1,298 Kompongchnang 1,992 1,992 1.5 2,913 Kandal 12,758 8,693 1.9 16,584 Phnom Penh 232 232 1.5 349 Siem Reap 876 876 2.3 1,984 Kompongthom 548 545 2.2 1,174 Kompongcham 6,961 6,921 2.9 19,994 Svayrieng 160 160 2.5 400 Prey Veng 1,140 1,140 2.6 2,911 Subcorridor 2 2,848 2,807 17.4 9,820 Siem Reap 876 876 2.3 1,984 Stung Treng 388 388 0.8 311 Mondulkiri 590 550 9.1 5,029 Rattanakiri 463 463 3.5 1,621 Preah Vihear 531 530 1.7 875 Subcorridor 3 1,647 1,642 6.2 2,777 Koh Kong 76 75 3.3 251 Kampot 1,421 1,417 1.7 2,352 Kep 150 150 1.2 174 Subcorridor 4 23,379 19,234 21.8 46,700 Sihanoukville 2 2 2.0 4 Kompong Speu 862 862 1.7 1,422 Phnom Penh 232 232 1.5 349 Kandal 12,758 8,693 1.9 16,584 Kompongcham 6,961 6,921 2.9 19,994 Kratie 1,586 1,586 1.9 3,007 Mondulkiri 590 550 9.1 5,029 Stung Treng 388 388 0.8 311 ha = hectare. Source: Cambodia Ministry of Agriculture, Forestry, and Fisheries. Appendix A: Basic Information on the Southern Economic Corridor National Components 93

Table A7: Production of Cassava by Province, 2005–2006

Provinces/ Cultivated Harvested Yield Production Cities area (ha) area (ha) (tons/ha) (tons) Subcorridor 1 26,800 26,743 131.2 514,299 Banteay Meanchey 1,120 1,120 9.8 11,018 Battambang 1,704 1,655 40.1 66,439 Pursat 413 413 14.6 6,043 Kompongchnang 521 521 3.1 1,610 Kandal 122 114 10.1 1,152 Phnom Penh 24 24 3.3 78 Siem Reap 1,141 1,141 12.0 13,691 Kompongthom 591 591 7.1 4,217 Kompongcham 20,430 20,430 19.9 406,408 Svayrieng 613 613 4.6 2,842 Prey Veng 121 121 6.6 801 Subcorridor 2 1,861 1,798 48.4 18,935 Siem Reap 1,141 1,141 12.0 13,691 Stung Treng 294 294 4.0 1,176 Mondulkiri 108 108 15.0 1,620 Rattanakiri 255 255 7.1 1,798 Preah Vihear 63 63 10.3 650 Subcorridor 3 744 744 28.0 4,843 Koh Kong 127 127 19.3 2,451 Kampot 546 546 3.7 2,037 Kep 71 71 5.0 355 Subcorridor 4 21,954 21,946 84.3 416,902 Sihanoukville 18 18 11.5 207 Kompong Speu 92 92 14.8 1,358 Phnom Penh 24 24 3.3 78 Kandal 122 114 10.1 1,152 Kompongcham 20,430 20,430 19.9 406,408 Kratie 866 866 5.7 4,903 Mondulkiri 108 108 15.0 1,620 Stung Treng 294 294 4.0 1,176 ha = hectare. Source: Cambodia Ministry of Agriculture, Forestry, and Fisheries. 94 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A8: Production of Sugarcane by Province, 2005–2006

Provinces/ Cultivated Harvested Yield Production Cities area (ha) area (ha) (tons/ha) (tons) Subcorridor 1 4,028 4,027 189.3 76,228 Banteay Meanchey 316 316 15.4 4,863 Battambang 327 326 26.9 8,863 Pursat 437 437 19.4 8,494 Kompongchnang 225 225 8.7 1,967 Kandal 270 270 25.5 6,885 Phnom Penh 0 0 0.0 0 Siem Reap 664 664 14.1 9,348 Kompongthom 109 109 14.3 1,564 Kompongcham 1,239 1,239 19.3 23,918 Svayrieng 287 287 24.9 7,148 Prey Veng 154 154 20.6 3,178 Subcorridor 2 1,160 1,160 95.7 19,376 Siem Reap 664 664 14.1 9,348 Stung Treng 247 247 21.0 5,187 Mondulkiri 76 76 36.0 2,736 Rattanakiri 135 135 12.1 1,630 Preah Vihear 38 38 12.5 475 Subcorridor 3 931 931 53.7 19,673 Koh Kong 50 50 17.0 850 Kampot 842 842 21.7 18,238 Kep 39 39 15.0 585 Subcorridor 4 2,006 2,006 146.5 43,074 Sihanoukville 0 0 0.0 0 Kompong Speu 65 65 12.0 780 Phnom Penh 0 0 0.0 0 Kandal 270 270 25.5 6,885 Kompongcham 1,239 1,239 19.3 23,918 Kratie 109 109 32.7 3,568 Mondulkiri 76 76 36.0 2,736 Stung Treng 247 247 21.0 5,187 ha = hectare. Source: Cambodia Ministry of Agriculture, Forestry, and Fisheries. Appendix A: Basic Information on the Southern Economic Corridor National Components 95 ($) Equities continued on next page ($) Fixed assets ($) loans Domestic ($) loans Overseas ($) capital Registered (%) share Foreign Foreign (%) Local share of projects Number Table A9: 1994 through First Half of 2008 Table Approved Investment by Sector, AgricultureAgro-industry 32 65 13.65 22.11 11.16 28.27 141,895,000 33,060,000 34,401,000 15,000,000 3,560,000 700,000 718,307,259 221,814,883 680,346,259 206,114,883 CattlePlantation 30 2 10.98 1.55 12.28 – 94,717,131 30,300,000 30,395,975 4,750,000 214,504,211 179,454,211 – – 2,921,815 2,921,815 Animal feedsBuilding materialCementChemicalsDiscsElectronics 25 3Energy processingFood 0.88 0.08 10 1.52 6 0.21 0.51 7 28,035,000 0.15 49 2 3,800,000 0.45 18 0.10 5,084,220 0.43 1.41 0.05 340,200,000 0.65 0.58 400,000 3.29 0.14 148,000,000 7,100,000 – 1.08 158,072,800 39,357,182 7,000,000 2,000,000 28,355,000 33,872,962 88,429,000 9,500,000 – 5,012,000 – 151,452,000 – 722,347,640 920,000 362,150,802 200,000 – 574,347,640 6,629,218 328,783,802 14,811,846 – 4,655,000 6,629,218 4,391,846 513,040,038 – 4,455,000 361,588,038 2,878,868 2,878,868 GarmentMedical chemicals 569 8.00 46.66 10 617,614,467 0.44 49,495,360 0.52 6,370,000 1,086,275,743 9,782,600 1,030,410,383 2,250,000 600,000 20,040,569 17,190,569 HatMechanic assemblyMechanics 10 1 0.29 0.01 1 0.67 0.08 0.10 10,400,000 2,750,000 – 980,000 750,000 300,000 10,287,289 – 6,787,289 – – 200,000 883,800 967,000 883,800 767,000 Household goodsLeather processing 9 1 0.28 0.10 0.59 – 4,090,000 1,000,000 890,000 – – 500,000 5,888,507 1,115,500 4,998,507 615,500 Sector Agriculture 129 48.29 51.71 300,068,106 79,701,000 9,010,000 1,157,548,168 1,068,837,168 Industries 1,041 22.74 77.27 2,418,954,967 577,056,580 100,162,000 5,235,896,395 4,560,677,815 96 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor ($) Equities continued on next page ($) Fixed assets ($) loans Domestic ($) loans Overseas ($) capital Registered (%) share Foreign Foreign (%) Local share of projects Number continued Medical instruments 1 0.00 0.10 100,000 – – 85,000 85,000 Medical suppliesMetalMiningOther industriesPaper 3Petroleum 0.12 93 0.17 6 39 2.52 0.34 2.33 15 2,020,000 24 6.41 0.23 1.41 0.45 165,707,500 0.53 212,000,000 1.00 5,400,000 2,350,000 1.77 – 2,010,000 264,370,000 29,209,600 900,000 1,131,772,435 13,000,000 1,127,412,435 1,600,000 – – 200,000 1,100,000 8,076,765 287,559,246 4,135,748 273,459,246 – 5,576,765 – 4,135,748 242,145,208 34,846,919 242,145,208 34,646,919 Petroleum distributionPetroleum Plastic 2 0.10 0.10 28 1,220,000 0.63 2.06 – 24,604,000 7,550,000 3,900,000 – 43,304,666 1,277,800 33,854,666 1,277,800 ShoesEducation 33EngineeringHealth services 0.50InfrastructureMedia 2.67 48,950,000 3 4 5 10 0.91 800,000 0.62 1.17 5.39 1,600,000 1.51 2.68 2.97 3 2.88 85,204,583 4,800,000 13,670,428 5,860,000 1.25 82,804,583 76,650,500 40,000,000 1.23 200,000 25,500,000 – 2,080,000 – – – 3,000,000 100,191,500 256,421,162 24,443,900 – 60,191,500 229,921,162 24,243,000 31,001,910 – 31,001,910 5,772,604 2,772,604 SocksTextilesTobacco processingWood Construction 42 4 9 21 1.40 0.00 0.10 22 0.67 2.64 0.38 0.76 8.52 1.35 256,960,000 154,480,000 3,700,000 9.66 17,010,000 108,900,000 75,000,000 166,292,472 447,587,186 273,500,000 218,107,186 12,000,000 – – – 3,194,538,443 2,909,038,443 – – – 63,862,049 89,193,100 5,516,688 63,862,049 89,193,100 5,516,688 Table A9: Table Sector Services 121 41.61 58.23 556,831,400 449,274,000 24,550,000 4,797,324,381 4,192,499,491 Appendix A: Basic Information on the Southern Economic Corridor National Components 97 ($) Equities ($) Fixed assets ($) loans Domestic ($) loans Overseas ($) capital Registered (%) share Foreign Foreign (%) Local share of projects Number continued Service energy 3 2.46 – 5,800,000 250,000 50,000 6,814,540 6,514,540 Services 35 13.91 15.02 50,870,000 52,500,000 12,400,000 437,705,257 342,805,257 TelecommunicationsTransport 22HotelTourism 3.19 centersTourism 14.99 11 164,258,000 3.36 53,752,000 12 5.74 68 33 4.73 26.06 16.02 63,550,000 – 5.88 34.12 13.19 572,000 1,459,390,000 694,888,562 373,612,473 85,400,000 541,136,582 163,492,998 1,019,600 100,000 9,800,000 6,850,000 41,990,437 20,400 837,320,605 1,533,773,537 41,318,437 1,532,733,637 606,977,667 – 5,710,624,641 5,700,824,641 Water supplyWater 3 0.83 1.55 3,000,000 – – 3,556,066 3,556,056 Sector TourismTotal 113 46.81 53.19 1,918,402,473 1,404 174,312,598 28.65 6,870,400 71.35 8,081,718,783 7,840,535,945 5,194,256,946 1,280,344,178 140,592,400 19,272,487,727 17,662,550,419 Table A9: Table Source: Council for the Development of Cambodia; Cambodia Investment Board. 98 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A10: Approved Investment by Country, 1994 through First Half of 2008

Register capital Regions Countries ($) Fixed assets ($) (%) Americas 117,355,900 588,711,016.36 3.05 United States 58,881,000 509,117,417.60 2.64 Canada 58,174,900 79,348,213.76 0.41 Argentina 300,000 245,385.00 0.00 ASEAN 2,085,537,723 3,341,781,630.47 17.34 Malaysia 1,576,407,473 2,199,447,878,.85 11.41 Thailand 192,177,350 521,256,417.89 2.70 Singapore 193,397,100 325,883,228.44 1.69 Viet Nam 67,770,300 228,856,098.54 1.19 Indonesia 54,485,500 64,998,431.75 0.34 Philippines 1,300,000 1,339,575.00 0.01 Cambodia 1,440,874,394 5,842,251,382.45 30.31 Europe 241,249,350 898,547,056.58 4.66 Russian Federation 12,450,350 289,006,053.00 1.50 France 37,140,450 243,464,475.02 1.26 United Kingdom 128,110,100 138,532,233.66 0.72 Belgium 5,000,000 33,319,100.00 0.17 Norway 3,370,000 16,645,630.00 0.09 Sweden 4,000,000 15,003,780.00 0.08 Netherlands 13,100,000 14,578,000.00 0.08 Switzerland 8,000,000 11,781,595.00 0.06 Portugal 5,550,000 4,264,722.40 0.02 Bulgaria 250,000 520,777.50 0.00 Germany 118,800 230,690.00 0.00 Others and other Asia 1,307,239,080 8,600,693,171.70 44.63 PRC 551,469,678 5,623,658,496.72 29.18 Korea, Rep. of 159,946,000 1,769,132,467.98 3.18 Taipei,China 396,249,970 628,138,302.42 3.26 Hong Kong, China 116,773,252 273,646,734.39 1.42 Japan 22,584,200 136,312,435.89 0.71 Kazakhstan 1,750,000 64,170,347.25 0.33 Australia 53,376,500 59,292,291.60 0.31 Nepal 250,000 20,713,495.75 0.11 Kyrgyz Republic 970,000 18,928,031.95 0.10 Israel 800,000 2,124,999.30 0.01 Macau, China 1,829,680 1,909,080.00 0.01 continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 99

Table A10: continued Register capital Regions Countries ($) Fixed assets ($) (%) New Zealand 559,800 1,461,085.40 0.01 Uzbekistan 30,000 585,403.05 0.00 India 400,000 340,000.00 0.00 Saudi Arabia 24,160,000 131,200,000.00 0.68 Sri Lanka 250,000 280,000.00 0.00 Total 5,192,256,446 19,271,984,257.56 100.00

ASEAN = Association of Southeast Asian Nations, PRC = People’s Republic of China. Source: Council for the Development of Cambodia; Cambodia Investment Board.

Table A11: Visitor Arrivals in Cambodia in 2008 1. Visitor arrivals in 2008: 2,125,465

2. Mode of arrival (Number of visitors)

Air 1,239,407 Phnom Penh International Airport 570,903 Siem Reap International Airport 668,504 Land and waterways 762,027 Land 690,138 Waterways 71,889 Same-day visitors 124,031

3. Visitor arrivals in 2007–2008

Share (%) Change (%) Visitors 2007 2008 2007 2008 2008/2007 Air 1,296,513 1,239,407 64.34 58.31 (4.40) Phnom Penh International Airport 535,562 570,903 26.58 26.86 6.66 Siem Reap International Airport 761,251 668,507 37.78 31.45 (12.18) Land and waterways 576,054 762,027 28.59 35.58 32.28 Land 531,064 690,138 26.35 32.47 29.95 Waterways 44,990 71,889 2.23 3.38 59.79 Subtotal 1,872,567 2,001,434 92.93 94.16 (12.99) Same-day visitors 142,561 124,031 7.07 5.84 (13.00) Total 2,015,128 2,125,465 100.00 100.00 5.48

( ) = negative value. Source: Cambodia Ministry of Tourism. 100 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A12: Number of Hotels and Guesthouses in the Southern Economic Corridor Subcorridors

Provinces/Cities Number of hotels Number of guesthouses Subcorridor 1 300 635 Banteay Meanchey 13 28 Battambang 19 15 Pursat 4 10 Kompongchnang 5 7 Kandal 0 47 Phnom Penh 148 278 Siem Reap 101 201 Kompongthom 4 10 Kompongcham 5 30 Svayrieng 1 9 Prey Veng 8 2 Subcorridor 2 117 237 Siem Reap 101 201 Stung Treng 5 10 Mondulkiri 2 18 Rattanakiri 9 8 Preah Vihear 10 Subcorridor 3 8 35 Koh Kong 6 13 Kampot 2 22 Kep 6 14 Subcorridor 4 209 524 Sihanoukville 42 108 Kompong Speu 0 10 Phnom Penh 148 278 Kandal 0 47 Kompongcham 5 30 Kratie 7 23 Mondulkiri 2 18 Stung Treng 5 10 Source: Cambodia Ministry of Tourism. Appendix A: Basic Information on the Southern Economic Corridor National Components 101

Table A13: Electricity Supply in the Southern Economic Corridor Subcorridors

Electricity Subcorridors Potential capacity Produced capacity Subcorridor 1 Banteay Meanchey 2,290 kVA 1,570 kVA Battambang 1,950 kVA 1,475 kVA Pursat 2,350 kVA 2,010 kVA Kompongchhnang 3,840,970 kWh 3,148,590 kWh Kandal Connected with Phnom Penh City Phnom Penh 117 MW 105 MW Siem Reap 10.5 MW 1,475 kVA Kompongthom 3,500kVA 2,000 kVA Kompogncham 3.6 kW 12.5 kW Svayrieng 1,250 kVA 850 kVA Prey Veng 1,250 kVA 850 kVA Subcorridor 2 Siem Reap 10.5 MW 1,475 kVA Stung Treng 1.5 MW 2,339,563 kWh Mondulkiri 150 kVA 125 kVA Rattanakiri 1,800 kVA 1,500 kVA Preah Vihear 1,190 kVA 645 kVA Subcorridor 3 Koh Kong 2,000 kVA 1,800 kVA Kampot 193.2 MW – Kep 3.08 MW 3 MW Subcorridor 4 Sihanoukville – 0.5–0.8 MW Kompong Speu Connected with Phnom Penh Kratie 2,300 kVA 1,600 kVA kVA = kilovolt-amps, kWh = kilowatt-hour, MW = megawatt. Note: For the other provinces, see the electricity supply situation in Subcorridors 1 and 2. The power station in Siem Reap Province was first built in 1960. This station has been retired and is now functioning as a substation. A new station, which is located away from the old site, was commissioned in 2003. Source: Electricité du Cambodge. 102 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A14: Key Resources in Southern Economic Corridor Provinces in Cambodia

Mining resources Other resources Subcorridor 1 Banteay Menachey limestone Daunsam flooded forest phosphate Battambang limestone Tonle Sap River gold ore Samkok Mountain iron ore Daunsam flooded forest aluminum precious stones Pursat clay Oral Mountain phosphate Samkok Mountain antimony Tonle Sap River chromium Kompongchhang clay Oral Mountain granite Tonle Sap River Kandal molybdenum Phnom Penh rivers Siem Reap clay Kulen Mountain granite Tonle Sap River Komponghthom clay Tonle Sap River gold Kompongcham clay gold Subcorridor 2 Siem Reap clay Kulen Mountain granite Tonle Sap River Stung Treng clay iron ore marble precious stones coal dolomite Mondulkiri lead, copper, zinc Phnom Preck granite Phom Namlear gold aluminum bauxite Rattanakiri lead, copper, zinc gold precious stones Preah Vihear lead, copper, zinc gold precious stones continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 103

Table A14: continued

Mining resources Other resources Subcorridor 3 Koh Kong limestone Bokor Mountain graphite gold iron ore phosphates Kampot white sand Bokor Mountain Kirirom Plateau Phnom Samkok Subcorridor 4 Sihanoukville white sand Bokor Mountain oil and gas beautiful beaches Kompong Speu lead, copper, zinc Bokor Mountain silver Kirirom Plateau tin tungsten limestone Phnom Penh rivers Kandal molybdenum Kompongcham clay gold Kratie lead, copper, zinc granite gold precious stones Mondulkiri lead, copper, zinc Phnom Preck granite Phom Namlear gold aluminum Stung Treng clay iron ore marble precious stones coal dolomite Source: Prime Investment Information in Cambodia, Council for the Development of Cambodia. 104 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A15: Potential Hydropower Sites in Southern Economic Corridor Provinces in Cambodia

Potential Sites Value Battambang

Battambang I Distance from provincial town (km) 40 Capacity (MW) 24 Project cost estimate ($ million) 49 Battambang II Distance from provincial town (km) 120 Capacity (MW) 36 Project cost estimate ($ million) 60 Siem Reap

Stung Siem Reap Krom Distance from provincial town (km) 55 Capacity (MW) 1.2 Stung Tanat Distance from provincial town (km) 100 Capacity (MW) 4 Stung Treng

Sre Pork Krom II Distance from provincial town (km) 30 Capacity (MW) 222 Project cost estimate ($ million) 339 Se San Krom II Distance from provincial town (km) 28 Capacity (MW) 207 Project cost estimate ($ million) 374 Pursat Province

Stung Atai Distance from provincial town (km) 140 Capacity (MW) 110 Project cost estimate ($ million) 156 Stung Resey Chrom Leu Distance from provincial town (km) 130 Capacity (MW) 32 Project cost estimate ($ million) 65

continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 105

Table A15: continued

Potential Sites Value Pursat Province

Pursat I Distance from provincial town (km) 90 Capacity (MW) 75 Pursat II Distance from provincial town (km) 70 Capacity (MW) 17

Pursat III Distance from provincial town (km) 30 Capacity (MW) 1.5 Pursat IV Distance from provincial town (km) 25 Capacity (MW) 1.5 Kompongthom Province Steung Chinith Distance from provincial town (km) 75 Capacity (MW) 5 Steung Sen Distance from provincial town (km) 95 Capacity (MW) 40 Steung Stuoang Distance from provincial town (km) 50 Capacity (MW) 4 Steung Chikreng Distance from provincial town (km) 100 Capacity (MW) 1 Rattanakiri Province Prek Leang I Distance from provincial town (km) 70 Capacity (MW) 55 Prek Leang IA Distance from provincial town (km) 60 Capacity (MW) 12 Prek Leang II Distance from provincial town (km) 80 Capacity (MW) 44 Sesan Krom III Distance from provincial town (km) 30 Capacity (MW) 375

continued on next page 106 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A15: continued

Potential Sites Value Rattanakiri Province

Srepok Krom III Distance from provincial town (km) 32 Capacity (MW) 330 Mondulkiri

Preck Pock Krom 4 Distance from provincial town (km) 100 Capacity (MW) 235 Preck Roveang 1 Distance from provincial town (km) 70 Capacity (MW) 7 Preck Roveang 2 Distance from provincial town (km) 80 Capacity (MW) 5 Preck Chbar Distance from provincial town (km) 95 Capacity (MW) 5 Preck Otalay 1 Distance from provincial town (km) 20 Capacity (MW) 5 Preck Otalay 2 Distance from provincial town (km) 23 Capacity (MW) 4 Preck Otalay 3 Distance from provincial town (km) 25 Capacity (MW) 5 Preck Otalay 4 Distance from provincial town (km) 30 Capacity (MW) 7 Preck Phear 1 Distance from provincial town (km) 35 Capacity (MW) 17 Preck Phear 2 Distance from provincial town (km) 40 Capacity (MW) 8

continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 107

Table A15: continued

Potential Sites Value Preck Phear 3 Distance from provincial town (km) 45 Capacity (MW) 9 Kampot Province

Kam Chai Distance from provincial town (km) 15 Capacity (MW) 180 Project cost estimate ($ million) 250 Kpong Reap Bok Ko Distance from provincial town (km) 40 Capacity (MW) 24 Au Trav Distance from provincial town (km) 14 Capacity (MW) 1 Koh Kong Province Kirirom III Distance from provincial town (km) 150 Capacity (MW) 13 Project cost estimate ($ million) 29 Steung Rusey Chom Kandal Distance from provincial town (km) 50 Capacity (MW) 125 Project cost estimate ($ million) 275 Steung Rusey Chom Krom Distance from provincial town (km) 25 Capacity (MW) 125 Project cost estimate ($ million) 130 Steung Cheay Areng Distance from provincial town (km) 55 Capacity (MW) 260 Project cost estimate ($ million) 502 Steung Tatay Distance from provincial town (km) 50 Capacity (MW) 80 Project cost estimate ($ million) 215 Steung Metek 1 Distance from provincial town (km) 55 Capacity (MW) 175 Steung Metek II Distance from provincial town (km) 40 Capacity (MW) 210

continued on next page 108 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A15: continued

Potential Sites Value Koh Kong Province Steung Metek III Distance from provincial town (km) 20 Capacity (MW) 50 Steung Keb 1 Distance from provincial town (km) 12 Capacity (MW) 4 Steung Keb II Distance from provincial town (km) 25 Capacity (MW) 26 Steung Oslar Distance from provincial town (km) 130 Capacity (MW) 2 Kirirom 2 Distance from provincial town (km) 150 Capacity (MW) 1 Kratie Province Sambo Distance from provincial town (km) 40–50 Capacity (MW) 467–3,300 Project cost estimate ($ million) 700–3,940 Prek Chhlong 1 Distance from provincial town (km) 120 Capacity (MW) 7 Prek Chhlong 2 Distance from provincial town (km) 60 Capacity (MW) 24 Prek Te 1 Distance from provincial town (km) 75 Capacity (MW) 7 Prek Te 2 Distance from provincial town (km) 50 Capacity (MW) 10 Prek Te 3 Distance from provincial town (km) 25 Capacity (MW) 13 Prek KamPhy 1 Distance from provincial town (km) 60 Capacity (MW) 2

continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 109

Table A15: continued

Potential Sites Value Kratie Province Prek KamPhy 2 Distance from provincial town (km) 40 Capacity (MW) 6 Prek Krearng 1 Distance from provincial town (km) 75 Capacity (MW) 8 Prek Krearng 2 Distance from provincial town (km) 50 Capacity (MW) 6 km = kilometer, MW = megawatt. Source: Council for the Development of Cambodia provincial offices; Electricite du Cambodge. 110 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Lao People’s Democratic Republic

Table A16: Population, Poverty, and Income Distribution

Population Land aged Rural Literacy Poverty Country/ area Density 15 to 64 population rate incidence Gini Province Population (km2) per km2 (%) (%) (%) (%) coefficient Lao People’s Democratic Republic 5,873,600 236,800 24.8 56.67 72.8 72.7 33.5 0.34 Khammouane 352,600 16,315 21.6 54.73 78.7 69.9 33.7 0.29 Savannakhet 858,500 21,774 39.4 56.41 77.5 68.5 43.1 0.31 Saravane 341,100 10,691 31.9 52.29 91.3 61.6 54.3 0.27 Champasack 625,700 15,415 40.6 55.75 79.5 81.8 18.4 0.30 Sekong 90,100 7,665 11.7 51.02 78.4 61.7 41.8 0.31 Attapeu 118,100 10,320 11.4 52.85 83.0 63.9 44.0 0.29

Note: Population density is the ratio of total population to total land area. Literacy rate for population aged 15 to 64 from Government of the Lao People’s Democratic Republic, Results from the Population and Housing Census 2005. Poverty incidence and Gini coefficient were taken from M. Andersson, A. Engvall, and A. Kokko, Determinants of Poverty in Lao PDR (Stockholm: Stockholm School of Economics, March 2006), which is based on results of the Government of the Lao People’s Democratic Republic, Lao Expenditure and Consumption Survey 2002/2003. The Asian Development Bank, Midterm Review of the Greater Mekong Subgregion Strategic Framework (2002–2012) (Manila, 2007) cited the poverty incidence in the Lao PDR as 32.7% and the Gini coefficient as 0.37%. A Gini coefficient of zero means an equal income distribution, whereas a coefficient equal to 1 means absolute inequality (i.e., one person receives all the income). Source: Lao People’s Democratic Republic. 2008. Lao PDR Statistical Yearbook 2007. Vientiane: Lao Department of Statistics.

Table A17: Population and its Economic Activities

Total active Farmer Mixed Nonfarm Country/Province population (%) farmer (%) activity (%) Lao People’s Democratic Republic 2,738,300 64.6 14.0 21.4 Female 1,375,800 66.5 14.8 18.7 Khammouane 166,900 81.4 2.2 16.4 Female 85,800 84.1 2.2 13.7 Savannakhet 431,000 85.9 1.1 13.0 Female 218,200 87.7 1.1 11.2 Saravane 167,100 79.8 12.9 7.3 Female 88,100 81.5 12.7 5.8 Champasack 305,400 62.9 17.5 19.6 Female 156,400 65.2 17.8 17.0 Sekong 40,100 66.8 18.7 14.5 Female 20,500 69.4 19.5 11.1 Attapeu 54,400 83.7 1.9 14.4 Female 28,400 87.3 2.1 10.6 Source: Lao People’s Democratic Republic. 2008. Lao PDR Statistical Yearbook 2007. Vientiane: Lao Department of Statistics. Appendix A: Basic Information on the Southern Economic Corridor National Components 111

Table A18: Villages with Access to Basic Infrastructure

Number Road Primary of accessa Electricity school Telephone Country/Province villages (%) (%) (%) Densityb Lao People’s Democratic Republic 9,113 59.7 41.7 80.9 201 Khammouane 658 48.6 59.4 82.5 – Savannakhet 1,012 70.5 54.2 89.8 180 Saravane 682 56.3 43.5 82.4 – Champasack 645 59.2 55.0 93.2 139 Sekong 252 36.9 24.2 72.2 – Attapeu 174 48.3 25.3 79.3 –

a Percentage share of villages located less than 200 meters from all-season roads accessible by cars and trucks. b Telephone density is defined as the number of telephone subscribers per 1,000 inhabitants. Source: Lao People’s Democratic Republic. 2008. Village Census 2007. Vientiane: Lao Department of Statistics.

Table A19: Population, Labor Force, and Income

Nonfarm Average Education Participation Unemployment activity Average labor level (%)a rate (%) rate (%) (%)b wage ($)c cost ($)d Lao People’s Democratic Republic 11.2 66.6 1.4 21.4 51 3,132 Female – 66.3 0.9 18.7 – – Khammouane 9.2 69.1 0.9 16.4 36 – Female – 69.3 0.7 13.7 – – Savannakhet 10.0 71.1 1.0 13.0 47 2,349 Female – 70.6 0.6 11.2 – – Saravane 5.4 73.2 0.1 7.3 49 – Female – 75.0 0.1 5.8 – – Champasack 12.2 68.6 1.1 19.6 40 2,867 Female – 69.1 0.7 17.0 – – Sekong 4.2 70.3 0.6 14.5 50 – Female – 70.5 0.4 11.1 – – Attapeu – 69.5 0.4 14.4 31 – Female – 69.9 0.2 10.6 – – a Percent of total population that completed secondary school of the school year 2004–2005. Participation rate was calculated using a population group from 15 to 64 years of age. b Percent of total population having occupation outside the agriculture sector. c Based on Lao People’s Democratic Republic, The Household of Lao PDR: Social and Economic Indicators, Lao Expenditure and Consumption Survey 2002/03 (Vientiane: Lao Department of Statistics, 2004). Wage rates were converted to US dollars using the 2003 annual average exchange rate of 10,571 kips (KN) = $1. d Calculated using the 2005 average annual exchange rate of KN10,654 = $1 and data from the Investment Climate Survey (2005) collaboration among ADB, the Government of the Lao PDR, and the World Bank in seven provinces (Champasack, Luangnamtha, Luang Prabang, Oudomxay, Savannakhet, Vientiane Capital, and Xayaboury). The survey included 303 firms operating in manufacturing and tourism service sectors. Source: Lao People’s Democratic Republic. 2008. Lao PDR Statistical Yearbook 2007. Vientiane: Lao Department of Statistics. 112 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A20: Income Levels and Economic Structure (Five-Year Average, 2003–2007)

GDP/GPP per Structure of production (%) Country/ GDP/GPP capita Province ($ million) ($ million) Agriculturea Industryb Service Lao People’s Democratic Republic 2,889.7 522 42.7 29.2 28.1 Khammouane – – – – – Savannakhet 382.2 460 51.6 23.5 24.9 Saravane 87.6 256 50.4 20.1 29.5 Champasack 381.6 625 53.4 22.5 24.1 Sekong – – – – – Attapeu 39.9 337 – – – Note: Gross domestic product (GDP), gross provincial product (GPP), and sectoral production figures represent the average values of 5 years (2003–2007) using the current exchange rate. Unemployment rates are based on Lao People’s Democratic Republic, Population and Housing Census 2005 (Vientiane: Lao Department of Statistics, 2006). aIncludes agriculture, livestock, and forestry products. bIncludes manufacturing, energy, mining and quarrying, and construction. Source: Asian Development Bank. 2007. Key Indicators for Asia and Pacific 2007. Manila; Lao People’s Democratic Republic. 2006. Population and Housing Census 2005. Vientiane: Lao Department of Statistics. For Savannakhet Province: Statistical Yearbook 2007, Department of Planning and Investment of Savannakhet Province; Champasack Province: Summary of the implementation of Socio-Economic Plan 2007–2008, Department of Planning and Investment of Champasack Province.

Table A21: Share of Intraregional Trade to Total Trade (%)

2000 2001 2002 2003 2004 2005 2006 2007 Trade/gross domestic product 31.7 31.4 28.4 40.3 37.3 40.9 55.4 46.6 Lao People’s Democratic Republic 59.8 60.3 70.4 77.2 65.3 70.4 77.3 68.5 Savannakhet – – 24.2 29.9 29.5 42.6 62.2 64.0 at Savannakhet– Mukdahan border checkpoint – – 59.5 70.2 62.4 66.2 39.3 45.0 at Dansavan– Lao Bao border checkpoint – – 40.4 29.7 37.5 33.8 60.6 54.9 Champasack –––––10.5 6.5 8.1 at Vang Tao –––––––– Note: Ratio of total trade (import plus export) with Greater Mekong Subregion countries to total trade with the rest of the world. The data for Savannakhet and Champasack indicate the percentages of cross- border trade to total provincial trade. Source: Lao People’s Democratic Republic Ministry of Industry and Commerce, Department of Commerce. For Savannakhet Province: Statistical Yearbook 2007, Department of Planning and Investment of Savannakhet Province. For Champasack Province: Summary of the Implementation of Socio-Economic Plan 2007–2008, Department of Planning and Investment of Champasack Province. Appendix A: Basic Information on the Southern Economic Corridor National Components 113

Table A22: Share of Lao People’s Democratic Republic Trade with Greater Mekong Subregion Countries to Total Greater Mekong Subregion Intraregional Trade (%)

2000 2001 2002 2003 2004 2005 2006 2007 Cambodia 0.03 0.07 0.03 0.03 0.07 0.01 0.01 0.02 China, People’s Republic of 7.88 14.85 8.08 15.15 14.29 11.13 9.00 9.58 Myanmar 0.08 0.00 0.01 0.04 0.00 0.00 0.00 0.36 Thailand 77.61 69.04 81.54 73.69 73.45 74.55 73.69 70.44 Viet Nam 14.40 16.04 10.34 11.09 12.19 14.31 17.31 19.60 Source: Lao People’s Democratic Republic Ministry of Industry and Commerce, Department of Import– Export, 2008.

Table A23: Share of Informal Cross-Border Trade (as % of Total Trade)

2000 2001 2002 2003 2004 2005 2006 Total trade 8.2 13.9 15.4 2.5 2.1 0.4 0.2 Greater Mekong Subregion countries 23.2 42.4 41.4 11.0 10.8 2.2 0.6 Thailand 49.2 92.8 56.5 6.5 6.5 1.1 0.6 Viet Nam 26.2 41.0 9.1 25.4 25.2 19.9 23.5 Source: Lao People’s Democratic Republic Ministry of Industry and Commerce, Department of Statistics and Planning, 2008.

Table A24: Average Share of Commodities Traded to Total Trade, 2005–2007 (%)

Lao People’s Commodity Democratic Republic Savannakhet Champasack Export Mining 46.6 93.0 – Wood and wood products 12.0 3.6 32.4 Agriculture and forest products 7.5 0.3 64.3 Industry and handicrafts 20.1 0.3 3.3 Electricity 13.7 – – Other 0.2 5.6 – Import Capital goods 36.2 18.9 47.1 Fuel and gas 24.3 62.8 30.0 Raw materials 20.8 3.1 11.3 Electronic appliances 4.6 0.4 5.3 Foodstuffs 3.4 11.1 3.2 Vehicles and spare parts 5.9 – – Electricity 1.7 – – Other 3.2 3.8 3.2 Source: Lao People’s Democratic Republic Ministry of Industry and Commerce, Department of Commerce. For Savannakhet Province: Statistical Yearbook 2007, Department of Planning and Investment of Savannakhet Province. For Champasack Province: Summary of the implementation of Socio-Economic Plan 2007–2008, Department of Planning and Investment of Champasack Province. 114 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A25: Sources of Foreign Direct Investment in the Lao People’s Democratic Republic (Five-Year Average, 2003–2007, Share to Total) (%)

Lao People’s Democratic Investor Republic Savannakhet Champasack Association of Southeast Asian Nations 40.1 61.6 – Cambodia 0.0 – – Indonesia 0.1 7.3 – Malaysia 4.6 1.6 – Myanmar 0.0 – – Philippines 0.0 – – Singapore 2.5 1.1 – Thailand 23.6 24.7 – Viet Nam 9.2 26.8 – Northeast Asia and the People’s Republic of China 26.5 24.7 – China, People’s Republic of 21.8 10.9 – Korea, Republic of 4.5 13.6 – Taipei,China 0.2 – – Organisation for Economic Co-operation and Development 30.3 14.0 – Australia 12.3 10.8 – Canada 2.1 – – France 8.9 0.5 – Germany 0.1 – – Italy 0.0 – – Japan 4.0 0.3 – Netherlands 0.0 – – Sweden 0.0 – – Switzerland 1.2 – – United Kingdom 0.3 2.4 – United States 0.3 – – Other 4.1 – – Totala ($ million) 1,216.207 476.267 277.026 a Average investment volume over 5 years (2003–2007). Source: Lao People’s Democratic Republic Ministry of Investment and Planning, Department of Foreign and Domestic Investment, Statistics and Planning Division. For Savannakhet Province: Statistical Yearbook 2007, Department of Planning and Investment of Savannakhet Province. For Champasack Province: Summary of the implementation of Socio-Economic Plan 2007–2008, Department of Planning and Investment of Champasack Province. Appendix A: Basic Information on the Southern Economic Corridor National Components 115

Table A26: Foreign Direct Investment in the Lao People’s Democratic Republic by Sector (Five-Year Average, 2003–2007, Share to Total) (%)

Lao People’s Democratic Sector Republic Savannakhet Champasack Electricity generation 53.16 – – Agriculture 12.37 54.4 52.3 Mining 10.12 – – Industry and handicrafts 6.28 39.7 28.5 Services 4.80 5.9 19.3 Trading 4.38 – – Construction 2.79 – – Hotel and restaurant 2.61 – – Wood industry 1.19 – – Banking 0.82 – – Telecommunications 1.11 – – Garment 0.26 – – Consulting 0.11 – – Note: Total foreign direct investment excludes domestic investment. Source: Lao People’s Democratic Republic Ministry of Investment and Planning, Department of Foreign and Domestic Investment, Statistics and Planning Division, 2008.

Table A27: Tourist Arrivals in the Lao People’s Democratic Republic, 2000–2007 (%)

Country of origin 2000 2001 2002 2003 2004 2005 2006 2007 Association of Southeast 71.7 70.1 69.2 68.0 71.4 72.5 73.4 78.4 Asian Nations Cambodia 0.2 0.3 0.4 0.4 0.4 0.5 0.3 0.3 Thailand 60.0 55.9 57.5 59.4 54.7 55.1 55.6 58.5 Viet Nam 0.0 12.2 9.7 6.5 14.6 15.1 15.7 17.9 Other Asia and the 10.3 12.0 9.5 10.3 10.2 9.6 9.6 8.2 Pacific nations Europe 11.7 12.0 13.9 14.8 12.5 12.0 11.4 9.1 Canada, the United States, 5.7 5.1 6.3 6.2 5.3 5.5 5.0 3.8 others in the Americas Africa and the Middle East 0.6 0.8 1.1 0.7 0.6 0.4 0.5 0.5

Source: Lao National Tourism Administration. 2008. 2007 Statistical Report on Tourism in Laos. Vientiane: Lao National Tourism Administration, Planning and Cooperation Department. 116 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A28: Tourist Arrivals and Revenues from Tourisma

Share Growth rate Country/province Visitors (%) Revenue (%) Visitors (%) Revenue (%) Lao People’s Democratic Republic 1,093,106b $151,914,400c 13.3 11.3 Khammouane 5.2 1.3 19.6 21.3 Savannakhet 18.3 4.6 19.2 17.0 Saravane 0.8 0.2 21.1 14.2 Sekong 0.5 0.2 40.0 42.0 Champasack 9.5 2.5 23.0 21.5 Attapeu 1.2 0.3 16.3 15.2

a Five-year average of shares and growth rates of tourist arrivals and revenues, as percent of total, 2003–2007. b Total number of visitors. c Total revenue. Source: Lao National Tourism Administration. 2008. 2007 Statistical Report on Tourism in Laos. Vientiane: Lao National Tourism Administration, Planning and Cooperation Department.

Table A29: National Biodiversity Conservation Areas, 2008

Name of Country/ Size of conservation province conservation Province area area (km2) area (km2) % Activity Access Lao People’s Democratic Republic 236,800 35,720 15.1 Total area 11 74,515 19,035 25.5 conservation areas Champasack 15,415 4,700 30.5 Xe Pian 2,400 Trekking, bird- South of watching, Pakse; Road elephant No. 6 riding Dong Houa 1,100 None yet Easily Sao accessible from Road No. 13 Phou Xieng 1,200 Trekking Easily Thong and orchid accessible photography from Road No. 13 Attapeu 10,320 1,975 19.1 Dong 1,975 19.1 None yet Remote and Amphanh mountainous; mainly limited to dry season continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 117

Table A29: continued

Name of Country/ Size of conservation province conservation Province area area (km2) area (km2) % Activity Access Saravane 10,691 2,595 24.3 Xe Xap 1,335 None yet No paved road to Ta Oy Xe Bang 1,260 None yet Not easily Nouan accessible Savannakhet 21,774 3,470 15.9 Dong Phou 400 Trekking Road No. 9 Vieng Phou Xang 1,100 Trekking Road No.9 Hae Dong Si Thuan 1,970 Khammouane 16,315 6,295 38.6 Hin Namno 895 None yet Highway 12 to Muang Boualapha Nakai-Nam 3,710 None yet Route 8B; Theun from Thakek via Route12 then Route 8B Phou Hin 1,690 Trekking, Route 8 Boun rafting, kayaking, caves

Source: Lao National Tourism Administration. 2008. 2007 Statistical Report on Tourism in Laos. Vientiane: Lao National Tourism Administration, Planning and Cooperation Department; Lao Ecotourism. 118 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Thailand

Table A30: Population and Land Area

Land Population Literacy Poverty Location/ Total area density (people rate incidence area population (km2) per km2) (%) (%) Thailand 63,830,000 513,100 124.40 93 11.25 Bangkok 6,842,000 1,568 4,363.50 98.0 1.64 Chonburi 1,169,000 4,363 267.93 97.6 1.30 Rayong 584,000 3,552 83.15 97.2 5.60 Chantaburi 527,000 6,338 164.41 94.9 4.14 Trat 240,000 2,885 83.18 92.1 12.45 Sakaew 532,000 7,195 73.94 93.7 13.75

Source: National Statistical Office of Thailand; United Nations Development Programme (UNDP). 2007. Thailand Human Development Report 2007: Sufficiency Economy and Human Development. Bangkok: UNDP.

Table A31: Labor Force Indicators, 2007

Location/ Participation Under-employ- Under- Women Average area rate (%) ment rate (%) employment rate (%) (%) wage ratea Thailand 72.3 1.4 98.1 98.0 104.5 Bangkok 56.5 0.7 55.8 – 131.3 Chonburi 60.3 0.4 59.9 53.4 116.4 Rayong 74.9 0.3 97.7 42.8 105.4 Chantaburi 61.2 0.4 60.8 54.9 111.8 Trat 61.9 0.2 61.7 53.7 100.8 Sakaew 56.4 1.7 54.7 47.8 103.4

a Minimum wage rate per day over 22 workdays in 2007, using exchange rate of Baht 34 = $1. Source: Thailand Ministry of Labor, 2007; National Statistical Office of Thailand. Appendix A: Basic Information on the Southern Economic Corridor National Components 119

Table A32: Income Levels and Economic Structure

Gross provincial Structure of production (%) product per capita Location/area ($) Agriculture Industry Services Thailand 3,400 11 44 45 Bangkok 9,422 0.1 25.6 74.2 Chonburi 11,275 4.05 61.20 34.75 Rayong 24,310 2.92 89.08 8.00 Chantaburi 2,129 29.59 12.73 57.68 Trat 2,635 45.37 8.68 45.95 Sakaew 1,581 28.20 16.02 55.78

Note: Gross provincial product data from 2007; economic structure data from 2006. Source: Thailand National Economic and Social Development Board.

Table A33: Trade between Thailand and Viet Nam

Total bilateral Exports from Imports to trade Thailand Thailand Value Change Value Change Value Change Trade Year ($ million) (%) ($ million) (%) ($ million) (%) balance 1998 823.3 13.3 591.7 7.8 231.5 30.4 360.1 1999 800.6 (2.8) 572.8 (3.2) 227.8 (1.6) 345.1 2000 1,179.4 47.3 847.4 47.9 332.1 45.8 515.3 2001 1,127.0 (4.5) 801.2 (5.4) 325.8 (1.9) 475.5 2002 1,186.0 5.3 948.0 18.3 238.6 (26.8) 709.4 2003 1,595.0 34.42 1,263.3 33.3 331.7 39.02 931.6 2004 2,313.7 45.17 1,877.0 48.7 436.7 31.66 1,440.3 2004 (January– 2,158.5 – 1,746.7 – 411.8 – 1,334.9 November) 2005 (January– 2,920.1 35.28 2,101.7 20.32 818.4 98.74 1,283.3 November)

( ) = negative value. Source: Thailand Ministry of Commerce, 2006. 120 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A34: Border Trade between Thailand and Cambodia, 2004–2007 ($ million)

Border Aranyaprathet– Klong Yai–Kho Year Poipet Kong Total 2004 Export 336.47 175.19 511.66 Import 18.05 0.99 19.04 Balance 318.42 174.2 492.61 2005 Export 349.20 273.86 623.06 Import 18.37 1.10 19.48 Balance 330.83 272.76 603.58 2006 Export 382.12 331.2 713.32 Import 24.29 75.54 99.84 Balance 357.82 328.97 686.79 2007 Export 442.04 346.41 788.45 Import 32.46 3.57 28.89 Balance 409.57 342.83 752.41 Note: Exchange rate used is $1 = Baht 34. Source: Thailand Ministry of Commerce, Foreign Trade Department.

Table A35: Approval of Applications for Foreign Direct Investment in Thailand, 2005–2007

2005 2006 2007 Number of projects 1,253 1,222 1,342 Total investment (billion baht) 571.1 373.2 744.5 Employment 314,614 177,571 215,427 Number of projects Major foreign shareholders Japan 368 360 352 Europe 155 135 174 Taipei,China 63 69 52 United States 57 52 63 Hong Kong, China 28 26 25 Singapore 81 65 89 Ownership 100% Thai 429 437 452 100% foreign 414 405 479 Joint venture 410 380 411

continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 121

Table A35: continued

2005 2006 2007 Number of projects Sector Agricultural products 204 171 200 Minerals and ceramics 36 32 35 Light industry 104 106 96 Metal processing 261 270 248 Electronics and electrical 230 228 258 Chemicals, plastic, and paper 170 131 155 Service and infrastructure 246 284 350 Location distribution Zone 1a 348 373 440 Bangkok 168 173 243 Metropolitan areas 180 200 197 Zone 2b 565 487 534 Rayong 125 117 146 Phuket 11 10 10 Other 429 360 378 Zone 3c 340 362 368 36 provinces 287 306 314 22 provinces 53 56 54 North 59 62 68 Central 21 11 20 Northeast 110 123 98 East 52 66 62 West 14 17 16 South 55 62 66 Otherd 29 21 38 a Bangkok, Nokhon Pathom, Nontabur, Patumthani, Samut Prakarn, and Samut Sakhon. b Phuket, Rayong, and others (Angthong, Ayuttaya, Chachoengsao, Chonburi, Kanchanaburi, Nakhon Nayok, Ratchaburi, Samut Songkhram, Saraburi, and Suphanburt). c The 58 remaining provinces are divided into a group of 22 provinces and a group of 36 provinces. d International maritime transport activity. Source: Thailand Board of Investment. 122 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A36: Tourist Arrivals, 2007

Country of origin Chonburi Bangkok Rayong Chantaburi Trat Sakaew Thailand 1,798,728 3,468,287 1,519,472 527,271 676,917 310,745 Malaysia 87,220 300,194 10,812 1,910 375 540 Singapore 37,876 424,475 12,259 2,223 965 135 China, People’s Republic of 470,184 963,103 12,901 2,012 1,795 393 Hong Kong, China 191,340 299,769 11,017 2,020 1,528 110 Japan 97,460 1,448,006 21,410 2,341 3,178 2,129 Korea, Republic of 573,741 309,089 15,056 1,842 3,499 13,476 Taipei,China 258,966 226,011 10,539 1,924 3,010 82 Austria 20,648 81,329 11,697 1,451 5,305 188 Belgium 16,264 62,526 10,053 1,350 7,402 124 Denmark 30,450 90,215 14,351 1,490 14,979 100 France 47,241 281,139 21,245 1,655 18,783 3,246 Germany 218,557 448,635 44,399 2,102 34,878 922 Italy 28,590 122,331 9,984 1,324 11,761 154 Netherlands 39,799 152,970 14,367 1,709 14,338 450 Sweden 38,998 127,089 24,760 1,654 36,534 331 Switzerland 26,668 132,031 19,688 1,769 11,449 279 United Kingdom 222,119 533,499 22,345 2,922 29,571 1,061 United States 82,646 535,634 12,849 2,324 12,919 1,760 Canada 14,757 113,903 7,623 1,030 5,409 179 Middle East 157,139 397,646 4,572 827 6,490 26 Australia 70,597 464,823 9,747 1,348 6,186 363 New Zealand 13,156 73,552 7,149 1,003 4,009 200 India 279,006 457,516 6,589 5,611 3,797 256 Russian Federation 889,752 163,341 8,374 816 20,686 13 Eastern Europe 70,295 99,370 6,698 1,273 2,749 39 Indonesia 37,347 137,074 2,735 477 2,483 54 Philippines 11,334 112,721 3,102 395 2,555 205 Finland 64,999 41,300 19,393 448 3,120 84 Norway 29,302 52,637 5,903 542 3,313 142 Spain 2,791 61,353 2,564 585 2,855 164 Africa 4,396 55,706 2,195 3,112 1,898 70 Myanmar 2,374 31,001 833 206 1,854 18 Israel 14,624 94,555 1,355 281 2,295 32

continued on next page Appendix A: Basic Information on the Southern Economic Corridor National Components 123

Table A36: continued

Country of origin Chonburi Bangkok Rayong Chantaburi Trat Sakaew Lao People’s Democratic Republic 7,768 20,568 594 190 1,200 141 Viet Nam 53,006 133,784 692 245 1,120 93 Brunei Darussalam 3,316 8,845 577 177 1,056 121 Cambodia 8,521 21,087 422 233 2,012 2,477 Other South Asia 22,041 – 635 69 856 8 Other Americas 7,969 – 1,344 113 1,290 427 Others 99,342 772,635 17,669 3,861 16,329 444 Totals 6,151,327 13,319,749 1,929,969 584,135 982,748 341,781

Source: Tourism Authority of Thailand.

Table A37: Major Tourist Attractions in the Thailand Component of the Southern Economic Corridor

Area Ecotourism Historical Cultural Bangkok – Grand Palace, Arun Rattanakosin Island Temple, the Chakri Maha Prasat Throne Hall Chanthaburi Namtok Plew National Park, Khao Chanthaburi National Khung Kraben Kichakut National Park, Khao Soi Museum, Maritime Research Development Dao Wildlife Sanctuary, Kung Museum, Tuk Daeng, Center, Oasis Seaworld Wiman Beach, Chao Lao Beach Kook Khi Kai Chonburi Pataya Beach, Sichang Island, – Buffalo running Sam Muk Island festival Rayong Samet Island, Khao Laem Ya – – Sakaew Pangsida National Park Prasat Khaonoi, Prasat – Sadok Kok Thom Trat Ko Chang National Park, Ko Mak, Wat Bupharam, – Ko Kut, Mai Rood Beach, Ban Residence Kampot, Khao Chuen Beach Lan Memorial

Source: Tourism Authority of Thailand. 124 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Viet Nam

Table A38: Population and Land Area by Subcorridor and by Province

Population density Rural Illiteracy Incidence Total Land area (people population rate of poverty Area population (km2) per km2) (%) (%) (%) Subcorridor 1 10,601,400 14,028.1 756 36.4 2.00 1.7 Tay Ninh 1,053,800 4,035.9 261 82.8 4.9 6.7 Ho Chi Minh City 6,347,000 2,098.7 3,024 14.5 0.9 0.5 Dong Nai 2,253,300 5,904.0 382 68.4 3.9 0.5 Ba Ria–Vung Tau 947,300 1,989.6 476 55.7 3.3 6.7 Subcorridor 2 2,744,700 21,576.5 127 72.7 10.2 19.7 Gia Lai 1,165,800 15,536.9 75 71.3 22.4 25.6 Binh Dinh 1,578,900 6,039.6 261 73.7 1.3 15.4 Subcorridor 3 2,946,200 11,680.0 252 76.5 3.2 11.6 Kien Giang 1,705,200 6,348.3 266 74.0 4.1 10.3 Ca Mau 1,241,000 5,331.7 233 80.0 2.1 13.3 Subcorridors Total 16,292,300 47,284.6 345 49.7 3.6 6.4 Whole country 85,154,900 331,211.6 257 72.6 4.0 14.8 Subcorridors Total/ Whole country (%) 19.1 14.3 1.3 – – –

km2 = square kilometer. Source: Data on population, land area, population density, and rural population from Statistical Yearbook of Viet Nam 2007; data on illiteracy rate and poverty incidence from Statistical Data of Labor Employment in Viet Nam 2005 (Ha Noi: Labor-Social Publishing House, 2006). Appendix A: Basic Information on the Southern Economic Corridor National Components 125

Table A39: Population as of January 2007

2000 2003 2004 2005 2006 2007 Subcorridor 1 9,063,800 9,599,500 9,830,900 10,058,300 10,314,700 10,601,400 Tay Ninh 976,300 1,017,100 1,029,800 1,038,400 1,046,800 1,053,800 Ho Chi Minh City 5,226,100 5,554,800 5,730,800 5,911,600 6,107,800 6,347,000 Dong Nai 2,039,400 2,142,700 2,172,100 2,194,500 2,225,100 2,253,300 Ba Ria–Vung Tau 822,000 884,900 898,200 913,800 935,000 947,300 Subcorridor 2 2,498,000 2,605,500 2,640,700 2,673,300 2,711,600 2,744,700 Gia Lai 1,017,000 1,075,200 1,095,500 1,116,200 1,144,600 1,165,800 Binh Dinh 1,481,000 1,530,300 1,545,200 1,557,100 1,567,000 1,578,900 Subcorridor 3 2,663,300 2,787,800 2,831,000 2,875,300 2,914,000 2,946,200 Kien Giang 1,524,000 1,606,600 1,630,400 1,657,000 1,683,100 1,705,200 Ca Mau 1,139,300 1,181,200 1,200,600 1,218,300 1,230,900 1,241,000 Total 14,225,100 14,992,800 15,302,600 15,606,900 15,940,300 16,292,300

Source: Statistical Yearbook 2007 of relevant provinces.

Table A40: Illiteracy Rate and Poverty Incidence

Illiteracy Incidence of poverty Employed Per 1,000 Per 1,000 Area population people % people % Subcorridor 1 5,489,800 118.3 2.2 177.1 1.7 Tay Ninh 613,600 30.2 4.9 70.6 6.7 Ho Chi Minh City 3,288,000 29.3 0.9 31.7 0.5 Dong Nai 1,150,800 45.2 3.9 11.3 0.5 Ba Ria–Vung Tau 437.400 13.6 3.3 63.5 6.7 Subcorridor 2 1,372,700 133.4 9.7 541.6 19.7 Gia Lai 550,600 123.1 22.4 298.4 25.6 Binh Dinh 822,100 10.3 1.3 243.2 15.4 Subcorridor 3 1,523,900 49.1 3.2 340.7 11.6 Kien Giang 882,000 36.3 4.1 175.6 10.3 Ca Mau 641,900 12.8 2.1 165.1 13.3 Total: Subcorridors 8,386,400 300.8 3.6 1,059.4 6.5 Total: Whole country 44,171,900 1,766.9 4.0 12,602.9 14.8

Source: Statistical Data of Labor Employment in Viet Nam 2005 (Ha Noi: Labor-Social Publishing House, 2006). 126 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A41: Land Use by Subcorridor (hectare)

Agriculture production Forestry Specialty Homestead Area land land land land Total land Whole country 9,436,200 14,514,200 1,433,500 611,900 33,121,200 Subcorridor 1 755,900 318,800 117,200 48,000 1,402,900 Tay Ninh 278,500 69,700 18,700 8,700 403,600 Ho Chi Minh City 77,900 33,400 28,900 20,700 209,900 Dong Nai 289,700 179,700 43,400 13,800 590,400 Ba Ria–Vung Tau 109,800 35,700 26,200 4,800 199,000 Subcorridor 2 635,900 1,049,100 60,200 20,700 2,157,700 Gia Lai 449,500 799,800 37,000 13,200 1,553,700 Binh Dinh 136,400 249,300 23,200 7,500 604,000 Subcorridor 3 583,400 207,300 42,000 18,000 1,188,000 Kien Giang 441,300 102,900 21,600 11,300 634,800 Ca Mau 142,100 104,400 20,400 6,700 553,200 Subcorridors Total 1,975,200 1,575,200 219,400 116,700 4,748,600

Source: Statistical Yearbook 2007 of relevant provinces.

Table A42: Structure of Land Use by Subcorridor (%)

Agriculture production Forestry Specialty Homestead Area land land land land Whole country 28.5 43.8 4.3 1.8 Subcorridor 1 53.9 22.7 8.3 3.4 Tay Ninh 69.0 17.3 4.6 2.2 Ho Chi Minh City 37.1 15.9 13.7 9.9 Dong Nai 49.1 30.7 7.4 2.3 Ba Ria–Vung Tau 55.2 18.0 13.2 2.4 Subcorridor 2 29.5 48.6 2.8 1.0 Gia Lai 32.2 51.5 2.4 0.9 Binh Dinh 22.6 41.3 3.8 1.2 Subcorridor 3 49.1 17.4 3.5 1.5 Kien Giang 69.5 16.2 3.4 1.8 Ca Mau 26.2 19.6 3.8 1.3 Subcorridors Total 41.6 33.2 4.6 2.5

Source: Statistical Yearbook 2007 of relevant provinces. Appendix A: Basic Information on the Southern Economic Corridor National Components 127

Table A43: Income and Structure of Production

Per capita gross Structure of production (%) domestic product/ Unemploy- gross provincial Agriculture Industry Services ment rate Area product ($) (%) Whole country 812 20.30 41.58 38.12 5.13 Subcorridor 1 2,321 4.00 59.50 36.50 Tay Ninh 865 36.78 29.11 34.11 4.58 Ho Chi Minh City 2,085 1.30 46.40 52.30 6.03 Dong Nai 1,139 12.10 57.70 30.20 4.26 Ba Ria–Vung Tau 7,424 2.26 89.12 8.63 4.54 Subcorridor 2 538 39.00 29.60 31.40 Gia Lai 471 47.16 25.96 26.88 4.10 Binh Dinh 580 34.20 31.80 34.00 5.21 Subcorridor 3 793 44.70 27.30 28.00 Kien Giang 818 43.67 26.26 30.06 4.96 Ca Mau 764 34.40 28.50 37.10 5.26 Subcorridors Total 1,744 – – – –

Note: Unemployment rate in urban areas based on Statistical Data of Labor Employment in Viet Nam 2005 (Ha Noi: Labor-Social Publishing House, 2006).

Table A44: Population and Gross Domestic Product, 2007

Gross domestic product (D billion)a Area Population Agriculture Industry Service Total Whole country 85,154,900 232,188.0 475,681.0 436,146.0 1,144,015.0 Subcorridor 1 10,601,400 16,445.4 241,316.1 148,012.2 405,773.7 Tay Ninh 1,053,800 5,504.0 4,354.5 5,104.3 14,962.8 Ho Chi Minh City 6,347,000 3,057.0 106,052.0 119,686.0 228,795.0 Dong Nai 2,253,300 5,175.0 24,714.0 12,943.0 42,832.0 Ba Ria–Vung Tau 947,300 2,691.4 106,195.6 10,278.9 119,165.9 Subcorridor 2 2,744,700 9,512.2 7,207.4 7,615.2 24,334.8 Gia Lai 1,165,800 4,350.6 2,395.1 2,479.2 9,224.9 Binh Dinh 1,578,900 5,161.6 4,812.3 5,136.0 15,109.9 Subcorridor 3 2,946,200 17,240.9 10,520.1 10,817.5 38,578.5 Kien Giang 1,705,200 10,028.9 6,030.3 6,903.6 22,962.8 Ca Mau 1,241,000 7,212.0 4,489.8 3,913.9 15,615.7 Subcorridors Total 16,292,300 43,198.5 259,043.6 166,444.9 468,687.0 Subcorridors (% of 19.1 18.6 54.5 38.2 41.0 whole country) a 2007 figures in current prices, in billion dong. Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008). 128 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A45: Gross Rice Output (tons)

Area 2000 2004 2005 2006 2007 Subcorridor 1 1,126,500 1,172,800 1,114,800 1,078,800 1,159,500 Tay Ninh 82,700 74,800 70,400 74,400 77,900 Ho Chi Minh City 235,300 159,400 133,600 104,200 117,000 Dong Nai 270,300 296,500 325,200 305,800 324,600 Ba Ria–Vung Tau 538,200 642,100 585,600 594,400 640,600 Subcorridor 2 698,100 792,400 761,100 889,000 858,400 Gia Lai 175,100 222,000 233,700 281,200 279,200 Binh Dinh 523,000 570,400 527,400 607,800 579,200 Subcorridor 3 3,134,800 3,143,400 3,331,300 3,147,700 3,396,600 Kien Giang 2,284,300 2,739,800 2,944,300 2,744,300 2,977,400 Ca Mau 850,500 404,100 387,000 403,400 419,200 Total 4,959,400 5,108,600 5,207,200 5,115,500 5,414,500 Per capita rice production (kilograms per person) Total 349 340 333 320 332 Subcorridor 1 124 119 111 105 109 Subcorridor 2 279 304 285 328 313 Subcorridor 3 1,177 1,128 1,158 1,080 1,153 Source: Statistical Yearbook 2007 of relevant provinces. Appendix A: Basic Information on the Southern Economic Corridor National Components 129

Table A46: Fisheries Production (tons)

Area 2000 2004 2005 2006 2007 Subcorridor 1 207,100 307,300 303,400 316,100 324,000 Tay Ninh 3,900 6,700 6,700 6,700 6,900 Ho Chi Minh City 47,800 56,200 53,300 56,700 55,000 Dong Nai 15,500 29,800 28,500 30,500 32,200 Ba Ria–Vung Tau 139,900 199,000 214,600 222,200 229,900 Subcorridor 2 78,000 101,300 110,800 110,600 118,400 Gia Lai 200 300 443 551 63,300 Binh Dinh 77,800 101,000 110,400 110,000 117,800 Subcorridor 3 447,000 557,600 608,100 652,800 706,200 Kien Giang 249,200 321,400 353,800 377,800 410,800 Ca Mau 197,800 236,200 254,300 275,000 295,400 Subcorridors Total 732,100 966,200 1,022,300 1,079,500 1,148,600 Whole country 2,250,500 3,142,500 3,465,900 3,720,500 4,149,000 Total subcorridors/ 32.5 30.7 29.5 29.0 27.7 Whole country (%) Subcorridor 1/Total 28.3 31.8 29.7 29.3 28.2 subcorridors (%) Subcorridor 2/Total 10.7 10.5 11.1 10.2 10.3 subcorridors (%) Subcorridor 3/Total 61.0 57.7 59.4 60.5 61.5 subcorridors (%)

Source: Statistical Yearbook 2007 of relevant provinces. 130 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A47: Gross Forestry Output at Constant 1994 Prices (D billion)

Area 2000 2004 2005 2006 2007 Subcorridor 1 212.1 239.6 224.1 270.3 259.4 Tay Ninh 86.5 116.2 116.9 120.6 123.5 Ho Chi Minh City 37.0 33.6 34.9 42.4 31.3 Dong Nai 61.7 56.5 57.9 69.2 64.7 Ba Ria–Vung Tau 26.9 33.3 34.4 38.0 39.9 Subcorridor 2 182.4 236.4 251.3 255.9 265.8 Gia Lai 81.6 106.3 117.5 119.5 124.0 Binh Dinh 100.8 130.1 133.8 136.4 141.8 Subcorridor 3 178.4 203.3 207.5 201.6 197.1 Kien Giang 41.2 83.7 85.6 88.4 89.6 Ca Mau 137.2 119.6 121.9 113.2 107.5 Total 572.9 679.3 682.9 727.8 722.3 Subcorridor 1/Total (%) 37.0 35.3 32.8 37.1 35.9 Subcorridor 2/Total (%) 31.8 34.8 36.8 35.2 36.8 Subcorridor 3/Total (%) 31.2 29.6 30.4 27.7 27.3 D = dong. Source: Statistical Yearbook 2007 of relevant provinces.

Table A48: Educational Level of Economically Active Population Aged 15 Years and Older (%)

Did not finish Finished Finished Finished primary primary secondary high Area Illiterate school school school school Country total 5.06 14.25 29.23 31.84 19.62 Subcorridor 1 Tay Ninh 5.63 23.64 41.28 15.01 14.44 Ho Chi Minh City 0.95 8.35 27.62 22.86 40.21 Dong Nai 4.21 15.04 33.84 24.93 21.95 Ba Ria–Vung tau 3.24 17.20 36.01 21.70 21.82 Subcorridor 2 Gia Lai 28.8 18.14 20.79 19.34 12.94 Binh Dinh 1.98 20.48 39.38 25.01 14.37 Subcorridor 3 Kien Giang 3.70 28.62 42.07 16.10 8.51 Ca Mau 2.53 28.49 47.67 15.33 5.98 Source: Statistical Data of Labor-Employment in Viet Nam 2005 (Ha Noi: Labor-Social Publishing House, 2006). Appendix A: Basic Information on the Southern Economic Corridor National Components 131

Table A49: Average Per Capita Monthly Income (D thousanda)

Salary Agriculture, Non-agriculture, and forestry, forestry, Area wages and fisheries and fishing Others Total Whole country 218 158 145 115 636 Subcorridor 1 Tay Ninh 259 205 148 85 697 Ho Chi Minh City 650 26 452 352 1,480 Dong Nai 369 173 221 104 867 Ba Ria–Vung Tau 356 98 213 110 778 Subcorridor 2 Gia Lai 151 177 109 61 498 Binh Dinh 188 134 169 61 553 Subcorridor 3 Kien Giang 178 263 138 96 675 Ca Mau 113 318 176 59 666 a 2006 figures in current prices in dong (D). Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008).

Table A50: Average Per Capita Monthly Income by Income Quintiles (D thousanda)

Quintile Area 12345Average Whole country 184 319 459 679 1,542 636 Subcorridor 1 Tay Ninh 267 396 517 699 1,606 697 Ho Chi Minh City 554 824 1,076 1,493 3,453 1,480 Dong Nai 297 502 711 933 1,892 867 Ba Ria–Vung Tau 240 381 551 769 1,939 776 Subcorridor 2 Gia Lai 146 231 369 585 1,157 498 Binh Dinh 197 320 440 599 1,210 553 Subcorridor 3 Kien Giang 210 359 485 675 1,649 675 Ca Mau 209 361 506 734 1,517 666 a 2006 figures in current prices in dong (D). Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008). 132 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A51: Difference between the Highest Income Quintile and the Lowest Income Quintile, 2006 (Average Monthly Per Capita Income, D thousand)

Lowest Highest Highest income quintile income income compared with the Area quintile quintile lowest quintile Whole country 184 1,542 8.4 Subcorridor 1 Tay Ninh 267 1,606 6.0 Ho Chi Minh City 554 3,453 8.1 Dong Nai 297 1,892 6.4 Ba Ria–Vung Tau 240 1,939 8.1 Subcorridor 2 Gia Lai 146 1,157 7.9 Binh Dinh 197 1,210 6.1 Subcorridor 3 Kien Giang 210 1,649 7.8 Ca Mau 209 1,517 7.3 D = dong. Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008).

Table A52: Export Turnover ($ million)

Area 2005 2006 2007 Subcorridor 1 24,453.4 29,004.4 33,515.8 Tay Ninh 260.9 404.0 493.3 Ho Chi Minh City 13,307.6 15,526.7 18,303.0 Dong Nai 3,186.0 4,275.0 5,474.0 Ba Ria–Vung Tau 7,698.9 8,798.7 9,245.5 Subcorridor 2 254.3 292.1 454.4 Gia Lai 39.4 48.3 127.1 Binh Dinh 214.9 243.8 327.3 Subcorridor 3 736.5 813.2 866.8 Kien Giang 215.6 230.3 266.0 Ca Mau 520.9 582.9 600.8 Total 25,444.2 30,109.7 34,837.0 Subcorridor 1/Total (%) 96.1 96.3 96.2 Subcorridor 2/Total (%) 1.0 1.0 1.3 Subcorridor 3/Total (%) 2.9 2.7 2.5 Source: Statistical Yearbook 2007 of relevant provinces. Appendix A: Basic Information on the Southern Economic Corridor National Components 133

Table A53: Import Turnover ($ million)

Area 2005 2006 2007 Subcorridor 1 15,818.6 17,684.6 22,616.4 Tay Ninh 182.9 269.3 298.3 Ho Chi Minh City 10,945.3 11,637.1 14,924.0 Dong Nai 4,183.0 4,999.0 6,329.0 Ba Ria–Vung Tau 605.4 779.2 1,065.1 Subcorridor 2 128.2 121.4 158.8 Gia Lai 16.1 13.1 17.2 Binh Dinh 112.1 108.3 141.6 Subcorridor 3 33.2 31.5 18.5 Kien Giang 29.2 24.2 18.5 Ca Mau 4.0 7.3 – Total 15,979.7 17,837.5 22,793.7 Subcorridor 1/Total (%) 99.0 99.0 99.0 Subcorridor 2/Total (%) 0.8 0.7 0.7 Subcorridor 3/Total (%) 0.1 0.3 0.3 Source: Statistical Yearbook 2007 of relevant provinces.

Table A54: Exports and Imports through the Moc Bai Border Gate ($ thousand)

First 6 months 2005 2006 2007 of 2008 Total trade 52,385 94,305 112,753 92,984 Formal 48,303 94,302 112,750 91,238 Informal 4,082 3 3 1,748 Total export 31,778 36,770 46,693 34,538 Formal 27,697 36,767 46,691 32,106 Informal 4,081 3 2 1,746 Total import 20,606 57,535 66,059 59,392 Formal 20,606 57,535 66,060 59,131 Informal – – – 260

Source: Moc Bai Border Gate Economic Zone management board. 134 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A55: Export and Import through Le Thanh Border Gate (Gia Lai Province) ($ thousand)

2008 2006 2007 (first 11 months ) Total trade 15,612 17,176 24,400 Formal 10,928 12,367 17,568 Informal 4,684 4,809 6,832 Total export 12,712 13,176 16,200 Formal 8,100 9,355 12,150 Informal 4,612 3,821 4,500 Total import 2,900 4,000 8,200 Formal 2,828 3,012 6,642 Informal 72 988 1,558 Le Thanh export/Gia Lai Province export (%) 26.3 10.4 –

Source: Customs office of the Le Thanh Zone.

Table A56: Export and Import through the Ha Tien Border Gate

% of Total Total Export Import Kien Giang Year ($ thousand) ($ thousand) ($ thousand) Province 2000 11,410 10,510 900 15.0 2001 9,919 7,262 2,656 8.4 2002 7,652 6,469 1,183 6.2 2003 7,797 6,988 809 5.1 2004 9,774 8,541 1,233 5.3 2005 11,237 7,769 3,468 4.5 2006 18,599 15,254 3,345 6.9 2007 26,110 22,290 3,820 9.4

Source: Ha Tien Border Gate Economic Zone management board. Appendix A: Basic Information on the Southern Economic Corridor National Components 135

Table A57: Foreign Direct Investment Projects Licensed in 1988–2007

Total Foreign- Viet Nam- Number registered Total charter side charter side charter Implementation of capital capital capital capital capital Year projects ($ million) ($ million) ($ million) ($ million) ($ million) 1988 37 341.7 258.7 219.0 39.7 – 1989 67 525.5 300.9 245.0 55.9 – 1990 107 735.0 720.1 623.3 96.8 – 1991 152 1,291.5 1,072.4 883.4 189.0 328.8 1992 196 2,208.5 1,599.3 1,343.7 255.6 574.9 1993 274 3,037.4 1,842.5 1,491.1 351.4 1,017.5 1994 372 4,188.4 2,539.7 2,030.3 509.4 2,040.6 1995 415 6,937.2 3,705.1 2,857.0 848.1 2,556.0 1996 372 10,164.1 3,511.4 2,906.3 605.1 2,714.0 1997 349 5,590.7 2,649.1 2,046.0 603.1 3,115.0 1998 285 5,099.9 2,474.2 1,939.9 534.3 2,367.4 1999 327 2,565.4 975.1 870.5 104.6 2,334.9 2000 391 2,838.9 1,312.0 951.8 360.2 2,413.5 2001 555 3,142.8 1,708.6 1,643.0 65.6 2,450.5 2002 808 2,998.8 1,272.0 1,191.4 80.6 2,591.0 2003 791 3,191.2 1,138.9 1,055.6 83.3 2,650.0 2004 811 4,547.6 1,217.2 1,112.6 104.6 2,852.5 2005 970 6,839.8 1,973.4 1,875.5 97.9 3,308.8 2006 987 12,004.0 4,674.8 4,328.3 346.5 4,100.1 2007 1,544 21,347.8 8,183.6 6,800.0 1,383.6 8,030.0 Total 9,810 99,596.2 43,129.0 36,413.7 6,715.1 45,445.5

Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008). 136 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A58: Foreign Direct Investment Projects Licensed in 1988–2007 by Economic Activity

Foreign– Viet Total Total side Nam–side Number registered charter charter charter of capital capital capital capital Sector projects ($ million) ($ million) ($ million) ($ million) Total 9,810 99,596.2 43,129.0 36,413.7 6,715.3 Agriculture and forestry 518 3,397.5 1,512.2 1,322.4 189.8 Fishing 156 515.1 249.3 188.4 60.9 Mining and quarrying 119 3,742.8 2,892.3 2,525.9 366.4 Manufacturing 6,323 52,345.4 21,328.6 18,598.4 2,730.2 Electricity, gas, and water supply 30 1,937.7 612.3 594.6 17.7 Construction 254 6,808.0 2,171.3 1,600.9 570.4 Wholesale and retail trade 108 641.9 292.2 192.9 99.3 Hotels and restaurants 291 7,620.6 3,144.9 2,474.0 670.9 Transport; storage, and communications 272 5,072.3 3,788.4 2,918.7 869.7 Financial intermediation 65 862.7 791.1 730.6 60.5 Real estate renting business activities 1,341 14,191.8 5,252.3 4,391.9 860.4 Education and training 101 146.8 72.7 60.3 12.4 Health and social work 54 591.4 224.8 188.5 36.3 Recreational, cultural, and sports activities 112 1,683.5 769.4 603.1 166.3 Community and personal service activities 66 38.7 27.2 23.1 4.1

Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2008). Appendix A: Basic Information on the Southern Economic Corridor National Components 137

Table A59: Foreign Direct Investment Projects Licensed in 1988–2007 by Province and Subcorridor

Foreign- Viet Nam- Total Total side side Number registered charter charter charter of capital capital capital capital Area projects ($ million) ($ million) ($ million) ($ million) Whole country 9,810 99,596.2 43,129.0 36,413.7 6,715.3 Tay Ninh 157 665.6 401.1 392.8 8.3 Ho Chi Minh City 2,816 20,174.2 8,601.4 679.0 1,811.4 Dong Nai 986 12,824.2 4,968.8 4,741.3 228.5 Ba Ria–Vung Tau 222 7,520.1 3,059.7 2,604.9 454.8 Subcorridor 1 4,181 41,184.1 17,031.0 14,526.0 2,503.0 % of Whole country 42.6 41.4 39.5 39.9 37.3 Gia Lai 7 24.0 22.9 13.0 9.9 Binh Dinh 38 253.1 136.5 125.6 10.9 Subcorridor 2 45 277.1 159.4 138.6 20.8 % of Whole country 4.6 2.8 3.7 3.8 3.0 Kien Giang 21 501.0 225.1 150.3 74.8 Ca Mau 10 20.9 18.7 13.8 4.9 Subcorridor 3 31 521.9 243.8 164.1 79.7 % of Whole country 0.3 0.5 0.6 0.5 1.2 Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical publishing house, 2008).

Table A60: Visitors Serviced by Accommodation

Area 2005 2006 2007 Subcorridor 1 4,856,100 6,333,600 6,704,900 Tay Ninh 369,800 355,800 364,900 Ho Chi Minh City 2,840,000 3,301,000 3,350,000 Dong Nai 552,600 860,200 1,100,700 Ba Ria–Vung Tau 1,093,700 1,816,600 1,889,300 Subcorridor 2 553,000 702,800 828,100 Gia Lai 309,700 355,200 441,600 Binh Dinh 243,300 347,600 386,500 Subcorridor 3 2,335,700 2,426,300 3,048,900 Kien Giang 1,820,100 1,897,000 2,516,900 Ca Mau 515,600 529,300 532,000 Total 7,744,800 9,462,700 10,581,900 Subcorridor 1/Total (%) 62.7 66.9 63.4 Subcorridor 2/Total (%) 7.1 7.4 7.8 Subcorridor 3/Total (%) 30.2 25.7 28.8

Source: Statistical Yearbook 2007 of relevant provinces. 138 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Table A61: Number of Visitor Arrivals in Southern Economic Corridor Areas

Province 2005 2006 2007 Tay Ninh Province 369,865 355,780 364,887 From Viet Nam 366,117 352,593 361,641 From other countries 3,748 3,187 3,246 Ho Chi Minh City 2,840,000 3,301,000 3,350,000 From Viet Nam 1,468,000 1,684,000 1,709,000 From other countries 1,372,000 1,617,000 1,641,000 Dong Nai Province 296,427 346,811 546,295 From Viet Nam 280,877 329,706 529,217 From other countries 15,550 17,105 17,078 Ba Ria–Vung Tau Province 1,093,700 1,816,600 1,889,300 From Viet Nam 1,017,100 1,724,700 1,794,600 From other countries 76,600 91,900 94,700 Gia Lai Province 291,700 335,400 420,900 From Viet Nam 287,600 331,200 416,400 From other countries 4,100 4,200 4,500 Binh Dinh Province 347,600 386,500 432,800 From Viet Nam 323,600 352,000 394,200 From other countries 24,000 34,500 38,600 Kien Giang Province 420,000 505,900 601,100 From Viet Nam 381,200 441,300 527,800 From other countries 38,800 64,600 73,300 Ca Mau Province 451,400 529,300 532,000 From Viet Nam 446,200 519,700 521,000 From other countries 5,100 9,600 11,000 Source: Statistical Yearbook 2007 of relevant provinces. Appendix A: Basic Information on the Southern Economic Corridor National Components 139

Table A62: Number of Telephone Subscribers (as of 31 December)

Area 2000 2003 2004 2005 2006 2007 Subcorridor 1 901,100 1,661,800 1,891,700 2,362,500 2,655,000 3,205,600 Tay Ninh 33,300 71,500 88,900 226,900 124,700 158,700 Ho Chi Minh City 699,800 1,228,000 1,333,100 1,606,000 1,992,800 2,385,600 Dong Nai 108,200 243,400 283,000 379,300 337,200 418,100 Ba Ria–Vung Tau 59,800 118,900 186,700 150,300 200,300 243,200 Subcorridor 2 59,000 117,300 141,900 178,900 241,700 329,500 Gia Lai 22,600 47,400 60,600 77,700 101,100 163,900 Binh Dinh 36,400 69,900 81,300 101,200 140,600 165,600 Subcorridor 3 73,400 173,900 226,900 314,700 285,200 527,500 Kien Giang 43,900 93,700 113,100 177,000 175,600 385,300 Ca Mau 29,500 80,200 113,800 137,700 109,600 142,200 Total 1,033,500 1,953,000 2,260,500 2,856,100 3,181,900 4,062,600 Subscribers per 100 people Total 7.2 13.0 14.8 18.3 19.9 24.9 Subcorridor 1 9.9 17.3 19.2 23.5 25.7 30.2 Subcorridor 2 2.4 4.5 5.4 6.7 8.9 12.0 Subcorridor 3 2.7 6.2 8.0 10.9 9.8 17.9 Source: Statistical Yearbook of Viet Nam 2007 (Ha Noi: Statistical Publishing House, 2006). Appendix B Key Goals of National Development Plans and the Role of Southern Economic Corridor Development

Lao People’s Democratic Cambodia Republic Thailand Viet Nam National Strategic Sixth National Tenth National Socioeconomic Development Plan Socioeconomic Economic and Development Plan 2006–2010 Development Plan Social Development 2006–2010 Plan Good governance Enhancement Human Acceleration Integration of of export and social of country’s country into the competitiveness development regional and region and the world Trade facilitation Increased international Enhancement of Improvement competitiveness integration agriculture of business Infrastructure Poverty Infrastructure environment development reduction development Capacity building Environmental Balanced Job creation and Increased trade sustainability regional growth private sector opportunities for Good Environmental development the poor governance sustainability Capacity building and human resource development Contribution of Southern Economic Corridor Development Strengthening physical infrastructure and connectivity to enhance competitiveness, facilitate regional and international integration, spread economic benefits, and reduce poverty Promoting and facilitating trade and investment in agriculture, agro-industry, manufacturing, tourism, and logistics to help in job creation, poverty reduction, and private sector development Addressing social and environmental concerns, including capacity building and human resource development, environmental sustainability, and mitigation of potential negative social and environmental effects Enhancing private sector participation to increase investment and employment opportunities and to promote improvement of business environment Appendix C Tasks of Key Greater Mekong Subregion Institutions in Southern Economic Corridor Development

Greater Mekong Subregion Institutions

he proposed institutional arrangements and mechanisms for implementing the strategy and action plan (SAP) for Southern Economic Corridor (SEC) development Tproposes to utilize to the fullest extent possible the existing Greater Mekong Subregion (GMS) institutional framework, which includes the leaders summit, the ministerial conference, the senior officials’ meeting, and GMS forums and working groups. In June 2009, GMS countries established the Economic Corridors Forum (ECF) to help accelerate the transformation of transport into economic corridors. Besides focal GMS bodies, several GMS mechanisms also have been established to support the implementation of priority GMS programs and projects. The key tasks of these institutions in promoting SEC development are summarized below.

All GMS organizational bodies are responsible to GMS leaders. GMS summits are held once every 3 years. The ministerial conferences are held yearly, except during years when there is a GMS summit. The senior officials’ meetings are held twice yearly. The sectoral forums and working groups, which meet at least once a year, include the Subregional Investment Working Group, the Subregional Telecommunications Forum, the Subregional Trade Facilitation Working Group, the Subregional Transport Forum, the Tourism Working Group, the Working Group on Agriculture, the Working Group on Environment, and the Working Group on Human Resource Development.

Leaders Summit

Sets vision and major directions for the GMS Program and its components, including SEC development.

Ministerial Conference

<<|" of the SAP for SEC development. <|>^ high-level resolution and other related matters brought to its attention. 142 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Senior Officials’ Meeting

implementation of the SAP for SEC development. < <|> authority to decide. <|> or implementation issues requiring action from higher authorities. ?\&?N\' private sector participation in SEC development.

Greater Mekong Subregion Forums and Working Groups

\ specific focus on the SEC in their respective sectors and areas of concern. & plan for SEC development) in their respective sectors and areas of concern. | respective sectors and areas of concern. \ SEC initiatives in their respective sectors and areas of concern. ?N\ in SEC development.

Greater Mekong Subregion Secretariat

*S other concerned GMS institutions on matters involving SEC development. | ? performing functions related to SEC development. <| submission to the senior officials’ meeting, the ministers’ meeting, and the ECF (proposed below). *~ matters involving SEC development.

National Coordinators

\>" ?<| issues in coordination with GMS secretariat in their respective areas. Appendix C: Tasks of Key Greater Mekong Subregion Institutions in Southern Economic Corridor Development 143

\> and institutions involved in SEC development. >~ matters involving SEC development, including national and local chambers of commerce and industry.

Greater Mekong Subregion Business Forum

\} in SEC countries and represents them in GMS deliberations involving SEC matters. |`N Corridor (NSEC) development areas. < private sector investment in SEC areas. dissemination of same. organizations and entities.

Economic Corridors Forum (see Section II)

in GMS. ? among GMS forums and working groups.

Governors Forum (see Section III)

! \ secure commitment of the governors or their equivalent in the provinces along the SEC and other GMS economic corridors. | > economic corridors.

Supporting Mechanisms

The development partners meeting brings together about 60 participating development partners covering bilateral and multilateral organizations and the private sector to provide a venue for dialogue with GMS countries and the Asian Development Bank (ADB) on the GMS program. The objective is to identify complementarities and potential areas of convergence and greater collaboration among the development partners in the subregion, including areas and initiatives under the GMS program, in which the private sector can actively participate. 144 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

This committee is charged with liaising with officials at border checkpoints to (i) implement the cross-border transport agreement (CBTA), (ii) monitor and evaluate CBTA implementation, (iii) involve the private sector in integrating provisions of the CBTA into logistics operations, and (iv) incorporate the CBTA into the national legal and regulatory framework of each country. !! This office, located in Bangkok, Thailand, was established to coordinate sustainable, community-based tourism development projects in GMS, in line with the United Nations Millennium Development Goals, and promote GMS as a single travel and tourism destination. "This center was established in early 2006 to serve as the information and knowledge clearing house for environmental management in GMS and is responsible for the timely and effective implementation of the GMS Core Environment Program. The Environment Operations Center also serves as the secretariat of the GMS Working Group on Environment. Its tasks in this capacity include organizing working group meetings, coordinating working group activities, and reporting to the working group on the progress of various Core Environment Program activities. # & This association was proposed to mainstream the participation of the private sector in the implementation of the CBTA. As an independent, private sector organization, the association is expected to facilitate the implementation of CBTA initiatives by providing practical services such as accrediting and certifying transport and logistics companies, operating express lanes for its members at border checkpoints, matching foreign investments with local enterprises, assisting firms in load balancing, and disseminating information.

Terms of Reference of the Economic Corridors Forum

Introduction

Pursuant to Article 4 of the Memorandum Toward Sustainable and Balanced Development of the Greater Mekong Subregion North–South Economic Corridor and Enhanced Organizational Effectiveness for Developing Economic Corridors signed by the GMS ministers on 31 March 2008 in Vientiane, Lao People’s Democratic Republic, an Economic Corridors Forum (ECF) is hereby established within the GMS organizational framework. The detailed terms of reference of the ECF are set forth below.

Role and Tasks

The ECF shall serve as the main advocate and promoter of economic corridors in GMS. It shall raise the profile and increase awareness of the needs and priorities of GMS economic corridor development, and enhance collaboration among areas Appendix C: Tasks of Key Greater Mekong Subregion Institutions in Southern Economic Corridor Development 145

along GMS economic corridors and among GMS forums and working groups. It shall promote coordination, networking, and facilitation of initiatives to develop economic corridors. More specifically, the ECF shall

the East–West Economic Corridor (EWEC), the North–South Economic Corridor (NSEC), and the SEC, and among GMS forums and working groups; among central and local officials, businesspeople, and international agencies on strategies, approaches, programs, and projects to accelerate economic corridor development; transport corridors into economic corridors; corridor development, identify gaps in implementing such strategies and action plans, and propose actions to resolve implementation issues; encourage and support the Governors Forum, and expand the participation of the private sector in economic corridor development; central level; and } development.

Status

The ECF shall be a standing body dealing with economic corridor development within the GMS organizational framework. It shall recommend measures to the GMS ministerial conference to promote economic corridor development. The GMS ministerial conference shall remain as the highest decision-making and coordinating body under the GMS Economic Cooperation Program, next to the leaders summit. Initiatives and measures discussed during ECF meetings shall be considered by the GMS ministerial meeting, senior officials’ meeting, and forums and working groups, with appropriate actions being taken by the concerned ministry or agency in the GMS countries in accordance with agreements reached among them.

Participation, Organization, and Chair

Participants in ECF meetings shall consist of (i) representatives of central government agencies; (ii) representatives of local governments and communities, particularly from the border provinces; (iii) representatives of the private sector, including those from the GMS–BF; and (iv) representatives of ADB and other international organizations. A task force meeting shall be convened prior to an ECF meeting to prepare the meeting’s theme, agenda, and program in line with the SAPs for the economic corridors. 146 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

A Governors Forum, which shall be a mechanism for coordination among governors of the provinces along GMS economic corridors, shall be constituted within the ECF.

The chair of the ECF shall come from the country hosting the ECF meeting; a cochair and vice-chair shall be designated, with the cochair being a nominee of ADB and the vice-chair coming from the host of the next ECF meeting. Meetings of the ECF shall be held at the ministerial level. The minister participating in ECF meetings may be the GMS minister and/or some other minister, depending on the agenda of the meeting, with the specific arrangements being made through GMS national coordinators.

Frequency of Meetings

The ECF shall meet every year or as and when required by the circumstances.

Venue of Meetings

The first meeting of the ECF shall be held in Kunming, Yunnan Province, People’s Republic of China. Venue of subsequent meetings shall be rotated among GMS countries or as agreed to by GMS countries.

Work Program and Secretariat Support

The ECF shall prepare its own work program and schedule to achieve its objectives.

ADB shall provide the necessary secretariat support to the ECF and work closely with the national coordinators of GMS countries for this purpose. Such support shall include assistance in coordinating and arranging meetings of the ECF.

Financing

Financing of ECF meetings shall be borne by the host country and/or province, to the extent possible. The host country may request that ADB and other international organizations provide necessary technical, administrative, and logistical support to ECF meetings in cases where local expertise and resources are limited.

Reporting

The ECF shall report its proceedings to the ministerial conference through the senior officials’ meeting. As secretariat of the ECF, ADB will post a summary of ECF meetings and activities on its GMS web page.

Review

The ECF terms of reference shall be reviewed periodically. If deemed necessary, amendments may be made in the terms of reference to make the ECF more effective in achieving its objectives. Appendix C: Tasks of Key Greater Mekong Subregion Institutions in Southern Economic Corridor Development 147

Terms of Reference of the Governors Forum

Introduction

A Governors Forum shall be established within the ECF. The detailed terms of reference of the Governors Forum are set forth below.

Purpose and Tasks

The Governors Forum shall complement the ECF in the promotion of economic corridor development in GMS. Its main purpose is to raise awareness, increase participation, and secure the commitment of the governors (or their equivalent) of the provinces along GMS economic corridors to the development of economic corridors in GMS. The Governors Forum shall be a mechanism for facilitating cooperation among said officials in the pursuit of economic corridor development. More specifically, the Governors Forum shall

&^' of the provinces along the EWEC, the NSEC, and the SEC; ~ ~ on strategies, approaches, and measures to promote economic corridor development; discuss possible ways and means of addressing such issues and concerns; of strategies and action plans for economic corridor development; \ level; > initiatives in respective areas; > ? corridors to promote economic corridor development.

Status

The Governors Forum shall be a mechanism for networking and exchange of information and experience on GMS economic corridor development among governors (or their equivalent) of provinces along GMS economic corridors. It shall be constituted as a subgroup within the ECF.

Participants and Chair

The main participants in the Governors Forum shall be the governors (or their equivalent) and other concerned senior executives of provinces along the EWEC, the NSEC, and the SEC. The Governors Forum may invite to its meetings other participants, 148 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

such as those from the private sector, depending on the program and agenda of such meetings.

The chair of the Governors Forum shall come from the host province. A vice-chair, who shall come from the host country of the next meeting of the Governors Forum (if this is known at the time of the meeting), may be designated.

Frequency of Meetings

Being a subgroup of the ECF, the frequency of meetings of the Governors Forum shall be the same as of the ECF. The Governors Forum could be convened a day before the meeting of the ECF meeting, with the proceedings of the Governors Forum being presented at the ECF meeting.

Venue of Meetings

The venue of the Governors Forum shall be the same as that of the ECF meetings.

Work Program and Secretariat Support

The Governors Forum, in coordination with the ECF, shall prepare its work program to achieve its objectives.

ADB shall initially provide the necessary secretariat support to the Governors Forum, together with GMS national coordinators.

Financing

Being a subgroup of the ECF, financing of meetings of the Governors Forum shall be borne by the host country and/or province, to the extent possible. The host country may request that ADB and other international organizations provide necessary assistance to the Governors Forum.

Reporting

Results of deliberations of the Governors Forum shall be transmitted to the ECF.

Review

The Governors Forum terms of reference shall be reviewed periodically. If deemed necessary, amendments may be made in the terms of reference to make the forum more effective in achieving its objectives. Appendix D Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan

Cost estimate Program/Project ($ million) Status/Remarks 1.1 Transport 1.1.1 Roads Central Subcorridor ||N` 165.0 Funding from Government of Loueng Road and construction of Japan under discussion Mekong bridge at Neak Loueng N{N#~ 679.0 Potential investors being sought Northern Subcorridor N Not available Funding being sought Preah Vihear–Stung Treng Section (Road No. 66) #N Not available Funding from the Cambodia and Rattanakiri Section (Road No. 66) Viet Nam governments &' 120.0 Funding from Government of class 4 to class 3 road from Cambodia Viet Nam –Viet Nam border at Pleiku to Quy Nhon

Southern Coastal Subcorridor 227.4 Funding from the Asian No. 33 in Cambodia to border with Development Bank (ADB), Viet Nam, and 93.6 km of national governments of Australia and highways 80 and 63, including the Republic of Korea, and host construction of two bridges across governments Cai Be and Cai Lon rivers (Phase I) ~` 140.0 In ADB pipeline for 2009–2011; under Phase I to Ca Mau City, Nam cofinancing being sought Can, and Ca Mau Cape (Phase II) |N 130.0 To be funded by ADB and Sa Kaeo section from two-lane to Government of Thailand on four-lane divided highway 50–50 basis, subject to loan approval. Included in ADB pipeline for 2009 continued on next page 150 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks 1.1.2 Rail 73.0 Funding from ADB, OPEC Cambodia (600 km for rehabilitation; (Organization of the Petroleum 48 km for reconstruction) Exporting Countries) Fund for International Development, governments of Cambodia and Malaysia 75.0 Financing sources to be identified Phnom Penh to Viet Nam border at (Viet Nam) Loc Ninh (254 km) and from Loc Ninh Not available to Ho Chi Minh City (129 km) (Cambodia) 1.1.3 Water transport To be Funding from Japan Bank for improvements on the Mekong River determined International Cooperation and for access to the port in Siem Reap; development of intermodal terminal at Khone Falls # Not available Funding from Government of Thailand *| Not available of C and D container terminals

1.1.4 Air transport ~ To be Sihanoukville Airport determined 6.0 Part of ADB-funded Mekong Treng airports in Cambodia Tourism Development Project (loan of $15.6 million to Cambodia covering four components) 1.2 Power #>&' 52.4 Funding from ADB and link between Kampot and Sihanoukville Japan Bank for International Cooperation # Not available Possible funding from the Tay Ninh in Viet Nam to World Bank and Electricité du Kompongcham and Kratie in Cambodge Cambodia, including two 115 kV power stations # Not available Possible financing from the World Ban Hat in the Lao People’s Bank, Electricité du Cambodge, Democratic Republic (PDR) to Stung and Electricité du Lao Treng in Cambodia \ 450.0 Financing being sought Nhon Trach 4 Combined Cycle Power Project (720 megawatts [MW])

continued on next page Appendix D: Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan 151

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks |{| 400.0 Financing being sought (200 MW), including 220 kV transmission line to Stung Treng and Viet Nam border where it interconnects with Viet Nam grid

1.3 Telecommunications ? 10.0 Funding from Government (GMS) Information Superhighway of Thailand; estimate for the Network Phase 2, Thailand– Cambodia–Thailand component Cambodia component: expansion of fiber-optic network at Aranyaprathet–Poipet border checkpoint from 12- to 24-core

1.4 Border facilities Central Subcorridor ~ 35.0 To be funded partly from proposed border facilities at the Corridor Town Development Aranyaprathet–Poipet crossing projects I and II, in ADB pipeline between Cambodia and Thailand for 2011 and 2012, respectively. and in the Bavet–Moc Bai crossing Cost indicated is net of assumed between Cambodia and Thailand cost of water and sanitation Intercorridor link > Not available Ongoing facilities at Na Nuk Kien (Lao PDR)– Tra Piy Kan (Cambodia), linking National Road No. 7 in Cambodia to National Road No. 13 in the Lao PDR 2.1 Trade and transport facilitation 5.0 For all economic corridors of the cross-border transport agreement, especially facilitation of exchange of traffic rights and modernization of border management (includes information dissemination; simplification, harmonization, and rationalization of forms and procedures; border- crossing facility improvements) # 2.5 For all economic corridors implementing cross-border transport agreement and trade facilitation initiatives > 3.0 For all economic corridors window inspection, risk management, use of information technology, and handling of transit trade

continued on next page 152 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks N 0.8 Project preparation for all phytosanitary requirements in GMS economic corridors; ADB pipeline cross-border trade (Cambodia, the includes the Improved Sanitary– Lao PDR, and Viet Nam) Phytosanitary Handling in GMS Cross-Border Trade project, in 2011 (loan/grant of $15 million each for Cambodia and the Lao PDR, and $30 million for Viet Nam) To be markets or distribution centers in determined major border areas to facilitate and support trading activities

< To be arrangements for financial determined settlement covering cross border trade in the North–South Economic Corridor 0.05 Source to be determined regular monitoring and reporting of cross-border trade in the Southern Economic Corridor (SEC) 2.2 Investment promotion 2.2.1 SEC-wide investment promotion and facilitation 0.10 Source to be determined within SEC countries and road shows in major foreign business centers !} 0.10 Source to be determined trade fairs 0.10 Source to be determined procedures in SEC areas 2.2.2 Business information 0.05 Source to be determined policies and regulations, including procedures for investment approval in SEC areas | 0.05 Source to be determined business opportunities in SEC areas | 0.05 Source to be determined directory, providing names and addresses of manufacturers, traders, tourist operators, and service providers in SEC areas together with the products and services they offer

continued on next page Appendix D: Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan 153

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks 0.025 Source to be determined providing basic information on the SEC with hyperlinks to GMS and GMS Business Forum websites 2.2.3 Promotion of investment in priority sectors/subsectors Agriculture | 50.0 Included in ADB’s pipeline Energy for Cambodia, the Lao PDR, for 2010; project preparatory and Viet Nam technical assistance (PPTA) approved in 2008 |> 0.1 Source to be determined border contract farming |^ Not available Ayeyawaddy–Chao Phraya– of cash crops (castor bean, maize, Mekong Economic Cooperation potato, sesame, soybean) in selected Strategy project SEC provinces (Battambang, Kampot, Koh Kong, Pursat) Logistics # 0.8 Project preparation for all development project economic corridors; project included in ADB’s indicative pipeline for 2011 ($63 million) ? 0.05 Source to be determined information platform 0.05 Source to be determined the logistics industry in the SEC 0.05 Source to be determined investment in the logistics industry in SEC countries ?\ 0.1 Source to be determined Transport Association Tourism 5.0 Mekong Tourism Coordination marketing program focusing on SEC Office and other sources tourist destinations | 47.1 Funded under ongoing ADB loan improve existing and develop new tourist destinations and facilities in SEC areas, including hotels, rest areas, and tourism information centers continued on next page 154 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks 10.0 Proposed under ADB loan/grant of access roads to major tourist pipeline in 2009 destinations in SEC areas 5.0 Ayeyawaddy–Chao Phraya– on single GMS visa scheme between Mekong Economic Cooperation Cambodia and Thailand Strategy project ?# 14.9 Funded under ongoing ADB Project covering Cambodia, the project Lao PDR, and Viet Nam # 23.0 Funded under ongoing ADB Project (Cambodia, the Lao PDR, and project Viet Nam) P 10.6 Funding requested from Triangle” Tourism Zone (Cambodia, United Nations Development the Lao PDR, and Thailand) Programme/World Trade Organization 80.0 Koh Kong, $62.8 million; infrastructure along the Southern Sihanoukville, $17.2 million; Coastal Subcorridor and Sihanoukville financing being sought #P Not available Partially supported by ongoing Triangle” (Cambodia–Lao PDR– ADB-funded Mekong Tourism Viet Nam Development Triangle) Development Project Special economic zones and industrial clusters 91.2 For Poipet ($91.2m); financing zones in border areas, and joint being sought development of border economic zones 0.1 Source to be determined management, and marketing of existing and planned industrial estates and special economic zones in the SEC | 0.1 Source to be determined along the SEC (e.g., agro-industry or resource-based production zones in selected areas in the SEC involving linkages in production, processing, and marketing) 0.1 Source to be determined cross-border supply chains involving agriculture and small and medium- sized enterprises in SEC areas

continued on next page Appendix D: Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan 155

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks 3.1 Environmental Concerns 0.5 Source to be determined of the SEC 0.5 Ongoing under Environment environmental assessment, Operations Center Biodiversity Conservation Initiative, and Environmental Performance Assessment, including cumulative impact assessment and spatial planning in the SEC ? 17.0 Included in ADB’s pipeline for Corridor Initiative, Phase II nonlending services for 2011 (Cambodia, the Lao PDR, Thailand, and Viet Nam) ? 130.0 Included in ADB pipeline for 2010 Corridors for Poverty Reduction and Watershed Protection (Cambodia, the Lao PDR, and Viet Nam) 9.9 Ongoing under Environment change–related risks (the Lao PDR Operations Center and Viet Nam) ? 130.0 Included in ADB’s pipeline management and mitigation for 2010 (Cambodia, the Lao PDR, and Viet Nam) 3.2 Social Concerns 39.7 Ongoing under ADB-funded Project (Phase I) (Cambodia, the project Lao PDR, and Viet Nam) 41.5 Included in ADB pipeline for 2010 Project (Phase II) (Cambodia, the Lao PDR, and Viet Nam) {<| 1.15 Ongoing with support from ADB Infrastructure Sector (Cambodia, and Government of Sweden the Lao PDR, and Viet Nam) ?{< 6.0 Ongoing with funding from infrastructure projects in GMS Government of Australia economic corridors (Cambodia, the Lao PDR, and Viet Nam) 0.40 Assumed share of GMS in total safe migration concerns for women project cost and children into regional cooperation

continued on next page 156 Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks 0.01 Funded under an ongoing ADB locations along GMS economic regional technical assistance corridors (RETA 7275); assumed share of SEC countries 0.2 Funded under an ongoing ADB for the mutual recognition of technical RETA (7275); assumed share of and vocational skills in GMS SEC countries

? 0.2 Funded under an ongoing ADB RETA (7275); assumed share of SEC countries 0.02 Funded under an ongoing ADB contract for technically skilled RETA (7275); assumed share of migrant workers in GMS SEC countries # To be competencies; basic tourism skills; determined agro-industry management, including marketing; and small and medium-sized enterprise management and financing To be vocational training institutes in SEC determined areas, including conduct of exchange programs 25.0 Subsumed under the (Cambodia, the Lao PDR, and proposed GMS Corridor Towns Viet Nam) Development projects I and II in ADB loan pipeline for 2011 and 2012, respectively

4.1 Private Sector Participation and Public–Private Sector Collaboration | 0.1 Source to be determined provincial chambers of commerce and industry in the SEC, initially among those in the border provinces 0.1 Source to be determined interaction, exchange of information, and coordination between the public and private sectors on SEC issues and concerns | 0.3 Study and piloting. Source to be support for small and medium-sized determined enterprises in SEC areas continued on next page Appendix D: Cost Estimates of Programs and Projects in the Southern Economic Corridor Action Plan 157

Appendix D: continued Cost estimate Program/Project ($ million) Status/Remarks ? 0.3 Study only; source of small and medium-sized enterprise medium-sized enterprise fund to development fund be determined |N 0.1 Source to be determined partnerships in the development of transport and other infrastructure in the SEC areas

| 0.1 Source to be determined private sector on possible sources of financing for commercial and infrastructure projects Bibliography

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Web Resources

www.adb.org www.adb.org/gms www.aseansec.org www.exploremekong.org www.gms-ain.org www.gmsbizforum.com www.gms-eoc.org www.gmslogistics.org www.mekongtourism.org www.visit-mekong.com Sharing Growth and Prosperity: Strategy and Action Plan for the Greater Mekong Subregion Southern Economic Corridor

The Southern Economic Corridor (SEC), one of the priority economic corridors under the Greater Mekong Subregion (GMS) Economic Cooperation Program, was designated as a GMS flagship initiative in 2002. Efforts have been taken since then to develop SEC but these were pursued mainly on a project-by-project basis. A series of consultations in SEC countries were conducted from the third quarter of 2008 to initiate a holistic approach to the development of SEC. The strategy and action plan for SEC is the product of these and subsequent consultations with government officials, representatives of the private sector, and other stakeholders in these countries. Besides providing a vision and framework for developing SEC, this strategy and action plan is aimed at improving coordination, ensuring effective implementation, and helping the mobilization of resources and the broadening of support for SEC development. The second GMS Economic Corridors Forum which was held in Phnom Penh, Cambodia on 17 September 2009 discussed and generally agreed with the directions set forth in this strategy and action plan for SEC development.

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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