RIS Research and Information System for Developing Countries

No. 1 March 2007 Indian IT Industry: Lessons for Mekong Countries ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ he strong demand over the past few job opportunities through indirect and ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ certified at SEI CMM Level 5 - higher than years has placed India among the induced employment in telecom, power, any other country in the world. Therefore, Tfastest growing IT markets in the construction, facility management, IT Indian firms are gradually gaining world. The Indian IT industry has been transportation, catering and other ground. demonstrating its superiority, sustained services. Government has taken several Why India has been so successful cost advantage and fundamentally- steps to further enhance this industry. in IT sector? According to many powered value proposition in the In order to ensure that the benefits commentators, it is the Abundant Talent international market. Over time, India has of IT reach the common man, Indian which has helped India to sustain the become the global IT hub. Today, Indian government has initiated a move to make rapid growth in IT sector over time. With IT industry represents US$ 37.4 billion available tools and fonts in various Indian over half of the population of India aged market and is expected to become US$ languages freely to the general public. less than 25 years, India’s young 47.8 billion by end of 2007-08, an Several regional languages software demographic profile is a unique and an increase of nearly 28 per cent in the tools and fonts have already been inherent advantage. This, complemented current fiscal (see Table 1). The IT released. All Indian languages are by a vast network of academic industry (software and ITES) exports from expected to be covered in 2007-08. infrastructure and the legacy effects of India grew from US$ 12.9 billion in 2004- To facilitate penetrations of the IT British colonisation, has contributed to an 05 to US$ 23.6 billion in 2006-07, and is and ITES in the rural areas, the Indian unmatched mix and scale of educated, expected to reach US$ 31.3 billion in government has formulated a proposal English-speaking talent. 2007-08 (see Table 1). It presently to establish 100,000 Common Service Cost Advantage is another contributes 5.4 per cent of GDP, up from Centres (CSCs) in rural areas, which will important factor which has positively 4.8 per cent last year. With this serve not only as the front-end for most contributed to the rise of India’s IT spectacular performance, Indian IT government services but also as a means industry. India has a strong track record sector is shifting its base from low-end to connect the citizens of rural India to of delivering a significant cost advantage, business processes to high-value ones. the World Wide Web. According to the with clients’ regularly reporting savings Service and software exports remain Goverment of India, the scheme will be of 25-50 per cent over the original cost the mainstay of the sector contributing implemented through Public-Private base. There is still scope for further US$ 31.3 billion and beating forecast to Partnership (PPP). An outlay of Rs. 57.42 lowering of infrastructure and overhead register a 32.6 per cent growth. billion has already been approved. costs in coming days in India due to its According to NASSCOM, increasing Indian companies are enhancing double digit growth and higher spending traction in offshore product development their global services delivery capabilities in infrastructure sector. For example, due and engineering services is supplementing through a combination of greenfield to technology diffusion, we witness rapid India’s efforts in IP creation. This segment initiatives, cross-border mergers and decline in telecom costs in India. is growing at 22-23 per cent and is acquisitions, partnerships and alliances Emphasis on Quality and expected to report US$ 4.9 billion in exports with local players. This is enabling them Information Security is also another in 2006-07. FDI has reached an to execute end-to-end delivery of new important factor for the rise in India’s unprecedented scale; over US$ 10 billion, services. Global software giants such as software exports. Demonstrated process announced in 2006-07, to be invested over Microsoft, Oracle and SAP, have quality and expertise in service delivery the next few years. The total IT software established their captive development has been a key factor driving India’s and services employment is likely to reach centres in India. A majority of the sustained leadership in global service about 1.6 million in 2007-08. The industry companies in India have already aligned delivery. Today, India-based centres in collaboration with the government and their internal processes and practices to ○○○○○○○○○ (both Indian firms as well as MNC-owned other stakeholders has initiated several international standards such as ISO, captives) constitute the largest number initiatives to further enhance the CMM, and Six Sigma. This has helped of quality certifications achieved by any availability and access to suitable talent establish India as a credible sourcing single country. According to NASSCOM, for IT-ITES in India. destination. As of December 2006, over National Skills Registry and the Cyber- Indian IT-ITES sector is estimated to 400 Indian companies have acquired labs initiatives launched over the past 18- have helped create an additional 3 million quality certifications with 82 companies 24 months are now running successfully

Mekong-Ganga Policy Brief, March 2007 1 ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Table 1: Indian IT Sector Performance In order to strengthen IT sector, the first and foremost requirement for (US$ billion) Mekong countries is to ensure domestic FY 2004 FY 2005 FY 2006 FY 2007E supply of adequate talent pools. Training is the regular and significant IT Services 10.4 13.5 17.8 23.7 component in the induction process of Exports 7.3 10.0 13.3 18.1 Domestic 3.1 3.5 4.5 5.6 all IT firms. Mekong countries firms ITES-BPO 3.4 5.2 7.2 9.5 should establish dedicated facilities Exports 3.1 4.6 6.3 8.3 and teams for employee skill Domestic 0.3 0.6 0.9 1.2 enhancement initiatives. Mekong Engineering Services and R&D, 2.9 3.9 5.3 6.5 countries should also work with the Software Products academia across the subregion and Exports 2.5 3.1 4.0 4.9 Domestic 0.4 0.8 1.3 1.6 abroad, through IT Workforce Total Software and Services 16.7 22.6 30.3 39.7 Development Initiative to encourage Revenues, of which, and facilitate greater industry interaction Exports 12.9 17.7 23.6 31.3 in Mekong subregion. The long term Hardware 5.0 5.9 7.0 8.2 steps that are needed include much Total IT Industry (including Hardware) 21.6 28.4 37.4 47.8 higher government investments in E – Estimated education, major education reform and Source: NASSCOM, New Delhi. better compensation and research grants for teachers/researchers in IT sector.

and the industry proposes to consolidate ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ earned wide appreciation, which is best Indian government may think to set these efforts by establishing a self- exemplified in the fact that several other up (similar in the line of Entrepreneurship regulatory organization that will identify nations are trying to emulate the policy Development Institute of India) a chain a basic set of security and privacy environment that has helped develop the of finishing schools for IT professionals standards, that member companies will IT-BPO sector in India. The Software to make them more employable with a be expected to adhere to. Technology Parks of India (STPI) scheme short terms of honing of technical skills Spread of quality telecommunication has played a pivotal role in catalyzing the and imparting soft skill training, helping facilities is another factor for software growth of this sector and supporting its bridge the manpower supply-demand sector development.Telecom penetration rapid proliferation across the country. The gap in Mekong subregion. in the country has increased from a tax holiday has helped attract much Setting up Special Economic Zone modest 3.6 per cent in 2001 to over 12.6 needed investments (MNC and Indian) in (SEZ) for IT sector in Mekong subregion per cent in 2006, and is targeted to reach the sector and the virtual model has would be very useful in attracting FDI and to 29.6 per cent by 2009. While the wire- allowed firms to avail benefits without also strengthening domestic supply ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ line segment continues to witness steady constraints on their choice of location – capacity. growth, rapid adoption of wireless encouraging entrepreneurship and For Mekong to fully capitalize on the telephony has made India the fastest integrated growth. Other aspects of opportunity in the IT space, countries growing market in the segment. At the continuing policy reform that will aid the in this subregion need to continue end of 2006, there were over 98 million sectors growth include the rationalization working towards timely and coherent wireless subscribers in India, up from of international taxation policies, mutual execution of initiatives to address barely 4 million in 2001. Yet, this is only a trade agreements with partner nations, supply-side concerns by (i) ensuring start. The low penetration levels and a and a proactive and positive stance on talent supply, (ii) creating world-class growing consumer base are driving international free trade. infrastructure, (iii) strengthening strong growth forecasts across all information security, (iv) enhancing segments of telecom demand, and are Going Forward: Opportunities operational excellence, (iv) providing likely to keep this sector in the spotlight regulatory support, and (iv) catalyzing for the foreseeable future. for Cooperation domestic market development. In addition to strong telecom links, Rise of India as a global IT hub offers cities across the country have witnessed many lessons for Mekong countries. steady growth in office facilities, hotels Requirements of Mekong countries in IT References and other supporting business are primarily two folds: Government of India. 2007. Economic infrastructure matching global standards. (a) Increased national capacities to Survey 2006-07. Ministry of Finance, New Delhi. Importantly, this growth is taking place, develop and implement policies and not only in existing urban centres – but programmes, including regulatory Kumar, N. and Joseph, K J. 2004. National ○○○○○○○○○○○○○○ increasingly in towns and smaller cities. and institutional frameworks, that Innovation Systems and India’s IT The enabling business policy and facilitate equitable access to Capability: Are There any Lessons for regulatory environment has played a information and communication ASEAN Newcomers? RIS Discussion Paper # 72. New Delhi: RIS. critical role in the rapid growth of the technology for development, and Indian IT-BPO sector. IT-BPO firms enjoy (b) Enhanced national capacities to apply NASSCOM. 2006. Strategic Review. National minimal regulatory and policy restrictions information and communication Association of Software and Service along with a broad range of fiscal and technology in planning and Companies (NASSCOM), New Delhi. procedural incentives offered by the implementing socio-economic RIS. 2006. Seizing New Opportunities for Central as well as individual State development programmes, including South-South Cooperation. RIS Policy Governments. These measures have for the promotion of gender equality. Brief #27. New Delhi: RIS. ■

2 Mekong-Ganga Policy Brief, March 2007 Lessons from Mekong Mekong Cross-Border Transport Agreement (CBTA) ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ he Mekong CBTA is originally a ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ protocols is expected by 2007/2008. deeper regional cooperation would be trilateral agreement between and South Asian countries may follow the most desired to make the countries agree Tamong the Governments of the Lao Mekong CBTA that has been very to transit of goods moving from one to PDR, Thailand, and Vietnam signed on successful in implementing single- another country within and/or outside the 26 November 1999. Cambodia, China window customs clearance at all border region. The prominent example is and Myanmar acceded to the CBTA in crossings in Mekong. Specifically, Mae Mekong’s East-West Economic Corridor, 2001, 2002 and 2003, respectively. A Sai-Tachilek is one of the seven pilot which has been promoted to connect the Memorandum of Understanding (MoU) points selected under the CBTA, which Andaman Sea (the Myanmar coast) was signed to clarify the relationship came into force in December 2003, to through Thailand and Laos with the South between the CBTA and its annexes and streamline regulations and reduce non- China Sea (at Danang in Vietnam). All this protocols; and commitment to amend physical barriers by introducing single- has happened only due to acceptance article 17 of the CBTA. An additional MoU window customs clearance. By end of of the Mekong CBTA. was also signed to reflect the staged 2006, 13 border points in the Mekong It is, therefore, important that the approach in the application of the CBTA have become operational. A single-stop, countries in South Asia evolve an to non-commercially operated vehicle. single-window customs clearance appropriate policy to facilitate On 30 April 2004 an amendment to the system has been put in place in the uninterrupted overland trade. Mekong CBTA was signed to reflect the revision Dansavanh (Lao PDR)-Lao Bao CBTA has some good lessons for South to Article 17 of the CBTA on mutual (Vietnam) border crossing point since Asia to follow. Towards this direction, recognition of driving licenses and for the June 30, 2005. deeper cooperation between India and inclusion of Annex 16 in the list of Since most of the countries in South Mekong countries will be beneficial in annexes and protocols. The CBTA is now Asia are geographically interlinked and facilitating cross-border transport of formally known as The Agreement for the regional trade is growing very fast, goods. ■ Facilitation of Cross-Border Transport of Goods and People. The Mekong CBTA is a compact and Mekong CBTA comprehensive multilateral instrument Part IV: Cross-Border Transport of Goods that covers all the relevant aspects of cross-border transport facilitation in one Article 7: Exemption from Physical Customs Inspection, Bond Deposit, and Escort document. These include: (a) The Contracting Parties undertake to exempt cargoes in international transit from: z single-stop/single-window customs (i) routine customs physical inspection at the border inspection (ii) customs escorts in the national territory, and z cross-border movement of persons (iii) the deposit of a bond as a guarantee for the customs duties. (i.e., visas for persons engaged in (b) For that purpose, the Contracting Parties undertake to institute a transit and inland transport operations) customs clearance regime, as specified in Annex 6. z transit traffic regimes, including Article 8: Transit Traffic exemptions from physical customs (a) The Contracting Parties grant freedom of transit through their territory for Transit inspection, bond deposit, escort, Traffic to or from the territory of the other Contracting Parties. and agriculture and veterinary (b) Transit Traffic shall be exempt from any customs duties and taxes. inspection ○○○○○○○○○○○○○○○○○○○○○○○○ (c) Charges relating to Transit Traffic other than customs duties and taxes shall be z requirements that road vehicles will gradually levied in two steps: have to meet to be eligible for cross- Step 1: Charges concerning Transit Traffic other than customs duties and taxes shall be border traffic exchange of levied as determined in Protocol 2. commercial traffic rights, and Step 2: Charges levied on Transit Traffic shall only be cost related. z infrastructure, including road and Article 9: Phytosanitary and Veterinary Inspection bridge design standards, road The Contracting Parties shall comply with international agreements related to the signs, and signals. regulations of the World Health Organization, Food and Agriculture Organization, and The CBTA applies to selected and Office International des Epizooties in applying inspection of goods crossing the border. mutually agreed upon routes and points of entry and exit in the signatory Article 10: Special Regimes for the Transport of Particular Categories of Goods countries. The CBTA includes a (a) The Agreement shall not apply to the transport of Dangerous Goods, as defined in preamble and 10 parts, and has 20 Annex 1. annexes and protocols. The CBTA has (b) The transport of Perishable Goods, as defined in Annex 3, shall be granted a priority entered into force with its ratification by regime for border crossing clearance formalities, set out in Annex 3, so that they all six member countries in December may not be unduly delayed. 2003. Full implementation of the Source: Asian Development Bank, Manila. Agreement and its annexes and

Mekong-Ganga Policy Brief, March 2007 3 India-Mekong Cooperation Activities

participated the Ministerial Meeting of MGC Mekong–Ganga Cooperation (MGC) at the sideline of 5th India-ASEAN Summit and MGC was established on 10 November z Working Group on Culture 2nd EAS Meeting, held at Cebu, Philippines. 2000 at Vientiane in the First MGC Ministerial z Working Group on Communication & MGC provides special focus on Meeting. It comprises of six Member Transportation overland connectivity. Under the MGC, there countries, namely, Thailand, Myanmar, z Working Group on Plan of Actions is a proposal to set-up a railway line from Delhi Cambodia, Lao PDR, Vietnam, and India. to Hanoi. Indian consultancy engineering The emphasis is on four areas of Progress company, RITES, has already completed a cooperation, which are tourism, culture, At the Second MGC Ministerial Meeting held preliminary study in 2006. Opening of the education, and transportation linkage in in Hanoi on 28 July 2001, the MGC countries second Friendship Bridge over the Mekong order to put MGC on solid foundation for adopted the “Hanoi Programme of Action” connecting the town of Savannakhet in Laos future trade and investment cooperation in affirming their commitment to cooperate in with Mukdahan in Thailand has made it the region. four areas of cooperation. The “Hanoi possible to travel by road from anywhere in Programme of Action” has 6 years timeframe India right up to Danang in Vietnam through Cooperation Mechanism from 2001 to 2007 and the progress of its East-West Economic Corridor. The working mechanism for MGC consists implementation shall be reviewed every two India offers 10 scholarships every year of the Annual Ministerial Meeting (back to years. At the Third MGC Ministerial Meeting to MGC countries in culture-related subjects. back with ASEAN Ministerial Meeting), the held in Phnom Penh on 20 June 2003, the India Cambodia and India Vietnam Senior Officials’ Meeting, and the five member countries adopted the “Phnom Penh Entrepreneurship Development Centres Working Groups, viz. Road Map” as a plan to accelerate the became operational in 2006. The India-Laos z Working Group on Tourism implementation of all MGC projects and Centre has been operational since

z Working Group on Education (HRD) activities. On 12 January 2007 India November 2004.

○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ ○○○○○○○○○○○○○○○○○○○○○○ India’s Engagement 5th ASEAN-India Summit 2007 The Fifth ASEAN-India Summit was held implementation of ASEAN e-Network Project - in ASEAN: successfully on 14 January 2007 in Cebu, establishing a VSAT-based Tele-Education Philippines. The Meeting was chaired by H.E. and Tele-Medicine Network to connect Focus CLMV Gloria Macapagal Arroyo, President of the Cambodia-Laos-Myanmar-Vietnam (CLMV). The CLMV countries, namely, Cambodia, Republic of the Philippines and was attended ASEAN leaders agreed to further Laos, Myanmar and Vietnam, which among by the Heads of State/Government of Brunei enhance ties in the area of human resource the ten ASEAN countries, are slightly less Darussalam, Cambodia, Indonesia, Lao development by pursuing cross-linkages for developed as compared to the other six. PDR, Malaysia, Myanmar, Singapore, research and development, conducting One of the major activities of the India- Thailand and Vietnam, and, Dr. Manmohan Indian education fairs in ASEAN countries, ASEAN Cooperation is to strengthen the Singh, Prime Minster of India. and encouraging exchange of scholars capacity of CLMV countries in fields like ASEAN leaders welcomed India’s “Look between ASEAN and Indian institutes of entrepreneurship development, English East Policy” as shown by India’s interest in higher learning. Similarly, ASEAN leaders language training, information and entering into Free Trade or Comprehensive acknowledge India’s efforts at establishing communication technology, health, Economic Partnerships with ASEAN Centers for English Language Training education, among others. Some of the countries. ASEAN leaders acknowledged (CELT) as well as an Entrepreneurship ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ projects initiated by India on CLMV that connectivity shall be further enhanced Development Center (EDC) in Lao PDR after countries under the 10th and 11th India- with the establishment of transport networks having successfully completed the ASEAN Working Group, 2007-08, are as between India and CLMV countries. They establishment of similar EDCs in Cambodia, follows: welcomed India’s active participation in the Myanmar, and Vietnam. z Setting up Centres for English Language ASEAN Regional Forum, East Asia Summit, (Excerpted from the Chairman’s Statement at the Training (CELT) and the Mekong-Ganga Cooperation. 5th ASEAN-India Summit, held at Cebu, z e-Network Project - Establishing VSAT- ASEAN leaders look forward to the early Philippines, 14 January 2007). based Tele Education and Tele-Medicine Network Visiting Fellows from Mekong at RIS z HRD programme in the area of Computer Networking RIS has been conducting a Programme on International Economic Issues and Development z Establishment of Entrepreneurship Policy (IEIDP) for participants from developing countries with a view to inculcate an Development Centres enhanced understanding on challenges and opportunities associated with the processes z Extending India-Myanmar-Thailand of globalization and development. The IEIDP Programme is offered by RIS in conjunction Trilateral Highway to Lao PDR and with the Indian Technical and Economic Cooperation (ITEC)/SCAAP Programme of the Cambodia Ministry of External Affairs, Government of India. In 2007, IEIDP programme was conducted z Setting up Software Development and at New Delhi from 19 February 2007 to 16 March 2007. Among 14 participants who attended Training Centres the IEIDP programme from developing countries and LDCs across the world, there were z Upgrading the education systems three participants from Mekong countries, one each from Lao PDR and Vietnam, namely, through implementation of curricula for Mr. Somboune Phomdouangdy, Dy. Director, Information and Technology Division, Lao kindergarten, primary, secondary, and PDR, and Mr. Nguyen Van Ha, Researcher, Vietnam Academy of Social Science; and one tertiary education from Cambodia, namely, Mr. Khut Chandara, Assistant to the Cabinet of Dy. Prime Minister, z ASEAN-India Human Resources Cambodia. Participantion of the three visiting fellows from Mekong countries was sponsored Training Programme by RIS under the 'India-Mekong Cooperation' Project, undertaken at RIS with the support z ASEAN-India IT Forum of Swiss Agency for Development and Cooperation (SDC).

4 Mekong-Ganga Policy Brief, March 2007 Focus Vietnam Rise of India: An Opportunity for Vietnam and Asia H. E. Pham Gia Khiem, Deputy Prime Minister and Foreign Minister of Vietnam ○○○○○○○○○○○○○ ounded by President Ho Chi Minh and With the joint efforts of both sides, in ○○○○○○○○○○○○○○○○○○○○ These figures show that trade and Prime Minister Jawaharlal Nehru and recent years, trade and investment relations investment relations between Vietnam and Fnurtured by generations of leaders and between the two countries have also been India remain modest and incommensurate people of Vietnam and India, our bilateral improved. The two-way trade increased with our political ties and cooperation relations of traditional friendship and considerably from US$ 697 million in 2005 potentials. I hope that the two governments comprehensive cooperation have stood the to more than US$ 1 billion in 2006 as targeted will soon work out effective measures to test of time, becoming an invaluable treasure in the action plan for the period 2004-2006. further promote bilateral trade and of the two countries and people. The relations By the end of 2006, India has had 12 investment, especially now that Vietnam has are now witnessing encouraging become a WTO member. Right now, Vietnam effective FDI projects in Vietnam with a developments in almost all fields, such as is seeing an inflow of foreign investment and

○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ registered capital of US$ 46.4 million, ranking politics, economy, trade, science and I would like to call upon Indian investors to 34th in 73 countries and territories investing technology, education and training, security do business in Vietnam. The Vietnamese in Vietnam. Interestingly, the realized capital and defence under the framework for government will grant you maximum comprehensive cooperation between the two has reached US$ 580 million - 13-fold of the incentives. countries as they enter the 21st century, the registered capital thanks to an oil and gas Vietnam always supports and highly action plan for the 2004-2006 period, and exploitation project between Vietnam

○○○○○○○○○○○○○○○○○○○○○○ values India’s role in the EAS as well as other agreements. Petroleum, ONGC Videsh Ltd (India), and BP India’s active contribution to the ASEAN At international and regional forums, the Exploration (U.K.), which has the realized countries and community building in East two sides have shared common views on capital of US$ 578.4 million - 34-fold of the Asia. I hope that India will continue to support numerous issues, closely collaborating with registered capital. ASEAN’s leading role in the EAS. each other, making contribution to peace, Earlier this February, ESSAR Group, We view India’s and China’s rise as an stability, cooperation, and development in signed a joint venture agreement with Vietnam opportunity for Asia and Vietnam. Thanks to the region and the world over. Steel Corporation (VSC) and Vietnam General high economic growth, India and China are In 2007, Vietnam and India celebrate Rubber Corporation (GERUCO) to build a hot two large and potential markets for other the 35th anniversary of the establishment of strip mill plant in Ba Ria-Vung Tau. Estimated Asian countries as illustrated by the rapidly full diplomatic relations. It is time for us to lift to cost US$ 527 million and to be completed growing trade between India and China with our traditional friendship and multi-faceted in 30 months, the project will significantly raise other Asian countries. Those economic cooperation to a new height. In this spirit, total investment from India into Vietnam. A frameworks will better serve economic Prime Minister Nguyen Tan Dung will pay an development in Asia as a whole. official visit to India, tentatively in April 2007 Vietnamese company, FPT, has made an and Vietnam is looking forward to receiving investment of US$ 150,000 in an Indian (Excerpted from the Dy. Prime Minister’s interview President Abdul Kalam in Hanoi later this technology development and investment with The Hindu, 1 March 2007). © The Hindu. year. project. Visit of Indian Parliamentary Delegation to Vietnam An Indian Parliamentary Delegation, headed by the Lok Sabha Speaker, Hon’ble Mr. Somnath Chatterjee, visited Vietnam on 22-27 March 2007 after a gap of over 35 years. During the meeting with the President of Vietnam, Mr. Nguyen Minh Triet, Mr. Somnath Chatterjee referred to the historical ties India and Vietnam shared. Recalling the saga of the Vietnamese liberation struggle, and India’s unstinted support to the people of Vietnam, the Lok Sabha Speaker said that the legendary leadership of President Ho Chi Minh was an inspiration to oppressed people everywhere. Mr. Chatterjee pointed out that there exists immense potential for enhanced cooperation in areas like Information Technology, Biotechnology, Science and Technology and Space Science. The Lok Sabha Speaker reiterated the need for parliamentary efforts to supplement governmental initiatives in cementing Indo-Vietnamese relations. He also offered India’s assistance for Vietnam in training and orientation for parliamentary officials at the Bureau of Parliamentary Studies and Training of Lok Sabha Secretariat. Reciprocating the views expressed by Mr. Somnath Chatterjee, the President of Vietnam, Mr. Nguyen Minh Triet observed that the warm and cordial relations between the two countries have gone a long way in bringing the peoples of India and Vietnam closer. President Triet applauded India’s achievements in diverse sectors and stressed that every effort should be made to build on this, including through parliamentary exchanges. He also emphasised on enhanced bilateral cooperation in the international sphere. Referring to the rapid strides Vietnam has made in the process of reconstructions, Mr. Chatterjee said, India is keen to cooperate with them in areas like information technology, science and technology, etc. He expressed happiness that the Nuclear Science Centre which was set up with Indian assistance in Vietnam is doing very well. The Lok Sabha Speaker called for enhanced cooperation in trade and commercial ties so as to realize the full potential that existed in these fields. He also pointed out that Vietnam could play a major role in India’s ties with the ASEAN. The Lok Sabha Speaker emphasized that India and Vietnam should promote further cooperation at the Parliamentary level as well. The Indian Parliamentary Delegation was on a six-day visit to Vietnam. The other members of the Delegation were: Mr. Rishang Keishing, Mr. Kishanbhai V. Patel, Dr. Babu Rao Mediyam, Dr. H.T. Sangliana, Mr. Thupstan Chhewang, Mr. Shyam Benegal, all Members of Parliament, and Mr. P.D.T. Achary, Secretary-General, Lok Sabha.

(Excerpted from the Lok Sabha Secretariat, New Delhi, Accessed on 16 April 2007)

Mekong-Ganga Policy Brief, March 2007 5 Focus Vietnam

Vietnam Woos Indian Paper Mills for ○○○○○○○○○○○ India, Vietnam to Plantations Focus on Air Links Vietnam, which offers good opportunities to of its affiliates. VPC has decided to harvest Lack of direct air links is the main cause for foreign investors to invest in paper trees on about 135,000 hectares in the the small number of Indian tourists visiting manufacturing and plantations, has initiated central northern region of the country, Vietnam and vice versa. With India along with moves through the State-owned Vietnam thereby increasing the availability of forest France declared as 'focus' coutries for Paper Corporation (VPC) to attract private raw materials to local pulp mills and to ensure Vietnam this year, Vietnam has been on a investment via joint ventures with local and sufficient supply of materials to large local ○○○○○○○○○○○○○○○○○○○○○○ major promotion spree with road shows, and some already held in Hyderabad, Bangalore, foreign companies. VPC has reportedly mills. The corporation also has plans to and Kolkata. Indian IT firms have been the approached some large Indian paper mills undertake fresh plantation on 10,000 poineers in harnessing the potential for to undertake plantation activity for mutual hectares in the central highlands of Kon Tum Vietnam, which also has considerable benefit of paper mills of both the countries. by 2010. It currently has a total resource ambitions of garnering the world software pie. The Indian mills seem to have been area of more than 105,000 hectares, with Vietnam's oil and gas reserves also put approached because a few of them have an average yield of 80 cubic m per hectare per seven years. VPC has targeted a the country on a higher position on the Indian already begun to scout for plantation production of 270,500 tonnes of paper of radar, with ONGC recently successfully opportunities abroad. Many large Indian mills various kinds by 2007. The targeted output bidding for two oil blocks. With Vietnam now with substantial expansion plans do not have includes 160,00 tonnes of printing and entering the WTO, there were hints that both much information about the adequate supply writing paper, 57 tonnes of newsprint and the countries may also pursue a more bilateral of virgin pulp locally. Vietnam, therefore, can 10,000 tonnes of tissue paper. route and direct air links to increase trade. be a good destination for them to source virgin pulp. VPC has plans to expand its (Excerpted from The Hindu Business Line, 5 (Excerpted from The Statesman, 16 January resource areas within 2010 in bid to satisfy September 2006). 2007).

raw materials demand for paper production © The Hindu Business Line © The Statesman

○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ Essar to Set up Steel Vietnam: Danang Gears Up for Plant in Vietnam East-West Corridor Essar Steel Vietnam Holdings Private Ltd The East-West Economic Corridor is both a Ho Chi Minh City. (ESVHL), a subsidiary of India's fourth largest transport system as well as a framework for Danang has the ability to become a steelmaker Essar Steel, signed a joint venture cooperation linking the countries in the tourism hub for central Vietnam as the agreement with State-owned Vietnam Steel Mekong region. The corridor, about 1,600 gateway to three World Heritage sites in Corporation (VSC) and Vietnam General km long, is a land link connecting the Indian Vietnam: Hoi An, Hue and My Son. Rubber Corporation (GERUCO) to form a joint Ocean with the Pacific Ocean. It runs from Danang is also rich in natural resources stock company. The joint venture company Mawlamyine in Myanmar through the border that tourists can enjoy visiting, such as the will set up a hot-strip mill plant with an initial crossing between Thailand and Burma at Marble Mountain, Bana Mountain, the annual capacity of two million tonnes of HR Myawaddy and Mae Sot. From there, the former French resort where the weather is coils, sheets and skin-passed coils. Estimated corridor goes through Phitsanulok and Khon good the whole year, plus the beaches right to cost US$ 527 million, the project is Kaen to the Thai-Lao border at Mukdahan, in the city. scheduled for completion within 30 months. Thailand and Savannakhet, Laos. Mukdahan is the province bordering ESVHL will hold 65 per cent equity, VSC 20 The Lao portion of the corridor is Laos’s Savannakhet, which is the starting per cent and Vietnam General Rubber slightly more than 200 km long. From the point of Route 9 leading to the Vietnamese Corporation the rest. The project will be Lao-Vietnamese border, the corridor border of Lao Bao before going to Danang. located in Baria Vung Tau province in stretches to the old imperial capital of Hue Bus transportation from Savannakhet to southern Vietnam. Currently Vietnam and from there to Danang. Danang is available daily. consumes six million tonnes of steel, of which Danang, the main city in central (Excerpted from the Vietnam News Agency, HR coils account for two million tonnes. Vietnam, is 764 km from the capital Hanoi 18 January 2007). Vietnam's steel consumption is and 964 km from the southern main city of © Vietnam News Agency

expected to go up to 10 million tonnes by ○○○○○○○○○○○○○○○○○○○○○○○○○○○ 2012. In the absence of a flat-product steel ○○○○○○○○○○○○○○○○○ plant, Vietnam imports its entire requirement of HR coils. This project is expected to India and Vietnam Set Bilateral Trade substitute such imports. VSC is a fully owned Target US$ 2 bln unit of the Government of Vietnam, having several steel plants in northern and southern India and Vietnam set a target of US$ 2 contribute to a broad-based development of Vietnam. Essar has production facilities in billion for bilateral trade by 2010, double bilateral ties. It was noted with satisfaction that India (4.6 million tonnes a year) and the current level. A Joint Commission meeting the value of bilateral trade in 2006 exceeded Indonesia (0.4 million tonnes). also noted that Indian companies are US$ 1 billion, which was the target set by Vietnam would be the second location interested in participating in petroleum, the 12th Joint Commission meeting. The outside India, where Essar would have a transportation and power sectors in Vietnam. meeting decided that the two countries presence. The meeting, co-chaired by Indian External should work for doubling trade by 2010. (Excerpted from The Hindu Business Line, 13 Affairs Minister, and Vietnamese Deputy (Excerpted from The Hindu, 28 Feburary Feburary 2007). Prime Minister, expressed confidence that 2007). © The Hindu Business Line multi-sectoral bilateral cooperation would © The Hindu

6 Mekong-Ganga Policy Brief, March 2007 ResourcesResources ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ The Greater Mekong success of some countries ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ agenda-setting and Subregion: Beyond Borders that long since embraced rule-making are heavily Regional Cooperation liberal trade regime, this dominated by develo- volume highlights the ways Strategy and Program ped countries. The to transform the digital challenge before Update, 2006-2008 divide into digital dividend. developing countries Asian Development Drawing from the detailed therefore is to seek Bank, 2006, Manila case studies of India and reforms to ensure that This book provides an five ASEAN countries, it establishes the the system serves their overview of major social, complementary role of innovation system needs better. political, and economic and trade regime in promoting production The report proposes an agenda for developments affecting the and use of ICT and draws lessons for other building a more development-friendly and GMS subregion. Key achievements of the developing countries that adopted a sustainable trading system. It offers GMS Program, including the holding of the liberal trade regime to catch up with the recommendations from a development Second GMS Summit of Leaders in ICT revolution perspective for revitalizing the Doha Kunming in July 2005, are summarized in Round of trade talks in key areas of the Update. An indicative pipeline of loan India-ASEAN Economic agriculture, market access for industrial projects and non-lending products and Relations: Meeting the goods, services, trade facilitation, services for 2006–2008 to support the Challenges of Globalization intellectual property rights, and dispute ADB’s strategic thrusts of greater Editors: Nagesh Kumar, Rahul settlement rules among others. It further connectivity, improved competitiveness, Sen and Mukul Asher highlights the potential of strengthening and increased sense of community South-South Cooperation for building a ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ among the GMS countries is presented. RIS, New Delhi and ISEAS, development-friendly trading system. Singapore, 2006, ASEAN-India Vision 2020: ISBN 81-7122-095-9 (India) Working Together for a ISBN 981-230-321-9 (Singapore) Further Readings Shared Prosperity Indian economy and ASEAN-India Network of Think- collectively ten ASEAN ™ Trade Liberalisation and Development in Tanks members are large and ICT Sector and Its Impact on Household RIS, 2004, New Delhi dynamic markets. They are Welfare in Vietnam, Tran Quoc Trung et ISBN: 81-7122-092-4 undertaking reforms to al., ARTNeT Working Paper 33, The Vision 2020 of ASEAN- deepen their integration UNESCAP, Bangkok, 2007. within and outside the India Partnership proposes ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ ™ Are Regional Trade Agreements in Asia a long-term strategic region. Although the India- Stumbling or Building Blocks? Some roadmap that will enable ASEAN trade and economic relations Implications for the Mekong-3 Countries, them to exploit the synergies to foster a have grown over the past decade in an Patrizia Tumbarello, IMF Working Paper comity of nations firmly integrated at impressive manner, the immense 53, IMF, Washingtion DC, 2007. commercial, cultural, political and social potential of cooperation and synergies ™ Impact of Cross-border Transport spheres and to achieve their respective remain to be exploited. They could Infrastructure on Trade and Investment long-term developmental goals. Given the fruitfully share technology, capital, human in the GMS, Manabu Fujimura and complementarities between ASEAN and talent, developmental experiences and Christopher Edmonds, ADBI Discussion India, a greater integration will help them coordinate their positions in international Paper 48, ADBI, Tokyo, 2006. forums such as WTO negotiations. join the ranks of developed economies. It ™ India-Vietnam Trade: Current Relations will also enable them to address the India-ASEAN partnership could also be and Prospects, Rajesh Mehta, RIS common challenges to comprehensive an important building bloc of the Discussion Paper #105, New Delhi: RIS, security. The eventual vision of the emerging broader regional economic 2006. cooperation in Asia, viz. an Asian ASEAN-India Partnership is to promote ™ Ho Chi Money Trail, Tim Kelly, Forbes Economic Community built in a phased Asian economic integration as a new Asia, September 18, 2006 engine of growth along with other East manner. ™ South-South Economic Cooperation: Asian countries. World Trade and Development Exploring GMS-India Relationship - An Information Technology, Advocacy Document, Consumer Unity Report 2007: Building a & Trust Society (CUTS), Jaipur, 2006. Innovation System and Trade Development-Friendly World Regime in Developing ™ The Mekong Region Foreign Direct Trading System Investment, Asian Development Bank, Countries RIS and Oxford University Press, Manila, 2006. K J Joseph, Palgrave Macmillan, New Delhi, 2007, ™ New Growth Horizons for CLMV Nations, 2006 ISBN: 0-19-568968-2 EDI Report, Issue 3, Enterpreneurship ISBN: 023000492X RIS argues in this report that as weaker Development Institute of India, By highlighting the factors that configured partners the developing countries have a Ahmedabad, 2004. the emergence of India as an ICT stake in the multilateral rule-based trading ™ Greater Mekong Subregion Business superpower from the South and limited system. However, the processes of Handbook, UNESCAP, Bangkok, 2002.

Mekong-Ganga Policy Brief, March 2007 7 Economic and Trade Indicators

Economy in 2005 Area Population GDP per capita Gross savings Foreign direct Trade (sq. km) (million) (US$, PPP) (% of GDP) investment (% of GDP) (US$ million, BoP) Cambodia 181040 13.798 2423 18.741 131.41 140.52 India 3287260 1079.721 3139 22.868 5335.00 41.64 Lao PDR 236800 5.792 1954 10.319 17.00 70.81 Vietnam 331690 82.162 2745 32.237 1610.10 139.99 Source: RIS based on World Development Indicators CD ROM 2006, World Bank

Global Merchandise Trade GDP Growth

(US$ million) 10.00 9.00 1991 2001 2005 8.00 7.00 Export Import Export Import Export Import 6.00 Cambodia 57.38 61.93 1295.80 1455.64 2838.96 4078.11 5.00 4.00 India 17873.50 19509.40 45225.70 59016.90 99132.60 139458.00 3.00 2.00

Lao PDR 82.11 154.27 375.54 719.46 677.75 1274.90 GDP GrowthAnnual (%) 1.00 Vietnam 2188.87 2482.86 15019.70 16217.10 30966.00 38347.50 0.00 Source: RIS based on Direction of Trade Statistics Year Book, 2006, International Monetary Fund 2001 2002 2003 2004 Cambodia India Lao PDR Vietnam Mekong-India Trade in 2005 (US$ million) GDP Per Capita Growth Exports Cambodia India Lao PDR Vietnam 8.00 Cambodia 0.26 1.65 129.21 7.00 India 19.82 2.37 568.36 6.00 5.00 Lao PDR 0.04 0.07 82.87 4.00 Vietnam 401.09 73.08 77.7 3.00 mports Imports 2.00 Cambodia India Lao PDR Vietnam 1.00 Cambodia 21.81 0.04 441.20 0.00 Annual GDP PerAnnual Growth Capita (%) India 0.29 0.08 80.39 2001 2002 2003 2004 Lao PDR 1.81 2.61 85.47 Cambodia India Lao PDR Vietnam Vietnam 142.13 625.2 91.15 Source: RIS based on World Development Indicators Source: RIS based on Direction of Trade Statistics Year Book, 2006, International Monetary Fund CD ROM 2006, World Bank (for both the graphs). Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong-Ganga Policy Brief within the framework of this project. This publication seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in or www.newasiaforum.org. RIS RIS is an autonomous policy think-tank, based in New Delhi, and devoted to trade and development issues. Its work programme focuses on multilateral trade negotiations, regional economic integration in Asia, new technologies and development, and South-South cooperation in general, among other issues. The work of RIS is published in the form of research reports, books, discussion papers and journals. For more information about RIS and its work programme, please visit its website: www.ris.org.in.

Core IV-B, Fourth Floor, India Habitat Centre Lodhi Road, New Delhi-110 003, India. RIS Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Research and Information System Email: [email protected] for Developing Countries Websites: http://www.ris.org.in; http://www.newasiaforum.org Managing Editor: Dr. Prabir De

8 Mekong-Ganga Policy Brief, March 2007 RIS Research and Information System for Developing Countries

No. 2 October 2007 Mekong Economic Corridors: Asia’s New Lifelines he Mekong region comprising including the Phnom Penh–Ho Chi Minh increased flexibility and reliability of Cambodia, Lao People’s City Highway, the East–West Economic electricity supply throughout much of the TDemocratic Republic, Myanmar, Corridor, the Northern Economic Corridor Mekong. These actions are expected to Thailand, and Vietnam covers an area of (Boten–Houayxay), the Yunnan Express- bring about accelerated economic growth enormous wealth and natural resources. way (Chuxiang–Dali) and Southern and and a very strong impetus in efforts to However, the greatest challenge the Western Yunnan Roads Development, the reduce poverty in all Mekong countries. Mekong is facing today is that despite Guangxi Roads Development, the Siem plenty of resources and significant Reap Airport, and the Dali–Lijiang Railway. Gains So Far economic progress in recent years, However, the three economic corridors, Today, high transport costs and low poverty is very much widespread in the namely, the North-South Economic connectivity levels are more detrimental to region. The effect that improvement of Corridor (NSEC), the East-West Economic a country’s development than ever before, cross-border transport infrastructure has Corridor (EWEC), and the Southern presenting particular challenges for on poverty incidence is a central issue for Economic Corridor (SEC), dominate the landlocked countries. In many cases, an assistance for Mekong LDCs and for their Mekong transport sector development important means of overcoming obstacles own public investment policies. plan. These three corridors are planned to to trade competitiveness is the promotion Mekong countries have undertaken encourage trade, investment, and tourism of “corridors” and bilateral and regional programmes to strengthen their economic in Mekong region, and ease the cross- transit arrangements between landlocked linkages while fostering peace, facilitating border movement of people and goods. countries and their transit neighbours. sustainable growth, and improving At the same time, to encourage seamless Mekong economic corridors are planned living standards in the process. In flow of goods and services across borders to reduce trade costs. Reduced trade particular, the Mekong region is working in the region, the “hardware” part of the costs can also indirectly induce foreign towards improving connectivity through economic corridors is supported through direct investment (FDI), mainly through strengthening linkages in transport, energy a “software,” known as Mekong Cross- intra-firm vertical integration across and tele-communication. The vision is to Border Transport Agreement (CBTA), borders that exploit the comparative create a more integrated, prosperous, and which was endorsed and adopted by all advantages of each location, and, such equitable region, complementing national the Mekong countries. The CBTA is also increases in FDI can further increase efforts to promote economic growth and formally known as the Agreement for the regional trade, adding to the direct effect reduce poverty, and augment domestic Facilitation of Cross-Border Transport of of trade expansion. This defines a virtuous development opportunities to create Goods and People. triangle of mutually reinforcing effects regional opportunities. The Mekong economic corridors between cross-border infrastructure Sustained economic growth over are planned to serve 2.6 million sq km development, trade, and investment, the the past decade has increased the of surface area and about 320 million final effects of which are higher economic demand for transport services. Efficient people. The corridors, as conceived, growth. However, institutions and policies transport networks have become more would link the region with a direct outlet for have to be in place to ensure the poor important to regional cooperation, in trade with Southeast, South and Northeast take part in this growth process. Increased both absolute and relative terms, as tariff- Asia. The combination of improved access trade and growth would also expand the based barriers to economic cooperation to trade and reduced impediments to fiscal resources available to governments have generally declined. With support of cross-border trade would accelerate the thereby enable consideration of new the Asian Development Bank (ADB), the economic development of the region policy options. Mekong governments endorsed a 10-year along the corridors. The remarkable progress in the strategic framework in 2001 to serve as According to ADB,1 the all-weather Mekong region in recent years is thus the blueprint for enhanced connectivity, roads are expected to allow smooth and reflected in the increase in average per increased competitiveness, and a greater efficient travel along the NSEC and EWEC capita income from about US$ 630 in 1992 sense of community in the region. About by 2012. Parallel to this, interconnected to about US$ 1100 in 2006.2 A recent 11 flagship projects were identified, power transmission lines will provide study (Edmonds and Fujimura, 2006)

Mekong-Ganga Policy Brief, October 2007 1 found a positive effect of cross-border Transport Strategy has two important direction, Mekong–Ganga Cooperation infrastructure on trade in major goods in objectives: (i) to strengthen existing (MGC) is a forum, established primarily to the Mekong region. internal links through identification of strengthen the institutional capacity of the In general, the development of additional or expanded cross-border Mekong countries. Under the MGC, there economic corridors in the Mekong region links; and (ii) to intensify the linkages is a proposal to set up a railway line from has played an important role in fostering with neighbouring regions such as with Delhi to Hanoi. As a matter of fact, opening trade within the region. The Mekong South Asia and BIMSTEC (Bay of Bengal of the second Friendship Bridge over economic corridors continue to produce Initiative for Multi-sectoral Technical the Mekong river connecting the town of sizable economic benefits at the micro and Economic Cooperation).5 More Savannakhet in Lao PDR with Mukdahan level, including higher levels of traffic, than 150 new investment projects have in Thailand has made it possible to travel improved traffic flow, increased transport been proposed under the new Mekong by road from anywhere in India right up to of goods, higher toll revenues, and Transport Strategy. Of these, 31 were Da Nang in Vietnam through EWEC. enhanced bus services for passengers considered as high-priority investment The growing partnership between using public transport. projects, including 20 road projects, 2 India and Mekong countries is also viewed According to an ADB study,3 the railway projects, 4 airport projects, and in the context of growing importance road improvement prompted traffic on 5 water transport projects (ADB, 2007). of South-South cooperation. While the highway (excluding motorcycles and dealing with Mekong countries, capacity other two-wheel vehicles) to grow by about building need cannot go unnoticed. One 47 per cent between 2000 and 2004, Challenges and Opportunities Mekong countries are suffering from acute of the principal reasons for the relative compared with about 2.5 per cent growth poverty; more than 52 million people are backwardness of Mekong countries is in traffic in the four years before that. The living below the poverty line in the region. that despite being endowed with natural growth in traffic generated more than US$ Major challenges, therefore, are: (i) the resources, they were never exploited to full 450,000 in toll revenue for the Government rising income disparities between urban scale due to lack of improved technology of Vietnam in 2004. and rural areas, (ii) a growing income gap and useable infrastructure services. Among the three corridors, the between rich and poor, (iii) inadequate Therefore, all the three countries in Mekong EWEC is in most advanced stage of attention to the special needs of ethnic attach utmost importance to develop implementation. It is a 1,500 km artery minorities, (iv) gender inequities, lack of their science and technology capability. starting from Da Nang Port in east in access to basic health and education, India has been playing a major role to Vietnam to the Andaman Sea in the west and (v) inadequate protection of the strengthen the entreprenueral capacity of in Myanmar. The benefits are apparent. environment. the Mekong countries. The challenge is to So far, 60 companies have invested in The linkages between poverty and translate recent gains into lasting progress the special economic zone located on transport corridors are complex, given the through successful regional cooperation. the Lao PDR-Vietnam border in the EWEC multidimensionality of poverty and cross- A collective effort towards strengthening (ADB, 2005). cutting nature of transport development. institutional capacity in Mekong will not By end of 2006, 13 border points in The emphasis, therefore, should be only reduce the poverty of the region, the Mekong have become operational. to connect growth, poverty reduction, but will also effectively make the Mekong A single-stop single-window customs and investment with the infrastructure economic corridors as lifelines of the clearance system has been put in place development being pursued through entire Asia. in the Dansavanh (Lao PDR)-Lao Bao Mekong economic corridors. Mekong (Vietnam) border crossing point since 30 economic corridors should offer more Notes June, 2005. 1 inclusive growth. Nonetheless, the full See, for example, Bryant (2005) Civil aviation projects have improved 2 potential of the Mekong countries can be See, World Bank (2007) connectivity and air safety in the 3 As quoted in ADB (2005) realized only if the problem of poverty and Mekong region, as well as access to 4 As noted in ADB (2007) environment is properly addressed. more distant destinations. Airports have 5 See, ADB (2007) One of the striking challenges been upgraded at Mandalay, Vientiane, of the Mekong economic corridors is Hanoi, Phnom Penh, Siem Reap, and that their success closely depends References several other locations in Mekong in Asian Development Bank (ADB). 2005. Greater on the accompanying policy reform, recent past. These improved airports, Mekong Subregion: Connecting Nations, capacity development, and institutional Linking People. Manila. air safety, and more open skies have strengthening in the region. Here comes Asian Development Bank (ADB). 2007. GMS stimulated business and tourism travel, Transport Strategy 2006-2015: Cost to Cost the role of regional cooperation. Greater encouraged investment, and generated and Mountain to Sea: Towards Integrated regional cooperation would remove the Mekong Transport Systems. Manila. new employment opportunities, even in landlockedness of Lao PDR in Mekong, Bryant, J. 2005. “Cooperation Works.” ADB Review, remote areas of the Mekong. As a result, June. thus making it land-linked. Being land- Mekong region has witnessed a rise in Edmonds, C. and Fujimura, M. 2006. Impact of Cross- linked, Lao PDR can serve as “hub” for border Transport Infrastructure on Trade and tourist flows. Tourist arrivals in Mekong trade between Mekong and South Asia. In Investment in the GMS. Discussion Paper 48, countries increased to nearly 18.8 million view of the economic growth in South and Asian Development Bank Institute (ADBI), in 2005, and is expected to rise to 30 Tokyo. Southeast Asia, Lao PDR might seek to million in 2010. Rajchagool, C. 2005. “A Socio-Historical Approach to increase its trade with India and Thailand. Transport in the Greater Mekong Sub-Region.” To address the future transport Given a long historical and cultural The Asian Journal, Vol. 12, No. 1, pp. 79-100. demand, Mekong leaders have redefined World Bank. 2007. World Development Indicators, link between India and Mekong countries, the Mekong transport development plan, Washington, D.C. there are ample scopes for cooperation and have proposed a new Mekong Prabir De, Fellow, Research and Information System for and so also potential gains. Towards this corridor network.4 This new Mekong Developing Courntries (RIS), New Delhi, India.

2 Mekong-Ganga Policy Brief, October 2007

Views from Mekong Mekong Economic Corridors Bring Significant Social Benefits recent development. During the period 1993-2004, poverty incidence reduced Table 1: Poverty Rate in 2004 (%) by almost 39 percentage points from Provinces Poverty Rate Poverty Rate Poverty Rate Share of Ethnic 58.1 per cent to 19.5 per cent. In annual (Overall) (Kinh and Chinese) (Ethnic Minorities) Minorities (1999) terms, a growth rate of GDP per capita of Vietnam 19.5 13.5 60.7 12.7 nearly 5.9 per cent was associated with Northern Mountains 35.4 14.2 57.4 48.5 a reduction in poverty by roughly 9.4 per North Central Coast 31.9 26.7 76.1 10.6 cent, implying one of the highest elasticity South Central Coast 19.0 14.9 92.2 5.3 of poverty reduction to economic growth Central Highlands 33.1 13.6 74.4 32.7 in the world. It is worthwhile to note that growth Mekong Delta 15.9 14.7 34.9 6.5 in Vietnam is more pro-poor than many Sources: GSO – VLSS 2004 and Population Census 1999, Vietnam. other fast-growing developing countries. An ample evidence of this pro-poorness he Mekong economic corridors are By examining the lessons from the of growth is the quick pace of poverty one of the important components of distribution pattern of benefits associated reduction in the rural areas, which even Tthe Strategic Framework for the with rapid growth in the past, this article outperformed the pace in urban areas. In Greater Mekong sub-region adopted by argues that these two impacts of the 1993, nearly two third of rural population the 10th GMS Ministerial Conference in Mekong economic corridors could be lived in poverty as compared to 25.2 Myanmar in 2001. The implementation limited if no appropriate accommodating per cent in urban areas. By 2004, only of the Mekong economic corridors has policies were implemented. The policies one in every four rural residents had developed significant changes in many should be tailor-made to suit the specific an expenditure level that is below the sectors in the Mekong countries resulting conditions of each directly affected region, poverty line. On average, rural poverty from several interrelating factors such and hence a much better understanding was reduced by 3.8 percentage point a as improvements in cross-border trade, of the poverty of the region is needed. year, almost twice as high as that in the increase in tourism and investment. Corridors go through poorest areas, urban areas in Vietnam. Vietnam having long coast is an important mainly inhabited by ethnic minorities. A Among the important factors leading end of a large number of roads in the salient feature of the roads of Mekong to rapid poverty reduction in Vietnam, the context of Mekong economic corridors corridors in Vietnam is that a large number reform in property rights and integration including the North-South, East-West of them go through the mountainous into the world economy are arguably two and the Southern corridors. As a result, areas that are covered by tropical forest. of the most important factors. Several Vietnam is expected to benefit significantly In addition, they also go through the studies have well documented the from these corridors. areas where the ethnic minorities reside. decisive role of these two factors behind From policy perspectives, a natural The North-South Corridor runs through rapid growth and poverty reduction in question is how much the economic Lao Cai and Yen Bai in the North East, Vietnam.1 Measures such as the relatively corridors in the context of the Mekong the EWEC goes through Quang Tri in the North Central Coast and Southern egalitarian distribution of land to farmers will contribute to the progress of poverty Corridor through Central Highlands (Gia since “Doi Moi” together with improvement reduction in the poor border areas Lai) to Binh Dinh. More than 80 per cent of in securing property rights for land and along the roads. Theoretically, poor Vietnam’s ethnic minorities live in the two the gradual removal of barriers to both areas could benefit from improvement regions: Northern Mountains and Central domestic and international trade have of infrastructure via two main channels. Highlands. clearly provided “right” incentives for First, these corridors will arguably improve These border areas where the farmers to invest more not only in terms of the interconnectivity of goods and labour markets, facilitate cross-border trade corridors run through are the poorest areas quantity but also in terms of effectiveness. and investment, and hence are likely to in Vietnam (Table 1). Ethnic minorities The resulting increase in productivity and spur economic growth in GMS countries. are a predominantly rural population, output has in turn helped a large number Expansion of overall economic activities dependent on agricultural income to a of poor living in the rural areas escape could have positive spillover impacts far greater extent than their Kinh and poverty. on the poorest areas through backward Chinese counterparts. Importantly, ethnic Yet the ability of the poor to linkages. Second, improved connectivity minorities are much more dependent participate in the value chain is not so and reduced transaction costs could lead on forestry land than Kinh people. But well documented in the existing literature. to increase in investment in these poor Vietnam Living Standard Surveys (VLSS) There is no doubt that improved access areas, and hence contribute directly to show only 24 per cent of ethnic minority’s to international trade represents a big reduce poverty by several ways such households report having forestry land opportunity to expand the sectors with as availability of off-farm employment or (Swinkels and Turk, 2006). comparative advantages. If the poor can improved market access. Rapid poverty reduction is one of the participate either directly or indirectly in outstanding achievements of Vietnam’s

Mekong-Ganga Policy Brief, October 2007 3 Views from Mekong the expanding sectors due to opening Program 135 that place great emphasis on limited mobility, these barriers prevent up the economy, the increased trade the development of infrastructure for poor the minorities from diversification of their and investment flows would have a large communes, especially those in remote and crops or working in off-farm activities, positive impact on poverty reduction. mountainous areas. Notable resources hence preventing higher rate of poverty If the poor farmers in Vietnam were have been provided to poor communes. reduction. not able to diversify their products and The HEPR spends about 30 billion VND Slower progress of the ethnic income sources to take advantage of per year in 41 provinces, while Program minorities in poverty reduction provides having access to the large and growing 135 alone allocated about 500,000 VND to evidence that increased openness market demand for their main products, every beneficiary household in 2003. The and investment and improvement in the story of poverty reduction would be spending of targeted programs for poverty connectivity do not necessarily result in quite different. A related issue, the mobility reduction in 2003 accounted for about 0.4 equitable pattern of distribution of gains of the poor to move to the expanding per cent of GDP or 180 million USD. among ethnicities in Vietnam. Since the sectors, especially non-farm activities, The current situation imposes a potential gains from Mekong corridors will also remains relatively unexplored. serious policy puzzle that is how to narrow result from similar sources, it cannot be Looking beyond the average, some the gap between the Kinh-Chinese and taken for granted that the ethnic minorities aspects of the success story is less ethnic minorities. There seems to be who inhabited in the border areas along spectacular than others. The rate of limited supporting evidence of trickle the corridors will benefit as much as the poverty reduction in ethnic minority areas down growth as Vietnam has experienced others. has been much slower than among the rapid overall economic growth and Another issue, not discussed in ethnic majority and a significant poverty poverty reduction for about two decades details here, is that increased border gap still exists. From 1993 to 2004, poverty and the time span is sufficiently long for trade would be associated with increased rate among ethnic minorities was reduced the realization of spillover effects even deforestation, and hence negatively by 25 percentage points, a considerable with the time lag as commonly argued affecting the livelihood of the vast majority achievement but still modest as compared for. Improved physical connectivity to of the ethnic minorities living in the areas to the 40 percentage point decrease for markets alone also appeared not to be directly affected by the corridors. Since the Kinh and Chinese. As a result, ethnic the solution. With increased investment this is extremely difficult for people here minorities in 2004 still accounted for 39 per in particular, in the context of the National to change from one to other activities, the cent of all poor people, nearly doubling Targeted Programs, accessibility for unwanted outcome could increase the of the proportion of ethnic minorities ethnic minorities improved considerably. vulnerability of the poor ethnic minorities. in the poor population in eleven years. Between 1998 and 2004, the proportion Given the complexity of the issue, According to the latest available Living of people living within two kilometers of an a holistic approach beyond standard Standard Survey in 2004, the proportion all-weather road has increased by similar safeguards approach is needed to tackle of ethnic minority’s population below the amount for both rural Kinh and ethnic the poverty issue of ethnic minorities in poverty line was 61 per cent, while the minorities rural residents, from 59 per the context of Mekong corridors. The poverty incidence among the Kinh and cent to 66 per cent for ethnic minorities ultimate challenge is to find appropriate Chinese was merely 13.5 per cent. and from 76 per cent to 84 per cent for accommodating policies for enabling the But the geographic dimension of rural Kinh (Swinkels and Turk 2006). ethnic minorities to take full advantages of poverty does not alone explain why The World Bank (2006) also provides a the newly arisen opportunities. ethnic minorities are poorer than others in striking example of districts with similarly Vietnam. The Kinh majority and Chinese short distances to a provincial town Note in remote areas have also experienced but experiences very different poverty 1 See, for instance, World Bank (2003), faster improvement of living standards incidence depending on the share of Vietnam Academy of Social Sciences (2007), than ethnic minorities. In most regions, ethnic minorities in the population. and Doan Quang (2006). the poverty incidence for the Kinh and There are a number of studies Chinese in 2004 was not much different looking at the causes of poverty of ethnic References from the national average of 13.5 per minorities in Vietnam, but the report Doan Hong Quang, 2006. ‘Pro-poor Economic cent. Even in the North West, the poorest Ethnicity and Development in Vietnam by Growth in Vietnam.’ Vietnam’s Socio-Economic region, only 17 per cent of the Kinh and the World Bank in 2007 provides arguably Development, 48, Winter 2006. Chinese had a level of expenditures below Swinkels, R. and C. Turk, 2006. ‘Explaining Ethnic the most comprehensive analysis. Apart Minority Poverty in Vietnam: A Summary of the poverty line while about 80 per cent from the frequently cited explanations Recent Trend and Current Challenges,’ mimeo. of ethnic minorities were poor (Swinkels such as limited access to finance, lack of Vietnam Academy of Social Sciences, 2007. Vietnam and Turk, 2006). infrastructure or less access to education, Poverty Update Report in 2006: Poverty and It should be noted that there have the report also examined the mobility as Poverty Reduction in Vietnam 1993-2004. The National Political Publishers. been significant amount of resources well as social and cultural factors that may World Bank. 2003. Poverty, Joint Donor Report to the and efforts devoted to facilitate the prevent ethnic minorities from taking full Vietnam Consultative Group Meeting. development of remote areas mainly advantages from opportunities associated World Bank. 2006. Aiming High, Joint Donor Report inhabited by ethnic minorities. Perhaps the with rapid economic growth and increased to the Vietnam Consultative Group Meeting. World Bank. 2007. Country Social Analysis: Ethnicity more systematic and eminent measures integration. The study finds that language and Development in Vietnam, in progress. are the National Targeted Programs, and cultural factors are important barriers especially the Hunger Eradication and to marketization and commercialization Doan Hong Quang, Senior Research Fellow, Vietnam Academy of Social Sciences, Hanoi, Vietnam. Poverty Reduction (HEPR) Program and of minority livelihood. Together with

4 Mekong-Ganga Policy Brief, October 2007

India-Mekong Cooperation Activities Strengthening Multi-faceted Linkages Mr. Pranab Mukherjee, Minister of External Affairs, India

Mekong-Ganga Cooperation (MGC) by providing textile experts and material year, only 30 applications have been signifies our desire to recapture the essence for display, including assistance and received, of which only 16 admissions of historic ties and complementarities of a expertise for displaying the exhibits. I have been confirmed. I request the region which is the birth place of enduring request the Leader of the Cambodia Leaders of the delegations present here civilizations, sustained and nurtured delegation to apprise us about the time- to inform their concerned authorities of by two of the great river systems in the frame for completion of the project and this and impress upon them the need world. This is an effort to bring together the financial sustainability of the project to make nominations in larger numbers geographically contiguous countries with after completion of the construction work. so as to ensure fuller utilization of these shared historical and cultural traditions. India, Myanmar and Thailand had scholarships. The Hanoi Programme of Action is an agreed in April 2002 to cooperate in India also proposes to organize expression of our collective will to revive the construction of a trilateral highway educational fairs in all the ASEAN the centuries’ old dynamic interaction in from Moreh in India, through Bagan in member countries. This would cover all commerce and culture and also to revive Myanmar, to Mae Sot in Thailand. The the MGC member countries as well. We our synergies which could be of common route alignment for the highway has, hope that this endeavor would lead to benefit to our peoples. however, not yet been finalized. I seek the greater awareness about the educational Regarding exchange of visits views of member countries about taking opportunities available in India and would amongst travel agents of our countries, this idea forward. help strengthen our educational ties. we can host a delegation comprising of India offered to conduct a feasibility The Hanoi Programme of Action, 20 travel agents (4 each from every MGC study for a rail link between Delhi adopted at the second MGC Ministerial member country) in India and organize a and Hanoi. As a first step, RITES was Meeting held in Hanoi in July 2001, wholesome interaction for them with Indian commissioned to carry out a feasibility provided for specific action to be taken travel agents and tour operators. study for an India-Myanmar rail link. The by the MGC in four areas of cooperation, While accepting the chairmanship executive summary of this study which has i.e. tourism, culture, education and of the MGC at Cebu, the Philippines on since been conducted has been made transport and communication. The Hanoi 12 January 2007, India had offered to available to all MGC member countries. Programme of Action has a six year time- host 100 Buddhist pilgrims from MGC I seek comments of my distinguished frame, covering the period from July 2001 countries. I am happy to announce that colleagues on how to take further this to July 2007. It is a very comprehensive we would be able to organize this visit in project. programme and its contents continue to September. India offers 10 scholarships to each be relevant. We propose extension of the India had in 2002 announced a of the MGC member countries, including Hanoi Programme of Action for another six contribution of US$1 million for setting international air fare (i.e. 50 scholarships years, i.e. from August 2007 to July 2013. up an MGC Museum of Traditional Asian on annual basis) for culture related (Excerpted from the External Affiars Minister’s Speech Textiles. Cambodia committed to provide studies in Indian universities. However, at the 5th Ministerial Meeting of MGC, Manila, 1 Au- a plot of land. Thailand had indicated the record of utilization leaves scope for gust, 2007). that it would associate with the project improvement. For instance, in the ongoing

RIS Mekong Ganga Policy Brief Launched RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, it has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation.” Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. Towards this aforesaid objective, RIS launched the first issue ofMekong-Ganga Policy Brief (MGPB) in April 2007. It seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think- tanks to promote the cause of deeper cooperation between India and Mekong countries. The publication is freely downloadable from RIS home page. The 1st issue of the Mekong-Ganga Policy Brief was launched at the GMS Task Force Meeting, organised by IWEP at Hanoi on 26th April 2007. Copies of the same were also distributed by RIS among the ASEAN delegates (including those came from Mekong countries), who attended the 9th India-ASEAN Senior Officers’ Meeting, held at Kolkata, during 26 -28, April 2007; also at the Commemorative Seminar to mark the 35th Anniversary of the Establishment of Full Diplomatic Relations between India and Vietnam, organised by the Indian Embassy in Hanoi and the Vietnam Academy of Social Sciences (VASC), held at Hanoi, during 18-20 June, 2007, and at the India – Vietnam Business Forum Meeting, organised by CII-FICCI-VCCI- ASSOCHAM, held in New Delhi on 6 July 2007.

Mekong-Ganga Policy Brief, October 2007 5 India-Mekong Cooperation Activities Report of the Fifth Ministerial Meeting of the Mekong-Ganga Cooperation The Fifth Ministerial Meeting of the that direct flights connecting all MGC well as the possibility to build the missing Mekong-Ganga Cooperation (MGC) was countries and air linkages between the link between Loc Ninh and Phnom Penh. held in Manila, Philippines on 1 August World Heritage sites in MGC countries The Meeting acknowledged the 2007. The Meeting was attended by would be a step forward to further promote completion of the road connecting H.E. Mr. Hor Namhong, Deputy Prime trade and tourism in the region. Further, Myawaddy and Tenasserim Mountain Minister and Minister of Foreign Affairs the meeting expressed appreciation of Range, 18-kilometer in length, in June 2006. and International Cooperation, Cambodia, India’s offer to host 100 Buddhist pilgrims The road link is part of the construction H.E. Dr Thongloun Sisoulith, Deputy Prime from MGC countries and Thailand for its of a trilateral highway which connects Minister and Foreign Minister of the offer to provide information on MGC Rate Moreh-Bagan-Mae Sot. The Meeting Lao PDR, H.E. U Nyan Win, Minister for Hotels in CD and directories formats, noted Thailand’s initiative to incorporate Foreign Affairs, Myanmar, H.E. Mr. Nitya subject to member countries providing the MGC transport and communication Pibulsonggram, Minister of Foreign Affairs the relevant information. cooperation with other cooperative of Thailand, H.E. Mr. Le Cong Phung, First The Meeting reviewed the progress frameworks such as ACMECS, GMS, etc. Vice Foreign Minister of Vietnam, and their made in the implementation of setting up Thai side agreed to provide a transport respective delegations. The Meeting was of a Museum of Traditional Asian Textiles cooperation proposal comprising all chaired by H.E. Mr. Pranab Mukherjee, in Siem Reap, Cambodia, for which India member countries of ACMECS, GMS Minister of External Affairs of the Republic has provided funds for the architectural and BIMSTEC as well as Malaysia and of India. designs, etc. for the project. Offers of Singapore and welcome inputs in this The leaders had a productive Thailand and Lao PDR to provide weaving regard from all MGC member countries. exchange of views on regional issues, equipment, textile samples and expertise On the education front, the leaders as well as on issues of importance to are being appreciated. It was decided agreed to strengthen regional educational the MGC. The Meeting reaffirmed the to fix some time frame for completion cooperation by tapping of the region’s of project and explore the possibility of importance of inter-linking MGC countries centers of excellence in education. In that financial sustainability of the project after through tourism, culture, human resource endeavour, leaders appreciated India’s completion of the construction work. development/education, transport and initiatives for its continued support for The Meeting regarded the importance communications, and emphasized the 50 MGC scholarships, offer to organize of the conservation of World Heritage sites need for MGC projects to make timely educational fairs in MGC countries which and appreciated Thailand’s offer to work would help in creating greater awareness progress. The Meeting reviewed and with India in the renovation and restoration about educational facilities available with found the modest progress in the of cultural heritage sites in member India. implementation of agreed projects since countries within the MGC framework. In conclusion, the meeting agreed the inception of Third Meeting of MGC, The Meeting agreed on the need for that in order to make progress, projects Phnom Penh, Cambodia. a comprehensive review of connectivity in The Meeting welcomed India’s offer to the region, particularly the construction of needed to have clear timeframes, sources host a delegation comprising of 20 travel a trilateral highway from Moreh in India, of funding, implementation mechanisms, agents in India and organize interaction for through Bagan in Myanmar, to Mae Sot and review mechanisms. them with the Indian travel agents and tour in Thailand, and a feasibility study for a (An excerption of the 5th Ministerial Meeting of MGC, operators. The Meeting recommended railway link between Delhi and Hanoi as Manila, 1 August 2007).

Vietnam and India Establish New Strategic Partnership Prime Minister of India, Dr. Manmohan and prosperity of the two countries, two countries’ diplomatic representative Singh and Prime Minister of Vietnam, contributing to peace, stability, missions and on the establishment of Mr. Nguyen Tan Dung issued a Joint cooperation, development and prosperity an English Language Training Centre in Declaration on Strategic Partnership in in the Asia-Pacific region and the world. central coastal Da Nang city, a cultural New Delhi, on 4-6 July 2007. During Prime Further, this New Strategic Partnership exchange programme, a cooperation plan Minister’s Dung visit to India, the two Prime would encompass relations in all spheres on agricultural research and education Ministers held extensive discussions and of bilateral activity including political, between the two Agriculture Ministries for mainly focused on enriching bilateral economic, security, defence, cultural, the 2007-09 period and an educational relations and on measures to further science and technology. Apart from this, exchange programme between the deepen the partnership between India and seven new agreements related to various Vietnamese and Indian governments Vietnam. They noted that the Strategic areas were also signed. They included an were also signed. Partnership marked a new breakthrough MoU on cooperation in the area of fisheries Several business agreements in bilateral relations and paved the way and aquaculture, between Vietnam’s S&T totaling nearly US$ 4.5 billion were for expanding bilateral multifaceted Ministry and India’s Power Ministry on also signed between businesses of the cooperation. the implementation of an agreement two countries, including cooperation It is now expected that the Joint on cooperation in the use of nuclear agreements between the VCCI and CII. Statement signed on this occasion would energy for peaceful purposes. An MoU serve the sustainable development on land and property exchange for the (Excerpted from the vnembassy-india.org).

6 Mekong-Ganga Policy Brief, October 2007

India-Mekong Cooperation Activities India Setting up Vietnam Favours Free Trade Agreement English Language with India Training Centres in Vietnamese Prime Minister Mr. Nguyen Tan environment for Indian companies. “India Dung favoured a Free Trade Agreement is one of the top investors in Vietnam. We Mekong (FTA) between Vietnam and India during welcome more investments from India his visit to India in July 2007. “I hope and promise to create good conditions Under the India–ASEAN Cooperation talks between Vietnam and India will to ensure its success,” he said. Initiative, India is setting up Centres begin soon for signing an FTA that would Terming his visits to Kolkata and for English Language Training (CELT) help create more favourable business Mumbai as “fruitful,” Mr. Dung said the in Cambodia, Lao PDR, Myanmar conditions to improve the level of trade,” two nations need to collaborate more. and Vietnam. This project is being Mr. Dung told the India-Vietnam Business “Vietnam wants to find out ways to elevate implemented by the English and Forum. the traditional relationship with India to a Foreign Languages University (EFL Lauding the role of Indian industry comprehensive strategic partnership in University), Hyderabad. In Cambodia, in the development of the Vietnamese science, technology and education for the CELT will be set up in collaboration economy, Mr. Dung said, “We need to sustainable development of the people of with the Royal Academy of Cambodia, further cement this relationship…” He both countries.” Phnom Penh. In Lao PDR, the CELT is also hoped that India would be able to Praising India’s ‘Look East’ policy, coming up in Vientiane in collaboration finalise the trade agreement with the Mr. Dung said it has helped South East with the National University of Laos. Association of South East Asian Nations Asian nations to come closer to India, CELT is temporarily set up in Da (ASEAN) of which Vietnam is a member. particularly Vietnam. “The relations Nang in Vietnam. Among recent “An India-ASEAN FTA would be beneficial between the two countries have increased activities, an orientation programme for the growth and prosperity of the entire considerably in the last five years, with for the Director of the Centres and region,” he added. bilateral trade reaching US$ 1 billion in officials for Centres in Cambodia, Lao The Vietnamese Prime Minister 2006.” PDR and Vietnam was organised in promised to create a favourable investment (Excerpted from The Hindu, 7 July 2007). Hyderabad on 12-16 February 2007, © The Hindu. and one month training programme for resource persons was conducted in Hyderabad from 12 March to 12 Tatas Sign Vietnam Phillips Carbon to April 2007. Deal Set up Plant in (Source: EFL University, Hyderabad). Tata Steel, the world’s sixth largest steel maker, has signed an agreement with the Vietnam Vietnam Steel Corporation to set up a cold India’s Phillips Carbon Black Ltd (a Essar to Form Joint rolling mill in Vietnam on 31 October 2007 Group company of RPG) has signed an at Hanoi. The Tata Steel will hold 65 per MoU with Vietnam National Chemical Venture with cent stake in the project, while Vietnam Corporation (Vinachem), on 4 July 2007 Steel will own the rest. The total capacity at Kolkata for setting up a carbon black PetroVietnam of Vietnam Steel is about 5 million tonnes. manufacturing facility in Vietnam. The India’s Essar Group is in talks with company is India’s largest carbon black PetroVietnam Exploration Production The companies will undertake a joint Corporation (PEVP), a Vietnam-based, feasibility study to ascertain the capacity manufacturer and the biggest exporter state-owned company, for jointly exploring and investment in the project. of carbon black. It exports carbon black oil and gas opportunities. The joint Tata Steel and Vietnam Steel are to 15 countries, including Vietnam. PCBL venture will cover Vietnam and other now carrying out a feasibility study for and Vinachem will form a joint venture with countries, where PEVP has interests in oil a steel project in Vietnam’s Ha Tinh majority holding by the former for setting blocks. Both the parties are working on a province. The Ha Tinh project includes up a carbon black manufacturing unit proposed memorandum of understanding a 4.5-million-tonne integrated steel plant in Vietnam. This will be the first carbon (MoU) before getting into the venture. An and the development of Thach Khe iron black plant in Vietnam. The unit, with a MoU is expected to be signed in coming ore mine at an estimated investment capacity of 50,000 tonnes, is expected months. The group would invest in the of US$ 3.5 billion. Vietnam with a GDP to go stream by 2009. It will require an project through Essar Energy Holdings growth of over 8 per cent, and per capita investment of US$ 100 million. Many (EEHL), a part of the group’s overseas steel consumption of over 85 kg, is on tyre manufacturers are eyeing Vietnam investment vehicle, Essar Global. the threshold of a significant increase in because of an abundance of natural The Essar Group, which recently consumption including value-added steel. rubber. Tyre makers are the buyers of announced an investment of US$ 527 Earlier this year, Vietnam Government carbon black. With the availability of million to set up a 2-million tonne steel gave the go-ahead to Vietnam Steel natural rubber, Vietnam is emerging as an mill in Vietnam, is also planning to set up Corporation to work with the Tata Steel attractive location for tyre manufacturers. a cement plant in Vietnam. for setting up the steel plant in Vietnam. (Excerpted from The Telegraph, 1 November 2007).

(Excerpted from Business Standard, 6 July 2007). (Excerpted from The Telegraph, 1 November 2007). © The Telegraph. © Business Standard. © The Telegraph.

Mekong-Ganga Policy Brief, October 2007 7 Focus Cambodia Financial Resources - Key Factor for MGC Advancement Mr. Hor Namhong, Deputy Prime Minister and Minister of Foreign Affairs & International Cooperation, Cambodia and visa formalities. I appreciate that I wish to recall that after the announcement during the ASEAN India-Summit, Cebu in countries and to set up a team to study of Mekong-Ganga Cooperation (MGC) 2007, Indian Prime Minister Manmohan feasibility on rail linkage from New Delhi initiative by the foreign ministers of the Singh reiterated Indian willingness to to Hanoi in Vietnam and the missing links. six countries in Bangkok on July 28, 2000, engage ASEAN in a discussion on an For the rail link, I have learned that Vietnam in collaboration with China we adopted the Vientiane Declaration open skies policy. I believe that direct Railway Construction Corporation is on Mekong-Ganga Cooperation at the flights connecting to all MGC member planning to build Saigon-Loc Ninh rail MGC Inaugural Ministerial Meeting in countries would be a step forward to link, designing to connect this point of Vientiane in November 2000, which set promote cooperation in air service and Vietnam’s border to Cambodian border out a vision for cooperation aimed at linkages as well as tourism in the region. in Kampong Cham province where the developing closer relations and better On culture, Cambodia welcomed understanding among MGC member missing link to Phnom Penh still exists. the commitment by India to offer fund Maybe India could consider to countries by identifying four priority for the establishment of MGC Museum areas of cooperation, namely, tourism, contribute to the realization of this missing of Traditional Asian Textile in Siem Reap. link in Cambodia in the framework of rail culture, education and transport and After that, Cambodia has provided one communication. linkage from New Delhi to Hanoi. hectare of land at Siem Reap for the By and large, I have noted that not At the Second Ministerial Meeting in museum site and India has provided funds Hanoi in July 2001, we adopted the Hanoi much progress had been made in the for architectural designs. implementation of projects in the four Programme of Action for MGC, which At MGC Ministerial Meeting in Phnom areas of cooperation in the Phnom Penh provided specific action to be taken in the Penh, 2003, we concurred to increase Roadmap, due to lack of funding. said four priority areas to be carried out in MGC Scholarship in different disciplines To revitalize our cooperation, the six years time frame from July 2001 to to train the trainers in IT and to create a financial resource is the key factor to July 2007. To ensure the implementation MGC website and information newsletters. ensure the effective implementation of of the Vientiane Declaration and the In this regard, we are grateful to India the projects. The Phnom Penh Road rd Hanoi Programme of Action, the 3 MGC for the scholarships provided to MGC Map should be reactivated to realize the Ministerial Meeting held in June 2003 in member countries. However, it would Hanoi Programme of Action with a new Phnom Penh, adopted the Phnom Penh be more appropriate if India could also extension period of 6 years timeframe Road Map to implement concretely these offer round trip airfares to the scholarship (2007-2013). In conclusion, I wish to specified sectors. holders. reiterate that funding is a vital factor for On tourism cooperation, in the On transport and communication, MGC advancement, without financial Roadmap, we agreed to develop a we agreed to the roadmap to support resources we can never move forward. combined tourist destination linking more the trilateral road linkages among India- (Excerpted from the Deputy Prime Minister’s Speech than one member country and to explore Myanmar-Thailand and consider further at the 5th Ministerial Meeting of MGC, 1 August 2007, the possibility of relaxation of traffic rights expansion of it to other MGC member Manila).

ship Development Centre in Cambodia Cambodia-India Entrepreneurship Development Centre (CIEDC) is a joint cooperation programme of Royal Government of Cambodia and Government of India. CIEDC is one of the four Entrepreneurship Development Centres (EDC) established as part of India’s technical assistance under Initiative for ASEAN Integration (IAI) in the CLMV countries (Cambodia, Laos, Myanmar and Vietnam). In 2006, CIEDC was formally accorded the status of national training centre by the Royal Government of Cambodia. The centre functions under the Ministry of Labour and Vocational Training (MoLVT). CIEDC receives technical guidance from Entrepreneurship Development Institute of India (EDII) for development and updating of training modules tailored to Cambodian situation. CIEDC is the nodal agency for capacity building of the Vocational Teachers of the PTCs on areas of entrepreneurship development and small business development. It is implementing Faculty Development Programme on Entrepreneurship for the newly recruited Teachers of Vocational training Institutes. The CIEDC recognizes the role of small businesses in providing large-scale employment for equitable distribution and effective mobilization of capital resources and skills in Cambodia. It focuses on the skills component, and aims to contribute to the demand for investment capital and utilization thereof by micro and small enterprises as potential key engine of a dispersed economic development in Cambodia. CIEDC Training Programs offer an opening for existing low productive enterprises to scale up on the productivity score, besides helping create new businesses with an overarching goal of sustainable poverty reduction by augmenting job creations together with enhancing self-employment among the rural and urban youth, women and men. The CIEDC provides technical services to new entrepreneurs in setting up their enterprises; facility for learning of Information and Communication Technology (ICT) and English language; vocational training to focus on Cambodia training programmes and other relevant training and services to entrepreneurs and assistance in access to finance to develop enterprises to trainees who complete training at CIEDC. The activities of CIEDC cater to the needs of both the start-up entrepreneur, at basic level and the existing entrepreneur, at advanced level in Cambodia. (Source: EDI, Ahmedabad).

8 Mekong-Ganga Policy Brief, October 2007

FocusResources Cambodia Major Indian Projects in Cambodia Betting Big on Tourism Cambodia with a GDP of about $2,500 has bet its future on Minimally Invasive Education (MIE) IT Kiosks tourism, which accounts for about 50 per cent of its GNP. Tourist With a view to promote computer literacy in Cambodia, India arrivals in 2006 were 1.7 million, an increase of 20 per cent over gifted 5 MIE IT kiosks. These kiosks which have been established the previous year. With over 60 per cent of tourists coming to in Siem Reap, Kandal, Takeo and Phnom Penh, are providing free visit the wonderful Angkor Wat (temple) ruins, the Government is Internet services and spreading computer literacy awareness. actively exploring how it can promote other sites in the country. The Cambodian Government has taken advantage of aid from Museum of Traditional Asian Textiles, Siem Reap various allies to fund restoration and preservation work of the India is setting up a Museum of Traditional Asian Textiles in country’s temple ruins. It is collaborating, among others, with German, French, Chinese, and Indian governments. Cambodia. The Government of Cambodia has alotted one Cambodia has instituted various systems to make it easy for hectare of land in Siem Reap for this purpose. the tourist. A tourist can get an ‘e-Visa’ over the web or procure one on arrival at the airport. Tour guides undergo a four-year Collaborations in Academics programme of study after high school and get a bachelor’s Following an MoU signed between IIT, Mumbai (IIT-B) and degree to qualify as a guide. They need to pay a licence fee Institute de Technologie du Cambodge (ITC) with the objective annually, wear a specified uniform even as freelancers, and follow of planning an exchange programme in Academics, Build a code of practice. Guides are certified in specific languages, Bright University, Cambodia and Annamalai University, India, based on their competence. Taxi and tut-tut drivers wear a Pannasastra University of Cambodia and Somaiya Educational standard vest with their number emblazoned across for easy Trust, Mumbai, and the International University, Phnom Penh and identification. Vinayaka Mission’s Research Foundation, Salem, have signed Lao is less prosperous with a per capita GDP of $2,000. Here an MoU for cooperation. tourism is one area that offers its people opportunities lacking elsewhere. However, in both countries, the Thai baht, the dollar ITEC Assistance and Programmes and the euro are readily accepted in shops and restaurants. Under the ITEC programme, the Government of India has They subscribe to a semi-official dollarisation where another trained 552 Cambodian nationals in various disciplines currency has legal tender status in the country. The visa fees, including Computer Applications, Industrial Pollution Control and airport exit tax, and even the entrance fees to monuments are Environmental Techniques, Agro Industry, Journalism, Labour listed in US dollars. Administration, Parliamentary Studies and Professional Courses (Excerpted from the Hindu Business Line, 22 January 2007). for Foreign Diplomats. © Hindu Business Line. IT Training for NiDA Officials Essar Set to Launch GSM About 44 Cambodian officials from National Information Communications Technology Development Authority (NiDA) Services in Cambodia completed a course in IT and Office Automation in India. The Essar Group is planning to launch GSM-based mobile services independently in Cambodia. The group has reportedly Higher Education in Buddhist Studies finalised a joint venture with a local company and soon would About 8 Cambodian monks were granted scholarships in 2005- apply for a licence with the Cambodian Ministry of Post and 06 for pursuing 3-year B.A. degree course in humanities and Telecommunications.The licence, when granted, will be for 30 years for mobile services and for 35 years for other telecom- Buddhist studies at the prestigious Benaras Hindu University, related sectors, such as internet services, the source added. Varanasi. The Essar JV will become the fifth mobile service provider in Cambodia, followed by Vietnamese company to provide mobile Angkor Wat Restoration Project (1986-93) phone and internet services in the country. The Angkor Wat Temple conservation project financed by the Cambodia is seen as an lucrative emerging market on Ministry of External Affairs, was the single largest project ever account of its poor telecom penetration. Its mobile market has undertaken by India under its ITEC programme in any country. been growing at an annual rate of 35 per cent over the last two The cost of India’s participation in the Angkor Wat project is years. At present, there are only three operators in the country estimated at US$ 4 million. include MobiTel, CamShin and Telekom Malaysia which jointly have only about 1.5 million subscribers, which translates to a Ta Prohm Restoration Project (2003 onwards) tele-density of less than 10 per cent. India has taken up Restoration of Ta Prohm temple in Siem Reap by ASI, for which funds are being provided under ITEC (Excerpted from the Economic Times, 30 May 2007). programme of MEA. The ASI utilised advanced 3D laser scanning © Economic Times. techniques in coordination with Elcome Technologies Limited. Besides that, technical teams from IIT, Chennai, and WAPCOS Indian Companies in Cambodia conducted studies on soil and foundation aspects, There are representatives of well-known firms, including Ranbaxy, Credit Line Core, Dr. Reddy’s, Cipla, Lyka, and Healol. Kirloskars is the first organization from the corporate sector in India to open up An agreement to extend a Credit Line of US$ 10 million on soft their office in Cambodia. The Brahmakumaris has opened their terms, an Indian company, Kirloskar Group, supplied irrigation branch in Phnom Penh. They are assisting with the retraining and pumps worth US$ 4.5 million to Cambodia for irrigation purposes. rehabilitation of former Khmer Rouge soldiers, and orphans, in ‘Living Values.’ (Source:India Indian Embassy,Setting Phnom Penh). up Entrepreneur- (Source: Indian Embassy, Phnom Penh).

Mekong-Ganga Policy Brief, October 2007 9 ResourcesResources

ness, namely a micro-economic approach Mekong-Ganga Cooperation Asia’s New Regionalism and that describes competitiveness as a Initiative - Analysis and Global Role – Agenda for the East Asia Summit firm-level approach and an institutional Assessment of India’s approach that takes a broader view Editors : Nagesh Kumar, K. Engagement with Greater and explains competitiveness as an Mekong Sub-region Kesavapany and Yao Chaocheng institutions-based phenomenon, focusing Swaran Singh, IRASEC, 2007 RIS and ISEAS, 2008 on the government’s role to create a ISBN: 978-974-7552-18-8 ISBN: 81-7122-098-3 conducive environment for trade. ISBN: 978-981-230-749-1 (Staff Working Paper 03/0731) From October 2006, India This book, brought out holds the Chair of the jointly by RIS and ISEAS, Mekong-Ganga Cooperation Singapore, discusses and Linking Greater Mekong Initiative (MGCI). MGCI aims analyses the crucial issues Subregion Enterprises to at rekindling the cultural impinging upon economic International Markets: The links between India and the integration in Asia. These Role of Global Value Chains, five riparian states of the include like Asia’s new global International Production Mekong River, namely, Cambodia, Laos, role and regional economic integration, Myanmar, Thailand and Vietnam. It is Networks and Enterprise relevance of broader regional economic Clusters from here that India seeks to strengthen integration in Asia and a roadmap, connectivity through building the physical strategic perspective, role of ASEAN, UNESCAP, 2007 The emergence of global value chains and social infrastructure in these countries. China, India, Asia Pacific region, trade (GVCs) and associated international This includes roads, rails, air links, issues, welfare gains, regional financial production networks (IPN) is transforming and information and communi-cation cooperation, energy outlook and agenda production, trade and investment in a wide technologies as also education, culture, for the East Asia Summit. The volume is range of industries. This offers potentially and imparting skills in development third in the series of RIS work in promoting significant opportunities for integrating management and other technical areas. economic integration and building Asian GMS enterprises, particularly SMEs India has taken scores of major initiatives economic community. under the MGCI and this newfound more effectively into the international economy. However, these developments enthusiasm has also provided a boost to Mekong Tourism: Blessings India’s bilateral relations with each country. also pose new challenges to enterprises (Occassional Paper No. 3, 2007) for All? and Governments, and redefine the Editor: Mingsarn Kaosa-ard Chiang framework for business-to-government Mai Social Research Institute, and government-to-government relations South-South Economic Chiang Mai University, 2007 in the context of regional cooperation in Cooperation-Enhancing GMS- This book investigates the the Subregion. This publication provides India Relationship, importance and the potential an insight to GVCs and IPN, and highlights CUTS International, 2007 of tourism in the Greater the required policy options in order to ISBN: 978-81-8257-083-2 Mekong economies. It also strengthen competitive capabilities of explores, at the industry SMEs in the world. This report explores trade and investment level, the income share relationship between India and the CLV accrued to labor, capital and GMS Transport Strategy countries looks at demand-side and government, and also between foreign supply-side factors that could enhance and local stakeholders measured. At 2006-2015 trade and investment flows between the community level, it investigates the ADB, 2007 India and the three countries; highlights impact of tourism on income distribution. The transport sector is critical to economic counterfactual perceptions and attempts In particular, the book looks at how tourism cooperation among the to paint future trade scenarios among exploits and interacts with natural and countries of the Greater these countries while recommending social capital. It argues that tourism has Mekong Subregion (GMS). policy measures aimed at enhancing a special characteristic in that it relies Soon after its inception in trade and economic cooperation; contains heavily on public and social goods and 1992, the GMS Economic a detailed account of past and present that it cannot be left to the market alone Cooperation Program trade and investment patterns, including to regulate activities. Involvement of civil developed a GMS Transport societies and public participation are an analysis of the policy reforms that have Master Plan (1995) to important components for effective public been undertaken by each country, gaps encourage commercial exchange among policy towards tourism management. and lacunae in economic cooperation the countries to spur development, among the countries and the main reasons generate employment opportunities, therein; also identifies areas of cooperation Competitiveness and and assist GMS countries’ programs to among the countries concerned, that is, Institutional Quality in the reduce poverty. The Transport Master the sectors where trade and investment Greater Mekong Subregion Plan served well to develop the economic flows may be enhanced. Sarah Mueller, corridors that are the foundation of the UNESCAP, 2007 GMS Program. GMS leaders, during their This research paper provides an overview Summits in 2002 and 2005, emphasized on two major approaches to competitive- that strong transport systems and logistics 10 Mekong-Ganga Policy Brief, October 2007

ResourcesResources are needed to deepen GMS cooperation. This publication broadly highlights the Bilateral Merchandise Trade between India and transport sector expansion plan in order Cambodia in 2005-06 to accommodate the projected transport needs till 2015 in GMS. (A) Top 10 Indian Exports to Cambodia (US$ Million) HS code Commodity Export Value Meeting the Challenge of 3004 Mdcmnts (Excl Itms of 3002,3005 / 3006) Fr Thrputc/Prphylctc 9.55 Private Sector Development: Evidence from the Mekong uses in Measurd Dosesor in Pckngs Fr Rtl Sale Sub-region 4113 Leather Further Prepard After Taning Crustleather of other Animals 0.72 OECD Development Centre, 2006 without Wool/ Hair w.o.n. split. ISBN: 9264028226 3003 Medicaments (Excl Goods Hdg No 3002 3005 or 3006) Cnsistnc of 0.52 This publication focusses on how firms in developing countries can improve their Two/More Constunts Mxd together for Hmn Medcne Nt Fr Rtl Sale competitiveness, access export markets, 2941 Antibiotics 0.43 create employment opportunities, and 902 Tea 0.41 reduce poverty - based on case studies. It also focuses on selected industries and 2403 Othr Mnfrd Tobaco & Mnfrd Tobaco Substtuts homogenised or 0.39 reviews experiences of governments and Reconstitued Tobacco Tobacco Extracts & Essences enterprises in the Mekong sub-region. 4112 Leather Further Prepard After Taning/Crust Leather of Sheep/Lamb 0.31 India-Vietnam Trade:Current Without Wool w.o.n. Split Relations and Prospects 3603 Safety Fuses Detonating Fuses Percussion or Detonating 0.26 Rajesh Mehta, RIS Caps;Igniters; Elec Detonatrs The paper analyses the level, growth and composition of India-Vietnam trade in 4106 Taned/Crust Hide & Skins of Other Animls Wout Wool/Hair Won 0.20 goods, identify sectors/products in which Split But not Further prepared. India has export potential in Vietnam, and 4107 Leather Further Prepared After Taning/Crust Incldg Parcmnt- 0.19 examine the implication of India-Vietnam bilateral free trade agreement. Some dressed Leather of Bovin without hair w.o.n.split preliminary results show that India has India’s Total Exports to Cambodia 24.19 export potential in number of sectors, if a duty free regime is agreed between India and Vietnam. (B) Top 10 Indian Imports from Cambodia (US$ Million) (RIS Discussion Paper No.105, December 2005). HS code Commodity Import Value 801 Coconut,Brazil Nuts & Cashew Nuts Fresh Or Dried 0.45 Whether Or Not Shelled Or Peeled Further Readings 1511 Palm Oil & Its Fractions W/N Refined But Not Chemically Modified 0.09  Geography as Opportunity, Keynote 4104 Taned/Crust Hide & Skin Of Bvne(inclding Buffalo) Or Equine Animal 0.04 Address by Mr. Pranab Mukherjee, Minister of External Affairs, Without Hair Wonsplt But Nt Further Prepared Government of India, 2007. 6204 Women’s/Girls’ Suits, Ensembles, Jackets, Dresses, Skirts,Trousers, Bib 0.04  Greater Mekong Subregion & Brace Ovrals,Brechs & Shorts Etc, (excpt Swimwear) Economic Cooperation Program: Strategic Framework for Subregional 9033 Prts & Accessories Fr Machines, Appliances, Instruments/Apparatus 0.03 Cooperation in Agriculture 2006- of Chapter 90,Nes 2010, ADB, 2007. 2933 Heterocyclc Compnds Wth Nitrogn Hetro Atoms(s) only 0.02  Vietnam-India in Focus, Embassy of the Socialist Republic of Vietnam, 5007 Woven Fabrics of Silk or Silk Waste 0.02 New Delhi, 2007. 5209 Wovn Fbrcs of Cotton, Contng >=85% Cotn By Wt Weighing>200 0.02  East to the Mekong, ie², Engineering Gm Per Sqm Export Promotion Council (EEPC), Vol. 1. No.7, June 2007. 3506 Prpd Glues & Othr Prpd Adhsvs Nes/Incldd Prdcts For Use As 0.01  A Bend in the River, Hannah Beech, Glues/Adhsvs Put Up For Retl Sale As Glues/Adhsvs Nt Excdng 1 Kg TIME, September 10, 2007. 4112 Leather Further Prepard After Taning/Crust Leather of Sheep/Lamb 0.01  Mekong Region: Foreign Direct Without Wool w.o.n. Split Investment, P r e m a - c h a n d r a Athukorala, et al. ADB Institute, India’s Total Imports from Cambodia 0.78 Tokyo, 2006. Source: Export Import Data Bank, Ministry of Commerce and Industry, Government of India, New Delhi.

Mekong-Ganga Policy Brief, October 2007 11 Economic and Trade Indicators

Cambodia and India: Per Capita Income Cambodia and India: Annual GDP Growth 16 13.40 4000 14 Cambodia 12 3000 9.96 10 8.43 8.59 9.23 7.66 2000 8 6.20 8.33

PPP 8.39 5.21 6 4.04 India

1000 (Annual %) 4 3.73

(current international $) 0 2 2001 2002 2003 2004 2005 0 Cambodia 1869 1980 2151 2381 2727 India 2507 2605 2838 3110 3452 2000 2001 2002 2003 2004 2005

Source: World Development Indicators CD ROM 2007, World Bank Source: World Development Indicators CD ROM 2007, World Bank

Cambodia and India: Changes in Sectoral Composition India’s Trade with Cambodia: 1981-2006 (% share in GDP) 1995 2005 35 Cambodia India Cambodia India Agriculture 49.65 28.24 34.19 18.30 30 Industry 14.82 28.12 26.71 27.33 25 Services 35.53 43.64 39.10 54.37 n 20 Total 100.00 100.00 100.00 100.00

Source: World Development Indicators CD ROM 2007, World Bank 15 US$ millioUS$ 10 Cambodia and India: Trade Indicators in 2005 Cambodia India 5 Exports of goods and services (% of GDP) 65.11 20.54 0 Imports of goods and services (% of GDP) 73.91 24.18 2006 Trade (% of GDP) 139.01 44.72 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Trade in goods (% of GDP) 109.90 28.54 Export Import Trade in services (% of GDP) 28.08 10.20 Source: World Development Indicators CD ROM 2007, World Bank Source: Direction of Trade Statistics, August 2007, IMF Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong-Ganga Policy Brief within the framework of this project. This publication seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of RIS or SDC. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in or www.newasiaforum.org.

RIS Research and Information System for Developing Countries (RIS) is an autonomous policy think-tank, established in 1984 in New Delhi, and specialised in trade and development issues. Its work programme focuses on multilateral trade negotiations, regional economic integration in Asia, new technologies and development, South-South Cooperation and strategic responses to globalization. The work of RIS is published in the form of research reports, books, discussion papers and journals. For more information about RIS and Supported by: its work programme, please visit its website: www.ris.org.in. .. DIREKTION FUR ENTWICKLUNG UND ZUSAMMENARBEIT DEZA DIRECTION DU DEVELOPPEMENT ET DE LA COOPERATION DDC Core IV-B, Fourth Floor, India Habitat Centre DIREZIONE DELLO SVILUPPO E DELLA COOPERAZIONE DSC SWISS AGENCY FOR DEVELOPMENT AND COOPERATION SDC Lodhi Road, New Delhi-110 003, India. AGENCIA SUIZA PARA EL DESARROLLO Y LA COOPERACION COSUDE RIS Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Research and Information System Email: [email protected] Managing Editor: Dr. Prabir De for Developing Countries Websites: http://www.ris.org.in; http://www.newasiaforum.org Associate Editor: Dr. Beena Pandey

12 Mekong-Ganga Policy Brief, October 2007

RIS Research and Information System for Developing Countries

No. 3 May 2008 Women’s Empowerment through Microfinance in India: Lessons for Mekong Countries

ndia has taken a major step forward of economic participation of women in the and females workers in their tea estates, by launching, along with five South world, Vietnam has made good progress or ITC’s e-chaupal initiative, among many IEast Asian countries, viz. Cambodia, with respect to gender equality. However, others. Lao PDR, Myanmar, Thailand and Vietnam, this progress has not been uniform as Against this backdrop, there is the Mekong-Ganga Cooperation (MGC) women lack access to health, education a tremendous scope for the Mekong initiative in late 1990s. In the Joint Vientiane and economic opportunities in both region to learn from several successful Declaration 2000, Mekong countries formal and informal sectors. In Vietnam, experiments conducted in India and agreed to develop transportation networks women are in fact over represented in elsewhere particularly in the field of and promotion of air services and linkages low skilled employment with low wages micro finance for women’s empowerment. in the MGC region. Cooperation in the in the informal sector. On the other, as In India, microfinance programmes field of women’s empowerment, health compared to women, men benefit from have been increasingly promoted as a and nutrition and the conservation, jobs with decision making power and potential tool for women’s empowerment preservation and protection of heritage higher status. As shown in Table 1, while and also as a tool for poverty alleviation. sites and artefacts, among others, has the female labour force participation rate Empowerment of women is a process also been central to MGC initiative. in India has been quite low, as compared in which women challenge the existing The most challenging social problem to Mekong countries, the gap between the social norms and cultural traditions to the Mekong region facing today is poverty labour force participation rates of males improve their own well being. Progress especially among women living in rural and females persists in all the countries towards gender equality and women’s areas and those are belong to ethnic reported here. empowerment in India has been built upon minorities. Today, Mekong region is faced In India, several instruments have strong commitments by the Government with wide disparities between urban and also been experimented to narrow the through wide range of policy measures rural communities and between rich and gap between the labor force participation and programmes. The National Policy for poor, gender inequities, lack of access rates through Self Help Groups (SHGs), Empowerment of Women (NPEW) was to basic health and education, and and some initiatives taken by the private adopted in India in 2001 with an objective inadequate protection of the environment sector of empowering small and poor to bring advancement, development and on which traditional livelihoods depend. labourers as stakeholders of their supply empowerment of women in all spheres However, the key to sustaining the social chains. This includes examples of Amul of life. and economic empowerment in the in cooperatives, Lijjat in self-help groups, Recognizing that women can leverage Mekong region is to address these social Tata tea in giving stakes to both males their strength, increase bargaining and environmental consequences and to protect the vulnerable groups as far as possible. Table 1: Labour Force Participation Rate Over the past ten years, despite having a growth of 7.1 per cent per annum, Country Labour Force Participation Rate (%) (ages 15-64) Cambodia continues to be one of the Male Female poorest countries in the world, with 34.7 per 1990 2004 1990 2004 cent population living below the poverty line. Gender discrimination persists in Cambodia 86.7 81.4 81.0 78.0 terms of education, health, employment Lao PDR 81.6 82.3 56.3 56.4 opportunities, lack of access to land Vietnam 85.5 82.4 79.4 77.4 ownership and credit, etc. in Cambodia. India 86.6 84.3 40.3 36.0 On the other, with one of the highest rate Source: World Bank, World Development Indicators, 2007

Mekong-Ganga Policy Brief, May 2008 1 power and enhance capacities and rates, a pilot project for linking SHGs with in the names of the female member skills through joint action, the systematic banks was launched by the National Bank of the family. Access to savings and efforts have been initiated to encourage for Rural Development (NABARD) and credits gives them a greater economic the organization of women into Self Help the Small Industries Development Bank role in decision making for the welfare Groups (SHGs) and to channel resources of India (SIDBI). These banks increased of their households. This also enables to these groups. The SHGs movement has their lending to these SHGs, which in women to increase expenditure on been supported through wide range of turn provide credit facilities to the poor, the well being of themselves and their schemes of a large number of government especially women. children in terms of their health, nutrition departments like Departments of Self-employed women in the rural and education. Therefore, access to Women and Child Development, Rural areas face major financial problems microfinance resulted into women’s Development and Agriculture, among like lack of working capital and lack of increased economic activity and their others. These schemes have become the ownership assets, and often fall in the control over income, has improved their main vehicle for providing women with vicious cycle of debt and exploitative social and economic status, knowledge access to savings and credit mechanisms approach of the moneylenders. Self- and relative empowerment in India. and institutions through micro-credit Employed Women’s Association (SEWA) Efforts to reduce poverty succeed schemes. In fact, the schemes started has established the Mahila SEWA best when they mobilise the poor as ‘micro credit’, which only relates Cooperative Bank with the specific themselves, including and especially to provision of loans, have gradually objective of providing credit to the self the women. Recognising the fact that expanded to ‘microfinance’ including the employed women with a view to empower microfinance programmes in India has provision of savings, credit and to some them. The origin of the microfinance the potential to have a powerful impact extent insurance facilities to the poor in can be traced to the establishment on women’s empowerment, the Mekong both rural and urban areas. of SEWA cooperative bank in 1974 countries may evolve suitable strategies In India, various micro-finance with 4000 members as share holders and draw upon the experiences of the programmes have been initiated with and each contributed Rs. 10 as share select experiments conducted in India in the explicit goal of empowering women, capital. It provides banking services at addressing poverty and empowerment as many microfinance institutions (MFIs) the doorsteps of these economically of women in cooperative sector. target female clients only. The success of active low income women. Besides Importance of structural interventions the concept of micro-credit through SHGs offering wide range of loans, savings and through promoting asset ownership by has encouraged the Government of India insurance schemes to the poor women, the women in formal and informal sectors to establish a national level micro-credit the Bank has been instrumental in making with the initiatives of SHGs has a powerful organization. Rashtriya Mahila Kosh them self-reliant and strengthening impact on women’s empowerment. (National Credit Fund for Women) was set them at the grassroots level. SEWA’s Strengthening women’s financial base and up in 1993 under the Ministry of Women activities are driven by the needs and economic contribution to their families and and Child Development, Government demands of its members. A wide range communities will therefore play a positive of India with an initial corpus of Rs. 310 of activities covering saving and credit role in empowering them in Mekong million. It provides credit for livelihood groups, micro insurance, watershed region, where women represent an ever and income generating activities to development, dairy cooperatives and increasing share of poor. India’s success poor women in the informal sector. It fodder security, agricultural development, stories of SHGs seem able to help Mekong extends micro-finance services through forest plantations, drinking water, craft women not only to increase their savings a client friendly and hassle free loan production, tailoring unit, salt production, and boost their incomes but give them the mechanisms for household activities, gum collection, mobile ration vans and confidence needed to step into new areas housing, micro-enterprises and family urban community slum organization, of community affairs as well. Such groups needs during emergencies, etc. to bring etc. are implemented by the members are thus capable of making a positive about the socio-economic upliftment of through a number of different institutions impact on poverty in Mekong region. In poor women. Since its inception till date, established by SEWA including large parallel, we also need to practice “gender it has sanctioned loan of Rs. 2294 million number of cooperatives of which the awareness” in order to ensure that women benefiting 595,937 women in both rural largest is SEWA Bank to make members are constantly kept in the picture. and urban areas in India. (WCD, Annual and their organizations self-reliant Report 2007-08). individual institutions. SEWA has opened Some micro-credit programmes have a managerial school where illiterate or References Government of India. 2007. Annual Report remained confined to a small area and semi-illiterate poor self-employed women 2007-08, Department of Women and learn management strategies according have been successfully functioning within Child Development, New Delhi. the existing credit and savings facilities. to their own requirement and demand for JICA. 2007. Cambodia – Country Gender For example, the Indira Mahila Yojana new sophisticated items in the market. Profile: Final Report, March has been successful in states like Andhra The success of the SEWA 2007. Tokyo: Japan International Pradesh, Maharashtra, Karnataka, and Bank demonstrated that women are Cooperation Agency. Tamil Nadu. The most unique success economically active and are bankable. Self-Employed Women’s Association (SEWA). which has been achieved by these micro With the help of the micro credit facilities, 2006. Annual Report 2006. Shree finance programmes by targeting women women have been using credits more Mahila SEWA Trust, Ahmedabad. for the credit services has been their ability productively, carry out savings and to repay loans in the range of more than became responsible enough for timely Websites: www.sewa.org; www.wdc.nic.in

95 per cent, higher than the traditional repayment of loans. On the more, many Beena Pandey, Research Associate, Research and banks. Overwhelmed by the repayment landholdings have now even shifted Information System for Developing Countries (RIS), New Delhi. ■ 2 Mekong-Ganga Policy Brief, May 2008

Views from Mekong Investing in Cambodia: Opportunities and Constraints

ituated in Southeast Asia, Table 1: Agriculture Value-Added (at constant 2000 $) Cambodia is endowed with a wide range of natural resources which Country Value added per Value added as S worker ($) percentage of GDP offer high potentials for natural resource- 2000 2004 2000 2004 based industrial activities. Realizing the importance of and benefit from Cambodia 290.19 305.08 37.87 32.70 Lao PDR 450.78 459.92 52.55 46.97 the exploitation of such resources for Thailand 540.60 605.04 9.02 10.07 its social and economic development, Vietnam 277.84 304.10 24.53 21.76 since early 1990s the Royal Government Source: World Bank, World Development Indicators 2007. of Cambodia (RGC) has started and continues to open itself to the region and the world through a range of liberalization and integration efforts, namely the specific industry classifications: approximately 440 kilometre coastline, accessions to Association of South East Cambodia abounds in both freshwater Asian Nations (ASEAN) and World Trade Agriculture and Fisheries fish and sea fish. There was a substantial Organization (WTO) in 1999 and 2004, Cambodia’s agriculture and fishery sector increase of fish catch in the early 2000s respectively. This reflects country’s high contributes to almost a third of its total from 296,000 tons in 2000 to 444,500 tons degree of openness being a member output and absorbs approximately 60 per in 2001. However, the volume declined to of such associations. Additionally, the cent of the total labour force (Table 1). As 360,000 tons in 2005 which appears to be introduction of the Law on Investment in almost two-third of the country population high if compared with the catch in the 1990s. 2001 offers a favourable environment for is living in the rural area and depends In addition, there has been rise in demand investment through the provision of fiscal largely on agricultural farming, agriculture for fish products in the domestic and Thai incentives and investment guaranty. For value-added per worker increased over markets. This grants promising investment instance, the regulation allows 100 per time. opportunities in food processing industry, cent ownership by foreign investors over The inflow of FDI to the agriculture i.e. canned fish, animal products, etc. In most assets, except for land. In view of the sector has been low at 3.5 per cent, as a complement to that, Cambodia obtains above, this article aims to depict certain share of total FDI, in 2004. This provides various preferential treatments from its priority sectors with high potential for opportunity for investors to embark on multilateral trade agreements (see Box 1). investment with the highlights of a number large-scale agriculture development At the international level, Cambodia being of key preferential treatments provided by utilizing the large number of cheap labour an LDC is provided with preferential market Cambodia’s trading partners and outline force. access at low/zero tariff rates, i.e. duty free constraints faced by foreign investors in to EU, US and Canada, and 0-5 per cent Cambodia. Rice farming rate to Japan. In the region, under AFTA- Paddy cultivation is the country’s traditional CEPT arrangements, Cambodia could Sector with High Potential for and common farming practice as around enjoy duty free of fish export to Malaysia Investment 70 per cent of the households engage and Singapore and 5 per cent to Thailand With its intention and endeavour to sustain with the activity. It has been noticeable and duty free access for all fish products the current high level of growth, the RGC in that total paddy production has reached to China under “Early Harvest Programme” cooperation with its development partners 6 million tons in 2005 due to expansion of (Cambodia and WTO, 2005). has been making significant efforts in harvested area and favourable weather mapping out several commodity and conditions (NIS, 2006). This helps enhance Agro-industry service sectors in order to diversify its few export activities to its neighbouring As clearly seen through its geographical existing export sectors, i.e. garment and countries Vietnam and Thailand and location and natural resource abundance, tourism. The Diagnostic Trade Integration other rice importing countries such as Cambodia is an appropriate location for Study (DTIS), conducted in 2007, has EU and US under special preferential agro-processing industry. Locations along concluded 19 sub-sectors with high treatment. The increasing price of rice the Mekong River, i.e. Kompong Cham potential for export and contribution in the international market, coupled with province provide strategic destinations to human development.1 This indeed expansion of harvesting areas, offers for the development of industry-support is in line with the government policy broad opportunities for foreign investors plantations. Realizing such potential gain in drawing large magnitude of foreign to enter rice milling industry as large and favourable conditions for industrial direct investment (FDI) into the sectors. proportion of rice production has been development, the RGC builds strategy Therefore, it is obvious that a number, exported raw to Vietnam and Thailand.2 around the provision of concessional land probably all, of those sectors are likely to domestic and foreign investors aiming to be viable entry points for foreign and Fisheries at creating backward linkages of existing/ domestic investors. Below are highlights of Possessing a large fresh water reservoir, potential industries with the local economic some of those potential sub-sectors under known as Tonle Sap Lake, and an activities such as smallholding farming

Mekong-Ganga Policy Brief, May 2008 3 activities. Several sectors offer investment is equipped with one-stop-shop service Cambodia use electricity generated by the opportunities,3 like silk processing, jute and where key ministries in charge of import- diesel power plants. The cost has been fibres, sugar, palm oil refineries, cashew export inspection are present in the zone. high compared with those in Thailand and nut processing, rubber processing, tapioca Additionally, investment guaranty and Vietnam. The government has encouraged starch, flour and fruit products, among other fiscal and administrative incentives investment in the sector by providing others. are also provided for the investment in the various tax incentives, namely tax holiday zone. Among the zones permitted, one is for up to 9 years and tax exemption on the Tourism Manhattan SEZ, located five kilometres import of machinery. Located in Southeast Asia and possessing from the border of Vietnam. It has been natural and cultural views, Cambodia operational and hosts five factories, four Extractive industries has the advantage in attracting high of which are well under way (Saing, 2007). Cambodia has a large stock of natural number of tourists from the region and There are high opportunities for foreign resource, particularly mine which is both the world. Cambodia has been attracting investors to invest in those locations as onshore and offshore. Since the onset of growing number of tourists from the they are close to the border where energy its privatization effort in the early 1990s, world. The total number of tourist arrivals the RGC has granted permission to several has reached 2.06 million in 2007 with an Box 1: Trading Conditions private firms to explore such mineral 18.53 per cent increase, and the share As a member of ASEAN and a signatory resources as oil, gold, bauxite, and other of income of the sector to GDP was to AFTA, Cambodia’s rice falls under metallic mines. It appears to be promising about 13.1 per cent in 2005. Currently, terms of sensitive products. This provides in the oil and gas extraction offshore, and the government concentrates on three favourable market access for Cambodia the areas estimated to store large volume poles of tourism development (Phnom export to Indonesia with MFN rate at Rp. of oil and gas has been divided into blocks Penh, Siem Reap, and Sihanoukville) 430/kilo; Malaysia at zero CEPT rate; and contracted to various private firms such by ensuring favourable conditions for Thailand at 5% of CEPT applied rate; as China Petrotech, CNOOC, Polytech, domestic and international investors to Singapore with tariff free, and Vietnam at PTTEP-SPC-RP, Chevron-MOECO-GS establish hotels, restaurants and resorts 5% applied CEPT rate in 2005. Caltex.4 The contracts take the form of with the international standards. Since early Source: Cambodia and WTO, 2005 production sharing. While the onshore 2000s there has been noticeable rise in one, concession of certain locations in number tourist arrivals, and flow of FDI into supplies are available at lower cost than the North Eastern part of Cambodia have the sector has also been significant. The those in the urban centres. Transportation been granted to a number of private firms opportunities for investment appear to be cost is also apparently affordable for export for exploration, for instance, BHP Biliton bright with increasing popularity of Angkor to neighbouring countries and the world. acquired license to explore bauxite. Wat complex, rural natural views and the beautiful beach. Infrastructure Investment Incentives As a developing country which has gone Garment through decades of civil wars, there has Investment guarantee Growth of the sector has been magnificent been immense need for infrastructure According to the Law on Investment in since mid 1990s, albeit flat growth in development such as the construction Cambodia all investors shall be provided 5 2007. With a status as a least developed of roads, railways, bridges, airports, sea with guarantee as follows: country, Cambodia has acquired two main ports and other facilities. Noticeably, cost  A foreign investor shall not be treated preferential statuses—General System of total number of projects approved in the in any discriminatory way. of Preference (GSP) and Most Favoured construction sector has risen considerably  The RGC shall not undertake a Nation (MFN). Such treatments are granted from US$ 30 million in 2005 to US$ 908 nationalization policy. by countries like EU, US, Canada, Japan, million in 2006. Traditionally, investment  The RGC shall not fix the price or fee of and Australia. In addition, as a member of in the form of Build Operate Transfer the products or services of a Qualified ASEAN, it could also use low-cost content (BOT) has been popular and viable for the Investment Project. imported from member countries. The private sector entry (e.g. the renovation Taxes incentives (Chapter 5, Law on sector has been purely export-oriented of Phnom Penh International Airport by Investment) industry which utilizes limited/no local a private company). The company has  Tax holiday: i) 6-9 years starting the content for the production. This could been operating well and is due to transfer first year of sale; ii) 5-year loss carry somehow provide chance for investors full ownership to the government in 2020. forward. to invest in certain supporting industries, Besides, the initiative among Greater  Reduced corporate income tax after particularly in jute and cotton. Mekong Sub-Region (GMS) members to tax holiday period: build Southern Economic Corridor linking o After tax holiday: 9% for the first Opportunities in Other Sectors Thailand and Vietnam crossing Cambodia five years and 20% thereafter; provides high opportunity for investment o Instead of tax holiday: 40% Special Economic Zones in the road network construction and other special depreciation. The government is well conscious that supporting facilities.  Exemption from import duties and VAT: there is a need for diversifying it current o 100% on inputs for qualified export basket and promoting investment Hydropower sectors in agro-industry. In December 2005, the Cambodia has geographical location, o VAT exemption for both inputs RGC introduced the concept of special many parts of which are suitable for and sales of supporting industries economic zone/export processing zone hydropower development. Due to rising to export-oriented garment and (SEZ/EPZ) by issuing a sub-decree on industrial activities and the growth of footwear sectors. the establishment of the zone, thereby a population, Cambodia needs investment dozen of economic promotion zones were in energy sector. So far most locations in Continued on page 6 granted to foreign investors. The zone 4 Mekong-Ganga Policy Brief, May 2008

India-Mekong Cooperation Activities Cambodia Welcomes Indian Investments H.E. Mr. Hun Sen Prime Minister of Cambodia

Since Cambodia is back on the path of We expect to realize this vision by India, China, Japan, Korea, Australia, New strong and sustained economic growth, mobilizing the resources from all sources, Zealand, EU and the USA as well as the testified by considerable and encouraging either domestically or from abroad to development initiatives at regional and sub- achievements during the last few years, invest in human resource development, regional levels, have provided investors I believe that this is the best time for the institutions and both hardware and software with the opportunity to gain access to the business community and all investors to infrastructures, including roads, bridges, markets of almost all countries around the assess the potentiality and opportunity as seaports, airports, railroads, power, world. well as the future vision of Cambodia. transmission lines, clean water supply, Cambodia has comparative During the last decade, Cambodia has irrigation, development and the transfer advantages and some important potential overcome many obstacles and challenges of knowledge, know-how and technology. in the agriculture and agro-industry, labor- and transformed itself into a peaceful Within this context, recognizing the intensive industries, processing, tourism, country with improved social order, stability, huge forces of the Indian economy and with mining, and at some sections of the cooperation and development. Despite the successful development experiences manufacturing and service sectors which the region and world’s economy have learnt from neighbouring countries in the are linked to the favourable condition of land, faced with major challenges, Cambodia’s region where FDI have been playing an weather, and natural resources. To attract economy gained momentum and dynamism important and critical role, Cambodia is foreign investors, we have adopted several by growing on average 9.4 per cent per strongly determined to attract as much policies to promote Private Participation in annum during 2000-2006. Especially, as possible FDI including Indian FDIs to the Provision of Infrastructures, to provide economic growth peaked at 13.5 per cent Cambodia. National Treatment which means that in 2005 the average per capita income Therefore, I invite Indian business-men foreign and domestic investors enjoy the almost doubled from 288 US$ in 2000 to and investors, to come and visit Cambodia same rights. Further, foreign investors can 513 US$ in 2006. Inflation has been kept low in order to carry out feasibility study on your do business with or without Cambodian at an average of under 3 per cent between investment plans. As we are supportive partners and we also allow free movement 2000-2006. Exchange rate has been of the private sector and consider the of capital and foreign exchange, without broadly stable. The country’s international private sector as an important engine any restriction. reserves have increased threefold from to generate economic growth. We have In the ASEAN context, I am grateful about 500 million US$ in 2000 to more than made considerable efforts to strengthen to India for its assistance and cooperation 1.5 billion US$ as of today. the judicial system, developed our legal to help narrowing the development gap At the same time, the promising future framework and institutions in order to through initiatives such as the Special from the commercialization of oil, gas and provide a favorable environment for the Course for Diplomats from ASEAN other mineral resources has opened up private sector and protect their investments Countries as well as for the establishment new economic opportunities and hope for and business activities in Cambodia. of Entrepreneur Development Center and Cambodia to become a new development Apart from this, by clearly Center for English Language Training in zone in the region. These factors suggested understanding the market demand for the Cambodia, Laos, Myanmar and Vietnam. I the possibility of high and sustainable development of the country, Government am hopeful that India will consider positively economic growth in the medium and long has actively promoted the policy of our request to provide assistance in the terms, as well as economic diversification integrating Cambodia into the regional and field of IT where India is well-known for its and faster poverty alleviation. In this world market. As a result, we have achieved expertise. context, the Royal Government of Cambodia large economies of scale. Cambodia’s (Excerpted from the Prime Minister’s Address has an ambitious vision to utilize this new membership in the WTO and the ASEAN Delivered at the Business Luncheon Organized opportunity for the next one to two decades community as well as trade agreements by FICCI, ASSOCHAM and CII, 8 December to transform Cambodia into a fast-growing that have been agreed and signed or still 2007, New Delhi). regional economy based on agro-business, in the process of negotiation both under manufacturing and services especially, in the bilateral and ASEAN framework with the tourism sector. ■ Indian Investment Wave Flows into Vietnam

According to the Vietnamese Ambassador to India, India had moved to the 28th place among foreign direct investors in Vietnam in 2006. In 2007, it made an impressive advance to the 6th among the top ten countries and territories directly investing in Vietnam. The ambassador said that Vietnam and India will strive to increase their bilateral trade turnover to 2 billion US$ in 2008, 2 years ahead of schedule. Many Made-in-Vietnam products have earned firm foothold in India over the past years, including pepper, rubber, hardware, electronics and garments and textiles. However, the ambassador noted the trade volume between the two countries remained modest with an average growth rate of India-bound export standing at just 20 percent. According to the Vietnamese diplomat, the signing of FTA between India and the ASEAN and the Vietnam-India FTA would help to boost commodity exchange between the two countries. He also stated that the Vietnamese Embassy in India is carrying out trade and tourism promotion programmes in India in a move to draw giant Indian corporations to operate in Vietnam. (Excerpted from the VietNamNet Bridge, 2 May 2008). ■

Mekong-Ganga Policy Brief, May 2008 5 India-Mekong Cooperation Activities India and Cambodia Seek Closer Economic Cooperation During the visit of the Cambodian Prime Both sides are committed to Work Plan on and US$ 15 million for the construction of Minister Mr Hun Sen to India during 7-10 Cooperation in the Field of Agriculture and an electric transmission line between Kratie December 2007, six agreements were Allied Sectors envisages cooperation in a and Stung Treng Province. Under the MoU, signed between India and Cambodia. The number of areas including integrated pest Cambodian National Petroleum Authority Indian Prime Minister Dr. Manmohan Singh management, use of pesticides, livestock (CNPA) and ONGC Videsh Ltd. would and Cambodian Prime Minister agreed production and management, disease exchange ideas on possible cooperation to lay down the criteria and procedure diagnostics and vaccines, integrated related to exploration, development, for the transfer of sentenced persons watershed management, aquaculture production, gas utilisation, processing, who are incarcerated in the other country production management, exchange of sale, distribution of petroleum and their back to their own country to serve the information and reports, exchange of germ products as well as training and education remainder of their sentence. They also plasm, training and exchange of visits by in oil and gas operations. signed a MoU on Cooperation in the scientists, agricultural extension services, Both India and Cambodia also Field of Water Resource Management cooperation in food processing industries consented to cooperate in the field to jointly collaborate in the area of water and development and improvement of of defence through regular exchange resources development and management. horticulture technology for fruits. programme in training, military instructors, It envisages the exchange of experts, Under the credit line agreement observers, military, naval vessels and organization of training programmes and between Cambodia and EXIM Bank of aircraft, exchange of intelligence, the establishment of a Joint Working Group India, India would extend a Line of Credit organization of seminars and symposia, to monitor cooperation in the area. for US$ 35.2 million at a fixed rate of interest cooperation in defence industry and Further, the MoU on Foreign Office of 1.75 per cent repayable over 20 years research and the protection of classified Consultations between India and Cambodia inclusive of a grace period of 5 years. information. envisages regular consultations at the Vice The Line of Credit would be utilized for Ministerial level to review all aspects of financing three projects - US$ 15 million for (Source: Press Release, Ministry of External Affairs, bilateral relations and exchange of views the Stung Tasal Development project, US $ New Delhi, 8 December, 2007). on international issues of mutual interest. 5.2 million for the purchase of water pumps

Continued from page 4 (Investing in Cambodia Opportunities and Constraints)

Constraints business practices and regulatory policy partners in formulating public private Although there are several opportunities uncertainty in Cambodia. sector at the provincial level in order to and incentives, investors face a number In relation to the aforementioned tackle existing business hurdles. of constraints as well. Cost of doing concerns, a report titled “Doing Business business shall be placed as a primary 2008” discloses poor performance Endnotes 1 For detail information, see executive concern as it has been well-perceived to indicators in relation to business practices. summary of Cambodia’s Trade Integration be a hurdle in business operation and start Table 2 reveals low business ranking Strategy, 2007, p. 16-35. up everywhere. Fuel price is one factor indicators compared with Lao PDR, 2 So far no official report discloses exact which marks up cost of production as Thailand and Vietnam, albeit better volume of such informal export. Cambodia is a net importer of petroleum. performing in the fields of Paying Taxes 3 Extracted from An Investment Guide to EIC survey in 2007 reveals high fuel price and Protecting Investors. Cambodia: Opportunities and Conditions, in Cambodia at US$ 0.96/litre compared Nonetheless, concerns raised by the 2004, p.34. with its neighbouring countries Vietnam private sector have so far been taken into 4 Based on map compiled by Oxfam America at US$ 0.65/litre and Thailand at US$ consideration by the RGC. For instance, 5 Investment Law: Article 8-11. 0.68/litre. Likewise, there has been grave public private sector dialogue has been concern among private business entities organized quarterly, and there has been Chan Hang Saing, Research Associate, Cambodia concerning anti-competitive and informal effort by the RGC and its development Development Resource Institute (CDRI), Phnom Penh.

Table 2: Selected Business Ranking Indicators of GMS Countries (Rank)*

Ease of doing Starting a Dealing with Employing Registering Getting Protecting Paying business business licenses workers property credit investors taxes Cambodia 145 162 144 133 98 177 64 21 Lao PDR 94 49 152 74 16 68 33 152 Myanmar ------Thailand 15 36 12 49 20 36 33 89 Vietnam 91 97 63 84 38 48 165 128 Source: World Bank, Doing Business 2008. Note: *countries ranked out of 178 economies.

6 Mekong-Ganga Policy Brief, May 2008

Focus Lao PDR India Offers Financial Assistance to Lao PDR to Combat Avian and Human Influenza

Ambassador of India to Lao PDR, handed term strategies including spreading of monitoring in cases of outbreak. over a cheque of US$ 100,000 to Vice awareness about the disease, facilities for (Source : Indian Embassy in Lao PDR). Minister of Health, at the Ministry of Health, testing and treatment, and response and Government of Lao PDR as a grant from Government of India for assisting Lao PDR in its efforts for combating avian and Indian Companies in Lao PDR human influenza. Government of Lao PDR Lao PDR receives foreign investment mainly in food processing and mining (most proposes to use this grant for purchasing notably of copper and gold). Tourism is the fastest growing industry in the country. medical health equipment including The main source of foreign investment into Laos is from China, Vietnam, Thailand, ventilators for hospitals in Vientiane. USA, Australia and France. India has signed Trade and Economic cooperation and Avian and human influenza is a bilateral investment promotion and Protection Agreements with Laos. CII and Lao major health concern which impacts National Chamber of Commerce signed the Joint Business Council Agreement to adversely on the national socio-economic facilitate exchanges. development objectives and retard Indians living in Lao PDR reside mainly in the capital city of Vientiane. Indians economic growth. The Government own two garment factories and an agar wood factory here. They also engage of India appreciates the efforts being in businesses like restaurants, gems and jewellery, tailoring and fabrics and in made by Lao PDR for combating avian miscellaneous consumer items. At present there are two Indian companies, who and human influenza through its Action have offices in Lao PDR, viz. Kirloskar and Aditya Birla Group. Plan which has both long term and short (Source : Indian Embassy in Lao PDR).

Lao-India Entrepreneurship Development Center

As a part of India’s assistance to the Lao drop outs to orient them to think in by many international organizations PDR in support of the Initiative for ASEAN terms of entrepreneurship as a viable and LIEDC itself initiating by the Integration (IAI), Lao-India Entrepreneur- career option. Awareness Workshops to understand ship Development Centre (LIEDC) was  Introduce and facilitate introduction the importance of entrepreneurship set-up on 27 November 2004, under of entrepreneurship in education related to the development of the the Ministry of Education, Department system to wean away the youths from country’s economic growth. Various of Higher Technical and Vocational job-seeking, and motivate them to modules like EDP (Entrepreneurship Education. Entrepreneurship Develop- become entrepreneurs and create Development Programmes), NEC (New ment Institute of India (EDII), Ahmedabad jobs for others. Enterprise Creation), EU (Enterprise is involved in the project as technical  Promote the development of resilient Upgradation), COMFAR (COMFAR III- advisor and has given its affiliation to Lao PDR entrepreneurs in strategic UNIDO’s Computer Model for Feasibility LIEDC. industries. Analysis and Reporting), SIMAP (Small LIEDC has been set up with a vision to  Create a conducive business Industries Management Assistants’ spearhead entrepreneurship development environment for emergence, Programme), SYB (Start Your Business), movement in Lao PDR and would be sustenance and growth of SMEs. Computer Application and KAB (Know the centre of excellence for facilitating  Support, guide, counsel existing About Business) for education has been creation of viable of competitive new entrepreneurs so that they are able to introduced both in the Head Quarter and enterprises and strengthen the existing grow, complete globally and operate through out the country. ones inline with the Prime Minister’s profitably. Taking full advantage of the various Decree number 42/ PM dated 20 April LIEDC has achieved remarkable training programmes, participants have 2004 on The Promotion and Development successes, in terms of reach, coverage, set up their 58 new enterprises including of Small and Medium Size Enterprises. sensitization and visible impact in various family businesses and small sizes. Apart The prime objective of the centre activities for new enterprises creation from this, 48 existing enterprises were is to maintain the highest standards of and existing enterprises upgradation. upgraded with the aim to export and entrepreneurial excellence in terms of : The centre has been successfully cope up with high competitiveness in the  Instill entrepreneurial culture amongst able to sensitize the policy makers region. Further, 6 Indian companies under Lao entrepreneurs, equipped with and administrators for incorporating the B2B have signed their agreement adequate knowledge and experience. entrepreneurship education in formal for cooperation and investment with Lao  Augment the supply of entrepreneurs education curricula. Right since its companies. through education, training and inception, 114 activities has been business advisory services. conducted and 8864 participants were (Source: EDII, Ahmedabad).  Inculcate entrepreneurial values involved under funding supported among educated youths and school

Mekong-Ganga Policy Brief, May 2008 7 Focus Lao PDR

ASI to Revive Wat Phou Temples in Lao PDR India Setting up The Government of India and the testifies to their rich experience in such Centre for English Government of Lao PDR signed an MoU, in work. The team from ASI would be 2007 for the conservation and restoration stationed at the Wat Phou Temple complex Language Training of UNESCO World Heritage Site of Wat in Champasak Province. Over a period India and Lao PDR have signed an Phou. of few years, the team would work to MoU for setting up Lao-India Centre for The World Heritage Cultural site Wat restore the main temple complex including English Language Training (LICELT) at the National University of Laos in Vientiane. Phou symbolizes age-old cultural and the palaces, causeways and terraces The Centre is being set up under the civilizational linkages between India and of the complex. The restoration work is India-ASEAN Cooperation framework Lao PDR. The Wat Phou temples built comprehensive in nature and would be around the 6th Century A.D. with Hindu with similar Centres also being set up in completed in three or four phases. Cambodia, Vietnam and Myanmar. India architecture and themes in Champasak The Wat Phou is not merely an are an eloquent testimony to the rich has been acknowledged globally for its archaeological site but represents the civilizational relationship between the second largest English-speaking skilled core of Lao spirit as it existed in that era peoples of India and this region even two manpower and high standards of English from 6th Century onwards. The restoration language training in India. The advances millennia ago. work by ASI would contribute to the revival made in India in IT sector as well as other The project would be executed by of the rich cultural tradition of Lao people high technology areas are attributed the Archaeological Survey of India (ASI) in by the international community to the direct coordination with the Department of and the Lao spirit. high standards of English language and Cultural Heritage Management, Ministry of (Excerpted from the Press Release of the Embassy of innovative skills available in India. India to the Lao PDR, 30 May 2007). Information and Culture of Lao PDR. ASI The broad objectives of the LICELT had also done the complex restoration (Source : Indian Embassy in Lao PDR). has been to provide a permanent work at Angkor Vat in Siem Reap which venue for teaching English language and conducting courses for building proficiency of civil servants, teachers, ICT Bilateral Cooperation between students and business community in India and Lao PDR Lao PDR. It also aimed to facilitate the use of English language in official and India and Lao PDR signed an MoU on ICT bilateral cooperation in 2004. So far, India business transactions and prepare has collaborated in setting up of an ICT Training Centre in 2004 with 25 computers students for examinations required for with software tools. The Centre was inaugurated by the then External Affairs Minister higher education abroad - TOEFL, IELTS. during ASEAN 2004 summit. India also organized capacity building programme Apart from the training, the LICELT for government officials through human resource development for 150 Government would offer some courses like Certificate officials in four course modules of five days duration. These Training Modules are of Proficiency in English; Certificate in Office Productivity Tools, Database Design & Analysis and Web Services, Portal and Business Communication; and Diploma Content Management, Basic Software Engineering Technologies and Methodologies. in teaching of English IELTS and TOEFL The Government of India has also prepared e-Governance Action Plan preparatory courses. The Centre being document for Government of Lao PDR. A MCA Programme for thirty Lao Students set up by Government of India will have in India for three years duration was also commenced in July 2007 in collaboration a modern Language lab with the latest with GGSIP University in New Delhi. Besides, setting up of National Data Centre teaching aids and office equipment. in May 2006 , five pilot Rural Tele Centers were established in remote and rural Two experts from the Central Institute of areas along the Mekong River for ICT Penetration in Agriculture, Rural Health and English and Foreign Languages, India, Rural Development Programmes. are being deputed for teaching English (Source: Indian Embassy in Lao PDR). language at the Centre. (Source: Indian Embassy in Lao PDR).

RIS Organized First Capacity Building Programme on Global and Regional Economic Cooperation Issues In an era of globalization and regional integration, the process of regional cooperation represents both challenge as well as an opportunity for developing countries, as their growth prospects depend largely on external economic environment. In order to strengthen analytical capacity among the researchers from the Asian developing countries, RIS in collaboration with IDE/JETRO, Tokyo organized the first Capacity Building Programme on Global and Regional Economic Cooperation Issues (GRECI) under the framework of Economic Research Institute for ASEAN and East Asia (ERIA) from 11 February to 7 March 2008 in New Delhi. The capacity building programme has been designed to expose the participants to the growing complexities of global economic issues, including regional economic cooperation and negotiations and build the analytical skills among the researchers from the East Asian countries especially from the CLMV (Cambodia, Laos, Myanmar and Vietnam ) countries. The capacity building programme had participation of researchers and government officials from countries like Cambodia, Indonesia, Malaysia, Myanmar and Thailand, respectively.

8 Mekong-Ganga Policy Brief, May 2008

ResourcesResources Field Based Detailed Study at collecting basic economic data and policy, and competition in South East Asia (Country population data on sub-regional level for water use, is to set out Vietnam) for Enhancing to analyze long-term impacts of the the background to how a Export of Engineering and logistic infrastructure development on transition to sustainable linked regions by simulation supported development in the Management Services from by the theory of spatial economics. The Mekong region might India report presents the current status of b e a c h i e v e d . T h e Part I – Draft Report, January infrastructure development in Cambodia, chapters presented here 2008 CDC, New Delhi describes infrastructure development review the current state Recognizing the potential of services plan and highlights issues related to of knowledge on key sector in the country, the Ministry of infrastructure development. challenges to sustainable development Commerce and Industry, Government of in this dynamic and productive, yet India identified few services where the (ERIA Related Joint Research Project Series 2007, No.6) vulnerable, region of the Mekong Delta. country has potential and capabilities to This report brings together an analysis of offer to the global market. These selected The Study on Infrastructure how livelihoods, economic development services, which include Consultancy Development in Lao PDR and natural resources management and Management services, are derived Leeber Leebouapao, Souphith in the delta have been influenced by from a list of 161 services identified Darachanthra and Others national policy changes, integration by WTO. In order to promote India’s into the international market economy National Economic Research export capabilities in these services and concomitant regional processes to across the world, a field based study Institute, Vientiane, March 2008 understand the current state of knowledge Lao PDR, the only one land-locked was commissioned and conducted by on key challenges for sustainable country in Southeast Asian region, with consultancy Development Centre (CDC). development no direct access to the sea and poor International Infrastructure infrastructure has constrained the socio- Linking Greater Mekong Development in East Asia – economic development of the country. The Subregion Enterprises to Towards Balanced Regional Government of Lao PDR has introduced International Markets: The Development and Integration a ‘land-linked’ strategy in parallel with Role of Global Value Chains, Editor: Nagesh Kumar regional and sub-regional infrastructure International Production ERIA, IDE-JETRO development trends especially in the Networks and Enterprise March 2008 framework of ASEAN, GMS, triangle Infrastructure is a key factor Development Area, etc. as an aim to Clusters in economic development, transform this obstacle situation to an George Abonyi and thereby also help in opportunity one. United Nations, 2007 narrowing gaps between This report aims to review the ISBN-10: 9211204925 developed and backward progress of infrastructure development ISBN-13: 978-9211204926 regions. Infrastructure, especially road and transport system Global value chains and international especially transport and connectivity, of the country. It also discusses the production networks are creating an is crucial for regional cooperation and importance of infrastructure development international economy increasingly integration. The ASEAN secretariat has including at national level and under characterized by fragmented and identified infrastructure development as regional cooperation scheme for the socio- specialized production dispersed across one of the Priority Integrated Sectors (PIS) economic development of the country. borders. This study provides an overview of the ASEAN economic community. This Apart from the significant policies and of their development and the implications report analyzed the current status, issues strategies, some critical issues regarding for small and medium sized enterprises. and challenges facing infrastructure infrastructure sector has been put forth. The study proposes actions to support development in East Asia and examine (ERIA Related Joint Research Project Series 2007, the participation of enterprises from the the role that regional cooperation can play No.11) Greater Mekong Sub-region in global in meeting the challenges. value chains. (ERIA Research Project Report 2007, No.2) Challenges to Sustainable Development in the Mekong India-Thailand Partnership: The Study on Infrastructure Delta: Regional and National The Way Forward Development in Cambodia Policy Issues and Research Federation of Indian Chamber of Chap Sotharith, Kem Reat Viseth Needs Commerce and Industry (FICCI) and Tekreth Samrach Editors : Tran Than Be, Bach Tan and PriceWaterhouseCoopers Cambodian Institute for Sinh and Fiona Miller (PwC), New Delhi, 2008 Cooperation and Peace, Phnom Sumernet, Bangkok, 2007 Outlining the deepening synergies Penh, March 2008 The purpose of this Report on conditions between Indian and Thai industry, this Despite some efforts have been made so in the Mekong Delta, consisting of four FICCI-PwC report points out that for further far, the status of infrastructure in Cambodia detailed chapters that address flooding advancing the objectives of the Look East is still in poor condition compared to the and salinity management, livelihoods policy, Thailand is one of the important countries in the region. The report aims and resource use strategies, fisheries countries under focus. The report notes

Mekong-Ganga Policy Brief, May 2008 9 Resources

that trade and investment between the regard to substance use and related risks. the essays in Taking two countries has gained momentum. The tool kit aims to provide ‘how to do it’ Southeast Asia to Market A number of initiatives in Mekong Sub- guides for assessment of individual, group trace the myriad ways region are proving its economic value and family counselling interventions that recent alignments among and capacity to dramatically transform can be applied in community or residential producers, distributors, the region. India-Thailand Free Trade settings. and consumers are Agreement has provided a big boost to affecting people and bilateral trade and investment. Living in a Globalized World: nature throughout the Ethnic Minorities in the region. Mid-Term Review of the Greater Mekong Subregion In case studies 10-Year GMS Strategic Editors: Don McCaskill, Prasit ranging from coffee and hardwood Framework (2002-2012) Leepreecha and He Shaoying products to mushroom pickers and Asian Development Bank, 2007 Mekong Press, 2008 Vietnamese factory workers, the authors detail the Southeast Asian articulations The Ten-Year Strategic Framework ISBN-10: 9748276635 for the GMS Programme (GMS-SF) of these processes while also discussing ISBN-13: 978-9748276632 the broader implications of these shifts. was endorsed by the GMS Leaders Indigenous peoples in Laos, Thailand, Taken together, the cases show how at their First Summit in Phnom Penh in Vietnam, and Yunnan (in China) live in commodities illuminate the convergence November 2002. Since then the GMS- a region of massive change, fuelled by SF has guided the implementation of the rise of China, the of changing social forces in Southeast the GMS Programme. By 2007, halfway end of war or sanctions, Asia today, as they transform the terms, through the GMS-SF’s implementation “open door” policies, practices, and experiences of everyday period, significant changes which affect and regional integration. life and politics in the global economy. the GMS Programme have taken place in P o l i c i e s a i m e d a t the regional and global environment. The minorities or developing Mekong Region: Foreign Mid-Term Review assessed the relevance upland areas, as well as Direct Investment of the GMS-SF in the light of progress transformations wrought Asian Development Bank (ADB), made and the changing regional and by migration, highways, 2006 global environment. hydropower, the Internet and other media, This report discusses in some detail The Review found that, under the and tourism are all impacting the cultures the significance of FDI especially in the GMS-SF, the GMS Programme has of the Akha, Lisu, Karen, Dai, Mien, Khmu, three transitional economies in the GMS. accelerated, delivering concrete results and numerous other groups in the Mekong Attracting FDI has been a key focus of and contributing to the shared vision of a region. market-oriented policy reforms in these prosperous, integrated and harmonious This book is the result of an innovative countries. As transitional economies, these Mekong sub region. It concluded that cross-border comparative project jointly countries require substantial amounts of the strategic priorities of the GMS remain conducted by an international team investment to transform their economies valid and will serve as good bases for of scholars. The authors focus on a and meet the economic, social, and other moving forward in the remaining half of variety of phenomena including religious developmental goals that they have set the GMS Strategy’s implementation period conversion, the media, healing practices, themselves. (2008-2012). rituals, hydropower projects, and tourist- oriented ethnic enclaves. A closing East Asian Infrastructure A Tool Kit for Building chapter is a theoretically informed study Development in a Capacity for Community- of the transformation of Hmong culture Comparative Global based Treatment and and identity, with insights that may well be applicable to the other groups. Perspective: An Analysis of Continuing Care of Young RIS Infrastructure Index Drug Users in the Greater Taking Southeast Asia to Nagesh Kumar and Prabir De, RIS Mekong Subregion Market: Commodities, Nature, Development of infrastructure is one of the John Howard and People in the Neoliberal key priorities of East Asia Summit (EAS) UNESCAP, 2007 countries. By constructing an Infrastruc- Age This tool kit was developed in response ture Index for 104 countries comprising all to requests by people working to build Editors: Joseph Nevins and the EAS members, this paper examines capacity for community-based treatment Nancy Lee Peluso the levels of infrastructure attainment of of young drug users Cornell University Press, 2Rev Ed EAS countries in a comparative global in the Greater Mekong edition, 2008 perspective over time and space. S u b re g i o n . I t u s e s ISBN-10: 0801474337 It makes observations on the gaps r e l e v a n t e x a m p l e s ISBN-13: 978-0801474330 between EAS countries in terms of from the subregion, Recent changes in the global economy infrastructure development, their overtime accessible web-based and in Southeast Asian national political performance, and provides some policy resources and templates economies have led to new forms recommenda-tions for narrowing the in order to enhance an of commo-dity production and new gaps. The Infrastructure Index developed understanding of the commodities. Using insights from political in this paper reveals very wide gaps problems many young people face with economy and commo-dity studies, in terms of infrastructure attainment

10 Mekong-Ganga Policy Brief, May 2008

Resources across the EAS region, which seem to have widened rather than narrowed over Bilateral Merchandise Trade between time. The paper recommends creating a regional mechanism in order to utilize India and Lao PDR in 2006-07 the region’s foreign exchange reserves for development of regional cross-border (a) India’s Exports to Lao PDR (US$ million) connectivity and other infrastructure HS Code Commodity Export Value services. (RIS Discussion Paper No. 135, March 2008). 85 Electrical Machinery and Equipment and Parts thereof; 0.69 Sound Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts. 90 Optical, Photographic Cinematographic Measuring, 0.32 Further Readings Checking Precision, Medical or Surgical Inst. and Apparatus Parts and Accessories thereof.  M&A Becomes a Buzz Word in 55 Man-made Staple Fibres. 0.24 Vietnam 2007. Nhan Dan, 30 May 84 Nuclear Reactors, Boilers, Machinery and 0.23 2008. Mechanical Appliances; Parts thereof.  Vietnam : Asia’s Other Miracle. The 29 Organic Chemicals. 0.21 Economist, 26 April –2 May 2008. 30 Pharmaceutical Products. 0.2  Half-way From Rags to Riches. 7 Edible Vegetables and Certain Roots and Tubers. 0.12 Special Report on Vietnam. The Economist, 26 April – 2 May 2008. 73 Articles of Iron or Steel 0.12  Managing Capital Flows: The 95 Toys, Games and Sports Requisites; Parts and 0.07 Case of Vietnam, Vo Tri Thanh and Accessories thereof. Pham Chi Quang. ADB Institute 64 Footwear, Gaiters and the Like; Parts of Such Articles. 0.04 Discussion Paper No. 105, May 12 Oil Seeds and Olea. Fruits; Misc. Grains, Seeds and 0.02 2008. Fruit; Industrial or Medicinal Plants; Straw and Fodder.  Rural Economy and Natural 39 Plastic and Articles thereof. 0.02 Resource Management: Concept 40 Rubber and Articles thereof. 0.02 Paper for the Mekong Region Programme. Swiss Agency for 96 Miscellaneous Manufactured Articles. 0.02 Development and Cooperation, 38 Miscellaneous Chemical Products. 0.01 March 2008. 63 Other Made Up Textile Articles; Sets; Worn Clothing 0.01  Connecting Mekong Region and Worn Textile Articles; Rags. with India through Infrastructure 82 Tools Implements, Cutlery, Spoons and Forks, 0.01 Linkages, Prabir De. The Financial of Base Metal; Parts thereof of Base Metal. Express, 5 February 2008. India’s Total Exports to Lao PDR 2.38  Opportunities for Trade in Services between GMS and India Challenges and Options for Future, Sanchita (b) India’s Imports from Lao PDR (US$ million) Chatterjee. CUTS Hanoi Resource Centre, 2007. HS Code Commodity Import Value  Review of the Energy Sector 13 Lac; Gums, Resins and Other Vegetable Saps 0.26 Integration in the Greater Mekong and Extracts Sub-Region-A Focus on the Electricity sub-Sector. David 32 Tanning or Dyeing Extracts; Tannins and Their Deri. 0.05 Dyes, Pigments and Other Colouring Matter; Paints Fruitman, CUTS Hanoi Resource and Ver; Putty and Other Mastics; Inks. Centre, 2007. 84 Nuclear Reactors, Boilers, Machinery and 0.04  Building Blocks or Stumbling Mechanical Appliances; Parts thereof. Blocks? The GMS and AFTA in Asia. Jayant Menon. ASEAN Economic 68 Articles of Stone, Plaster, Cement, Asbestos, Mica 0.01 Bulletin, August 2007. or Similar Materials. India’s Total Imports from Lao PDR 0.36

Source: Export Import Data Bank, Ministry of Commerce and Industry, Government of India, New Delhi

Mekong-Ganga Policy Brief, May 2008 11 Economic and Trade Indicators

India’s Trade with Lao PDR India and Lao PDR: Per Capita Income 35 4000

30 3500

25 $) 3000 onal 2500

20 nati n ter in

illio 2000 15 m ent ent $ $ rr

u 1500 US 10 (c 1000 PPP PPP 5 500 0 0 2000 2001 2002 2003 2004 2005

-5 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 India 2364 2507 2605 2838 3110 3453 Export Import Lao PDR 1505 1592 1676 1773 1892 2039

Source: Direction of Trade Statistics, January 2008, IMF Source: World Development Indicators CD-ROM, 2007, World Bank

India and Lao PDR: Changes in Sectoral Composition India and Lao PDR: Annual GDP Growth (% in GDP) 1995 2005 10.00 9.23 India Lao PDR India Lao PDR 8.33 9.00 8.39 Agriculture 28.24 55.68 18.30 44.82 8.00 Industry 28.12 19.24 27.33 29.47 7.02 7.00 6.37 Services 43.64 25.08 54.37 25.72 5.81 5.90 6.11 5.77 Total 100.00 100.00 100.00 100.00 6.00 %)

5.00 Source: World Development Indicators CD-ROM, 2007, World Bank

nnual 5.21

(A 4.00 4.04 India and Lao PDR: Trade Indicators for the Year 2005 3.00 3.73 India Lao PDR 2.00 Trade (% of GDP) 44.72 58.08 1.00 Merchandise trade (% of GDP) 28.54 43.65 0.00 Exports of goods and services (% of GDP) 20.54 27.16 2000 2001 2002 2003 2004 2005 Imports of goods and services (% of GDP) 24.18 30.91 India Lao PDR International tourist, number of arrivals (million) 3.92 0.67

Source: World Development Indicators CD-ROM, 2007, World Bank Source: World Development Indicators CD-ROM, 2007, World Bank Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation

RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong-Ganga Policy Brief within the framework of this project. This publication seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of RIS or SDC. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in or www.newasiaforum.org. RIS Research and Information System for Developing Countries (RIS) is an autonomous policy think-tank, established in 1984 in New Delhi, and specialised in trade and development issues. Its work programme focuses on multilateral trade negotiations, regional economic integration in Asia, new technologies and development, South- South Cooperation and strategic responses to globalization. The work of RIS is published in the form of research reports, books, discussion papers and journals. For more information about RIS and its work programme, please visit its website: www.ris.org.in.

RIS Schwezerische Eidgenossenschaft Federal Department of Foreign Affairs (FDFA) Research and Information System Confédération suisse Swiss Agency for Development and Cooperation (SDC) Confederazione Svizzera Department Development Policy and Multilateral Cooperation Global Issues and Sustainable Development Division for Developing Countries Confederaziun svizra Core IV-B, Fourth Floor, India Habitat Centre, Lodhi Road, New Delhi-110 003, India. Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Managing Editor: Dr. Prabir De Email: [email protected] Associate Editor: Dr. Beena Pandey Websites: http://www.ris.org.in; http://www.newasiaforum.org

12 Mekong-Ganga Policy Brief, May 2008

RIS Research and Information System for Developing Countries

No. 4 March 2009 Prospering Thailand-India Economic Partnership

he resurgence of Thailand-India technology spillovers and increasingly the country, and they were from major economic relationship is one of the mobile human populations. Over the cities like Delhi, Mumbai, Kolkata, Tmost significant events in the years, the friendship between the two Bangalore and Chennai. At the same time, contemporary period between the two nations has led to close collaboration in the number of Thai citizens visiting India nations. It is a renaissance that is not only many areas. increases each year - more than 50,000 taking place with the transformation in Fast Growing Economic Ties tourists visited India in 2008, spreading Asia, but also throwing open new more beyond the Buddhist sanctuaries, to More recently, the relationship has gotten opportunities for millions of people on both other emerging and interesting cities. This even closer economically. It is here that countries in this vast region to build a safer, illustrates the potential of people-to-people major bilateral changes have occurred as more prosperous and freer world. contact, especially the young generation both sides start to see and explore more and great scope for collaboration on Despite an ongoing global financial economic opportunities offered by each education and training. Thailand’s crisis, the biggest ever probably in living other. India has rapidly changed to hospitality and agro-business industry are memory, both Thailand and India, like become Thailand’s major trading partner, well known in India and Indian genuine many, are actually hurting, but seem to be and India ranks high being the most knowledge in science and technology is able to confront with the impact and to important South Asian investor in also well advanced compared to adjust accordingly their economies in Thailand. In 2008, bilateral trade between Thailand’s endowments in this field. These order to remain active in a reshaping post- the two reached more than US$ 6 billion, represent some of the areas that require crisis world. Thailand and India could a six times’ increase from 2000. Indian FDI bold initiatives and expressions of their collaborate more and become partners in approvals in Thailand had also willingness to come closer together. several new initiatives to help the unfolding substantially changed in the last few of prospects and uncertainties in Asia and years, with the presence of not only Thailand’s recent embrace with India the world. existing Thai-Indian companies, but also rests largely on an increasing integration Today, both Thailand and India share the new Indian multinationals like Aditya with the ASEAN+6 countries. With the common interests that extend far beyond Birla, Indorama, Tata and many others. recent trade and investment trends, day-to-day business. The best way to Thai investors, the third among ASEAN, Thailand has been able to reverse for the address this partnership is to take a long after Singapore and Malaysia, have also first time its trade deficit with India to a term view and a new shape of things to made more their presence with a rising position of a trade surplus since 2005. The come. A long term view in the sense that India and tremendous opportunities formation of preferential and bilateral trade bilateral ties have long been intertwined offered for their business inside the and investment arrangements like an in the context of history, culture, religion, country. They are doing business in food Early-Harvest Scheme (EHS) of Thailand- as well as language, where Thailand has processing, hotels and tourism, India FTA seems to serve as a catalyst for much inherited from India, directly or construction and electrical equipment furthering growing interests in Thailand- indirectly. Any attempts to building future manufacturing. India trade and investment. India’s bilateral ties should not miss the point of The openness gap with regard to trade economic policy changes since the this importance. As for a new shape of in goods, services, capital and people beginning of the 1990s, in line with the things to come, it is true that these days, flows between the two countries has liberalization process of the WTO, also almost all countries, without any exception, consistently reduced and contributed contribute to make Thailand-India including Thailand and India, are subject substantially in improving their economic ties an interesting new to forces of globalization, both positive and relationships in recent years, with landscape to be followed more closely. negative ones. But globalization without Thailand, generally, more open, as an One should also recognize the role played a proper regionalization is just an empty economy, but India also fast growing and by multinationals from Japan, South Korea, slogan. For this reason, Thailand and India liberalizing its protective regimes. the EU, the US, Taiwan, Australia, for share major long term regional and Precisely, this could also be illustrated by instance, that are still active to build their bilateral policy challenges posed by their the large numbers of Indian tourists visited regional production and service networks historical contact up to the present, Thailand. In 2008, more than 600,000 and use the potentials of Thailand and especially the economic dimension set by Indian visitors came here to visit the India in securing their business outlook market-driven trade, investment, capital city Bangkok and various parts of through FDI combining with trade.

Mekong-Ganga Policy Brief, March 2009 1 Links Moving to the Next Level FTA. In the meantime, Thailand expects address needs in bridging gaps in income, Seizing new arising opportunities of rules of origin, standard inspections and human resources development and Thailand and India, however, will require other non-tariff barriers in India, to be more infrastructure apart from continuing trade strong leadership and commitment of both relaxed, in order to help Thai exporters and finance cooperation and liberalization. sides. It requires regionalism rather than meet the Indian requirements. To both, As partners in progress, prospects for isolationism, and free trade rather than bilateral trade is complementary to each deepening a bilateral economic protectionism. When both think of their other with Thailand’s exports to India in relationship should not be limited to a strict future, they should expect more – not less the areas of processed food and sense of give-and-take exercise like in the – attention, trade, investment, innovation, automotive components and parts and scope for further FTA and Economic people flows and other major areas of Indian exports to Thailand in areas where Partnership Agreement (EPA). cooperation from different levels of their Thailand lacks expertise such as Liberalization is often seen among trading partnerships. Fortunately, both Thailand pharmaceuticals and chemicals. In any partners who will get the fair share and if and India have made interesting ground case, it seems to be that both sides are possible what would be the government works and moved a long way before they still upbeat with the results of on-going role and measures to mitigate such an become closer in recent years. This is negotiations at the regional level like impact. Such a view should not limit in especially true at the time of global ASEAN and BIMSTEC, which should also further developing FTA and EPA between contribute to a deepening bilateral financial and economic crisis when both the two. On the other hand, both could economic relationship, but should not fall the economies are likely to be contracted not forget a long term view of such of short sight to their own bilateral by several percentage points or so. Thus, liberalization will also create more partnership. they would require promising partnerships cooperation in resource pooling rather to be forged in several new areas. Among other things, there is a growing than market sharing according to the good Indeed, both Thailand and India have interest in connectivity linking the two use of their comparative advantage. been playing a more active role in regions. The two countries are well Beside, they could gain more in well enhancing regional economic connected by air transport with more structured global and regional production partnerships. Thailand is a founding airlines, over hundred flights per week, to networks in which they would work for member of ASEAN and remains prominent meet the demand. However, still more more efficiency and better resource player all along in regional affairs whether needs to be done in terms of road and rail allocations in the longer run. Thailand- it is the ASEAN Regional Forum (ARF), the links. As often noted, Thailand continues India FTA and EPA in this sense will be Greater Mekong Subregion (GMS), or to play an active role in helping economic closely linked to the progress for an recent initiatives like the ASEAN+3 or the and infrastructure development especially ASEAN-India FTA and EPA and BIMSTEC East Asia Summit (EAS). India is a major in Cambodia, Myanmar, Lao PDR, and Viet FTA and EPA, and other cooperation power of the world and also in South Asia. Nam. The country strategy has already schemes like MGC. There is no doubt that started to work for land transport So any interesting cooperation schemes leadership and commitment needed from improvement with the neighbours and is have often to do with the key role of India. both sides will be more than ever. Joint even extending this same approach Certainly, domestic and regional changes business groups to organize in priority beyond the region to reach parts of have helped these two countries to sectors are important to lay the ground Southwest China and Northeast India. In become closer. India’s “Look East Policy” work for inter-governmental organizations. connection with India and South Asia, and Thailand’s “Look West Policy” have There should be ways and means to Thailand sees 1,400 km of road link, which been instrumental to bridge mutual improve issues of common concerns like once completed, would strongly benefit understanding and further contact. the lack of information among their all countries including Myanmar, the Thailand’s support of India to be an followed citizens and also the country in the middle between the two, in ASEAN Dialogue Partner, now more than misconceptions with each other. Also, the long run. For India, it would mean road a decade, has contributed to India interaction among them and with countries connectivity with ASEAN. fostering its linkages with the region, around the region has to grow day-by-day through the ASEAN+6 and the ASEAN- Challenges for Future and from strength to strength. Its new India cooperation, which also extends to Partnership nature of relationships requires them not other cooperative efforts at the to be strict only to bilateral ties but rather Both Thailand and India economic subregional level, like Bay of Bengal to become more wide-ranging and relations with Asia and the world will Initiative for Multi-Sectoral and Technical comprehensive in their future bilateral continue to be growing despite an Cooperation (BIMSTEC), Mekong-Ganga approach. There are wide ranging areas uncertain economic environment Cooperation (MGC), and the bilateral of cooperation, Thailand believes, that level, like Thailand-India FTA. worldwide. The crisis is and will continue to weaken the Western economies, so the they could foster together starting from Precisely, Thailand-India FTA, with an pendulum has swung, and to many, the bridging development gaps, poverty EHS, has already been implemented since economic prowess might move back to reduction, skilled development down to September 2004, covering 82 major the Asian region. There is still much hope energy saving and technology dealing traded items with the trade value of more from a reasonable growth of China and with the environmental improvement. than US$ 500 million in 2008. The progress India among the Asian nations in a post- Thailand relies on India’s good spirit to join and success in such partnerships have crisis world. Thailand and India require ASEAN constructively with the belief that produced positive efforts in extending close ties and commitment to working India will join the East Asian region in liberalization attempts to cover new hard in solving all upcoming problems and developing prosperity and peace for the modalities, almost all manufacturing finding new opportunities. The EAS, in benefits of people in Asia and the world traded goods, services, and investments. which both countries are working together in the years to come. However, it seems to be that India’s desire with others, will have to enhance the is likely to see ASEAN-India FTA Suthiphand Chirathivat, Professor of Economics region’s purposes and vitality. There will and Formerly Dean, Faculty of Economics, implementing soon before re-negotiating be more pro-active regional response to Chulalongkorn University, Bangkok. Views are his for a further deepening of Thailand-India an on-going crisis with specificities to personal. QQQ

Mekong-Ganga Policy Brief, March 2009 2 India–ASEAN Transport Network: Fostering East Asian Partnership

ver the last decade of sides of the border. In general, free have been improved to higher class globalization, India and East movement of goods between India and standards. Still, about 12,000 km or 9 O Asia have become much closer East Asia through India – Myanmar border percent of the total AH network still than ever before.1 Trade between India is not only restricted but also risky for remains below minimum standards and East Asia increased from a meagre political and security reasons. The land (UNESCAP, 2008a). About US$ 26 billion US$ 20 billion in 1991 to over US$ 110 transportation network between India and has already been being invested or billion in 2007.2 Such spectacular growth East Asia is very weak and fragmented. committed for the development of various continued in investment and production To help remove the physical and non- sections of AH routes in member networks between the two. Yet, a large part physical barriers to trade and countries, while about US$ 18 billion is of India–East Asia’s economic potentials, transportation between India and East needed to upgrade and improve about particularly in trade and investment, is Asia, several land transportation projects 26,000 km of AH routes (UNESCAP, unrealized. According to some are being planned, of which BIMSTEC 2008a). commentators, infrastructure bottlenecks Trilateral Highway (BTH), a subregional TTTrans-Asian Railway: The Trans-Asian within countries and lack of cross-border project connecting India with Thailand Railway was originally conceived in the infrastructure network are the important through Myanmar, and Asian Land 1960s. Its medium- to long-term objective ones that holding back deeper integration Transport Infrastructure Development is to provide a continuous rail link between 3 between India and East Asia. (ALTID) programme, a pan-Asian project Singapore and Istanbul with possible Cross-border (regional) infrastructure initiated by the United Nations Economic onward connections to Europe. The is typically seen as one of the major and Social Commission of Asia and the progress of TAR has been very similar to determinants of economic integration Pacific (UNESCAP), are the important AH. Current network of TAR covers process (Atalik and Fischer, 2002; Kuroda ones. 114,000 km of railways in 22 member et al, 2008). It enhances regional (and countries. TAR network has also been international) connectivity through free Pan-Asia Land Transport Network formalized through an Intergovernmental UNESCAP initiated the ALTID project in flow of goods and factors across border Agreement, which has now been signed 1992 with the aim of improving and allowing countries to benefit from a better by 22 countries, of which six have ratified expanding transport and communications relocation of resources. An efficient and or accepted it including India. However, links within Asia, as well as with other integrated transport and logistics network East Asian countries like Malaysia and regions. The ALTID project comprises the between India and East Asia is utmost Japan are yet to sign the Asian Highway (AH), the Trans-Asian important to enhance the flow of goods Intergovernmental Agreement, and Railway (TAR), and the facilitation of land and services, particularly when increased Indonesia and Viet Nam have signed but transport. ALTID project’s main objective trade and investment between them are not yet ratified. The Intergovernmental is to establish pan-Asian connectivity seen as the outcomes of trade Agreement on TAR will come into force on through uniform standards across the liberalisation initiatives, those are already 11 June 2009 with China becoming the region. undertaken (e.g. India–Thailand FTA or eighth country ratifying the Agreement India–Singapore CEPA), or are underway Asian Highway: With participation of 32 (UNESCAP, 2009). Around 6,500 km or 8 (e.g. India-ASEAN FTA). This article briefly countries as of 31 March 2009, AH network percent of 81,000 km of the TAR network discusses the emerging land presently covers a total length of 141,000 is missing link, mostly in the Southeast transportation network between India and km of highways in Asia. The Asia. An estimated investment of US$ 15 East Asia, and presents some important Intergovernmental Agreement on the billion is required to build single-track lines challenges that need to be addressed in Asian Highway entered into force on 4th on the missing links to complete the TAR order to enhance the regional connectivity. July 2005, and as of 31st March 2009, the network (UNESCAP, 2008b). Agreement has been signed by 28 Land Transportation Networks: countries, of which 22 countries have Subregional Land Transport Steady but Slow Progress enforced the Agreement, including India Networks Merchandise trade between India and and most of the East Asian countries. In addition to pan-Asian projects such as East Asia is primarily transported by sea. However, Indonesia, Lao PDR, Malaysia, AH and TAR, there are several subregional While India has overland links with East and Singapore have signed the initiatives to connect countries within the Asian countries through Myanmar, the Intergovernmental Agreement, but they subregion in South and East Asia. These land-bridge between South and Southeast are yet to enforce it. Since the entry into subregional programmes have undertaken Asia and cross-border land transportation force of the AH Agreement in 2004, a several road and railway projects, some of between India and East Asia is yet to significant progress has been achieved which can facilitate land transportation witness any major breakthrough. There is in developing and upgrading the AH between India and East Asia. no formal arrangement of cross-border network. During 2005 and 2006, about ASEAN (Association of Southeast trade and transportation between India 10,000 kilometres of the AH in member Asian Nations) has several cross-border and Myanmar, except trade in few goods countries have been upgraded to meet transport projects, of which ASEAN for the need of local people living both minimum standards and other sections Highway and the Singapore-Kunming

Mekong-Ganga Policy Brief, March 2009 3 Railway project are the important ones. trade costs, thus impeding trade growth rules, regulations and standards relating GMS (Greater Mekong Subregion) and eroding the benefits of trade to the network to a regional standard, programme has undertaken three major liberalisation. There is potential for preferably to an international standard. economic corridors such as (i) the East- improving regional transport network to There is also need for an appropriate West Economic Corridor, running from Da reinforce regional production and trade. financing mechanism to mobilize Asia’s Nang, Viet Nam, through Lao PDR and Any attempt, therefore, towards deeper huge savings for infrastructure Thailand to Myanmar; (ii) the North-South integration of the economies of the region development, particularly financing and Economic Corridor, which covers the thus holds high promise, if accompanied managing missing links and bridges. We major routes running from Kunming by initiatives that help integrate the region also have to mobilize private sector through Chiang Rai to Bangkok or through improved cross-border participation in regional infrastructure Nanning through Hanoi to Haiphong; and transportation network. projects. Effective coordination is, (iii) the Southern Economic Corridor, Although several benefits are apparent therefore, necessary to generate running through the southern parts of from completed subregional projects such willingness of countries to participate in Thailand, Cambodia, and Viet Nam. The as in GMS, three main issues hamper the the regional connectivity projects. countries in GMS have also signed a full delivery of India – East Asia benefits— Regional cooperation among Asian Cross-Border Transport Agreement first, the subregional transport corridors countries is essential for establishing Asia- (CBTA) for facilitation of movement of (“Hardware”) in Asia are not always wide transport network towards an goods and vehicles across border. Brunei supported by “software” except perhaps integrated Asia. An integrated connectivity Darussalam-Indonesia-Malaysia- the GMS; second, missing infrastructure between India and East Asia would Philippines–East ASEAN Growth Area links in many parts have reduced the provide substantial benefits to landlocked (BIMP-EAGA) has undertaken projects on effectiveness of the completed projects in and island countries as well as poor small air and maritime services, as well as subregions; and third, the lack of synergy countries by giving them access to world software aspects of regional infrastructure. between national and subregional market at lower costs. Therefore, high- Indonesia-Malaysia-Thailand Growth transport corridors between India and East level policy direction is important in the Triangle (IMT-GT) has been pursuing five Asia is very common. As a result of the successful development of mutually economic corridors. SAARC (South Asian road improvement, national traffic has beneficial regional transport infrastructure Association for Regional Cooperation) has increased across the corridors, indicating and services between India and East Asia. planned ten road corridors, five rail that national level benefits have been Finally, the need for integrated transport corridors, ten inland or maritime gateways high.4 At the same time, the international and logistics network is quite pressing at and seven aviation gateways for land traffic has been slow to grow, partly a time when ongoing global financial implementation in the subregion. Likewise due to the absence of an agreement to turmoil makes it necessary for Asian in BIMSTEC (Bay of Bengal Initiative for facilitate cross-border movement of countries to strengthen their regional Multi-Sectoral Technical and Economic vehicles and absence of a strong and infrastructure networks in order to enhance Cooperation), implementation of BIMSTEC stable pan-Asian transport networks. So the regional demand. Trilateral Highway (BTH) linking India- far, the overall attitude toward AH and TAR Thailand and India are in the centre Myanmar-Thailand has also been taken up projects is apparently tilted toward stage of the subregional programmes, by the member countries in 2005 for addressing national constraints rather contracting parties to AH and TAR, having improving physical connectivity in the than developing regional arrangements. bilateral FTA in operation, members of subregion. A scrutiny of subregional pan-Asian cooperation initiative like East Challenges and Policy Options programmes clearly shows that most of Asia Summit (EAS) Group (ASEAN+6), them have now undertaken exclusive and members of G20, besides partners The demand of regional connectivity in projects to improve subregional in some other subregional initiatives like East Asia increased during 1990s to connectivity. To realise the potentials of Mekong-Ganga Cooperation (MGC). support the export-led growth strategy these subregional networks, we may have India–Thailand combination is thus very and fragmented production network, to integrate them with the pan-Asian unique. Improved connectivity between which later was fuelled by successful arteries such as AH and TAR. The new them, land transport or otherwise, have implementation of some transport upcoming cross-border projects like every potential to strengthen the India-East corridors in the GMS and elsewhere in Mekong–India Economic Corridor Asia cooperation. Asia. Cross-border transport networks (MIEC)5 also need to be integrated with envisaged by UNESCAP and Asian pan-Asian networks to maximize welfare. Endnotes subregions are well thought projects for In parallel, the initiatives for building the 1 In this article, East Asia is defined as Northeast the countries to get their goods to market supply capabilities and trade (China, Japan and Korea) and Southeast (10 ASEAN more efficiently, quickly and cheaply. But, liberalization in Asian countries have to members) Asian countries. except GMS, where the progress is be complemented by a new approach 2 Calculated based on Direction of Trade Statistics remarkable, implementation of similar towards intermodal transport and transit Yearbook 2008, IMF. projects in other subregions is relatively for making the entire continent 3 Refer, for example, Brooks and Menon (2008), Brooks slow. interconnected that existed in the past. and Hummles (2009), and Francois, et al (2009). India and East Asia have been Asia should have either its own regional 4 See, for example, Kumagai et al (2008). witnessing sharp rise in merchandise transit arrangement or through accession 5 MIEC is new corridor being envisaged by the trade and showing greater trade to the existing international conventions. Economic Research Institute of ASEAN and East Asia interdependence on a large variety of In order to hardware infrastructure of an (ERIA). goods. At the same time, lack of regional Asia-wide transport network to work Continued on page 11 connectivity continues to pose higher effectively, we have to strengthen the

Mekong-Ganga Policy Brief, March 2009 4 India-Mekong Cooperation Activities ASEAN-India Relationship Grown from Sectoral Dialogue to Summit Level

Partnership H.E. Dr. Surin Pitsuwan Secretary-General, ASEAN ndia has been an important partner of on trade in services and investment as a cargo from Dawei Port in Myanmar and ASEAN that has attached great single undertaking, and to work towards road/rail link between India and Thailand- Iimportance to the relationship and the conclusion of substantial discussions Cambodia-Viet Nam going through the partnership with India. We follow with great on these two agreements in order to Straits of Malacca. For example, while the interest and welcome India’s “Look East” complete the ASEAN-India CECA. current travel distance from India to policy and its efforts to strengthen relations ASEAN together with its East Asia Thailand is more than 4,500 km, it is with ASEAN as a group. Summit (EAS) partners formally brought expected to be less than 2,500 km. It is only natural that the ASEAN-India into being the Economic Research Similarly, while the current travel distance relationship had grown from a sectoral Institute for ASEAN and East Asia (ERIA) from India to Cambodia is more than 4,200 dialogue in 1992 to a full dialogue in June 2008, which is designed to be a km, it is expected to be less than 3,000 partnership in 1995, and then it was further think-tank, similar to the OECD. It assumes km; likewise the current travel distance elevated to a Summit-level partnership. an important role in building the intellectual from India to Viet Nam is currently more Working together, ASEAN and India have foundation for East Asia integration and than 4,200 km, but is expected to be less achieved great synergies. Both cherish in contributing to the establishment of the than 3,000 km. and value peace, security and stability for ASEAN Economic Community by 2015 in ASEAN is working to upgrade its national development and prosperity. terms of policy-oriented and strategic regional infrastructure including on its Within the broader political and security economic research and capacity building. mainland Southeast Asia railway for which framework, India has been an active ERIA will focus its work on the three pillars a feasibility study has been completed. participant in the ASEAN Regional Forum of deepening integration, narrowing the The goal is to link the missing rail sections (ARF). ASEAN and India are close in terms development gap and sustainable in some ASEAN Member States to make of land route connectivity. development in East Asia. This would it trans-ASEAN and to link it with Kunming Civil aviation cooperation between certainly help to create the world’s largest in South China. The rail link will be covering ASEAN and India has been given a long- business space in a vibrant and more 33,480 km of roads. integrated East Asia. awaited boost with the adoption of the The work in upgrading ASEAN regional ASEAN-India Aviation Cooperation ERIA has come up with important infrastructure combined with enabling Framework. The Framework, which took research activities and practical policy policy framework to facilitate and promote shape from Prime Minister Manmohan recommendations. Among others is the goods in transit, multi-nodal transport and Singh’s proposal for dialogue on an Open East Asia Industrial Corridor (EAlC) inter-state transport would eventually Skies Agreement, will lay the foundation Project, is a region-wide cross-border contribute to a bigger EAS trade zone in for closer aviation cooperation between comprehensive development plan which due course. ASEAN and India and result in a more aims to facilitate and enhance economic India’s “Look East” policy has focused liberalized environment which will be growth in the region through industrial on economic engagement with ASEAN beneficial to all. Under the Framework, development of the Mekong Region and Member States and in the East Asian ASEAN and India agreed to work towards linking it with the economies of India and region. Given our buoyant trade and concluding an agreement based on the China. The EAIC is envisaged to be economic relations, India has key roles to ‘Open Skies’ principles, covering both realised including through development of play to shape the emerging East Asia airfreight and passenger services as well wider-regional industrial belts, e.g. the architecture. Specifically, India has as cooperation in other aviation fields Delhi-Mumbai Industrial Corridor (DMIC) talented pool of human resources and including airline cooperation, airports and and the East-West Economic Corridor. tremendous research capabilities. air navigation, aviation safety, aviation Integration of the DMIC and the EAIC Bringing together researchers from India security, human resources development is expected to enhance ASEAN-India and other East Asian countries under ERIA and information exchange. trade as well as to provide new would enable the region to tap the full The good news is that ASEAN and opportunities for “trade creation.” The potential in the area of policy-oriented and India concluded the ASEAN-India Trade- DMIC and EAIC will facilitate optimization strategic economic research. Through in-Goods Agreement in August 2008 of logistic costs through multi-modal ERIA, close links with the policy-making under which both sides agreed on the integration; reduce logistic cost by processes in ASEAN and East Asia could modality for tariff reduction and/or improving transport infrastructure, boost be forged which could in turn enhance the elimination, which is among the key industrial development by integrating with internal linkages of East Asian economies. elements that will facilitate the creation of transport infrastructure. (Excerpted from the Secretary-General’s Address Delivered at the Regional Security and Cooperation an open ASEAN-India market. The two One projected benefit under the Dialogue Organized by FICCI on 21 January 2009 in sides would also commence negotiations proposed EAIC is reduced travel time of New Delhi). QQQ

Mekong-Ganga Policy Brief, March 2009 5 India-Mekong Cooperation Activities India Signs Economic Cooperation Optical Fibre Link Agreements with Myanmar between India and India and Myanmar signed four agreement between the EXIM Bank of Myanmar economic cooperation agreements India and the Myanmar Foreign Trade India and Myanmar operationalised their demonstrating the expanding partnership Bank for $ 64 million for financing three first optical fibre telephone link, a $7 million between the two countries. The 230 kv transmission lines in Myanmar to state-of-the-art network that will bring the agreements were signed in the presence be executed by the Power Grid two countries closer and give a boost to of the Union Minister of State for Corporation of India. bilateral economic cooperation. This Commerce and Power, Mr. Jairam The third agreement is a credit line project funded by India and executed by Ramesh and the Myanmar Minister for agreement between the Exim Bank of India Telecommunications Consultants India National Planning and Economic and the Myanmar Trade Bank for Limited (TCIL) provides the high-speed Development, Mr. U Soe Tha. $20 million for financing the establishment broadband link for voice and data The first agreement is the Bilateral of an aluminium conductor steel reinforced transmission and connects Mandalay, Investment Promotion Agreement (BIPA) (ACSR) wire manufacturing facility to be Myanmar’s second most important between the two governments designed used for expansion of the power commercial hub after Yangon, and the to facilitate greater Indian investment in distribution network in Myanmar. The fourth border town of Moreh in Manipur. Myanmar and vice versa. It provides a agreement is between the United Bank of According to the TCIL, the call rates framework for the resolution of disputes, India and the Myanmar Economic Bank between India and Myanmar are bound to promotion and protection of investment, for providing the banking arrangement for fall sharply with the installation of the optical extending national treatment and MFN the implementation of the border trade fibre link between Mandalay and Moreh. treatment, repatriation of investment and agreement between the two governments Myanmar announced that it was returns and entry and sojourn of technical that takes place at Moreh (in Manipur) at planning to construct optical fibre network and managerial personnel. present. in the entire area along its border with India which could then have another direct link The second agreement is a credit line (Source: commerce.nic.in, 24 June 2008). also with China, Laos and Thailand. On the occasion, the Myanmar’s India-Myanmar Trade and Communication Minister, said it would Economic Ties Set greatly help the country’s IT, telecom sector, Centre for business industries, schools and to Increase with universities in their utilisation of broadband Enhancement of IT internet access. Skills India (Excerpted from the TMCnet.com, 9 February 2009). The Indian President, Ms Prathiba Patil, © TMCnet.com. The Prime Minister of Myanmar, H.E. while addressing a business forum in Viet General Thein Sein, and the Minister of Nam, said that India and Viet Nam will Tourism Identified State for Commerce and Power, Mr. Jairam continue to be superb trading partners and Ramesh inaugurated the India-Myanmar opportunities between the two countries as Trade Link Centre for Enhancement of IT Skills could be explored in areas of technology (IMCEITS) in Yangon. The IMCEITS, set transfer, R&D and private-public investment Mr. Jarnail Singh, Secretary of the Ministry up by the Centre for Advancement of in infrastructure development. of Development of Northeastern Region (DoNER) said at the ASEAN North East Computing (C-DAC) with Indian At the Viet Nam-India business forum assistance, will be connected to ten India Business and Trade Opportunities held in HCM city, she said close bilateral Summit in Viet Nam on February 14, 2009 regional centres and train nearly 1000 IT cooperation would go a long way in opening professionals per year. that tourism is the most effective way to up new opportunities and strengthening the increase the still negligible trade between In a significant development, India and relationship between the business India’s northeastern region and Viet Nam. Myanmar have announced the conversion communities of the two countries. The Summit focused on tourism as the of border trade to regular trade. Both India has emerged as the biggest key to increasing Indian-Viet Namese countries agreed to convert the present trading partner for Vietnamese exports to trade. Mr. Rajeev Singh, Secretary border trade at Moreh-Tamu and South Asia. Bilateral trade has increased General, Indian Chamber of Commerce Zokhawthar-Rhi border points to normal from US $490 million in 2003 to touch $1 (ICC), said that a key challenge to tourism trade.The Joint Trade Committee also billion in 2006 and $1.5 billion in 2007. In and trade is the northeastern region’s lack decided to open border trade at a new the period January-September 2008, the of “proper road connectivity” to Myanmar border point Avakhung (Nagaland) - Leshi two way trade crossed $2 billion with and the rest of Southeast Asia. He also (Myanmar), expand the current list of items exports by Viet Nam reached $1.7 billion said that with good roads, transportation for barter trade under the India-Myanmar and imports from India achieved $308 time and cost would be reduced by half Border Trade Agreement to 40 and million. and trade would go on. operationalise the new banking (Excerpted from the fibre2fashion.com, 27 (Excerpted from The Sangai Express, 18 February arrangement for trade. November 2008). 2009). (Source: commerce.nic.in, 16 October 2008). © fibre2fashion.com. © The Sangai Express.

Mekong-Ganga Policy Brief, March 2009 6 Focus India–Thailand Cooperation Thai-Indian FTA Marks Export Expansion Khon Kaen to be Speaking at a seminar on “Thailand-India surplus reached US$ 596 million, a three- Bangalore of FTA: The Voice of the People,” former fold increase from 2006. Thailand Commerce Minister, Narongchai The Minister said that, since Thailand Akarasaeni, said the continued is exporting a rising number and volume In an interaction with the India-Thai implementation of the Thailand-India FTA of products to the Indian market, Thai Business Association (ITBA) on 28 May bodes well for the country’s exports. He entrepreneurs should learn more about how 2008, organised by the India-Thai said tariffs on 82 products had been cut to penetrate and benefit from its potential. Chamber of Commerce (ITCC) in under the FTA agreement since late 2006. (Excerpted from the Business News, 19 December Bangkok, Hon’ble Mr. Suwit Khunkitti, Since then, Thailand has been in surplus 2008). Deputy Prime Minister and Industry in regard to trade with India. Last year, the © Business News. Minister of Thailand spoke about business collaboration between India and Thailand. The talk was attended by many prominent Indo-Thai Cultural and Historical Linkages businessmen of Indian origin and Thailand. Inspired from Bangalore, Mr. The Royal Thai Embassy, New Delhi, in between the peoples of Thailand and Khunkitti wants to promote ICT services collaboration with the Indian Council for India, which is an integral component of in Thailand. Hon’ble Minister expressed Cultural Relations (ICCR) and Thammasat Thailand’s cultural diplomacy. his interest in making “Khon Kaen the University, organized the seminar on ‘Indo- The seminar called for more in-depth Bangalore of Thailand”. He also said that Thai Historical and Cultural Linkages’ studies and further research on the studies have shown that most certified ICT under the theme of “Reflections on Indo- subject. It created awareness regarding personnel is from North-East of Thailand, Thai Historical and Contemporary Cultural the age-old Indo-Thai historical and not only Thais but also foreigners who Relations,” at Thammasat University in cultural linkages, which can play an have married Thais and are living in North- Bangkok during 7-8 July 2008. The important role in shaping modern societies East Thailand. seminar aimed at fostering a better and influence the contemporary lifestyles, understanding of the long-standing Indo- (Source: India–Thai Chamber of Commerce, both in Thailand and India. Bangkok). Thai historical and cultural relations and enhancing people-to-people contact (Source: Royal Thai Embassy, New Delhi). Northeast India RIS Organizes ERIA Capacity Building Programme on Global and Regional Gateway to ASEAN Economic Cooperation Issues The 4th North East Business Summit was organised in Guwahati, India on 15-16 Under the Economic Research Institute for ASEAN and East Asia (ERIA) September 2008 in an effort to promote framework, RIS in collaboration with IDE/JETRO, Tokyo organized the second business relations the northeastern Capacity Building Programme on Global and Regional Economic Cooperation Issues region shares with India’s neighbouring (GRECI) in order to strengthen analytical capacity building among the developing countries like Thailand, Myanmar, country professionals, including diplomats, researchers, journalists and others from Bangladesh, Nepal, Bhutan, Cambodia the Asian developing countries during 6 February to 6 March 2009 in New Delhi. and Lao PDR. The GRECI Programme is designed to expose the participants to the growing Organised by the Ministry of complexities of global economic governance, including regional economic Development of the North Eastern Region cooperation and negotiations and provide opportunities for meaningful peer (DoNER), Government of India and Indian interactions among the fellow participants from the East Asian countries especially Chamber of Commerce (ICC), the Summit from the CLMV (Cambodia, Laos, Myanmar and Viet Nam) countries. Like previous explored various facets through which the year, the participation in 2009 batch was fairly representative of the ERIA region and economic and business relations could be diverse in terms of specializations of the participants from countries like Australia, improved with ASEAN countries. Special Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, New Zealand, focus in the Summit was on sectors like Philippines, Thailand and Viet Nam respectively. IT, Infrastructure, Power, Agro & Food The programme included lectures by RIS faculty and renowned experts and Processing and Tourism. The Summit also participants presentations on three main issues such as Global Economic stressed on building international Governance, Regional Economic Integration, and Trends in Indian Economy. Besides partnerships and issues pertaining to course inputs, more emphasis was given on debate and interactions on key economic connectivity, power and telecom with issues of global importance. neighbouring countries. A total of 115 On successful completion of the programme, the participants expressed their foreign delegates and 12 countries deep satisfaction regarding the course contents and the usefulness of such training participated in the Summit. programmes for capacity building programmes in developing countries. They also (Excerpted from the India News Online, 29 opined that in view of the renewed emphasis on South-South cooperation, more September, 2008). thrust should be given to such capacity building programmes. © India News Online.

Mekong-Ganga Policy Brief, March 2009 7 Focus India–Thailand Cooperation Despite FTA, Indo-Thai Economic Ties Need a Boost

Thailand’s “Look West Policy” and India’s accessories, whereas India’s imports from solving some critical issues like rules of “Look East Policy” have been Thailand are sourced for industries in origin, safeguard measures and dispute supplementing each other in enlarging sectors like electronics and electrical, settlement mechanism, among others. If market size and business opportunities. polymers, automobile, telecom and office the rising pace of bilateral trade between Bilateral trade between the two countries equipment and home appliances, among the two countries has any indication to has grown from less than $300 million in others. The present trade pattern between offer, Indo-Thai FTA is nonetheless helping 1991 to over $4 billion in 2007. India’s the two countries shows some sort of the trade and investment to grow further trade with Thailand is relatively diversified, complementarities and provides and has also been cementing the India- and carried mostly intermediate and opportunities for trade creation, provided ASEAN partnership. Due to the location industrial products feeding domestic barriers are eliminated. of Thailand and its bilateral and regional production. India’s exports to Thailand At present, both the countries are FTAs, Indian enterprises enjoy relatively a which have grown over time are chemical, engaged in elevating the FTA into a bigger market in Southeast Asia in general medicinal and pharmaceutical products, comprehensive agreement by covering and Mekong region in particular. iron and steel products, machinery and services and investments. Discussions are (Excerpted from The Financial Express, 18 June 2008). parts, yarn and fibres, vehicle parts and going on to make it as a perfect FTA by © The Financial Express.

Software Base Indo-Thai Bilateral Relations Promoted Diplomatic relations between India and Thailand were established in 1947, soon after India gained independence. India’s ‘Look East Policy’ from 1993 and Industry Minister of Thailand, Suwit Thailand’s ‘Look West Policy’ since 1996 set the stage for a substantive Khunkitti, said that Indian software consolidation of bilateral relations. The past few years since 2001, have witnessed companies should start to look at Thailand growing warmth, increasing economic and commercial links, exchange of high- as the base to cater to ASEAN and the level visits on both sides, and the signing of a large number of Agreements leading Greater Mekong Subregion (GMS), as a to a further intensification of relations. Thailand and India are cooperating in various planned free trade zone in Khon Kaen multilateral fora like India’s dialogue partnership with ASEAN, the ASEAN Regional which would offer attractive incentives. He Forum (ARF), and the EAS, the sub-regional grouping BIMSTEC involving also commented that recently, there has Bangladesh, India, Sri Lanka, Thailand, Myanmar, Nepal and Bhutan, and trilateral been a trend by Indian companies coming transport linkages with Thailand, Myanmar and India. India is a member of the to invest in Thailand, but we should invite Asia Cooperation Dialogue (ACD) initiated by Thailand in 2002 and of the MGC, a more companies to look at Thailand as a group of six countries. base for not just Thailand but also the region as a whole, especially the GMS (Source: Royal Thai Embassy, New Delhi, India). countries. There is also planning to make Khon Kaen more attractive than the (investment incentives) that IT companies Thailand Proposes to Promote are seeing in countries such as Malaysia and Singapore. Halal Cooperation Project Mr. Suwit said, once the entire spectrum of FTAs is in place, then Thailand A delegation of Thai experts visited New member countries. In this connection, would stand to gain exponentially. With Delhi to promote cooperation on halal food Thailand has developed considerable and India’s economy growing at a pace, that under the BIMSTEC framework on March widely accepted expertise in halal science is turning it into a major economic 18-19 2009. The delegation was headed and technology and is willing to share their powerhouse, the timing of increased trade by H.E. Ms. Krisana Chandraprabha, knowledge and expertise with BIMSTEC is highly opportune. Ambassador, attached to the Ministry of member countries in order to enhance the Plenty of investment opportunities exist Foreign Affairs, with the participation of Dr. quality and potential of the industry in the in Thailand apart from IT, as India has Winai Dahlan, Director, The Halal Science BIMSTEC. strengths in other areas such as Center, Chulalongkorn University, Mr. The Thai delegation also visited Hind manufacturing and pharmaceuticals, he Poldej Worachat, Charge d’Affaires, Royal Agro Industries, Ltd., at the company’s added. To make things easier, Mr Suwit Thai Embassy, as well as representatives production facilities in Aligargh, Uttar said, that the industrial zone being from the Ministry of Agriculture, Ministry Pradesh. They also met with officials from developed in Khon Kaen would allow of Commerce, Ministry of Foreign Affairs, India’s Ministry of External Affairs, the easier access for companies to hire and the Royal Thai Embassy. Agricultural and Processing Foods expatriate workers and the work permit Thailand proposed cooperation in the Products Export Development Authority, process would be expedited. field of halal products, services and and the Food Safety and Standard standardisation in BIMSTEC, as they Authority. (Excerpted from the Bangkok Post.com, 26 July 2008). believe that there is a great potential in (Source: Royal Thai Embassy, New Delhi, India). © Bangkok Post.com. the halal industry amongst BIMSTEC

Mekong-Ganga Policy Brief, March 2009 8 Resources

Integration of Landlocked countries, also referred to as “the North,” in the People’s Republic of China. It Countries into the Global trade among countries of the South, also evaluates the performance of ADB Economy and Domestic known as “South-South trade,” can assistance during 1992–2007, but Economic Reforms: The Case provide resources for meeting the accords relatively more emphasis to of Lao People’s Democratic developmental goals of the South. activities and developments since 1999. (ARTNeT Policy Brief No. 17, UNESCAP). While the evaluation attempts to cover all Republic the GMS countries, the difficulties in Donald J. Lewis, 2008 obtaining energy sector data and related In this report, Laos’ challenges Transport and Trade information have limited the coverage of encountered as part of the WTO accession Facilitation in the Greater Myanmar and, in some cases, Guangxi process are surveyed. Subsequently, the Mekong Subregion–Time to Zhuang Autonomous Region and Yunnan linkages between Laos’ domestic reform Shift Gears Province. In terms of energy sector processes and WTO accession are N. Singru content, it focuses mainly on the analyzed, with a particular focus on certain ADB, December 2008 hydropower and power transmission sub- key sectors and institutional GMS Program has focused on transport sectors, which are the sub-sectors related arrangements. Based upon foregoing, and trade facilitation initiatives in its to ADB lending operations. policy recommendations for the Lao PDR endeavor to enhance connectivity and government and regional and international improve competitiveness across organizations, particularly, UNESCAP Greater Mekong Subregion, international borders. The objective of this presented in the conclusion to this report. 2009–2011 evaluation is to provide an independent Throughout this report, the status of Laos ADB, 2008 assessment of ADB’s assistance to the as a landlocked country and a least The regional cooperation strategy and transport and trade facilitation sectors developed country (LDC) are stressed as program (RCSP) for the Greater Mekong within the GMS program and the regional giving rise to special considerations and Subregion (GMS) aims to help achieve the cooperation strategy and program for the policy responses. GMS vision of an integrated, harmonious, GMS, and to identify issues and areas and prosperous subregion. It has four (ARTNeT Working Paper Series No. 58, where ADB and the GMS countries could UNESCAP). strategic pillars: (i) strengthening work together more effectively to improve connectivity and facilitating cross-border the development effectiveness of their movement and tourism; (ii) integrating Economic Cooperation and partnership. More specifically, the SAPE national markets to promote economic Regional Integration in the assesses the effectiveness of ADB-funded efficiency and private sector development; projects in terms of national and Greater Mekong Subregion (iii) addressing health and other social, subregional benefits and costs. It seeks Yann Duval, 2008 economic and capacity-building issues to identify lessons from past experience associated with subregional links; and (iv) Following a brief survey of the various for further development of the GMS managing the environment and shared economic cooperation programs and strategy and program and also for other natural resources to help ensure initiatives in which countries of the GMS, regional cooperation initiatives. sustainable development and particularly CLMV, are engaged, this conservation of natural resources. The paper examines the extent to which GMS regional cooperation operations business economies have converged and become Greater Mekong Subregion: plan (RCOBP) for the GMS for 2009–2011 integrated, not only among themselves but Maturing and Moving Forward is consistent with the strategic pillars of also with other ASEAN countries. Hemamala Hettige the current RCSP. Preliminary evidence of stakeholders’ ADB, December 2008 involvement in selected subregional The study concludes that there is a need cooperation initiatives is also presented. to take stock of the achievements so far On the Borders of State (UNESCAP Trade and Investment and that the time has come to review GMS Power: Frontiers in the Division, Staff Working 02/08). strategy and organizational arrangements Greater Mekong Sub-Region going forward. Any consideration of future Martin Gainsbor institutional arrangements needs to be Routledge, 2008 Promoting South-South predicated on a clear understanding of the ISBN-10: 0415414652 Trade: Recent Developments future purpose of the GMS program and ISBN-13: 978-0415414654 the role of ADB within it. and Options Covering the main themes of globalization, Rajan Sudesh Ratna, 2009 Energy Sector in the state power and culture Over the years, developing countries, Greater Mekong Subregion from the fifteenth to the commonly referred to as “the South,” have ADB, 2008 twenty-first century, this emerged as an important player in the This report presents the findings, lessons, book explores the world economy as manifested in terms of and recommendations of an independent changing nature, meaning global GDP, investment, savings, trade, assessment of the ADB’s assistance to the and significance of the foreign exchange or manufacturing energy sector in the GMS, comprising, Greater Mekong Sub- capability. With the increase in the overall Cambodia, Lao PDR, Myanmar, Thailand, region. growth of the South and its decreasing Viet Nam, and Guangxi Zhuang dependence on trade with developed Autonomous Region and Yunnan Province

Mekong-Ganga Policy Brief, March 2009 9 Resources

Transport Infrastructure and Pro-Poor Tourism in the cooperation to enhance intra-regional Trade Facilitation in the Greater Mekong Sub-Region trade is also analysed. Empirical Greater Mekong Subregion CDRI - Development Analysis estimates of trade costs in Asia suggest Susan Stone and Anna Strutt Network (DAN), 2007 that there is significant room for infrastructure to lower those costs further. ADB Institute, 2009 This report of pro-poor tourism in five By approaching the infrastructure-trade As trade is an important driver of growth countries of the Greater Mekong Sub- nexus at the regional level through and infrastructure is a necessity for trade, region, emphasizes that tourism has cooperative activities, this book shows it infrastructure development has a key role become, or continues to be, a significant is possible to increase the range of policy to play in economic development. This driver of economic growth and options and risk management paper aims to quantify the potential development in all the participating opportunities. benefits of the development of the countries like Cambodia, Laos, Thailand, economic transport corridors, along with Viet Nam and Yunnan province of China. the implementation of the Cross-Border At the same time, the governments of the Tourism Sector in the Greater Transport Agreement (CBTA) in the less developed of these countries, in Mekong Subregion Greater Mekong Subregion (GMS). Some partnership with their international ADB, 2008 development partners, the private sector of the key linkages between upgraded This report presents the findings, and other development stakeholders, are infrastructure, economic growth, and lessons, and recommendations of an working together to achieve more effective sectoral responses are explored using a independent assessment of ADB’s poverty reduction outcomes. computable general equilibrium (CGE) assistance to the tourism sector during framework. 1992–2007 in the GMS. The study The paper provides a static view of Performance of Export- identified a number of lessons, including one-off gains from a conservative estimate Oriented Small and Medium- (i) need to further simplify visa and border in a reduction in transport costs and Sized Manufacturing - crossing arrangements; (ii) importance improvements in trade facilitation. The Enterprises in Viet Nam of developing community-based tourism; findings show clear gains from Tran Quoc Trung, Nguyen Thanh (iii) need to improve cross-sector improvements in physical land transport coordination to build synergies; and (iv) Tung, Tran Duy Dong and Phan and the more substantial gains from critical role of demand analysis for toursim improved trade facilitation. The results also Hoai Duong, 2008 to help inform project design. provide a glimpse into the potential gains This paper recommends the formulation from intra-regional trade, highlighting the of policies that support the development potential markets within the GMS. of business linkages and networking, and India’s Role in East Asia: (Working Paper Series No. 130, ADBI). which promote subcontracting Lessons from Cultural and arrangements between small and large Historical Linkages enterprises or between domestic firms and Ellen L. Frost, 2009 foreign investment enterprises. It is also India’s presence in the East Asia Summit Reshaping Economic necessary to support and facilitate the Geography in East Asia signals not only a victory for New Delhi’s direct involvement of SMMEs in exporting “Look East” policy but also an implicit Editors : Yukon Huang and or indirectly through large manufacturing “Look West” policy on the part of India’s Alessandro Magnoli Bocchi enterprises. neighbours to the east. This convergence World Bank Publications, 2008 (ARTNeT Working Paper, No. 54, represents not only a major economic ISBN-10: 0821376411 UNESCAP). opportunity for India but also a long-term ISBN-13: 978-0821376416 strategic shift in regional order. The purpose of this essay is to demonstrate This book reveals how the Infrastucture and Trade in Asia new economic that for historical, cultural, political as well geography is reshaping Editors: Douglas H. Brooks and as for substantial economic reasons India development objectives Jayant Menon belongs to the East Asian table. It is time from initiatives to foster Edward Elgar Publishers, 2008 to “re-center” our notions of Asia so that growth via enhanced ISBN-10: 1847209416 maps and other geographic concepts agglomeration and ISBN-13: 978-1847209412 reflect India’s resurgent links with eastern connectivity to the world This book explores the neighbors. India’s political role in the Asian economy, to programs virtuous cycle of integration movement underscores this that channel resources to lagging regions. infrastructure investment, need. One of the key opportunities for Key themes include how East Asian trade expansion and policy makers is to revive and build on governments have dealt with economic growth in India’s historical and cultural legacy in Asia agglomeration economies; urbanization, developing Asia. Issues without appearing to be seeking and regional disparities; improving relating infrastructure, hegemony or trumpeting a chauvinist connectivity with infrastructure both hard and soft, to vision. investments; and eliminating barriers both trade facilitation and trade (RIS Discussion Paper No. 147, January inside and outside borders to favour the costs are defined and examined, and the 2009). movement of labour, goods, and services. role of infrastructure in regional

Mekong-Ganga Policy Brief, March 2009 10 Resources

Further Readings Bilateral Merchandise Trade between

Viet Nam Joins with Asian Nations to India and Thailand in 2007-08 Overcome Crisis. Viet Nam News, 20 April 2009. (a) India’s Top 10 Exports to Thailand
Prime Minister Nguyen Tan Dzung’s Interview Granted To The Bangkok Post, HSHSHS Commodity groupsoupsoups VVValuealuealue SharSharShare*e*e* mofa.gov.vn, 3 March 2009. CodeCodeCode (US$ million) (%)(%)(%)
Viet Nam Makes Practical Contributions 71 Natural or Cultured Pearls, 390.86 21.61 To ASEAN, Nhan Dan, 2 March 2009. Precious or Semiprecious Stones,
Angkor What? Arjun Goswami, The Pre.Metals, Clad with Pre.Metal and Financial Express, 26 February 2009. Artcls thereof Imit.Jewlry; Coin.
Mekong Media Makeover. Development 74 Copper and Articles thereof. 201.65 11.15 Asia. No.2 December 2008. 27 Mineral Fuels, Mineral Oils and Products 171.93 9.51
Magnet of Mekong Sub-region, Viet Nam of their Distillation; Bituminous Business Forum, 10 November 2008. Substances; Mineral Waxes.
Mekong PMs Discuss Development 72 Iron and Steel 169.36 9.36 Amid Global Financial Turmoil, afp.com, 23 Residues and Waste from the Food Nov 7, 2008. Industries; Prepared Animal Foder. 154.28 8.53
India’s “Look East” Policy Delivering 29 Organic Chemicals 120.74 6.68 Results, Suvrokamal Dutta, Zeitgeist Asia, V.1, No.4, September 2008. 84 Nuclear Reactors, Boilers, Machinery
India Ready To Better Working Relations and Mechanical Appliances; Parts thereof. 105.89 5.85 With Lao: President, The Economic 87 Vehicles other than Railway or Tramway Times, 27 August 2008. Rolling Stock, and Parts and Accessories thereof. 55.37 3.06 Continued from page 4 (India–East Asia 52 Cotton. 55.33 3.06 TTTransporransporransport Network: Fostering East Asian 38 Miscellaneous Chemical Products. 44.40 2.45 ParParPartnership)tnership)tnership) India’India’India’s TTs otal ExporExporotal ts to Thailand 1808.791808.791808.79 References Atalik, G. and M. M. Fischer (eds.). 2002. Regional (b) India’s Top 10 Imports from Thailand Development Reconsidered, Springer, Berlin. Brooks, D. H. and J. Menon (eds.). 2008. HSHSHS Commodity groupsoupsoups VVValuealuealue SharSharShare**e**e** Infrastructure and Trade in Asia, Edward Elgar, CodeCodeCode (US$ million) (%)(%)(%) Cheltenham. Brooks, D. H., and D. Hummels (eds.). 2009. 84 Nuclear Reactors, Boilers, Machinery Infrastructure’s Role in Lowering Asia’s Trade and Mechanical Appliances; Parts thereof. 504.68 21.92 Costs: Building for Trade. Edward Elgar, 85 Electrical Machinery and Equipment and Cheltenham. Parts thereof; Sound Recorders and Francois, J., et al. (eds.). 2009. Pan-Asian Integration: Linking East and South Asia, Palgrave MacMillan, Reproducers, Television Image and Sound Basingstoke. Recorders and Reproducers, and Parts. 326.79 14.20 Kumagai, S. et al. 2008. “Predicting Long-Term 72 Iron and Steel 292.04 12.69 Effects of Infrastructure Development Projects in Continental South East Asia: IDE Geographical 39 Plastic and Articles thereof. 252.47 10.97 Simulation Model”, ERIA DP # 2008-02, Economic 40 Rubber and Articles thereof. 123.08 5.35 Research Institute of ASEAN and East Asia (ERIA), Jakarta. 76 Aluminium and Articles thereof. 94.50 4.10 Kuroda, H., et al. 2008. “Infrastructure and Regional 29 Organic Chemicals 60.69 2.64 Cooperation”, In Bourguignon, F. and Pleskovic, B. (eds.) Rethinking Infrastructure for 87 Vehicles other than Railway or Tramway Rolling Development, World Bank, Washington, D.C. Stock, and Parts and Accessories thereof. 59.95 2.60 UNESCAP (United Nations Economic and Social 71 Natural or Cultured Pearls, Precious or Commission for Asia and the Pacific). 2008a. Semiprecious Stones, Pre.Metals, Clad with UNESCAP Briefing: Development of the Asian Highway, UNESCAP, Bangkok. Pre.Metal and Artcls thereof; Imit.Jewlry; Coin. 57.32 2.49 ______. 2008b. Trans-Asian Railway: Facts and 59 Impregnated, Coated, Covered or Laminated Figures, UNESCAP, Bangkok. Textile Fabrics; Textile Articles of a kind ______. 2009. “Intergovernmental Agreement on suitable for Industrial Use. 37.97 1.65 the Trans-Asian Railway Network to Come into Force in June 2009,” Press Release No. G/09/ India’India’India’s TTs otal ImporImporotal ts frfrts om Thailand 2302.132302.132302.13 100.00100.00100.00 2009 dated 18 March 2009, Bangkok. Prabir De, Fellow, RIS, New Delhi. Views are his Notes: * Share in total exports to Thailand, **Share in total imports from Thailand personal. QQQ Source: Export Import Data Bank, Ministry of Commerce and Industry, Government of India, New Delhi.

Mekong-Ganga Policy Brief, March 2009 11 Trade and Integration Indicators

India’s Trade with Thailand India and Thailand : Per Capita Income

Source: Direction of Trade Statistics Yearbook CD-ROM, December 2008, IMF Source: World Development Indicators CD-ROM, 2008, World Bank

India and Thailand: Changes in Sectoral Composition India and Thailand : Annual GDP Growth (% in GDP) 1995 2006 India Thailand India Thailand Agriculture 26.49 9.51 17.53 10.70 Industry 27.83 40.75 27.89 44.62 Services 45.68 49.75 54.58 44.68 Total 100.00 100.00 100.00 100.00 Source: World Development Indicators CD-ROM, 2008, World Bank

India and Thailand: Integration Indicators (% of GDP) 1995 2006 India Thailand India Thailand Trade 23.13 90.43 48.78 143.53 Trade in goods 18.34 75.78 32.36 125.73 Trade in services 4.78 20.06 15.23 27.40 FDI, net inflows (US$ billion) 2.14 2.07 17.45 9.01 FDI, net inflows 0.60 1.23 1.91 4.37 FDI, net outflows 0.03 0.53 1.06 0.50 Source: World Development Indicators CD-ROM, 2008, World Bank Source: World Development Indicators CD-ROM, 2008, World Bank Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong-Ganga Policy Brief within the framework of this project. This publication seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of RIS or SDC. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in or www.newasiaforum.org. RIS Research and Information System for Developing Countries (RIS) is an autonomous policy think-tank, established in 1984 in New Delhi, and specialised in trade and development issues. Its work programme focuses on multilateral trade negotiations, regional economic integration in Asia, new technologies and development, South-South Cooperation and strategic responses to globalization. The work of RIS is published in the form of research reports, books, discussion papers and journals. For more information about RIS and its work programme, please visit its website: www.ris.org.in.

Schwezerische Eidgenossenschaft Federal Department of Foreign Affairs (FDFA) RIS Confédération suisse Swiss Agency for Development and Cooperation (SDC) Confederazione Svizzera Department Development Policy and Multilateral Research and Information System Cooperation for Developing Countries Confederaziun svizra Global Issues and Sustainable Development Division Core IV-B, Fourth Floor, India Habitat Centre Lodhi Road, New Delhi-110 003, India. Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Managing Editor: Dr. Prabir De Email: [email protected] Associate Editor: Dr. Beena Pandey Websites: http://www.ris.org.in; http://www.newasiaforum.org 12 Mekong-Ganga Policy Brief, March 2009 RIS Research and Information System for Developing Countries

No. 5 June 2011 Foreign Direct Investment in Mekong Countries: Opportunities and Challenges

he Mekong countries comprising Cambodia (CDC), its foreign investment venture (JV) with foreign firms. Following Cambodia, Lao People’s Democratic approval body. The Government changed the Asian financial crisis of 1997, the FDI TRepublic (Lao PDR), Myanmar, the foreign investment regime by revising Law was further amended in mid-2000 in Thailand and Vietnam grew rapidly during the Law on Investment in early 2003. There which foreign invested enterprises (FIEs) the last decade. With the exception of is no limit on foreign equity participation as were allowed to indulge in mergers and the years of global financial crisis, growth 100 per cent foreign ownership is allowed acquisitions (M&As). Though Vietnam rates of this magnitude and duration are in almost all the sectors and industries. But invites FDI in many sectors, there are limits remarkable in Mekong history. Output in Cambodia follows restrictive investment on foreign equity participation in Vietnam. the region increased by 7.82 per cent in policies in its infrastructure sector. For For example, private participation is not the last decade. Cambodia witnessed example, electricity transmission and port allowed in mining and telecommunications the strongest GDP growth of 8.1 per cent, operations are closed to foreign capital and a minimum 30 per cent foreign capital followed by Vietnam (7.3 per cent), Lao participation and the foreign participation is required in JVs.4 in airports is limited to less than 50 per PDR (6.7 per cent) and Thailand (4.1 per Thailand cent).1 It has been observed that higher cent.2 Thailand maintains a relatively liberal investment is pivotal to growth of some Lao PDR of the Mekong countries, and, therefore, investment regime. Thailand’s Investment Lao PDR implemented the open-door policy Promotion Act of 1977 focused at attracting foreign direct investment (FDI) under its New Economic Mechanism in has been the major focus of policy reforms promoting investment in agriculture and 1986, passed the Foreign Investment Code manufacturing sector, and Thailand later in the region. FDI can also have important in 1998, and set up Foreign Investment positive effects on a host country’s passed the revised investment foreign Management Committee (FIMC) for the investment legislation on November 1999. development effort. In addition to the promotion of FDI. Lao PDR implemented the direct capital financing it supplies, FDI FDI in Thailand is allowed in almost all Investment Code in mid-1994 and revised sectors including financial services like can be a source of valuable technology it in end-2004. The Code allows foreign banking and insurance, and in services and know-how while fostering linkages investment in all sectors with 100 per cent like aviation and transportation. Initial with local firms, which can help improve ownership except in mining and energy foreign investment is subject to a minimum an economy’s health. Based on these projects. In the case of joint ventures, capital requirement of Thai Bhat 2 million. arguments, developing countries have foreign equity participation is allowed to be Thailand’s latest investment promotion offered incentives to encourage foreign at least 30 per cent of total invested capital. measures are aimed at attracting FDI direct investments in their economies, and In 2009, the National Assembly of Lao in eco-friendly chemicals, high-tech subsequently carried reforms in order to PDR passed the promotion of Investment equipment and energy savings and sharpen the FDI policy. Law. Under the new Law, incentives will be 5 provided to investors who are investing in alternate energy business. FDI Policy Reforms in Mekong hospitals, schools, colleges, universities Myanmar and skill development centres. Lao PDR Myanmar implemented open economic Countries allows 100 per cent repatriation of capital, policy in the year 1988. Myanmar’s first Cambodia profits and dividends after deduction of 10 investment-related law was implemented The Government of Cambodia began its per cent withholding tax that is creditable in the form of Myanmar Foreign Investment 3 free-market reform process in the mid- against corporate tax. Law (FIL) in order to facilitate investment 1980s. Cambodian Government passed a Vietnam in private sector. Foreign investors in liberal foreign investment code in 1989 and Vietnam initiated economic reforms (called Myanmar have options to start business subsequently set up a National Investment Doi Moi i.e. “renovation”) in 1986, with an either in the form of wholly foreign-owned or Council in 1991. Cambodia national aim of creating a market-oriented economy. a JV with local partner (where the minimum assembly passed the new Laws and The country’s first FDI law, passed on 9 share of foreign entity is 35 per cent of total Regulations on Investments in the Kingdom December 1987, aimed at facilitating new equity capital). FDI in Myanmar is permitted of Cambodia and established a liberalised investments and providing international in almost all sectors except in 12 sectors investment regime. The Government set up market access for the country’s exports. specified by the Government. Foreign the Cambodian Investment Board (CIB) In 1990, the FDI Law was amended to investment is exempted from income tax under the Council for Development of facilitate private sector to engage in joint for three years.6

Mekong-Ganga Policy Brief, June 2011 1 India-Mekong Investment Trends Dabur and Lupin (pharmaceuticals) and (MPI), FDI is inhibited in Vietnam due India and the Mekong region have many Bharti Airtel (telecommunications). While to poor infrastructure and low-quality commonalities in historical, cultural and the major Thai firms investing in India work force, for example, out of 2 million political aspects. India is one of the are C P Aquaculture (India), Italy-Thai employees working in the FDI sector, only fastest growing economies in the world Development, Krung Thai Bank, Charoen 0.4 million (40 per cent) are trained at with a growing share of foreign investment Pokphand (India) (banking services), vocational schools. Infrastructure systems abroad. India launched “Look East Policy” Stanley Electric Engineering (electronics), like electricity, water, traffic and seaport in 1991 to intensify its engagement with Thai Summit Neel Auto (automobile), Thai in Vietnam are also very weak. Also, Association of South East Asian Nations Airways (airlines), Precious Shipping Vietnam does not have clear instructions on (ASEAN) through deeper economic, (shipping), Preuksa Real Estate, Dusit conditional investment sector (businesses political and strategic cooperation. FDI and Amari group of hotels (recreational need a license to operate in this sector). flows from India to ASEAN members were activities), to mention a few. For example, there are about 70 conditional US$ 591 million in 2008, accounting for 1.2 Currently, investment flows from investment areas for which there are per cent of total FDI in the region. In 2009, India to Cambodia are negligible. But the no clear-cut instructions.13 Although the the FDI inflows from India to ASEAN grew Government of India has identified sectors Vietnamese economy is dependent on to US$ 984 million, accounting for 2.5 per such as IT, water resource management agriculture to a large extent, it has not been cent of total FDI in the region.7 and electricity where India can potentially able to attract FDI in this sector, mainly due On the other hand, India received invest in Cambodia. As a step towards to implementation of old techniques that US$ 105.98 billion cumulative FDI equity enhancing bilateral investment, the first act as barriers to investment in this sector. inflows during January 2000 to December India-Cambodia Trade and Investment Vietnam has not devoted enough money 2009. However, the FDI inflows from Business Forum, Exhibition and Buyer to make agriculture as an attractive sector the Greater Mekong Sub-region (GMS) Seller Meet was held in Phnom Penh for foreign investment. Vietnam ranked countries8 to India were US$ 75.53 million, on 11-12 November, 2009. In a latest 78 (out of 183) in Doing Business Index representing only 0.08 per cent of the development, Cambodian Trade Ministry 2011, prepared by the World Bank and cumulative FDI inflows in India. A scrutiny attended the India-ASEAN business fair International Financial Corporation (IFC). of sectoral FDI equity inflows from GMS in New Delhi, held during 5-6 March 2011, According to the Index, investor protection to India during the same period reveals in order to boost investment between the against self-dealing is very low in Vietnam that highest FDI inflows have been in the two countries. (it ranks 173 out of 183). At the same time, telecommunications sector (23 per cent India and Myanmar signed a Bilateral Cambodia ranks 147, Lao PDR 171, and of FDI inflows), followed by construction Investment Promotion Agreement (BIPA) Thailand 19 in Ease of Doing Business (15 per cent), housing and real estate (14 and Double Taxation Treaty (DTT) in 2008. Index of the World Bank. per cent), chemicals other than fertilizers Both countries plan to enhance cooperation (12 per cent) and hotel and tourism (5 per in the fields of energy, oil and natural gas, Concluding Remarks 9 cent). power, IT, infrastructure development, The economies of Mekong region grew India invested in 52 FDI projects in telecommunications and agriculture. at 6.7 per cent in 2010, which is a Vietnam with a total registered capital of According to the World Investment Report commendable performance considering 10 US$ 211 million during 1988-2010. Indian 2010, the cumulative FDI inflows during the fact that many economies in the FDI has occurred mainly in sectors such as 2000 to 2008 in Myanmar were over US$ world are still suffering from economic oil and gas exploration, mineral exploration 2.3 billion. The same report mentions that slowdown in the aftermath of global and processing, sugar manufacturing, the total FDI flows from the world to Lao financial crisis. There is no doubt that the agro-chemicals, informational technology PDR increased from an annual average Mekong countries require large amount of (IT), and agricultural processing. Tata of US$ 24 million in 2001 to over US$ 156 FDI as it has positive spillovers in the form Group of India is expected to invest more million in 2009. India has identified factors of dispersion of knowledge, managerial than US$ 4.5 billion in next few years in such as effective transport connectivity, expertise, and dissemination of marketing production of steel and exploration of iron cheap labour, and availability of natural techniques. ore. Reliance, Essar, RPG, and ONGC are resources as important determinants of Cambodia is continuing its free- major Indian companies that have invested FDI in Lao PDR. market reforms that were initiated in the in Vietnam.11 From Vietnam, an IT firm has While India has the advantage in IT mid-1980s. Though FDI from India to invested about US$ 0.15 million in India and telecommunication sector, the Mekong Cambodia has been negligible in the in information technology development countries are blessed with abundant past, India has identified various sectors project.12 natural resources and educated labour that are perceived to have potential in the India and Thailand are important force. Wage advantage, vast and growing near future such as IT and infrastructure regional partners and are active members market and ASEAN free trade region development. of regional groupings such as East Asia are some of its advantages over other Lao PDR has also followed an open- Summit (EAS), Mekong-Ganga Cooperation regions in the world. Moreover, India and door policy since the mid-1980s and (MGC) and Asia Cooperation Dialogue Mekong countries share similar culture. actively seeks FDI in areas like education (ACD). Bilateral investments between these Thus, there is vast untapped potential for and skill-development. India can be a two growing economies have grown rapidly further enhancement in bilateral investment major source of FDI in this area as it has a in the last decade. Cumulative Indian FDI between India and Mekong countries. strong services sector. into Thailand was around US$ 1.5 billion Vietnam began its economic reforms during 1970 and 2008. Thailand, in turn, programme in the mid-1980s and seeks to has invested over US$ 65 million in India Barriers to FDI attract FDI in various sectors. Indian MNCs FDI from India to Vietnam is low despite from April 2000 to December 2009. Major are investing in various sectors in Vietnam Vietnam possessing a large market and Indian firms investing in Thailand are as like agriculture, mineral exploration and abundant labour force with relatively lower follows: Tata Group (automobiles, IT, steel), information technology. As both countries Aditya Birla Group (chemicals, textiles), wages. According to the Vietnamese Indo Rama Group (chemicals), Ranbaxy, Ministry of Planning and Investment Continued on page 11

2 Mekong-Ganga Policy Brief, June 2011 Prospects for India-Vietnam Cooperation in Biotechnology

odern biotechnology provides was identified by Vietnamese government would need to be labelled, and the breakthroughs in healthcare, as one of the six key technological release of GMOs should be approved Magriculture, processing industry directions for the country’s socio- by biosafety committee. In 2010, large and environmental protection. The global economic development. The first scale field trials for GM corn, soy bean biotech market in 2009 reached a value national law supporting biotechnology and cotton were launched, there by of US$ 201 billion and is forecast to reach development was issued in 1994. In 2008, paving the way for commercialization of US$ 318 billion in 2014.1 In Asia and the the government approved the “Master GM crops in 2012. Integrating with the Pacific region, the biotech market has Plan for Development and Application of world economy, Vietnam’s government been growing at a rate of around 16 per Biotechnology to the Year 2020.” With the recognizes the importance of protecting cent per year. Higher growth rates have Master Plan, Vietnamese government is Intellectual Property Rights (IPR). Vietnam been witnessed in emerging markets like aiming at boosting biotech research and is a member of World Intellectual Property India, Malaysia, and Singapore. These application in order to build a new high- Organization (WIPO), and a party to Paris countries are anticipated to dominate the tech industry supplying key products, thus Convention for the Protection of Industrial market in future with combined share of contributing to the growth. The government Property, World Trade Organization (WTO) around 70 per cent of overall market size.2 is showing its commitment in consolidating Agreement on Trade-Related Aspects of Biotech is one of the fastest growing resources, calling for diverse forms of Intellectual Property Rights (TRIPS). knowledge-based sectors in India. It is investments, improving legislations in Vietnam has achieved reasonable expected to play a key role reshaping order to increase biotech investment progress in biotechnology. The role and India’s rapidly growing economy. During efficiency facilitating the formation and position of biotechnology is recognized 2005-2009, the industry witnessed an development of biotech market in Vietnam. by the government and the society. impressive growth of around 26.5 per The target was set that by the year 2020, The level of research and technological cent per year and generated total revenue biotechnology of Vietnam will reach development has been improved of US$ 2.4 billion in 2009.3 India is regional advanced level and international markedly. Biotechnology has penetrated looking forward to achieve US$ 5 billion standard at strategic fields. into various aspects of life and contributed in biotech revenue in 2011 and US$ Vietnam is taking steps in preparation 10 billion in 2015.4 India is recognized to Vietnam’s successful story of moving of technical infrastructure for biotech from a food importing country to the as a manufacturer of economical high- development. It is expected that the world’s second largest rice exporter. quality bulk drugs and formulations. heart of biotech innovation will be a Biopharma contributed 62 per cent of network of national key laboratories. Five Indian biotech revenue, followed by laboratories have been established with India-Vietnam Relations bio-service (19 per cent), bio-agri (14 an investment of US$ 3 to 5 million each.5 India and Vietnam have a long history per cent), bio-industrials (4 per cent), A special funding is given to facilitate of friendly relationship and cooperation. 4 and bioinformatics (2 per cent). With a international research collaboration and These two countries established official large pool of scientific talents, advanced technology transfer. Two hi-tech parks diplomatic relations in 1972. Vietnam and research and development facilities, world are in schedule to host hi-tech enterprises India signed a bilateral trade agreement in class information technology, and cost including biotechnology. Investment 1978 and bilateral investment promotion effectiveness, the biotechnology industry in biotech R&D has increased from and protection agreement in 1997. Direct in India is emerging as a global key sector. US$ 300,000 in 1991 to US$ 10 million air links, visa exemption agreement, in 20105, 6 over the last two decades. In etc. have been established to bolster Biotechnology in Vietnam 2000, the government approved post- businesses and tourism. The two countries With a population of over 86 million, graduate overseas training programme established strategic partnership in July Vietnam is the 13th most populous with funding of US$ 15 million per year. It 2007. Vietnam and India are members of country in the world. Currently the was targeted to have 4500 technicians, the Mekong-Ganga Cooperation (MGC) country is implementing reform process 12000 bachelors, 1200 masters, and 300 and ASEAN-India Free Trade Agreement toward modernizing the economy and PhDs trained in biotechnology in Vietnam (FTA). competitive export-driven industries. during the period 2011-2015.6 Bilateral trade between Vietnam Vietnam achieved a strong growth rate In 2010, the government issued and India has increased rapidly over the of 7.5 per cent in the last two decades. biosafety decree creating the framework last two decades, from US$ 75 million in Despite the global recession, GDP of for commercialization and utilization of 1990 to US$ 2754 million in 2010. India Vietnam increased by 6.8 per cent in 2010 genetically modified organisms (GMOs) currently is the 11th largest exporter to over the previous year. and genetically modified (GM) products. Vietnam. In 2009, Vietnam imported Biotechnology in Vietnam is historically Under the decree, products containing from India US$ 170 million of biotech grounded in agriculture. Biotechnology more than 5 per cent GM materials related products, mainly medicaments

Mekong-Ganga Policy Brief, June 2011 3 (US$ 123 million) and GM cotton in 2010 the country spent US$ 290 million Biotech promotion (US$ 47 million). In 2010, India invested on import of antibiotics. The increasing Cultural differences and the lack of in 50 projects with total inward FDI of US$ demand for antibiotics during the last few information are the major barriers 212 million in Vietnam. years causes concern in the country, and affecting India-Vietnam cooperation. In education and training, India the government is actively acquiring the For bolstering biotech collaboration, offers Vietnam more than 100 long-term technology for domestic production. With the establishment of a center for and short-term scholarships every year. vast experience in antibiotic production, collaborative research and technology During 2001 to 2008, India offered Indian companies would be the best transfer could be considered. The Vietnam a US$ 2.5 million project on partners. center will be responsible for biotech human capacity building in software Environment protection market research, introduction of Indian industry. Vietnam and India have signed technology, collaborative R&D, and With rapid pace of urbanization and science and technology cooperation monitoring the pace of cooperation. industrialization, pollution in Vietnam agreement in 1976. A subcommittee for is growing at an alarming rate. The science and technology cooperation government is now tightening regulations Concluding Remarks was established in 1997. The 8th session on environmental protection. Several large Biotechnology has become an integrated of the subcommittee was held in New factories were forced to close down due to part of the world economy. With the growth Delhi in December 2010. Till date, four non-compliance of rules and regulations. rate of 16 per cent per year, biotech collaboration projects have been signed. The market for waste treatment is large. market in Asia and the Pacific region Indian technology is often regarded as holds vast potential for development and Prospects for India-Vietnam cost effective and suitable in Vietnamese collaboration. Although in early stage of Biotech Cooperation condition. development, biotechnology in Vietnam Although biotechnology has already has received special attention from the contributed significantly to the country’s Agriculture policy makers. A legislative framework socio-economic development, biotech As true home of Green Revolution, has been established and measures market in Vietnam is still in early stage India has vast experience in agricultural have been taken to ensure that by the of formation. The market lacks leading biotechnology. With over 800 GM cotton year 2020 biotechnology of Vietnam players and this opens vast opportunity varieties approved and more than 20 shall reach regional advanced level. for biotech direct investment and domestically developed GM food crops India and Vietnam have long history joint ventures. Several Indian biotech under field trial, India could offer the of friendly relations and cooperation. companies already have their presence in region with alternative choice alongside Biotech joint ventures, collaboration in Vietnam, including Ranbaxy, Venky, Vinh with traditional GM suppliers. Since India biotechnology education, environment Thinh - BIOSTADT JSC, etc. Taken into is relatively late with GM food approval protection, production of antibiotics and consideration the specificities of biotech for domestic use, steps should be taken biofuel, commercialization of GM crops development in Vietnam and India as well to build up mutual trust and recognition are promising fields for deepening that as trends in biotech development and in commercialization of GM products. relationship. technology transfer, following fields of Collaborative development and trial of collaboration would be of mutual interest: GMOs could also be considered. Notes and References Education and training Biofuel research 1 Biotechnology: Global Industry Guide 2010. Both India and Vietnam are deficient in Datamonitor Premium Research Reports, During the past few years India has fossil energy resource. India produces 2010. undergone a rapid technological change, only 30 per cent of its oil requirement and 2 Asia Pacific Biotechnology Market (2008- especially in the field of biotechnology. has to import the rest from other countries. 2012). RNCOS Industry Research Solutions, With world standard in education, R&D, 2010. Vietnam has to import more than half of technological knowledge, English 3 Booming Biotech Market in India. RNCOS its petroleum requirement. Vietnam has language, India is an appropriate partner Industry Research Solutions, 2010. to diversify energy supply and renewable 4 for Vietnam in human resource capacity Indian Biotechnology Sector – Overview. biofuel is one of the options. Three large European Business and Technology Centre, building. Besides offering fellowships as bioethanol factories are expected to enter 2011. happened in the past, Indian universities in operation in 2011. Current technology 5 Master plan for the development of bio- could consider to open its branches is problematic since it utilizes food industry in Vietnam to 2020. Food Industries in Vietnam. Knowledge transfer would Research Institute - Ministry of Industry and stuffs for ethanol production. Vietnam is establish the presence of India and open Trade, 2007. launching research on 2nd generation 6 up the market and business. Master plan for development and application of bioethanol, that is, bioethanol of biotechnology in Vietnam to the year Antibiotic production based on lignocellulose derived from 2020. Decree No 14/2008/QÐ-TTg issued Vietnam is a developing country in the agricultural waste and forestry residue. by Vietnam Prime Minister, 2008. tropics where infectious diseases are With ample supply of rice straw, corn Vu Nguyen Thanh, Food Industries Research common. With a large population, the cobs, sugarcane bagasse, etc. second Institute, 301 Nguyen Trai, Thanh Xuan, Hanoi, country’s demand in antibiotics is high. generation of bioethanol is promising for Vietnam. Views are his personal. ■ According to Vietnam customs statistics, both Vietnam and India.

4 Mekong-Ganga Policy Brief, June 2011 India-Mekong Cooperation Activities Shift of Power to Asia Mr. S.M. Krishna External Affairs Minister of India

especially welcome my colleagues less developed, members of ASEAN, Within this framework I believe, we from ASEAN countries and their i.e. Cambodia, Lao PDR, Myanmar and must focus even more sharply in our I delegations, who have honoured us Vietnam. efforts to construct an interconnected with their presence not only for this event The shift of power to Asia in this economic block. but also for other activities that we in India century is almost a cliché now. While such I believe that India and ASEAN can do are privileged to host this week to focus a shift may indeed be taking place, the so by concentrating even greater efforts on our relations with these countries. I processes involved are far more complex on physical connectivity. This aspect fits express my gratitude to the Secretary than what would appear at first glance. A very well with our own domestic priority of upgrading infrastructure. If the two can General of ASEAN, H. E. Dr Surin Pitsuwan number of new initiatives and institutions proceed in tandem, it is possible that in the for accepting my invitation. in South East Asia are coterminous with We stand at the threshold of twenty space of next five to seven years we will and contribute to this shift. see a dramatic flowering of India-ASEAN years of the launch of the formal Dialogue On the strategic side, there is the partnership between India and ASEAN, relations. Connectivity will enhance the ASEAN Defence Ministers Meeting Plus which started in 1992. We look forward potential of Merchandise Trade and Eight process. India’s participation in this to holding the Commemorative Summit in Investment Agreements that have been is part of the wider paradigm shift which 2012 in India. already put into effect or are on the anvil. characterises our Look East Policy. It is a happy coincidence, that this two Greater physical connectivity will The second big institutional change reinforce intellectual inter-linkages that we decade period has been transformational have or will foster. for India, as also for its engagement with is the continued evolution of the EAS In this context, I would like to mention South East Asia. process. Our Look East Policy has evolved our joint initiative for the revival of the It has been a gratifying engagement with the process, which was born in Nalanda University. for us – an engagement which has drawn 2005. This policy has, therefore, evolved Similarly the Mekong-Ganga strength from India’s rapidly developing to include the Far Eastern and Pacific regions and facilitated greater links with Cooperation (MGC) launched in the bilateral ties with individual ASEAN year 2000, is a sub regional initiative Japan, Republic of Korea, Australia and countries, and from our millennia-old comprising India and five ASEAN New Zealand. bonds with the countries and civilizations countries. Both the Ganga and the EAS further expanded at its 5th of the region. Mekong are not mere rivers but symbols The words ‘Look East’ encapsulate our Meeting in October last year to include US of civilizations. Members of MGC are renewed focus on these ties. I wonder if and Russia into its ambit. India welcomed working to promote cooperation in the we have a phrase that can capture the age the expansion, which we believe, will add sectors of tourism, culture, education and old roots, cordiality and partnership that to regional pace and security. transport and communications. are at the heart of our Look East Policy. With this backdrop of historical and Our enterprising ancestors created Historical ties of India with Myanmar, contemporary wide ranging associations, through the passage of time a most Thailand, the Malay Peninsula, Cambodia, how does India look beyond the first two wonderful matrix of mutually enriching Laos and with what was known as the East decades of our engagement with ASEAN? cultures, and mutually reinforcing bonds. Indies – Sumatra, Java, Bali and Borneo There are few vectors which suggest As we look to India-ASEAN engagement - are well known. These ties are rooted in themselves for the future. beyond 2012, we need to assiduously geographical contiguity and commonality Firstly, I think we need to focus on a promote people-to-people relations. It is of a multitude of other factors. vision for our region which is inclusive. on the wings of these ties that the future of our relationship will soar. It is both a contemporary need and As many of you know in India we have Before I conclude, I would like a responsibility to nurture these natural sought to embed in our developmental relationships. We are committed to to congratulate the Indian Council of experience the principle of inclusivity. deepening our all round engagement World Affairs, the Federation of Indian These principles need to form part of with ASEAN. Chambers of Commerce and Industry, international efforts as that in the end is India’s first FTA was signed with the Institute of Southeast Asian Studies the strongest factor for the maintenance ASEAN. This Agreement will provide a and the SAEA Research Group of of peace and security. further thrust to the almost twenty-fold Singapore, as well as the Economic increase in our trade with ASEAN which Secondly, we feel that the principles Research Institute in Jakarta, for their has been witnessed in nearly twenty years of State sovereignty and non-interference fruitful partnership in restructuring the since 1990. in internal affairs of others must be the Delhi dialogue. I also compliment all India has undertaken a number of bedrock of our cooperative endeavors. the think tanks, scholars and experts initiatives in line with its commitment to Thirdly, diversity comes naturally involved who have worked so hard to the ‘Initiative for ASEAN Integration’ which to us in Asia. Respecting diversity and bring this Dialogue to fruition. developing tolerance must, therefore, form is intended to bridge the developmental (Excerpted from the Speech delivered at India-ASEAN gap between the older and the newer, the third prong of our approach. Delhi Dialogue-III, New Delhi, 3 March 2011). ■

Mekong-Ganga Policy Brief, June 2011 5 India-Mekong Cooperation Activities ASEAN-India Economic Relations Mr. Sundram Pushpanathan Deputy Secretary General of ASEAN for ASEAN Economic Community t present ASEAN and India is and the ASEAN-India Trade in Goods liberalisation over 90 per cent of products experiencing steady economic Agreement have been realised. We traded, including the so-called “special Agrowth despite the global economic are also making good progress in the products,” such as palm oil (crude situation as well as robust trade spurred liberalisation of trade in services within and refined), coffee, black tea and by the ASEAN-India Trade in Goods ASEAN as well as opening up our region pepper. It will open the way for over 4,000 Agreement that came into force last year. for investments through the ASEAN items to be traded duty-free between The India-ASEAN Business Fair Comprehensive Investment Agreement. ASEAN Member States and India. The and Business Conclave today represent Moreover, we are promoting movement of services and investment agreements will another milestone in the history of ASEAN- skilled labour through mutual recognition provide greater market access for Indian India dialogue relations that began in arrangements of skills and professions professionals, services providers as well December 1995. The two events are the as well as freer flow of capital through the as investors to the ASEAN region and brainchild of H.E. Dr. Manmohan Singh, development of our capital markets. vice-versa. the Prime Minister of India, at the 7th We have started to focus on the Beyond our bilateral free trade area, ASEAN-India Summit in October 2009. I second pillar of the AEC on developing ASEAN and India are exploring an East- am happy to note that the proposals have a competitive economic region through Asia wide trade arrangement together with materialised so speedily underscoring the greater cooperation in the critical areas the other countries under the EAS. This resolve of both sides to leverage on the of competition policy, intellectual property will create the world’s largest economic economic strengths of each other and rights, and consumer protection. At the space for our businesses to operate and together on the economic opportunities same time, we are strengthening our prosper. from rising Asia. cooperation in the third pillar of the AEC ASEAN has just launched its Master In essence, the government-to- on narrowing the development gap by Plan on ASEAN Connectivity covering government cooperation that we started assisting our lesser developed ASEAN physical, institutional and people-to- through the ASEAN-India Trade in Goods countries to come fully on board economic people connectivity both within ASEAN Agreement under the ASEAN-India integration while supporting our SMEs and ASEAN with its partners. India can FTA is now transforming into business- to grow and eventually venture across actively participate in this connectivity to to-business cooperation through the borders in ASEAN. The work ahead is reap mutual benefits. This would include two events. Certainly, the high level of challenging but ASEAN has shown it is further strengthening infrastructure participation of ministers and business ready and has the grit to make things connectivity between India and ASEAN leaders, and the overall enthusiasm work for the region, our partners and through the Mekong countries; concluding shown in today’s fair augurs well for the businesses. speedily the ASEAN-India Air Transport future of ASEAN-India economic relations I am pleased to note that, despite the Agreement; and advancing further especially with the establishment of the continued impact of the global economic India’s cooperation with ASEAN in the ASEAN India Business Council, which crisis, India remained the 7th largest areas of education, energy, agriculture should also promote greater business- trading partner of ASEAN, with total trade and forestry, science and technology, to-government cooperation so that we of US$ 39.1 billion in 2009. It is equally information communication technology, can improve the climate for trade and important to note that ASEAN is India’s 4th tourism, small and medium enterprises, investment under the ASEAN-India FTA largest trade partner after the EU, the US and others. for our businesses. and China. On FDI, India has remained In closing, I wish to underscore Let me take this opportunity to the 6th largest investor in ASEAN, with that ASEAN and India have developed briefly update you on the key progress investment valued at US$ 970 million in a strong foundation for cooperation and achieved in building the ASEAN Economic 2009. FDI inflows from India accounted collaboration in the last 15 years. It is Community (AEC) that will be established for 2.5 per cent of total FDI into the region. the time that our business communities in the year 2015. Since the adoption of the Cumulative FDI from India in ASEAN from build their networking and partnerships AEC Blueprint in November 2007, ASEAN 2000 to 2009 was about US$ 3.67 billion. leveraging on this firm foundation and has been making steady progress towards Certainly, the ASEAN-India FTA will their inherent strengths, so as to take the realisation of the AEC. be the cornerstone of our growing and leadership in driving the economic Indeed, January 2010 is seen as a prospering economic partnership. Once dynamism between the two growth poles key milestone in the history of ASEAN as fully implemented, after we conclude our in East Asia. We need to alleviate the we realised the ASEAN FTA where the services and investment agreements, it business dimension of our cooperation ASEAN-6 countries of Brunei Darussalam, will pave the way for the creation of one of to a higher level and we should start now Indonesia, Malaysia, the Philippines, the world’s largest free trade areas with a with this India-ASEAN Business Fair and Singapore and Thailand collectively have market of almost 1.8 billion people and a Business Conclave. achieved almost a zero tariff regime as combined GDP of US$ 2.8 trillion. (Excerpted from the Speech delivered at the India- well as all our FTAs with China, Japan, The ASEAN-India Trade in Goods ASEAN Business Fair and Business Conclave, New South Korea, Australia and New Zealand Agreement, in particular, will see tariff Delhi, 2 March 2011). ■

6 Mekong-Ganga Policy Brief, June 2011 India-Mekong Cooperation Activities ACC Delegation Visits Laos Vietnam Expo

A group of five members of the 20 representatives of different business 2011 on Business Assam Chamber of Commerce (ACC) organizations and noted businessmen Cooperation recently represented Assam at a special from different states of India took part in conference held in Laos celebrating 55 the discussions. Opens in Hanoi years of completion of diplomatic relations According to a press statement, between Laos and India. Dr Nam Vialut, Minister for Industry and Vietnam Expo 2011, the 21st In the conference, the business Commerce, Government of Laos, Indian international trade fair, organised by the infrastructure and investment possibilities Ambassador Dr. Jitendra Nath Mishra, Ministry of Industry and Trade (MoIT) and at different spheres, particularly in Assam Habib Mahammad Chaudhury, president the Vietnam Exhibition and Advertisement and North-east India, were broadly of Lao Indian Chamber of Commerce, Joint Stock Company discussed by the group, led by Rupam Khantavons Dalavons, Principal Secretary Under the theme “Vietnam -- Goswami, State convener of the ACC. of Laos and the members from the Integration and Development”, Vietnam It needs a mention here that the business delegation of Assam, led by Expo 2011 displays agricultural, food processing products, wood-based conference was organised by the Indian Goswami, took active part in discussion. products, decoration furniture, handicraft Embassy at Laos in collaboration with the (Excerpted from the Assam Tribune, 5 May 2011). articles, fashion ware, IT products, Lao Indian Chamber of Commerce. At least © Assam Tribune. manufacturing machines and equipments, among others. The Expo attracted almost 600 domestic and foreign companies from 20 Free Trade with ASEAN to Open Up countries and territories including Czech Republic, China, Cuba, India, Indonesia, Prospects Laos, Malaysia, Nigeria, Pakistan, Russia, Slovakia, South Korea, Thailand, the According to a joint study, the India- in service categories such as machinery, United Arab Emirates, the United States ASEAN FTA will open up a host of computers and supplies, industrial and Vietnam, etc. process control equipment, optical business opportunities for Indian industry, The expo also sees the first time instruments, horological instruments to especially in the construction sector. of Indian enterprises participating with name a few. Indian companies could seriously a large-scale national pavilion of 70 look at the current open project tenders The FTA, which was signed with companies, providing a great opportunity in the ASEAN region in construction- Malaysia, Thailand and Singapore and for Vietnamese enterprises to seek related activities such as construction came into effect from January 1, 2011, investment and establish trade relations of agricultural buildings, bridges, canal, is expected to be in place with all the with this huge market. roads and highways, sports facilities and member countries by 2016. water-treatment plants. (Excerpted from the People’s Daily Online, 7 April 2011). According to the study, ASEAN (Excerpted from the Hindustan Times, 15 May 2011). countries would also provide opportunities © Hindustan Times. © People’s Daily Online.

Investors Meet as Part of North East Business Summit

As part of the 6th North East implemented under the Look East Policy said. The Food Park construction is almost Business Summit, the Indian Chamber of the Indian government. complete at Nilakuthi. It will have 55 fruit of Commerce (ICC) organised a one The construction of an Integrated processing units. Moreover, the state has day Investors’ meet at Imphal. Seven Check Post at Moreh is ongoing. The one of the finest silk cocoons of the world, ICC officials and 26 private investors government will be building a five storey he said. from different parts of the country with building at Moreh to be utilized as a Tourism Minister, TN Haokip said that proposals of 39 projects interacted with market. Manipur is a state with rich tourist spots. private organisations, entrepreneurs He emphasised that the state government Drawing the attention of the investors, and officials of various government is planning to introduce a Imphal to Erabot said that Manipur is a place with departments during the meet. Mandalay bus service which will give a new rich natural resources and a fresh and boost to the tourism business in the state. At the Summit, Commerce and clean environment. There are many Industries Minister Y Erabot said that varieties of fruits, medicinal plants and (Excerpted from www. e.pao.net, 27 April 2011). various projects are currently being aromatic plants available in the state, he © www. e.pao.net.

Mekong-Ganga Policy Brief, June 2011 7 Focus India India, Thailand Agree to Double Thailand Invites Trade by 2014 Indian Investment India and Thailand agreed to double cooperation in education, tourism and Prime Minister of Thailand, Mr. Abhisit their bilateral trade by 2014, which stood culture, apart from identifying space Vejjajiva made an impassioned plea at US$ 6 billion at present, and also to technology, disaster management and to Indian business leaders to choose expedite their negotiations on a free science and technology as other areas Thailand as their destination for investment. trade agreement on goods, services and of cooperation. Addressing a luncheon meeting investments. Noting that the two nations enjoyed with captains of industry from India The agreements came about at the “active exchanges” in defence, counter- and Thailand, Mr. Vejjajiva called meeting of Prime Minister Manmohan terrorism and security, the Indian Prime upon them to cash in on the economic Singh with his Thai counterpart Abhisit Minister said that they have agreed to complementarities offered by the two Vejjajiva. further strengthen cooperation and to countries to raise bilateral trade to US$ “Our bilateral trade turnover has initiate senior-level dialogue between the 10 billion in the next two years. reached about US$ 6 billion. We have two defence ministries. To increase the attractiveness of his agreed to aim towards doubling of our Both the leaders expressed their country as an investment destination, trade by 2014,” Indian Prime Minister said desire to cooperate “to secure” the vital Mr. Vejjajiva proposed to significantly cut in a statement after his delegation level sea lanes of communication, which pass corporate income-tax rates and sought talks with Vejjajiva. through the Indian Ocean region. Indian participation in sectors such as pharmaceuticals, auto parts, chemicals, “We have agreed to expedite the “Developing close relations with software and ICT. Emphasising that the conclusion of negotiations on bilateral Thailand is an important component of Thailand market for medical equipment free trade agreement that will include our Look East policy. We work together in was around US$ 800 million, the Thailand goods, services and investments,” the a number of regional mechanisms such as Prime Minister hoped that being a world Indian Prime Minister said, adding that the BIMSTEC, the ASEAN Regional Forum, leader in manufacture of drugs and in ministerial level joint commission would the East Asia Summit, and the Mekong modern healthcare, India would cash in meet this year to follow up on the range Ganga Cooperation Initiative,”Prime on the opportunity. of bilateral initiatives. Minister said. Welcoming Thai investments in India, The two Prime Ministers are of the (Excerpted from The Hindu, 6 April 2011). he said: “We see Thailand as playing unanimous view that a strong India- © The Hindu. a positive role in our efforts to catalyse Thailand partnership is a factor of peace development and improve connectivity of and stability in the Asia-Pacific region. our north-eastern states with the ASEAN Thai Prime Minister said India’s Look region.” East policy complimented Thailand’s RIS International He further said Thailand is “a close Look West policy, adding that his Conference on friend and a valued regional partner” for country was looking to participate in a India and that the two countries shared number of projects in India, especially in Mekong-India civilisational links, apart from being infrastructure. maritime neighbours. Cooperation The two countries, he said, had also (Excerpted from the www.twocircles.net, 5 April 2011). Research and Information agreed during the meeting to intensify © www.twocircles.net. System for Developing Countries (RIS), New Delhi, in collaboration FTA with Thailand to be Concluded with the Institute of Foreign Policy Studies (IFPS), Calcutta by 2011 University, Kolkata, is organizing The Prime Minister of Thailand, Abhisit foreign experts and repatriate profits back an international conference on Vejjajiva urged India Inc to be a part of the to their homeland. ‘Mekong-India Cooperation: Thai growth story by lining up investments “Last year alone, investment Linking Markets, Fostering Trade’ applications from India received at in the country known primarily for its at Kolkata, on 23-24 June 2011. Thailand’s Board of Investment were tourism. He said in a series of investor- The overall objective of this friendly steps the Thai government is valued at US$ 60 million. And this is the conference is to draw policy going to reduce the corporate tax. first step towards more applications,” He said the Thailand Board of he said. “There has been 46.2 per cent lessons toward building capacity Investment, which is the high-level surge in the number of tourists arriving through South-South cooperation. government body that charts the road in Thailand from India in 2010, at almost Several eminent international and map for FDI inflows into the country, has 800,000, is a telling sign of the confidence national scholars, policy analysts, been progressively supporting investors and friendship between our peoples,” he added. academicians and industry with various incentives from reduction in people are expected to attend corporate tax to an eight-period long tax (Excerpted from The Financial Express, 6 April 2011). this international conference. holiday to allowing companies to bring in © The Financial Express.

8 Mekong-Ganga Policy Brief, June 2011 Focus India

India-Myanmar-Thailand Agree to Boost Trade and Commerce at Moreh, India

In a landmark event and a big boost am sure that we will have no borders terms of trade and investment. It will towards enhancing cross-border trade between the three countries and people be of mutual benefit to both sides. between India, Myanmar and Thailand, can connect with each other and trade can Investors and traders from Thailand a trilateral trade conference was recently improve. Tourism will also get a boost.” want to send their exports to India,” Aat held at Tamu town, near Moreh. At the meeting, an accord on five Aat Pisanwanich, Director, Centre for The Thai team was led by the Thai- points was reached. It included boosting International Trade Studies, Bangkok, Myanmar Border Trade in-charge Tharodol people to people contact, promotion said. It is a positive step and we should Thongruang. The Myanmarese team was of cross border trade to conduct the try to use it for the strengthening our led by Trade Chamber of Commerce Vice- second motor car rally from Imphal to cultural and economic relationship President U Myin Swe. Thailand, the exchange of sports and because that is the only way we can The main agenda of discussion exchange of cultures. A memorandum move forward,” Amar Yumnam, Professor, among the three sides was about for understanding between Manipur Manipur University, added. improving trade between India and and Thailand University for a student Manipur will play an extremely Thailand with mutual cooperation from exchange programme was also reached important role as far as trade with Myanmar. The three countries are already to provide exposure to students. Southeast Asian Nations is concerned. working on a 1400 km long road corridor Visiting dignitaries also urged the The policymakers understood this and are from Imphal to Mae Sot in Thailand via centre to hold more such discussions in working towards the rapid development Bagan in Myanmar. The road will play a Thailand so that better knowledge about of the state. key role in growth of trade and tourism. working in India could be disseminated. Addressing the conference, “I think we need to improve our (Excerpted from the Sify.com, 3 April 2011). Thongruang said: “In the near future I relations so that we can cooperate in © Sify.com.

Lao-India Cooperation on Human Resource Development

Lao’s Minister of Industry and Commerce, Dr Nam Viyaket has reiterated India’s continued interest and commitment to support development objectives through capacity building and human resource development between Laos and India. The commitment was made at the India-ASEAN Business Fair and Business Conclave (IABF) Business Session IV Investment Opportunities in India, on 3 March 2011, Pragati Maidan, New Delhi. Dr Nam touched upon in general the economic and socio-cultural situation of the Lao PDR that has continuously improved. Strengthening the economic structure on the basis of linking agro-forestry development with industry and services has been well conducted in every part of the country and has been more realistic than ever. In the trade sector, the main policy is to promote both external and internal trade through progressive trade liberalisation, trade facilitation, maintaining existing markets, expanding market access, and promoting foreign and domestic investments. Overall, the Lao government has made significant efforts to improve investment climate and facilitate cross border trade. The trade between Laos and India has been increasing gradually since year 2000 but the last two years have witnessed significant growth. According to the statistical information obtained from the Ministry of Industry and Commerce of Laos, the trade volume between the two countries during the years 2008-09 was to the tune of US$ 6.8 million. During the years 2009-2010 the volume of trade between the two countries shot up to US$ 37 million, an almost 450 per cent growth over the previous year. Metal ores, machineries and electronic goods were the major trade products. Indian entrepreneurs have committed quite a sum in foreign direct investment. The major areas of Indian investments are plantation-cum-pulp project (total commitment US$ 350 million at current prices, almost US$ 600 million); iron ore and agar-wood. The investment in plantation cum-pulp project alone is expected to raise the position of India from 22nd to 6th in FDI. India and Laos have worked together constructively in terms of the economic cooperation and India is already engaged in a number of projects in Laos in the areas of hydropower, IT, human resource development, agriculture and mining. The Secretary-General of ASEAN, Dr Surin Pitsuwan, said ASEAN, being a new locomotive of growth in the global economy, together with India, could become a transmission belt of economic prosperity, political transformation and cooperation. (Excerpted from KPL Lao News Agency). © KPL Lao News Agency.

Mekong-Ganga Policy Brief, June 2011 9 ResourcesResources

Competitiveness of the global landscape? More urgently, how can the locational advantages of the abundant ASEAN Countries: Corporate Asia weather the severe, global financial and cheap labour force in peripheral area, and Regulatory Drivers and economic storm originating from the as well as cross border infrastructure Editors : Philippe Gugler and Julien global credit crisis? How will it extend its services with the support of ethnic ties Chaisse gains to people left behind? between two adjoining countries. Edward Elgar Publishers, 2010 This book raises the question of whether ISBN-10: 184980124X Cross Regional Trade they are applicable, feasible and effective in less developed border region with ISBN-13: 978-1849801249 Agreements: Understanding a majority of small and medium-scale The present study Permeated Regionalism in industries. The book thus discusses: focuses on the role of East Asia what produces entrepreneurs and how FDI in advancing the Editors: Saori N. Katada and Mireya do they operate? What are advantages of performance of ASEAN Solis border locations for entrepreneurs? What and the competitiveness Springer, 2010 are impact of government investments of its firms, whereas and other measures? What other factors other studies typically ISBN-10: 3642098193 contribute to and hinder industrial focus solely on the role of ISBN-13: 978-3642098192 establishment and growth in border trade. The book presents An unacknowledged key towns, and how? a c o m p r e h e n s i v e feature of East Asian FTA view of ASEAN’s experiences over the diplomacy is the region’s past decade, addressing the industrial active cross-regional preferential trading Impacts of Economic competitiveness of ASEAN and analysing Corridors in the Mekong the role of MNEs against the background relations. In sharp of the challenges of integration. They contrast to the Americas Sub-Region: Assessing illustrate that regional integration will only and Europe, where the Impacts of Economic be a success, if ASEAN’s linkages are cross-regional initiatives Corridors in the Mekong broadened with global partners through gained strength after the Countries on FDI Inflows, negotiations of FTAs. consolidation of regional trade integration, International Trade and East Asian governments negotiate trade Poverty Reduction deals with partners outside of their region Nga La Thi Asian Regionalism in the at an early stage in their FTA policies. The World Economy: Engine for book asks three main questions: Are there VDM Verlag Dr. Müller, 2010 Dynamism and Stability regional factors in East Asia encouraging ISBN-10: 3639287193 Masahiro Kawai, Jong-wha Lee and countries to explore cross-regionalism ISBN-13: 978-3639287196 Peter Petri early on? What are the most important T h e p r e s e n c e o f Edward Elgar Publishers, 2010 criteria behind the cross-regional partner Economic Corridors (ECs) ISBN-10: 1848448546 selection? How do cross-regional FTSs in the GMS had brought (CRTAs) influence their intra-regional trade many economic impacts ISBN-13: 978-1848448544 initiatives? potentially, in particular, This book examines the in this work, three issues dramatic transformation on international trade; of the Asian economy, Dynamics of Cross Border FDI inflows and poverty the challenges it faces, Industrial Development in reduction were assessed e m e r g i n g r e g i o n a l Mekong Sub-region: A Case by using secondary data solutions, and how Study of Thailand source and previous research work of Asia can play a more Chuthatip Maneepong the author at Mekong Institute. The aim constructive role in the LAP LAMBERT Academic Publishing, of this study is to investigate the roles of global economy. 2010 transportation and its facilities to support Asia is becoming not ISBN-10: 3838319109 the sub- regional economy. just the world’s factory, but also its leading ISBN-13: 978-3838319100 creditor, and one of its key sources of An important strategy dynamism and stability. Key questions for turning the periphery Globalization and Development are identified and addressed in three of border area into in the Mekong Economies areas: Asia’s growth and productivity, centre of growth, and for Editors : Suiwah Leung, Ben Bingham financial stability, and regional economic accelerating economic and Matt Davies integration. In each of these areas, the concentration away Edward Elgar Publishers, 2010 contributing authors evaluate current from capital cities is trends and the forces shaping the future. ISBN-10: 1848444826 maximizing the value of They consider whether the region’s ISBN-13: 978-1848444829 border locational. Large- progress is sustainable and what it will Since the late 1980s, Vietnam, Cambodia, scale industry located take to make it so. How is Asia reshaping PDR Lao, and Myanmar have been in border areas and relocated to border its economy in response to the changing opening their economies to international towns has a growth potential by exploiting trade and investment. With the exception

10 Mekong-Ganga Policy Brief, June 2011 Resources of Myanmar, the reforms Merchandise Export Share have yielded impressive (%) results, but the process 2000 - 2004* 2005-2009* is far from complete. In Exporter Importer this enlightening book, a (Avg.) (Avg.) group of leading scholars Cambodia Lao PDR 0.068 0.009 outline the continuing Cambodia India 0.004 0.052 reform efforts needed to survive the current Cambodia Thailand 0.922 0.547 global recession and Cambodia Vietnam 1.990 2.772 place these economies in a competitive India Cambodia 0.023 0.029 position on the recovery of the world India Lao PDR 0.006 0.005 economy. India Thailand 1.270 1.068 In the aftermath of the global financial crisis of 2008, this topical book analyses India Vietnam 0.571 0.873 the opportunities and threats to Lao PDR India 0.014 0.018 continued globalization for the Mekong Lao PDR Cambodia 0.003 0.044 countries, particularly in relation to rapid Lao PDR Thailand 20.448 33.104 industrialization through joining the production networks of East Asia. It then Lao PDR Vietnam 16.199 14.140 assesses the political will for sustaining Thailand Cambodia 0.715 0.975 the reform process. Thailand India 0.781 1.715 Thailand Lao PDR 0.588 0.887 Further Readings Thailand Vietnam 1.468 2.586  Upliftment of the Burmese Refugee Vietnam Cambodia 1.159 2.053 Community by Students from IIT Delhi. Vietnam India 0.279 0.474 Indian Express, 7 June 2011. Vietnam Lao PDR 0.364 0.246  Tamanthi Hydel Project: India’s Vietnam Thailand 1.940 2.277 Eastern Foothold. Shivananda H. www.idsa.in, 6 June 2011. Note: * In percentage of country’s total global export Data Source: International Financial Statistics (IFS), International Monetary Fund (IMF)  Hanoi on a High: The City and Country Reaching for the Asian Continued from page 2 Century, Andrew Sheng, The (Foreign Direct Investment in Mekong Countries... ) Statesman, 30 May 2011. grow further, one can expect increase in Endnotes  Indian Water Resources Secretary FDI from both sides. 1 Author’s calculation based on World visits Laos. ibnlive.in.com, 29 April Thailand continues to follow liberal Development Indicators Online, 2011. 2011. investment policies and MNCs from both 2 http://iab.worldbank.org/Data/Explore%20 Economies/Cambodia  Myanmar, India To Speed Up sides have invested in sectors such as IT, 3 http://www.adb.org/Documents/Reports/TMR- Renovation of Arnanda Pagoda. pharmaceuticals, telecommunications, banking and electronics. foreign-direct-investment/chap-5.pdf DailyIndia.com, 27 April 2011. 4 Ibid. Mekong region countries need to  Burma Democracy Group Wants 5 Source: http://www.jtbf.info/poli_economy/pdf/ address some policy issues in order India’s Action. Morung Express, 25 review1102_e.pdf to attract substantial amount of FDI in 6 May 2011. Source: http://www.myanmars.net/myanmar- long-term. Countries like India wishing to business/main.htm#Foreign_Direct_  Foundation Stone of Textile invest in Mekong countries face barriers Investment_Policy Museum Laid. Fibre2fashion.com, that prohibit FDI due to weak legal and 7 Source: http://www.aseansec.org/5738.htm 8 21 September 2010. institutional framework and because These countries are Thailand, Vietnam,  India’s NHPC looking to build Myanmar, Laos and Cambodia. of lack of investor-friendly business 9 12.47GW of Hydropower in Source: Ministry of Commerce & Industry, India. regulation prevalent in these countries. http://siadipp.nic.in/publicat/newsannual/2009/ Myanmar. Industrial Fuels and These barriers are in the form of unclear chapter6.1.G.pdf Power, 21 December 2010. property rights, a weak legal system, and 10 Source: Statistical Handbook of Vietnam, 2010.  East Asian Community Primer. Shinji a lower quality of governance. FDI to these http://www.gso.gov.vn/default_en.aspx?tabid= Fukukawa. The Japan Times, 1 countries also face barrier due to lack of 515&idmid=5&ItemID=11023 December 2010. well-developed physical infrastructure and 11 Source: http://vietnambusiness.asia/india-has- 52-investment-projects-in-vietnam/  India’s ‘Look East’ Policy has low entrepreneurial skills in these Mekong 12 Source: http://www.indembassy.com.vn/ Strategic Goals (Comment). countries. If Mekong countries are able to tabid/72/default.aspx Thaindian News, 26 October 2010. address these impediments to FDI, large 13 http://www.vccinews.com/news_detail.  Status of Kaladan Project. pib.nic. investment in diversified sectors and the asp?news_id=19546 resulting positive spillover effects can be in., 26 August 2010. Gurpreet Singh Bhatia, Associate Fellow, RIS, expected in these countries. New Delhi. Views are his personal. Mekong-Ganga Policy Brief, June 2011 11 Trade Indicators

Trade in Goods Trade in Services (US$ billion) (US$ billion)

2007 2008 2009 2010 2007 2008 2009 2010 Export 4.40 4.29 4.55 - Export 1.55 1.65 1.62 - Cambodia Cambodia Import 5.30 6.51 5.39 - Import 0.92 1.04 1.02 - Export 149.95 194.53 164.92 216.87 Export 86.93 104.22 90.60 - India India Import 228.69 320.79 257.19 323.62 Import 70.81 88.26 81.00 - Export 0.84 1.09 1.07 - Export 0.28 0.40 0.39 - Lao PDR Lao PDR Import 1.07 1.40 1.43 - Import 0.04 0.09 0.12 - Export 153.86 175.90 151.99 195.38 Export 30.36 33.38 29.94 34.05 Thailand Thailand Import 141.29 178.68 134.83 184.59 Import 38.43 46.26 37.76 45.86 Export 48.31 62.69 57.10 - Export 6.03 7.04 5.66 - Vietnam Vietnam Import 60.70 80.71 69.95 - Import 6.79 7.96 6.89 -

- Data not available - Data not available Data Source: International Financial Statistics (IFS), IMF Data Source: International Financial Statistics (IFS), IMF Intra-regional Trade Matrix: 2009 (US$ million)

Reporting Countries\ Export Cambodia India Lao PDR Thailand Vietnam Total World Partner Countries Share (%)

Cambodia ─ 4.82 0.36 21.70 115.51 142.40 4984.27 2.857 India 41.39 ─ 20.65 1592.29 1722.47 3335.41 165204.00 2.019 Lao PDR 0.47 0.18 ─ 423.74 225.91 649.82 1520.97 42.724 Thailand 1575.12 3215.06 1636.84 ─ 4666.11 9518.01 151972.00 6.263 Vietnam 1146.90 419.60 169.30 1266.10 ─ 1855.00 57195.70 3.243

Data Source: International Financial Statistics (IFS), IMF Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation

RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong-Ganga Policy Brief within the framework of this project. This publication seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of RIS or SDC. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in. RIS RIS, a New Delhi based autonomous think-tank, specializes in policy research on international economic issues and development cooperation. The organization is envisioned as a forum for fostering effective policy dialogue and capacity-building among developing countries on international economic issues. The focus of the work programme of RIS is to promote South-South cooperation and assist developing countries in multilateral negotiations in various forums. For more information about RIS, its work programme, and for downloading the discussion papers and policy briefs, please visit its website: www.ris.org.in. RIS Schwezerische Eidgenossenschaft Federal Department of Foreign Affairs (FDFA) Research and Information System Confédération suisse Swiss Agency for Development and Cooperation (SDC) for Developing Countries Confederazione Svizzera Department Development Policy and Multilateral Cooperation Global Issues and Sustainable Development Division Core IV-B, Fourth Floor, India Habitat Centre, Confederaziun svizra Lodhi Road, New Delhi-110 003, India. Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Managing Editor: Dr. Prabir De Email: [email protected] Associate Editor: Dr. Beena Pandey Website: http://www.ris.org.in

12 Mekong-Ganga Policy Brief, June 2011 RIS Research and Information System for Developing Countries

No. 6 November 2013 An Invitation from a Neighbour

yanmar is open for trade and the atmosphere has improved since of reforms and cites changes brought investment but the response from late January 2013. Tensions have also about in the areas of foreign exchange, MIndian business has not been been building between the Buddhist banking, budget formulation, agriculture adequate despite the growing political and Muslim communities. Deadly riots and improvement in business climate. It ties between the two countries. erupted last year in Rakhine state in two further notes that economic performance A message coming out from our spells between the Rohingayas and the has improved projecting a 6.25 per cent neighbour Myanmar, that is transforming Rakhine Buddhist community, leading to growth for 2012-13 and a growth rate of itself after 50 years of military rule, is: casualties and displacement of people. 7 per cent over the next five-year period. ‘We are open for business.’ Are our Last month there were attacks against The local currency Kyat, for example, has commercial establishments listening and the Muslim community in certain areas of seen a fair degree of stability. are they ready? Central Myanmar. On the financial front, private local Our bilateral relations with Myanmar President Thein Sein has banks have been granted an enhanced have gathered momentum in recent acknowledged that rioters have harmed role, including handling foreign exchange times. We have agreed on a wide-ranging the image of the country but he has transfers, and have been allowed to development cooperation agenda. India also talked about adoption of a different consolidate themselves. Steps are under has made substantial commitments to approach to build trust. In a recent way to make the Central Bank more assist Myanmar in the areas of capacity meeting with Muslim leaders, Ms. Suu Kyi autonomous from the Finance Ministry. building, connectivity, infrastructure and told them that the law has to be just for On the trade side, procedures for border region development. Our trade all and she would want everyone to feel import and export licences have been and economic ties have, however, not proud of being a citizen of the country. made easier. Myanmar products will kept pace. India figures at only seventh Building trust and peace to pave the way also now enjoy concessional market place in Myanmar’s total imports and for an inclusive society is a delicate and access with the European Union making ranks even lower at 13th place in terms of painstaking process. It is hoped that the them eligible for benefits under its GSP foreign investments into Myanmar. Being a troublemakers are firmly and effectively scheme. This will be particularly attractive large and contiguous neighbour, a closer dealt with and the supremacy of the rule for those establishing garment making overall engagement would call for a more of law is maintained. units in Myanmar. On the investment robust trade and investment share that One can expect that responsible front, a new Foreign Investment Law was seems definitely possible at a time when leaders of Myanmar would not want enacted in November 2012 after which rapid changes are unfolding. adverse domestic developments to affect new regulations and procedures for the its hosting of international events in the processing of investment proposals have Inclusive Politics coming months. It will also chair the been issued. The Myanmar Investment To what extent has Myanmar transformed ASEAN from January 2014. Commission has provided further details itself? President Thein Sein has, in the last about the areas where, and in what form, two years, taken the country towards a More Open Economy foreign investments will be allowed. democratic path that has made political Myanmar is also moving towards an Lack of adequate infrastructure is life more inclusive; it has also enabled accelerated development programme a constraint and an opportunity. The Daw Aung San Suu Kyi and her National with the promise of a more open economy. government is paying attention to setting League for Democracy (NLD) to enter An unexpectedly deliberative Parliament, up power and other infrastructure projects. Parliament, albeit in a small way. The social activism and loosening of media Expansion of telecom network, airports government has released a great majority controls have further energised the development, hotel zones in major cities of political prisoners and launched an process. An economic reform programme and real estate development, including ethnic reconciliation process to build launched with more debate is likely to be affordable housing, are other areas where peace with various minority groups that more acceptable and enduring even if the one can see specific initiatives being have been out of the national mainstream process is slower. taken. This is apart from the offers invited before independence. Several steps have already been for a large number of onshore petroleum Some problems have no doubt arisen taken. An IMF Staff Assessment Report and gas blocks for which bids were due in taking forward this process. Hostilities on Myanmar acknowledges that the by mid-March and which should have broke out with the Kachin rebels but government has embarked on a bold set elicited a good response. A few months

Mekong-Ganga Policy Brief, November 2013 1 ago, the government also invited bids for spillovers of benefit to both countries Banking and finance are other 30 offshore blocks, 19 deep sea ones and from the Myanmar Institute of Information areas. The United Bank of India 11 in shallow waters. Technology that is being set up with the made a beginning with the opening Many Indian trade and industry Indian government support as a centre of a representative office in Yangon in associations have mounted delegations to of excellence in Mandalay. All such December 2012. More Indian banks Myanmar during the last several months. commercial proposals will no doubt need need to follow. Making available easy A few product shows have been held. host country approvals but if they are well credit finance would provide a big Some companies are exploring trade and conceived and bring value addition, they boost to banking and finance sector. investment opportunities. A few have also would be welcomed. While the US and EU have taken steps been shortlisted for certain infrastructure On its part, our government will to suspend or waive the economic projects. Our companies and industry also have to try and make the cost of sanctions imposed by them earlier, associations will, however, need to pack doing business with Myanmar more these have not altogether translated in a lot more punch to significantly improve competitive. Encouraging enhanced into allowing US$ denominated letters of our trade and investment ranking. The direct air connectivity between our metros credit to be opened vis-à-vis Myanmar. US$ 500 million concessional Line of and Yangon is now rendered easier Our banks need to operationalise these Credit extended by EXIM Bank of India to with a more liberal bilateral air services as soon as they become possible. the Myanmar government could play an agreement signed during Prime Minister Finally, our businesses have important role in enhancing trade relations Dr. Manmohan Singh’s visit to Myanmar also to learn how to do business in to mutual benefit. Both the governments in May 2012. As of now, there is only a Myanmar. Businesses from countries and the agencies concerned will, however, tri-weekly Air India flight from Kolkata like China, Thailand, Korea, Japan and need to ensure that the proposals for to Yangon. It is woefully inadequate. Singapore frequent the country. Many utilising these credit lines are quickly Compare this with airlines from Japan, of them have established a strong local finalised and translated into contracts. the Republic of Korea, Qatar and Taiwan presence keeping regular contacts with which have introduced regular flights to government ministries in Nay Pyi Taw, Development Programmes Yangon in the last six months, and airlines the new capital, and networking with Devising suitable commercial strategies from China, Singapore and Thailand now the local business people in Yangon, can also help to build on our development flying more frequently every day and to Mandalay and other business centres, cooperation programmes. For example, more destinations in Myanmar. all of which form an important part. our businesses can explore possible Trade and industry associations of these commercial ventures that can ride on the Shipping, Banking and Finance countries have also made Myanmar back of some of the infrastructure that will Furthermore, direct shipping services that a priority country. It is essential that be created from the Indian government- will enable our goods to reach Myanmar as our political ties and development assisted Kaladan project in western in a matter of a few days, as in fact they cooperation efforts gather momentum, Myanmar or the Kalay-Yargyi road project did during the colonial days, than several our trade and investment relations also in the North-West that will enable Moreh weeks at present, would play a critical gain further strength so that they get to on our Manipur border to be connected role in facilitating greater trade. The reinforce one another. to Mandalay and beyond by 2016 as Shipping Corporation of India will need Ambassador V. S. Seshadri, was the part of the India-Myanmar-Thailand to take the initiative here with some initial Indian Ambassador to Myanmar from July 2010 to trilateral highway project. Similarly, our support from the government to make the February 2013, and presently is the Adviser in RIS. (This is a shorter version of author’s original article IT companies could work on commercial services viable. published in The Hindu on 19 April 2013). ■ Major Indian Development Cooperation Projects in Myanmar Development cooperation is a key to India-Myanmar relations and India has offered technical and financial assistance for projects in Myanmar, both in infrastructural and non-infrastructural­ areas. These include upgradation and resurfacing of the 160 km long Tamu-Kalewa-Kalemyo road; construction and upgradation of the Rhi-Tiddim Road in Myanmar; the Kaladan Multi-Modal Transit Transport Project, to mention a few. Indian public sector company, RITES is involved in development of the rail transportation system and in supply of railway coaches, locomotives and rolling stocks. A heavy turbo-truck assembly plant was set up in Myanmar by TATA Motors with Government of India’s financial assistance in 2010. An India-Myanmar Industrial Training Centre has been set up by HMT in Pakokku with the assistance of Government of India, whereas a second centre is being set up in Myingyan. Myanmar- India Centre for English Language (MICELT), a Myanmar-India Entrepreneurship Development Centre (MIEDC) and an India-Myanmar Centre for Enhancement of IT Skills (IMCEITS) have been set up under the Government of India assistance. India is assisting Myanmar to set up the Myanmar Institute of Information Technology (MIIT) at Mandalay. With financial and technical assistance of India, the Advance Centre for Agricultural Research and Education (ACARE) is being set up at the Yezin University Campus at Nay Pyi Taw. India is also assisting Myanmar in setting up a Rice Bio Park at the Yezin in collaboration with the Yezin Agriculture University. Other projects include restoration of the Ananda Temple in Bagan, upgradation of the Yangon Children’s Hospital and Sittwe General Hospital. India is also providing assistance in setting up power transmission lines and upgradation of microwave links in several parts in Myanmar. India has also assisted in the reconstruction of many schools in Tarlay township, the area worst affected by the severe earthquake that struck north-eastern Myanmar in 2011. Source: Indian Embassy, Yangon. ■

2 Mekong-Ganga Policy Brief, November 2013 Myanmar and Regional Connectivity

Tin Htoo Naing Visiting Fellow, Yangon Institute of Economics, Myanmar

any of the economies in South Myanmar is a full member of development of transportation network and Southeast Asia depend either regional cooperation blocs such as across Mekong subregion, mainly in Mon the investment flows from ASEAN, SAARC, GMS, BIMP-EAGA, Cambodia, Lao PDR, Myanmar, and the western economies or the market of BIMSTEC, ACMECS, ACD and BCIM. Vietnam (Cho, 2008). those economies or both as the principle The purpose of these regional groupings The EWEC is designed to be the engines for rapid economic growth. The is to provide economic and technological direct and continuous land route between Southeast Asian countries are aware of cooperation among the members in the the Indian Ocean and the South China the need to further diversify its engines of areas of security, trade and investment, Sea. The highly efficient transport system growth from the traditional growth engines technology, energy, tourism, transport and will strengthen economic cooperation of the US to Japan and more recently, communication. between Myanmar, Thailand, Lao PDR China to India as well. Connectivity Myanmar is of geopolitical importance and Vietnam by linking two port cities: improvement is the key to such growth. for regional connectivity with its location Mawlamyine in Myanmar and Da Nang Although a small economy with a at the tri-junction of East Asia, Southeast in Vietnam. population of 60 million and a GDP of US$ Asia and South Asia, and a potential Although EWEC connects eastern 58 billion, Myanmar’s possession of natural central hub for exchange of goods, ASEAN countries, Western and Southern resources and its strategically important services and technology. The cross- Economic Corridors are the key base location give it a significance beyond its border connectivity plays a very important to establish Mekong-India Economic economic weight class. Myanmar is the role in this scenario. Establishing better Corridor (MIEC) by extending the link only land bridge between India, China and connectivity will allow Myanmar and the to Dawei in Myanmar. The MIEC is ASEAN, and has a unique opportunity to other neighbouring countries, to create advantageous for Myanmar as it will develop as a regional economic hub. With possibilities for collaboration between enable direct trade, transit trade and a potentially vibrant agriculture sector, it them and to expand economic synergies the development of special economic or can become the food basket of Asia. for development in the region. industrial zones along the corridors (e.g., Myanmar is further endowed with Economic Corridors Yangon, Mandalay, Monywa, Myingyan, significant energy and other mineral Mawlamyine, Dawei, Kyautphyu, etc.) Economic Corridor is an approach resources, which it can use to support as well as trade posts in the border to leverage overall development by rapid industrial development based areas (e.g., Myawaddy, Tamu, Rhi, integrating infrastructure with other on its strategic location and latecomer Muse, etc.). Development of economic economic opportunities including trade, advantage (Verbiest and Tin, 2011). corridors and transportation networks will investment and efforts to address social However, underdeveloped infrastructure reduce not only transport costs but also and other impacts arising from increased and an unfavorable institutional and growth differentials among the respective connectivity of respective region. business environment seriously limit countries in the region. Myanmar’s participation in regional and There are three main economic global production networks. corridors that have so far been defined India-Myanmar-Thailand in the GMS Programme, namely, the Trilateral Highway Myanmar needs financial and East-West Economic Corridor (EWEC) – India-Myanmar-Thailand Trilateral technical assistance from international running from the Da Nang Port in Vietnam, Highway (TH) Project is an important agencies to design and implement through Lao PDR, Thailand, and to the development process for trade, transport needed policy reforms to transform growth Mawlamyine Port in Myanmar; the North- and the economy of three member potential into actual growth and to foster South Economic Corridor (NSEC) – which countries. The inspiration of TH project is peace-building and democratisation covers the major routes running from to enhance trade, investment and tourism process. Recently, the EU and USA eased Kunming to Chiang Rai to Bangkok via Lao by linking the three countries. It is planned restrictions on Myanmar, and the World PDR and via Myanmar, and from Kunming to be a 1,360 km long Moreh-Bagan-Mae Bank and IMF have pledged to restart to Hanoi to Haiphong (and most recently, Sot highway at the estimated cost of US$ the relations with Myanmar government. from Nanning to Hanoi); and the Southern 700 million. The intrinsic objective of the Likewise, Myanmar has to perform Economic Corridor (SEC), which runs road was to fulfill the ambition of creating well in its duties as ASEAN Chair in 2014, through southern Thailand, Cambodia, a ‘link’ between Northeast India and and comply fully with AFTA (ASEAN and southern Vietnam. Southeast Asia. Free Trade Area) requirements by 2015. With the assistance of UNESCAP, However, until now, route for the Deeper integration within ASEAN and ADB and Mekong River Commission, TH within Myanmar has not yet been fast expanding trade with China and EWEC project is being implemented not stable although some sections have been India would further be the drivers of only to improve freight transportation approved. This obstacle limits survey sites rapid growth. and trade in the region but also for the to be investigated, data availability and

Mekong-Ganga Policy Brief, November 2013 3 production of related maps. The TH route re-establish and renovate railway networks and will save cost and time for China by granted by Myanmar government passing in Myanmar. sending their products to the west and through the country comprises various RITES has already completed a Middle East through Myanmar, instead missing links: some are village-to-village preliminary study to establish Delhi-Hanoi of passing through the Malacca Strait. tracks and some are totally untouched. railway link in 2006.There are also other rail As the projects, both Dawei and India and Thailand have upgraded some of link projects like the Jiribam-Imphal-Moreh Kyaukphyu, are designed to develop the link roads but due to financial scarcity in line in Manipur and the Tamu-Kalay-Segyi the port with industrial zones and Myanmar, much work remains incomplete. line in Myanmar, as well as rehabilitation transportation links, they will promote not Apart from financial problems, there of Myanmar’s existing Segyi-Chaungu only trade volume but also foreign direct are many debilitating concerns such as Myohaung line. According to the RITES, investment in the region (MPA, 2011). security in the region. The development the Jiribam-Imphal-Moreh rail link is The project, targeted to complete within and commercially viable status of TH highly estimated to cost US$ 649 million, the three years, is to be implemented in line depend on political stability in some of the Tamu-Kalay-Segyi link in Myanmar US$ with another ongoing China-Myanmar states in India’s Northeastern region. 296 million, and the cost of refurbishing gas pipeline project from Kyaukphyu to the Segyi-Chungu-Myohaung line has Kunming. Stilwell Road been pegged at US$ 62.5 million. All these China and India have suggested to the Kaladan Multi-Modal Transit rail links would ultimately add up to the Transport Project (KMMTTP) Myanmar government that the 1726 km- New Delhi-Hanoi rail link proposed at the The purpose of the project is connecting long Stilwell Road, which could serve as MGC ministerial meeting held in Phnom the landlocked area of Northeast India an important road link between the world’s Penh in June 2003. two most populous nations, be reopened. with the sea via western Myanmar and The road links Ledo, in India’s Assam Dawei Deep Sea Port open up trade routes to Southeast Asia. State, with Kunming in China. Trade The Dawei project is being implemented The Framework Agreement was signed by between China and India has expanded by the Italian-Thai Development Company. the Minister of Foreign Affairs of the Union rapidly in recent years and both countries It would include a 250 sq. km area with of Myanmar and the Minister of External would benefit from the road link. India and three major components: Deep Sea Port, Affairs of the Republic of India during the China are eager to reopen this road. India Industrial Estate (Heavy, Medium and goodwill visit of Vice Chairman of the State wants to open its landlocked northeastern Light Industries), and cross-border road, Peace and Development Council (SPDC) states to trade with China and ASEAN rail and pipeline links. The total project in April 2008 (MPA, 2010). nations, while China is willing to send investment cost of infrastructure and The project will firstly connect Kolkata its products through the same route supporting facilities is estimated to be US$ seaport in east part of India, with the (UMFCCI, 2011). Myanmar can benefit 8.6 billion, and the required investment seaport in Sittwe, the capital city of from this transit trade by charging fees from potential industrial investors in the Rakhine state in west part of Myanmar, a and gaining spin-off benefits from tourism. industrial estate is estimated to exceed total distance of 539 km. It will then link US$ 50 billion (MPA, 2010). Sittwe to the Mizoram state in Northeastern Tiddim-Rhi-Falam Road In regard to the geographic review, India via river and road transport. The Detailed project report for upgrading the proposed project area is supposed project is aimed at reducing the travel of Tiddim-Rhi-Falam Road was carried to become an Asian regional hub linking time in Aizawl-Silchar-Siliguri-Kolkata out by the Border Road Organisation of to China and Southeast Asia, India, the route (1,700 km). The equipment and India and Public Works of Myanmar in Middle East, Europe, and Africa. It is at materials from India were supplied and 2006. A technical team from RITES Ltd. the end of the Southern Economic Corridor the construction work was started in of India had consulted Myanmar officials of the Greater Mekong Subregion, and a December 2010 and is scheduled to on the implementation of the project in gateway to the Indian Ocean. be completed in 2013. Plans have been 2008. IRCON International Ltd. has been The construction for the Dawei project made for 50,000 tonne ocean liners to assigned by the Indian government and is scheduled to be completed by 2018. berth at Sittwe deep seaport that will cost delegation from the two countries had The project has three phases of five years US$ 120 million. As part of the project, visited Tiddim-Rhi-Falam Road in 2009. each. The first phase of infrastructure the border road of Lungtian and Paletwa Regarding the information from Indian construction started in 2011. However, has been built. side, it has been known that US$ 60 million the project has been progressing slowly has already been allocated for upgrading Conclusion due to limitation of financial resources, 225 km road section between Tiddim and India-Myanmar-ASEAN Connectivity which remains a contentious issue as Rhi. If this road opens, it would surely could be realised through enhanced noted elsewhere. boost bilateral trade between the two physical infrastructure development, countries. Kyaukphyu Deep Sea Port effective institutional arrangements and China is developing another project for empowered people. Myanmar is located New Delhi-Hanoi Rail Link at a strategic geographical location in the India is planning New Delhi-Hanoi Rail building a deep-sea port at Kyaukphyu in western Rakhine State in Myanmar. Southeast Asia. As it is costly for ASEAN Link with two possible routes. The main countries to reach the Indian Ocean tasks of developing New Delhi-Hanoi Rail Kyaukphyu deep-sea port and connecting highway projects will shorten the overall through the Malacca Straits, Myanmar Link are: (a) to link India’s Manipur with can serve as a gateway and development India’s main railway corridor, and (b) to distance by thousands of kilometers Continued on page 6

4 Mekong-Ganga Policy Brief, November 2013 India-Mekong Cooperation Activities Myanmar – the Golden Land: Suvarnabhumi Mr. Salman Khurshid External Affairs Minister of India I consider it a great honour and privilege art, built splendid pagodas and Both our countries have achieved to be here this morning at the inaugural monasteries, crafted elegant sculptures, manifold accomplishments in the past six function of the International Conference drawn magnificent mural paintings and decades, but I believe we have far to go in on Buddhist Cultural Heritage. As developed classic literature and poetry. living up to the expectations of our people the international community watches Two Monk merchants obtaining from Lord and the dreams of the founding fathers of Myanmar with renewed interest, it is Buddha some hair relics and on their our nations. Today, Myanmar is poised at only apt that this important meeting of return enshrining them in a temple which a fascinating point in its history, when it is scholars - designed to provide us with later became Shwedagon Pagoda is a well reinventing itself and its relationship with a better understanding of the depth and known folklore. I am told that Myanmar the global community. The government global spread of Buddhist influences has other famous pilgrimage sites such has set itself an ambitious agenda of - is being organised in this golden land- as the Mahamuni Pagoda in Mandalay, achieving good governance, rule of law, “Suvarnabhumi.” the scenic Kyaiktiyo Golden Rock Pagoda securing fundamental rights of citizens, While describing the Buddha, Pandit and of course, the over 2000 temples in reducing income disparity, economic Jawaharlal Nehru, India’s first Prime just 16 square miles in the ancient city of reform and environmental conservation Minister had written: “Seated on the Bagan, which I hope to visit tomorrow. and political dialogue. We in India, stand lotus flower, calm and impassive, above India, as the birthplace of Buddhism, has ready to assist, in whatever way desired passion and desire, beyond the storm its fair share – the Mahabodhi temple at by the government and the people of and strife of this world, so far away he Bodh Gaya, the revered stupa at Sarnath/ Myanmar, in this transition, to what I would seems, out of reach, unattainable. Yet Varanasi and the Buddha attaining believe would create a democratic polity again we look and behind those still, Mahaparinirvana at Kushinagara – being and lead to economic prosperity and well unmoving features there is a passion and some of them where millions of pilgrims being of the people of Myanmar. an emotion, strange and more powerful from all over the world, including an ever The high level exchanges between than the passions and emotions we have increasing number from Myanmar, come the two countries in the past two years, known. His eyes are closed, but some to pay respect. including the visit of our Prime Minister in power of the spirit looks out of them and a To highlight this glorious common May, have imparted a momentum to our vital energy fills the frame. The ages roll by heritage, the President of Myanmar and relations. Our initiatives in the fields of and Buddha seems not so far away after Prime Minister of India decided in favour of connectivity, border area development, all; his voice whispers in our ears and tells organising this conference, when President information technology, agriculture and us not to run away from the struggle but, U Thein Sein undertook a State visit to India capacity building, are a demonstration calm-eyed, to face it, and to see in life in October 2011. I am very glad that their of our resolve to create a bright future, ever greater opportunities for growth and directions have been realised today with which can be shared by both the nations. advancement.” the cooperation of many partners,including The Kaladan Project, connecting the Buddhism is a thriving religion. In the Ministry of Religious Affairs of Myanmar, Rakhine and Chin States in Myanmar 1879, Sir Edwin Arnold, the noted poet and the Sitagu International Buddhist with the North Eastern part of India, and journalist, wrote in his ‘The Light of Academy of Myanmar. I am also happy has potential to substantially increase Asia’, “a generation ago little or nothing to see that the conference is being the trade between these parts of our was known in Europe of this great faith attended by several renowned Buddhist countries. The Imphal-Mandalay Bus of Asia, which had nevertheless existed scholars and venerable monks from Service and the India-Myanmar-Thailand during twenty-four centuries and at this Myanmar, from India and from various Trilateral Highway is expected to enable day surpasses, in the number of its other countries to share their knowledge the communities across the borders followers and the area of its prevalence, and perspectives on the chosen theme of to meet and create deeper economic any other form of creed. Four hundred Buddhist Cultural Heritage. and social bonds. So would the Border and seventy millions of our race live India and Myanmar are bound Haats that our two sides have agreed to and die in the tenets of Gautama; and by geography. But these bonds are set up along the India-Myanmar border. the spiritual dominions of this ancient reinforced, deepened and strengthened I also have great pleasure in informing teacher extend, at the present time, from by our historical, cultural and spiritual ties, you that, encouraged by the support Nepal and Ceylon, over the whole eastern which are enduring. The shared traditions of the EAS Member States, the ancient peninsula to China, Japan, Tibet, Central of Buddhism and the ‘Sangha’ formed the Buddhist Nalanda University is being Asia, Siberia and even Swedish Lapland. bedrock of our early contacts, as poets, revived in the Indian state of Bihar. Forests of flowers are daily laid upon his philosophers and princes traversed our We have appointed Nobel Laureate stainless shines, and countless millions of two countries. These contacts led the Prof. Amartya Sen as the Chancellor of lips daily repeat the formula, I take refuge way to the movement of people and this prestigious University. The School in Buddha.” trade, creating a continuum of complex of Buddhist Studies, Philosophy and The people of Myanmar, influenced exchanges, strengthened in our struggle Comparative Religions will be one of the by profound Buddhist philosophy, have to create independent nations in the seven schools proposed to be set up as over a long period, created beautiful modern times. part of the University. Nalanda University

Mekong-Ganga Policy Brief, November 2013 5 India-Mekong Cooperation Activities

will keep alive the spirit of ancient Nalanda to an International Buddhist Conference in people and Government of Myanmar. We in a modern setting and it would be our Sanchi in November 1952: “The message are deeply appreciative of the importance contribution towards the preservation and that Buddha gave 2,500 years ago accorded by Myanmar to this initiative growth of Buddhist heritage. shed its light not only on India or Asia by having the statue installed at the Lord Buddha’s teachings have had but the whole world. The question that premises of the most holy Shwedagon universal reach and timeless appeal. Not inevitably suggests itself is how far can Pagoda. Indeed, we also deeply value only has Buddhism spread far and wide the great message of the Buddha apply the cooperation that we currently have in from India to Central, South East and East to the present day work? Perhaps, it may, being able to offer our assistance in the Asia, it is now practiced by more than 500 perhaps it may not; but I do know that if restoration of the world renowned Ananda million people across the world. Growing we follow the principles enunciated by Temple at Bagan by experts from the acceptance and influence of Buddhism Buddha, we will win peace and tranquility Archaeological Survey of India. around the world can also be gauged from for the world.” In conclusion, let me once again thank the words of a renowned British historian, This year marks the 2600th year of all the collaborators for putting together Arnold Toynbee, who in ‘Turning the the Buddha’s enlightenment. India takes this important conference and to all the Wheels’ wrote, “The coming of Buddhism pride in being the cradle of Buddhism, scholars for accepting the invitation to to the West may well prove to be the most the land where Gautama Buddha attained discuss and to dwell on the sacred and important event of the twentieth century.” enlightenment. This conference, through fascinating heritage of Buddhism and As the world is threatened by violence its intensive discussions, can provide a its culture across nations and regions. and terrorism and conflicts and hatred, platform to not only explore but to also The Conference on Buddhist heritage, the Buddha’s message of peace, equality, strengthen the deep and rich cultural I believe, would provide an opportunity, unity, harmony and tolerance is more bonds that the common link of Buddhism to celebrate and ponder upon the unity relevant today than at any other time in can provide among all the countries in diversity that Buddhism and Buddhist history. Buddhist philosophy of feeling represented in this conference, in culture has acquired since ancient times. fashioning a better world. for other’s sufferings as our own holds the I wish the conference every success. key to develop a sense of compassion, I am happy that coinciding with this kindness and brotherhood leading to important conference, we will also be (Excerpted from the Address delivered by the External individual inner peace and peaceful able to unveil and consecrate the Sarnath Affairs Minister of India at the inauguration ceremony co-existence. It is interesting that Pandit style Buddha statue gifted by the people of the International Conference on Buddhist Cultural Heritage in Yangon on 15 December 2012). Jawaharlal Nehru conveyed the following and Government of India to the friendly ■

Continued from page 3 (Myanmar and Regional Connectivity) The 2nd Round

of EWEC and SWEC corridors will be international financial crisis. Building an Table of the beneficial for the region. The other enhanced regional connectivity requires ASEAN-India Network projects such as Dawei and Kyaukphyu not only the infrastructure development of Think-Tanks deep sea ports, KMMTTP and highway but also the development of new projects will heavily shorten the overall strategies and institutions, more effective India has been very distance and will save money and time implementation of existing and future supportive of the objective for ASEAN, India and China for their trade initiatives (ADB, 2011). ASEAN-India must through Myanmar. The improvements turn ambitious plans for better regional of an ASEAN Community by in transportation infrastructure network connectivity into reality in order to tap their 2015 and the Initiative for will deliver numerous benefits and full economic potential. ASEAN Integration. We look ensure that all economies across the forward to applauding your References region have competitive access to sense of achievement in international markets through an efficient, ADB (2011), Asia 2050: Realizing the Asian reliable and thriving regional network. Century, Singapore. 2015. Looking to the future, It will also integrate national markets to Myanmar Port Authority (2010), “Dawei I would like to emphasise promote economic efficiency and private Special Economic Zone Project”, that as the ASEAN countries sector development. Improvements in Powerpoint Presentation. integrate better amongst the modes and infrastructures in terms Myanmar Port Authority (2011), Yangon. of their capacity will result in reduced themselves, it is necessary The Republic of the Union of Myanmar, transport costs, which in turn will increase that their integration with Federation of Chamber of Commerce and trade, and help change the location of Industries (2011). India also progresses apace. economic activities. However, the current Verbiest, J.P. and Tin Htoo Naing (2011), (Excerpted from the speech delivered by projects being implemented through the External Affairs Minister of India at the Myanmar Country Paper: ASEAN 2030 Myanmar are faced with delays due to inaugural session of 2nd ASEAN-India Network of Studies, Asian Development Institute, Think-Tanks (AINTT) Conference in Lao PDR on political instability, and the effects of the Japan. ■ 10 September 2013). ■

6 Mekong-Ganga Policy Brief, November 2013 Focus Myanmar RIS Launched Project Exim Bank of India Opens Its on Development Representative Office in Yangon, Myanmar Corridors in Export-Import Bank of India’s Myanmar would significantly contribute to Myanmar: (Exim Bank’s) Representative Office at enhancing bilateral trade and investment Implications for India Yangon was formally inaugurated on ties between Myanmar and India in the 9 September 2013, in the presence of years to come and Myanmar would be RIS has launched a policy research project on ‘Development Corridors in H.E. U Myint Swe, Hon’ble Chief Minister of greatly benefited by its expertise in trade Myanmar’ that attempts to understand Yangon, H.E. Mr. Gautam Mukhopadhaya, and overseas investment and finance. the level of trade links that India has Ambassador of India to Myanmar, and He also recommended that Myanmar with Myanmar, through both formal Mr. T.C.A Ranganathan, Chairman presents a plethora of opportunities for and Managing Director of Exim Bank. and informal channels. It will carry out collaboration for especially partner Asian a detailed fact finding survey of new A seminar on Trade and Investment countries like India. opportunities between India and infrastructure being planned or under Earlier during the function, Exim Myanmar was also organised to mark the implementation in Myanmar and their occasion, which was attended by Bank’s Chairman and Managing Director, implications for Northeast India in Myanmar’s high-level government Mr. T.C.A. Ranganathan, in his welcome general and India in particular. functionaries, diplomats, multilateral address, stated that Exim Bank through its The study would also examine agencies, banks, large number of global network of offices and wide range of the current status and performance of corporates and the Indian diasporas. financial, advisory and capability building border infrastructure in Northeast India, H.E. Mr. Gautam Mukhopadhaya, activities has strived to play a catalytic particularly in bordering states with Ambassador of India to Myanmar, in role, as a key player, in promoting India’s Myanmar. It would also investigate the his opening remarks welcomed Exim international trade and investment relations strength and dimensions of the regional Bank’s decision to open an office in with partner countries, while contributing connectivity through Northeast India. Yangon, its eighth overseas regional to the internationalisation endeavours This study would make an attempt office, and hoped that Exim Bank’s of Indian business. He highlighted that to understand: i) resources of Myanmar presence in Myanmar would serve to bilateral trade relations between India and to be linked through development further boost and facilitate bilateral Myanmar have witnessed significant rise corridors; ii) opportunities for resource- trade and investment relations between in recent years, with India accounting for based industries which will have India and Myanmar and contribute to the 15 per cent of Myanmar’s global exports strong spillover effects and generate developmental endeavours of Myanmar. in 2012, and ranking as its second largest downstream projects in Myanmar and He urged the trade and industry bodies export market. As a partner country for India’s Northeast; and iii) scopes and in the region to benefit from the use of Myanmar’s imports, India accounted for opportunities and production networks financing and support services offered a share of 3 per cent of Myanmar’s global between India and Myanmar and beyond in sectors like petrochemicals, textile and by Exim Bank. imports while ranking as the seventh clothing, rubber and other plantation crops, Delivering the Special Address, H.E. largest import source. U Myint Swe, Hon’ble Chief Minister of processed foods and marine products, etc. Yangon, congratulated Exim Bank of India (Excerpted from the Press Release, Embassy of India, Finally, based on these investigations, and observed that Exim Bank’s presence in Yangon, Myanmar, 9 September 2013). ■ a coherent strategy would be developed for strengthening the existing levels of trade (and also investment) links and Brainstorming Seminar on connectivity between India and Myanmar. India-Myanmar Strategic Partnership Brainstorming Session on India- RIS organised a Brainstorming Seminar brainstorming seminar touched upon wide Myanmar Trade and on India-Myanmar Strategic Partnership ranging issues on the selected themes. on 4 February 2013 in New Delhi. In the The themes of the Brainstorming Connectivity inaugural session, Ambassador Shyam Seminar included the India-Myanmar RIS organised a Brainstorming Saran, Chairman, RIS, delivered the Economic Partnership: India’s Session on India-Myanmar Trade introductory remarks. Shri Harsh Vardhan Development Cooperation; Trade, and Connectivity in New Delhi on Shringla, Joint Secretary (BSM), Ministry Investment, Finance and Connectivity; 13 April 2012. The session began with of External Affairs, Government of India, Energy and Natural Resources; and welcome remarks by Dr. Biswajit Dhar, presented the overview of India-Myanmar Development of India’s Northeast. In Director-General, RIS and special relations. the concluding session, Ambassador remarks by Ambassador Shyam The Brainstorming Seminar had Shyam Saran, presented the Blueprint Saran, Chairman, RIS. The seminar participation of eminent diplomats, senior for the future. Presentations made at the was attended by policy makers, government officials, senior officials and Brainstorming Seminar are available on government officials and private sector representatives of private sector. The the RIS website: www.ris.org.in ■ representatives. Further details are available at www.ris.org.in ■

Mekong-Ganga Policy Brief, November 2013 7 Focus Myanmar Inception Workshop of Myanmar Research and Capacity Building Project 2013 RIS organised a workshop on Myanmar Department of International Development India presented an overview of the India- Research and Capacity Building Project (DFID). The workshop was supported by Myanmar economic relations with special 2013 to identify scopes and directions the Sussex University. focus on India’s capacity building and of research and capacity building Dr. Biswajit Dhar, Director-General, human resource development assistance programme on Myanmar in New Delhi RIS, in his opening remarks introduced programmes in Myanmar. on 22 April 2013. The programme was the project and RIS activities on ASEAN In the Session I, Dr. Prabir De attended by the senior government and Myanmar. Prof. Jayanta Kumar (RIS) presented the detailed plan of the officials, both from India and Myanmar, Ray (Calcutta University) gave special Myanmar research and capacity building research scholars from various institutes address, and highlighted the historical, project. He also presented the current viz. UNESCAP, Sussex University, Calcutta social and cultural relations between overview of the economic scenario of University, Jadavpur University, RIS and India and Myanmar. Prof. Ray said that Myanmar, and highlighted the areas representatives of organisations from in the contemporary period, capacity where Myanmar needs capacity building. Myanmar like Department of Economic building has always been in the forefront The objective of this capacity building Development Studies (EDS) of the Ministry of India’s bilateral cooperation with project taken up by RIS is to train Myanmar Myanmar and other Mekong countries. of National Planning and Economic officials, policy makers and research Prof. Ray urged for stronger capacity Development (MNPED), Centre of scholars on contemporary global and building in publication, administration Economic and Social Development of regional economic issues and build the and computer science in Myanmar. While the Myanmar Resources Development analytical capacity. making special observations, Mr. Kumar The project is coordinated by Institute (MDRI), and Yangon Institute of Tuhin, Joint Secretary (DPA), Ministry of Dr. Prabir De, Senior Fellow, RIS. Economics (YIE) and representatives of External Affairs (MEA), Government of ■ India Grants US$ 500 Million Line of Credit to Myanmar During Prime Minister Dr. Manmohan India’s Northeast into sharp development Meanwhile, private Indian companies Singh’s visit to Myanmar in 2012 a slew focus and significantly improve its have started moving in but the volume of of agreements and many MoUs were connectivity. their investment is negligible, compared signed. Of these, the most significant MoU The most ambitious project to be even to those of Thailand and Singapore. is concerned with granting of US$ 500 undertaken jointly by the two countries along India is the fourth largest trade partner million line of credit by India to Myanmar, with Thailand, involves the construction of of Myanmar (second largest export which this country will utilise for upgrading a road from Moreh to Mae Sot in Thailand destination and seventh largest import its agriculture, irrigation, rail transportation via Myanmar. A land customs station source), next to Thailand, China and and electric power system. will be opened at Zorinpui in Mizoram to Singapore, though it has the potential to After the signing ceremony, Prime promote border trade between Mizoram be the first. Minister Dr. Manmohan Singh said the MoU and Myanmar. The border trade points on As one Myanmar official put it aptly and agreements will usher in a new era of the Indian side will have banking facilities. “We are like long forgotten friends of India cooperation for mutual development. He Border haats (stores) like those on the which suddenly has discovered that we said India’s economic growth was there India-Bangladesh border, will be set up still exist.” The official said, it would have to help Myanmar to march further on its along Northeast’s border with Myanmar. A made a lot of sense if the Indian Prime path of progress. host of other projects will be taken up on Minister had brought with him here some The captains of the Indian industry both sides of the India-Myanmar border of the northeastern Chief Ministers which like Sunil Mittal and Navin Jindal, who which will upgrade roads and highways, would have made the outcome of his visit are part of the Indian delegation, called construct schools and health centres, more meaningful and spectacular. the signing of the MoUs a historic event. bridges and promote agriculture related After all, he had made this unique Both are of the opinion that this was the training activities. experiment during his visit to Dhaka right time for the Indian industry to come India has offered assistance for in 2011. A repeat of that would have and invest in Myanmar in a big way. Indian contributed significantly to the visit’s industry should not miss this opportunity the production of large cardamom in substance and outcome. Because a large to make its contribution to Myanmar’s the Naga Self Administered zone in part of the last two days’ talks between economic and all round growth possible. the Naga inhabited areas in Myanmar, the leaders of the two countries centered “For Indian investment in Myanmar this bordering India’s Northeast. Both sides around the improvement of infrastructure, is the most opportune time. It’s now or have agreed to ensure border security connectivity and trade between the never,” they said. through cooperation and exchanging intelligence inputs. northeastern states and the adjoining A more significant MoU signed provinces of Myanmar. by both sides concerned the socio- India has decided to help Myanmar economic development of India-Myanmar in higher education and has offered (Excerpted from the nationmultimedia.com, 29 May 2012). border areas. It proposes to bring this scholarships and fellowships to © nationmultimedia.com ■ geographically strategic isolated area of Myanmarese researchers.

8 Mekong-Ganga Policy Brief, November 2013 Focus Myanmar India to Link with Myanmar Port to Boost ASEAN Connectivity In its push for greater connectivity with expertise, such as steel, manufacturing, and Thailand and play a crucial role in ASEAN countries, India is focusing its power, petrochemicals and services. boosting trade and investment in the three attention on a deep-sea port in southern Thailand’s construction giant Italian- countries. Myanmar that would provide a much Thai Development Co has been involved The Kalewa-Yargi section of the shorter sea route to the economically in construction of the deep-sea port, highway in Myanmar, which India has vibrant Southeast Asian region and help which is designed to accommodate offered to upgrade, is facing some boost trade. The Dawei deep sea port and ocean-going cargo ships that pass problems due to the hilly terrain, said the special economic zone is slated to give through the Indian and Pacific oceans, source. “The major chunk of the Trilateral a huge boost to connectivity and trade cutting short the maritime distance over Highway has been completed. On the in the Southeast Asian region when it is a relatively long detour via Singapore. Kalewa-Yargi section and upgradation commissioned in a few years. The project The Dawei Special Economic Zone and repairing of 71 bridges, which India is being developed jointly by Myanmar Development Co, jointly owned by had agreed to undertake during Dr. and Thailand. Thailand and Myanmar, will be assigned Manmohan Singh’s visit to Myanmar in “The Dawei deep sea port, when to run the project. May 2012, work is on,” the official added. complete, will provide India an alternative The Greater Mekong sub-region also India and the 10-nation ASEAN sea route to Southeast Asia and reduce has a North-South corridor linking cities of countries have a combined population of dependency on the congested Strait the Mekong basin countries - Cambodia, 1.8 billion, which is one-fourth of the global of Malacca and cut transport time,” an Laos, Myanmar, Thailand and Vietnam - to numbers. The combined GDP of India and official told IANS. The Dawei port is part of China. But India is not keen to join this. the regional bloc is around US$ 3 trillion. the southern corridor of the Mekong India “That corridor cuts across to China and Among other connectivity projects Economic Corridor. India is concentrating India is not very keen to join it,” said the with the bloc, India is also helping on the southern economic corridor, official. Myanmar upgrade the 160 km Tamu- which would connect Ho Chi Minh City Kalewa-Kalemyo road, repairing 71 old in Vietnam, Phnom Penh in Cambodia, India is involved in the 1,400 km bridges in Myanmar, besides building Bangkok in Thailand to Dawei in Myanmar. Trilateral Highway, linking India, Myanmar and Thailand, that is slated to become the Kaladan multi-modal transit transport “When Dawei port is ready, India is a reality by 2016. The highway from project. The Kaladan project, expected planning to connect it with Chennai. There Moreh in Manipur to Mae Sot in Thailand to be completed in 2014, will connect will be no need to go through the Strait of via Myanmar would open up India’s Kolkata port with Sittwe port in Myanmar Malacca then,” said the official. During landlocked Northeast to Southeast Asia. by sea and also link Sittwe to Mizoram via Prime Minister Dr. Manmohan Singh’s visit The project is being funded by the ADB. river and road transport. to Thailand last May, the Thai government The highway is expected to allow freight invited Indian business to invest in the and container trucks to move across (Excerpted from the dna, 11 August 2013). Dawei Special Economic Zone, especially the borders from India to Myanmar ■ in areas where Indian companies have © dna

India’s Energy Cooperation with Myanmar The Union Minister of Commerce, Industry help in developing a full value chain for India and Myanmar through Bangladesh and Textiles Mr. Anand Sharma met Daw silk production in Myanmar. was also discussed. The Minister said Aung San Suu Kyi, Chairperson of the In his meeting with Mr. U Than Htay, that India stands ready to continue to National League for Democracy (NLD), Myanmar’s Energy Minister, the Minister assist Myanmar in the development of its Myanmar at Nay Pyi Taw. The Minister of Commerce, conveyed the interest of infrastructural projects. He also expressed conveyed to Ms. Suu Kyi that India Indian banks in setting up their branches happiness over the progress made in stands ready to extend all necessary in Myanmar. “India will also be happy to the Inland Waterway component of the assistance to the people of Myanmar in assist in strengthening the banking system Kaladan project. their developmental efforts. “Myanmar is in Myanmar as we inherit common banking The need to improve air, road and a vitally important neighbour for us. The laws,” said the Minister. The two Ministers water connectivity between India and relations between our two countries have set a bilateral trade target of US$ 3 billion Myanmar also came up for discussion broadened and deepened in the past two by 2015. between the two Ministers. “A Joint years,” said the Minister to Ms. Suu Kyi. The Minister also conveyed India’s Working Groups (JWG) to determine the technical and commercial feasibility of Both the leaders exchanged views on interest in deepening cooperation in cross-border rail links and the commercial the issues of mutual interests and Ms. Suu procuring energy, oil and natural gas Kyi expressed keen interest in building feasibility of direct shipping links between from Myanmar. “Our companies are linkages with the textiles sector of India. the two countries are working with the sole interested in securing more exploratory Stressing the preference of the people of aim to boosting the trade ties between the oil and gas blocks both onshore and Myanmar for natural fiber, she said that two countries,” said the Minister. offshore,” said the Minister to Mr. Htay. the handloom sector of India has immense The issue of the revival of the discussions (Source: Ministry of Commerce and Industry, potential for Myanmar. Pointing to the Department of Commerce, Press Release, 6 June on the gas pipeline connection between conducive ecology, she sought India’s 2013, New Delhi). ■ Mekong-Ganga Policy Brief, November 2013 9 Focus Myanmar

India Offered Help to Revive Apparel Sector in Myanmar India has offered to help the revival of technical assistance from Apparel Export Sharma. India will also set up a textiles 300 apparel factories in Myanmar. During Promotion Council (AEPC) – to enhance trade show – Textiles Expo in Yangon for his meeting with the Myanmar President compliance standards in Myanmar for traditional textiles with Handloom Export U Thein Sein, in Nay Pyi Taw, the Union exports to developed countries. Promotion Council (HEPC) as lead council. Minister of Commerce, Industry and Sponsored by the Ministry of Textiles, The Indian Minister announced that Textiles, Mr. Anand Sharma also offered and helmed by AEPC Disha is an initiative Indian Trade Promotion Organisation US$ 5 million Line of Credit for revival to driving industry towards sustainable (ITPO) will undertake this event. “We of these factories. The South India human capital advancement. Disha will also facilitate in return an exhibition Textile Research Association (SITRA) attempts to educate apparel exporting of Myanmar industry in India organised will provide technical assistance in members on a code of ethics that covers by ITPO free of cost next year,” said formulation of revival plans for these all critical social and environmental Mr. Sharma. factories. Private sector companies will concerns like child labour, health and Textiles sector appeared prominently play a big role in revival and building industrial safety, etc. For capacity building during Indian Minister’s three-day visit joint ventures with these closed apparel in Myanmar textiles sector, India has to Myanmar, as National League for factories. “A delegation comprising the offered two scholarships for two slots experts, officials and businessmen will Democracy leader Daw Aung San under National Institute of Design (NID) visit Myanmar within two weeks,” the Suu Kyi, during her meeting with Mr. and 250 scholarships for textile workers Minister informed the media persons after Sharma, also expressed keen desire under Integrated Skill Development the meeting. to establish linkages in the sector Scheme. Scholarships have been offered specially in handloom and silk. “Entire “India will also cooperate with in National Institute of Fashion Technology Myanmar in formulating a common sector as such will be brought in for and Institute of Foreign Trade also. compliance code for standards and also cooperation including silk,” Mr. Sharma the best practices in the factories,” said “India will be setting up India- told mediapersons. the Indian Minister. The Minister proposed Myanmar Apparel Sector joint ventures (Source: Ministry of Commerce and Industry, to the Myanmar President a Common (JVs) in Thilawa SEZ in collaboration with Department of Commerce, Press Release 9 June Compliance Code - Disha Myanmar with other international brands,” said Mr. Anand 2013, New Delhi). ■

Myanmar Launches National Strategic Plan for Women

Myanmar has launched a strategic plan the support of the government. Enabling It will develop a five year Operational to advance women’s rights in Nay Pyi systems, structures and practices are Plan to coordinate the implementation of Taw on 3 October 2013 with the aim of created for the advancement of women, strategic policies. empowering women with the support of gender equality, and the realisation of The Operational Plan will be reviewed the government. women’s rights,” May Sabei Phyu, Senior and revised on a regular basis, in The National Strategic Plan Coordinator of the Gender Equality accordance with respective government for the Advancement of Women Network, told Eleven Media. national plans. 2013-2022 (NSPAW) was initiated in There are twelve priority areas in “We will work together with all the 2010 by the Ministry of Social Welfare, the plan: livelihood, education and ministries of the government under the Relief and Resettlement with support training, health, violence against women, different priority areas. We believe the from the Gender Equality Network and the emergencies, the economy, decision- plan will play a crucial role in gender Myanmar National Committee for Women’s making, institutional mechanisms for the equality in Myanmar,” said Kaythi Myint Affairs (MNCWA). advancement of women, human rights, Thein, Assistant Coordinator of the During the three-year development the media, the environment and children. Gender Equality Network. period, there have been a number of In order to effectively implement Experts have long expressed the consultations with relevant ministries, each priority area, four main tasks - importance of empowering women as an government departments and over research and surveys, awareness raising, important step to economic development 50 groups comprising NGOs, civil and growth. Despite decades of society organisations, UN agencies implementation, budget and policy male-dominated military rule, Myanmar and technical experts from the Gender making - have been outlined in each area. has traditions that value women’s rights. Equality Network. The management committee for the NSPAW will be established under “The main objective of the plan is that (Excerpted from the elevenmyanmar.com, 4 October all women in Myanmar are empowered the guidance of the Myanmar National 2013). and able to fully enjoy their rights with Committee on Women’s Affairs (MNCWA). © elevenmyanmar.com ■

10 Mekong-Ganga Policy Brief, November 2013 Focus Myanmar

India Offers US$ 150 Million for SEZ at Sittwe

India has offered US$ 150 million credit Thanbayakan Petrochemical Complex through Myanmar. These will prove for project exports for establishing a proceeded smoothly. The renovation of great benefit to India’s landlocked Special Economic Zone (SEZ) at Sittwe of the Thanlyin Refinery was financed Northeast. in Myanmar Buyer’s Credit Scheme by US$ 20 million LoC, signed in 2005- Border Road Organistation (BRO) under National Export Insurance Account 06. The upgradation of Thanbayakan has completed the resurfacing and (NEIA). The offer assumes that Myanmar Petrochemical Complex is being financed maintenance work of 132 km Tamu- Government will give a suitable land for by another US$ 20 million LoC signed in Kyigone-Kalemyo stretch of the road the purpose. 2008-09. During his meeting with the Myanmar and handed over to Myanmar. The The Minister later told media persons President U Thein Sein, in Nay Pyi Taw, remaining 11 km of the 28 km section that many of the Indian companies the Union Minister of Commerce, Industry on the Kyigone-Kalewa stretch is also undertaking exploratory activities in North and Textiles, Mr. Anand Sharma covered to be handed over to Myanmar after East region India which shares common a whole gamut of issues for deepening completion. Indian assistance towards geological traits with neighbouring the economic ties between India and repair/upgradation of the 71 bridges Myanmar are well placed to also take up Myanmar. Substantive decisions were on the Tamu-Kalewa road and the such activities there. taken in the meeting which was also upgradation of the Kalewa-Yargyi road attended by Foreign Minister, Industry Myanmar Government has shortlisted section of the Trilateral Highway was Minister and Planning Minister from the 59 companies for submission of final announced during the visit of the Prime Myanmar side, on SME sector, economic bids for 18 onshore gas blocks on offer. Minister to Myanmar in May 2012. Seven Indian companies are part of those cooperation, trade, energy, agriculture The work on the Sittwe Port of shortlisted. The Minister conveyed the and telecommunication. the Kaladan Project, which began in robust track record of Indian companies President U Thein Sein conveyed December 2010, is expected to be to the President. Myanmar’s appreciation of India’s completed by mid 2013. The Detailed Indian companies are very active contribution to the country’s development. Engineering Report (DER) for the road in oil and gas field in Myanmar. OVL “Path breaking reform measures taken component is expected to be finalised and GAIL have announced US$ 1.33 by the Government of Myanmar in in 2013. A new Air Service agreement billion investment in China-Myanmar economic, political and social field is to facilitate direct air connectivity was gas pipeline project. Phase I of 200 km a positive message that has resonated signed during the visit of the Prime Kyaukphyu-Kunming Oil & Gas pipeline globally and India is committed to be Minister in May 2012. Currently Air India a steadfast partner of Myanmar in this worth US$ 475 million for construction is operating 3 services per week on the journey,” the Minister told the President. of two parallel pipelines for gas and oil Kolkata Yangon Sector. Talking about cooperation in has been awarded to Punj Lloyd. PSC-1 During the Prime Minister’s visit banking sector, the Minister conveys onshore block in Central Myanmar worth to Myanmar in May 2012, several new India’s appreciation for the Myanmar US$ 73 million has been awarded to initiatives were announced and signed Government’s approval to allow Indian Jubilant Energy India on the basis of a Banks like United Bank of India to set global tender in 2011. The two leaders including extension of a new line of credit a representative office in Myanmar. also discussed revival of the discussions (LoC) for US$ 500 million to Myanmar, He expressed the hope that the two on the gas pipeline connection between support for setting up an Advance public sector banks viz., Bank of India India and Myanmar through Bangladesh. Centre for Agriculture Research and and State Bank of India, who have India is involved in improving road Education in Yezin, a Rice Bio-park also expressed interest, would also be connectivity with ASEAN country which in the integrated Demonstration Park permitted to operate in Myanmar. The will create new opportunities for India’s in Nay Pyi Taw, and an Information Minister stressed the need for permission north eastern region. The Minister Technology Institute in Mandalay, Air to open full-fledged banking services. informed of the significant progress in Service Agreement, Establishment of “Even setting up a joint venture state- the area. India has extended assistance Joint Trade and Investment Forum, owned bank with India and Myanmar for road development projects which MoU on Border Areas Development, sharing equity would further enable include upgradation of the Tamu-Kalewa- and establishment of Border Haats and to strengthen our ties in banking and Kalemyo (TKK) road (about 160 km); Cultural Exchange Programme. The commerce”, said the Minister. Kaladan Multi-Modal Transit Transport Minister addressed the first meeting of The two leaders also discussed Project which envisages development of Joint Trade and Investment Forum which cooperation in energy sector. The road and inland waterways from Sittwe was co chaired from Indian side by Minister expressed satisfaction on the port in Myanmar to Mizoram; and some Mr. Sunil Bharti Mittal at Yangon. progress of cooperation in this field as segments of Trilateral Highway Project (Source: Ministry of Commerce and Industry, the renovation of the Thanlyin Refinery (about 1360 km) connecting Moreh Department of Commerce, Press Release, 9 June and the ongoing upgradation of the (Manipur, India) to Mae Sot (Thailand) 2013, New Delhi). ■

Mekong-Ganga Policy Brief, November 2013 11 ResourcesResources

India-Myanmar Connectivity: New Energy Architecture: This book focuses on Current Status and Future Myanmar issues of governance Prospects World Economic Forum (WEF), 2013 and the nature and complexities of social Prabir De and Jayanta Kumar Ray This report is the transformation in India’s Institute of Foreign Policy Studies, culmination of a nine- month multi-stakeholder Northeast -- a ‘problem’ Centre for Pakistan and West Asian zone for policymakers Studies, Calcutta University, Kolkata process investigating Myanmar’s energy -- particularly since KW Publishers Private Ltd., 2013 architecture, which the early 1990s. While This paper deals with trade and physical involved the Asian governance is the thread connectivity links between India and Development Bank, the that runs through the volume, the latter Myanmar. Specifically, it presents the World Economic Forum at one level addresses the challenges status of all major modes of transportation and Accenture. The process aimed to of governing in global times a region links between India and Myanmar, and understand the nation’s current energy historically marked by acute violence, discusses the challenges and prospects. architecture challenges and provide an inter-ethnic conflict and insurgency; and at Besides, it also presents Myanmar’s overview of a path to a ‘New Energy another, traces macro changes in the very selected connectivity projects with Architecture.’ forms and technologies of governance. neighbouring China and Thailand. It also The essays in this volume, point to how draws up an action plan for implementation changing forms and technologies of of connectivity projects in Myanmar. India’s Foreign Policy and governing insurgency, development and Regional Multilateralism culture do not remain mere instruments Arndt Michael of peace, but define the very nature and Myanmar’s Moment: Unique content of both peace and conflict and Palgrave Macmillan, 2013 Opportunities, Major Challenges their interrelationship in the region. McKinsey Global Institute, June 2013 ISBN-10: 1137263113 For the first time in the history of Myanmar is a highly ISBN-13: 978-1137263117 scholarship on the region, the three unusual but has While successful crucial issues of insurgency, development promising prospect for processes of regional and culture have been analysed through businesses and investors multilateralism are taking the lens of governance. This volume, - an underdeveloped place in all corners of the therefore, marks an important addition to economy with many world, South Asia and the scholarship on the region. advantages, in the heart its neighbouring regions of the world’s fastest- have not been able to growing region. Home successfully cooperate Enhancing India-ASEAN to 60 million inhabitants in a regional framework. Connectivity (CSIS Reports) (46 million of working age), this Asian At present, there are four Ted Osius and Raja C. Mohan nation has abundant natural resources regional organisations or initiatives: the Center for Strategic and International and is close to a market of half a billion SAARC, the Bay of Bengal Initiative for Studies (CSIS), 2013 people. And the country’s early stage Multi Sectoral-Economic Cooperation, ISBN-10: 1442225092 of economic development gives it a the Indian Ocean Rim-Association for “greenfield” advantage: an opportunity to Regional Cooperation and the Mekong ISBN-13: 978-1442225091 build a “fit for purpose” economy to suit the Ganga Cooperation Initiative. Arndt Twenty years ago, India modern world. Michael examines the genesis and launched its “Look evolution of these organisations by using East” policy. For most of those 20 years, Myanmar’s Trade and Its the theoretical perspective of norm localisation. The study focuses especially Myanmar’s isolation, Potential Report on India - a founding member in all four mistrust between India Asian Development Bank (ADB), organisations - and traces the impact of and its neighbours,

January 2013 India’s foreign policy on the discourse, the and poor infrastructure The research paper development and the institutional designs connectivity hindered tabulates Myanmar’s of regional multilateralism. the development of links merchandise trade as between South and Southeast Asia. reported by its partner With Myanmar’s tentative opening and countries, thereby Governing India’s Northeast: improved relations between India and circumventing the data Essays on Insurgency, Bangladesh, an opportunity exists for constraints stemming Development and the Culture India to boost trade and security ties from Myanmar’s patchy of Peace with mainland and maritime Southeast trade records. It also Samir Kumar Das Asia. And the United States, during estimates Myanmar’s President Barack Obama’s second term, export potential, based on the bilateral Springer, 2013 is committed to rebalancing toward export patterns observed for six other ISBN-10: 8132211456 Asia, with India playing a pivotal role. countries in Southeast Asia. ISBN-13: 978-8132211457 With these facts in mind, CSIS presents 12 Mekong-Ganga Policy Brief, November 2013 ResourcesResources key recommendations in the areas of the changing context of geo-politics the remote region that is diplomacy and security, infrastructure and and globalisation. Today, many believe, suddenly a geopolitical energy, and enhancing people-to-people it is a defining partnership among center of the world. collaboration among India, ASEAN, and some of the most dynamic and geo- From their very the United States. strategically important countries of the beginnings, China and world, including those which are the India have been walled future economic power houses of the A Neorealist Assessment of off from each other: by Asia-Pacific, impacting not only regional India’s Look East Policy the towering summits but global equations. The compilation of the Himalayas, by a Johanna B. Tscher and Johanna of essays in this volume written by vast and impenetrable Botscher eminent diplomats who, as practitioners jungle, by hostile tribes and remote inland GRIN Verlag, 2013 and propagators, helped shape and kingdoms stretching a thousand miles ISBN-10: 3640892194 give direction to the Look East policy, from Calcutta across Burma to the upper contains incisive and in-depth candid ISBN-13: 978-3640892198 Yangtze River. accounts of the policy and its evolving Soon this last great frontier will vanish- In line with its new foreign complexion. policy after the end of the the forests cut down, dirt roads replaced Cold War, India started by super-highways, insurgencies crushed- leaving China and India exposed to each to significantly increase Security and Development in other as never before. This basic shift in its political, economic India’s Northeast and military relations with geography-as sudden and profound as Gurudas Das Southeast Asia at the the opening of the Suez Canal-will lead beginning of the 1990s. Oxford University Press, 2012 to unprecedented connections among Since then, but particularly ISBN-10: 0198079788 the three billion people of Southeast Asia and the Far East. for the last ten years, this ISBN-13: 978-0198079781 so-called “Look East Policy” has grown to This book provides a rich What will this change mean? Thant a strong and multifaceted partnership that account of the dynamics Myint-U is in a unique position to know. constitutes a major component of Indian of the development Over the past few years he has travelled foreign policy today. The principal purpose of civil wars in India’s extensively across this vast territory, of this thesis is to evaluate India’s motives Northeastern region. where high-speed trains and gleaming for its strong interactions with Southeast The rise of ethnic new shopping malls are now coming Asia. The most common approach among militancy in the region within striking distance of the last far-flung academics to explain India’s Look East in the 1980s had an rebellions and impoverished mountain Policy follows a liberal understanding of adverse impact on its communities. And he has explored the International Relations. Liberals argue development, making it new strategic centrality of Burma, where that both, India and the Southeast Asian hostage to security concerns of the Indian Asia’s two rising, giant powers appear to countries want to exploit complementarities state vis-a-vis its north-eastern borders. be vying for supremacy. in their economic and social structures. The consequent underdevelopment led This thesis, however, follows a neorealist to rise in internal insecurity. The book The 2011 Myanmar Spring: understanding of International Relations by examines the inter-linkages between Implication for India and China: arguing that the Look East Policy is primarily external security threats, economic Opportunities and Challenges a strategy of the Indian government to under-development, and internal counterbalance the growing Chinese insecurity that have led to a conflict Rimli Basu influence in Southeast Asia. trap in the region. The author argues in LAP LAMBERT Academic Publishing, favour of cross-border cooperation as 2012 Two Decades of India’s Look an alternative strategy for breaking this ISBN-10: 3848426307 East Policy: Partnership for trap and facilitating the development of ISBN-13: 978-3848426300 Peace, Progress and Prosperity the area’s bordering regions, as the same Bilateral relations are of Editor: Amar Nath Ram can hardly be accomplished within the immense importance framework of national development. Manohar Publishers & Distributors, since under the garb 2012 of globalisation and global dependence; ISBN: 978-981-4380-21-8 Where China Meets India: Burma and the New regional fragmentation In the last nearly two is making a headway. Crossroads of Asia decades, India’s Look This dichotomy is simply East Policy has evolved Thant Myint-U visible with the rise of the and acquired its own Farrar, Straus and Giroux, 2012 number of low-intensity- momentum and, ISBN-10: 0374533520 conflicts, proxy warfare, insurgency arguably, critical mass to all over the world. India is situated in a ISBN-13: 978-0374533526 give it a new and greater most politically volatile region with her Thant Myint-U’s ‘Where China Meets India’ meaning, relevance, neighbours — Pakistan, Bangladesh, depth and content in is a vivid, searching, timely book about

Mekong-Ganga Policy Brief, November 2013 13 Resources

Sri Lanka, China, Bhutan and Nepal - all ASEAN-India Connectivity means to settle their differences will have coming in different sizes and strengths. Report: India Country Study deal a huge blow to a region already Pragmative changes of the 90’s were touted as the world’s best in the coming RIS, 2012 reflected in the political arena through the years. In this regard, ChinIndEAN is the “Look East Policy”. With the “Rising China,” ISBN-10: 9380574371 main catalyst for the region’s stability and all Asian regional powers, and even the security. USA have become more concerned ISBN-13: 978-9380574370 about the spread of Chinese influence in This Report outlines a Southeast Asia. China-Myanmar proximity strategy to enhance the Expansion of North East India’s can be perceived as a shift of the ‘security’ physical connectivity Trade and Investment with and ‘power balance’ of the whole region. between ASEAN and Bangladesh and Myanmar: India. It recommends Indian and ASEAN relations with Myanmar An Assessment of the are focused on engagement. It is against two major axis that this backdrop, that this book intends to could be promoted to Opportunities and Constraints focus and reason out as to why India enhance this physical RIS, 2011 should go beyond the idealist Nehruvian connectivity: the first policy, and go ahead with a realist policy one is surface connectivity through ISBN-81-7122-100-9 with the goal of securing and maximising India’s North East Region (NER) and the This study attempts to her security interest. second one is multimodal connectivity better understand the through Southern India, primarily through existing level of trade Countries of the World: Republic Chennai–Ennore area. The Report argues links through both formal of the Union of Myanmar that ASEAN-India connectivity would help and informal channels Tomas Clancy unlock the tremendous growth potential between India and its neighbours around the CreateSpace Independent Publishing of the region by removing constraints and country’s North East by Platform, 2012 bottlenecks to economic development. focusing on Bangladesh ISBN-10: 1470045125 and Myanmar. More specifically, the study ISBN-13: 978-1470045128 ChinIndEAN: The Interlocking analyses the scope of utilising nine Land Countries of the World - Burma ... What is Interests of China, India and Customs Stations (LCSs) for improving so special about Burma? ASEAN border trade with two countries. Three sets What is it’s history, Jose Aims Rocina of issues are examined in the study. These culture and geography? Amazon Digital Services, Inc., 2012 are: (a) pattern of border trade between What is it that makes it This book analyses the India and its two neighbours and the so special and unique? conflicting interests of possibilities of expanding it; (b) supply- What are its similarities China, India and ASEAN side constraints that may exist in the NER and differences to in Asia, specifically, which inhibit India’s two-way trade with its other countries in the the Southeast and two neighbours; and (c) exploring India’s world? This in-depth their potential impact investment opportunities in Bangladesh guide answers these on regional political and Myanmar with buy-back provisions questions and more, providing you with a direction and dynamics. that can promote border trade through comprehensive understanding of Burma, Failure of the parties the LCSs. and a lasting appreciation of its wonders. to cooperate and find Further Readings  ADB doing analytical work on East Coast Economic Corridors: Nag. K.R. Srivats. The Hindu Business Line, 19 November 2013.  Let's Flow Along with the Mekong. Chandrajit Bannerjee. The Hindu Business Line, 18 November 2013.  Can Myanmar live up to expectations? Bangkok Post, 11 June 2013.  Myanmar, ASEAN stand to gain from enhanced profile after WEF. May Wong, Channel Newsasia, 8 June 2013.  The Rush to Tap Myanmar’s Energy Promise. Roben Farzad. Bloomberg Business Week, 7 June 2013.  East Asia joins forces to tap deep regional tourism potential. Eturbonews.com, 6 June 2013.  Myanmar a key passageway for integration with South-East Asia: Saran. Livemint.com, 6 June 2013.  Power Grid, IFC may tie up for rural electrification, distribution. Livemint.com, 6 June 2013.  Indian firms, government eye Myanmar for investment, strategic inroads. Times of India. 5 June 2013.  ADB - Asian Development Bank : Myanmar Unveils US$ 500 Million Tourism Plan. 4-traders.com, 5 June 2013.  China, India Vie for Myanmar’s Energy Resources. Atlantic Sentinel, 3 June 2013.

14 Mekong-Ganga Policy Brief, November 2013 Statistical Indicators

GDP, GDP Per Capita and Population of India and Myanmar GDP GDP Per Capita Population Year India Myanmar India Myanmar India Myanmar (US$ billion) (US$) (million) 2000 474.57 10.28 461.11 205.00 1029.19 50.13 2012 1841.72 55.27 1500.76 868.09 1227.19 63.67 2018* 2481.18 96.40 1869.34 1343.62 1327.30 71.75 CAGR (2000-12), % 11.96 15.05 10.33 12.78 1.48 2.01

*Forecast Source: World Economic Outlook, October 2013, International Monetary Fund (IMF).

India’s Merchandise Trade with Myanmar Year Export (US$ million) Share* (%) Import (US$ million) Share* (%) 2000-01 52.71 0.12 181.69 0.36 2005-06 110.70 0.11 525.96 0.35 2012-13 544.66 0.18 1412.69 0.29

*Share in country’s total export (import) Source: Export-Import Databank, Department of Commerce, Government of India.

India’s Exports to and Imports from Myanmar: Major Products (a) Export to Myanmar 2012-13 Share* HS Code Commodity (US$ million) (%) 30049099 Other Medcne Put Up For Retail Sale N.e.s 41.26 7.58 72104900 Othr Prdcts Of Iron/Non-Alloy Steel Otherwise Pltd/Cotd Wth Zinc 39.46 7.24 23040030 Meal Of Soyabean, Solvent Extracted (Defatted) Variety 38.87 7.14 85371000 Bords Etc For A Voltage<=1000 Vlts 26.01 4.78 84306900 Other Machinery, Not Self-Propelled 23.18 4.26 Total Export To Myanmar 544.66

(b) Import from Myanmar 2012-13 Share* HS Code Commodity (US$ million) (%) Beans Of The Spp Vigna Mungo, Hepper Or Vigna 7133100 344.23 24.37 Radiata,Wilczek Dried & Shld 44034910 Teak Wood In Rough 278.86 19.74 44039913 Gurgan (Dipterocarpus Alatus) 220.86 15.63 7139010 Other Dried & Shld Leguminous Vegtbls, Split 202.60 14.34 44039929 Other 139.66 9.89 Total Import from Myanmar 1412.69 *Share in country’s total export (import) to (from) Myanmar Source: Export-Import Databank, Department of Commerce, Government of India.

Mekong-Ganga Policy Brief, November 2013 15 Statistical Indicators

Myanmar’s Top 10 Export Partners in 2012 Myanmar’s Top 10 Import Partners in 2012

Export Share* Import Share* S. No. Countries S. No. Countries (US$ million) (%) (US$ million) (%) 1 Thailand 3362.58 40.64 1 China 6242.48 36.93 2 India 1219.71 14.74 2 Thailand 3419.34 20.23 3 China 1181.2 14.28 3 Singapore 1474.61 8.72 4 Japan 612.25 7.40 4 Korea 1463.98 8.66 5 Korea 319.24 3.86 5 Japan 1384.45 8.19 6 Malaysia 167.56 2.03 6 Malaysia 774.10 4.58 7 Vietnam 99.52 1.20 7 India 586.71 3.47 8 Singapore 71.74 0.87 8 Indonesia 441.75 2.61 9 Bangladesh 67.85 0.82 9 Germany 138.92 0.82 10 North Korea 65.89 0.80 10 Vietnam 129.59 0.77 World 8273.79 World 16903.80

*Share in country’s total export *Share in country’s total import Source: Direction of Trade Statistics Yearbook, IMF, August 2013. Source: Direction of Trade Statistics Yearbook, IMF, August 2013.

Mekong-Ganga Policy Brief An RIS Publication on India-Mekong Economic Cooperation

RIS has been supporting the process of regional economic integration in Asia with its studies and research. Besides its pioneering contribution to the process of economic integration in South Asia and on broader regional cooperation in Asia, RIS has been supporting the ASEAN-India economic partnership with special emphasis on India-Mekong cooperation. As its most recent initiative to enhance deeper cooperation between India and Mekong countries, RIS has undertaken a project entitled “Building Capacity through South–South Cooperation: Case of Mekong-India Cooperation”, supported by the Swiss Agency for Development and Cooperation (SDC). Overall objective of this project is to strengthen trade and investment related capacity of Mekong countries through information sharing, dissemination of knowledge and experiences, networking and transfer of skills. RIS has launched Mekong Ganga Policy Brief within the framework of this project. The Mekong Ganga Policy Brief seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of RIS or SDC. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is freely available from RIS or can be downloaded from www.ris.org.in. RIS Research and Information System for Developing Countries (RIS), a New Delhi based autonomous think-tank under the Ministry of External Affairs, Government of India, is an organisation that specialises in policy research on international economic issues and development cooperation. RIS is envisioned as a forum for fostering effective policy dialogue and capacity-building among developing countries on international economic issues. The focus of the work programme of RIS is to promote South-South Cooperation and assist developing countries in multilateral negotiations in various forums. RIS is engaged in the Track II process of several regional initiatives. RIS is providing analytical support to the Government of India in the negotiations for concluding comprehensive economic cooperation agreements with partner countries. Through its intensive network of policy think-tanks, RIS seeks to strengthen policy coherence on international economic issues. For more information about RIS and its work programme, please visit its website: www.ris.org.in

RIS Schwezerische Eidgenossenschaft Federal Department of Foreign Affairs (FDFA) Research and Information System Confédération suisse Swiss Agency for Development and Cooperation (SDC) Confederazione Svizzera Department Development Policy and Multilateral Cooperation Global Issues and Sustainable Development Division for Developing Countries Confederaziun svizra Core IV-B, Fourth Floor, India Habitat Centre, Lodhi Road, New Delhi-110 003, India., Ph. 91-11-24682177-80 Fax: 91-11-24682173-74 Editor: Dr. Prabir De Email: [email protected], Website: http://www.ris.org.in Managing Editor: Dr. Beena Pandey

16 Mekong-Ganga Policy Brief, November 2013 No.7 November 2016

Mekong-Ganga Cultural Fusion

he Mekong is one of the longest and practices while producing significant or Bengali, is originally from Southeast most magnificent rivers in the world. but evolutionary historical change Asia and was chewed across the region Akin to the Ganga river in India, in domestic politics and inter-state and as far as Taiwan. Paan continue to T play an important cultural role and are the Mekong is seen not only as a source relations. The Indian cultural influence, of livelihood but also a sacred entity therefore, was an adaptation and not an used in many ceremonies in India and with cultural and spiritual significance. acceptance. Moreover, Southeast Asians Southeast Asia. These examples are a It is also known as “mother of rivers” or gave as much as they learnt from foreign clear menifestation of two-way cultural “mother of waters”. The countries in this cultures and civilizations. communicaton. region, namely, Thailand, Cambodia, Lao The influence of Indian civilization on Despite a rich cultural heritage, PDR, Vietnam and Myanmar long fought the Mekong region is evident to anyone the cultural connectedness and over and controlled by outside powers, who has been to this region. Also, a large communication between these two from the colonial era through the Cold number of literatures are available on regions is very limited. We are living War, are rapidly changing with a fast India’s influence in this region. The impact in an interconnected world in the changing world. The Mekong countries that the Mekong region and Southeast age of diffused culture based on a are emerging to be a new growth centre Asia had on cultural and historical events modern outlook that relies on science and also a new strategic frontier in Asia. in India has not drawn adequate attention. and rationality to address emerging With a population of around 240 The evidence, however, suggests that challenges. While we celebrate our past million and a combined GDP of US$ 664 the cultural influence flowed both ways and continue to follow several rich cultural billion, the Mekong region has geopolitical and Southeast Asia has also contributed traditions, we also witness modifications significance and economic weight. It is in enriching India’s culture and traditions. and adaptations and infusion of new located at the junction of the enormous In his exceptional book The Ocean elements in our cultural journey. The emerging markets of Asia. The cultural of Churn, Sanjeev Sanyal has illustrated contemporary dynamics of the region and religious diversity of the Mekong Southeast Asia’s influence on Indian and the fast-changing global society region in Southeast Asia is remarkable. society. The Khasis of Meghalaya, for brings new ideas and poses different Nearly 100 different ethnic groups live instance, remain matrilineal to this day. challenges. Therefore, it is important for just in the lower Mekong basin. Khmer, Traces of matrilineal customs seem to the Mekong-Ganga Cooperation (MGC) Lao, Thai and Vietnamese people have have been imbibed even by neighbouring regional forum to deliberate upon issues depended upon the Mekong’s resources communities that may never have been on which they could share their expertise for thousands of years. The Mekong still matrilineal. For instance, in Assamese and experience and learn from each forms an integral part of each distinct Hindu weddings, the ‘sindoor’ (red other. As such, we identify four major culture and they all rely upon its fish to vermilion) is applied to the forehead issues on which there is a possibility of eat and its waters to travel and trade. of the bride by the mother-in-law at the greater collaboration. The diversity of cultures and traditions is ‘jurun’ ceremony that precedes the legendary. wedding. The act of applying sindoor Cultural Resource Management Indian culture, religions and is a key part of Hindu marriage ritual First issue is the management of political ideas played a considerable and is usually the prerogative of the cultural resources. Cultural resource role in the politico-cultural landscape husband. The performance of this rite management (CRM) is directly related of the Mekong region. The cultural and by the groom’s mother symbolizes the to the management of economic civilizational imprints of India influenced women of the family accepting a new development, tourism, preservation, the emergence of statehood and member – a very matrilineal view of and commodification. The ultimate goal inter-state system in Southeast Asia. wedding. Another good example, which of CRM is sustainable management of Studies show that the countries in this Sanyal highlights in his aforesaid book, cultural resources. Culture and cultural region adapted and modified a whole is the custom of chewing paan (betel resources represent a vital asset in efforts range of foreign ideas and rules to suit leaves with areca nuts, usually with a bit to develop tourism across Southeast their interests and local context. This of lime and other ingredients). While it is Asia. Tourism in the Mekong region is process of adaptation preserved and in common across the Indian subcontinent, highly dependent on cultural attractions, some cases amplified local beliefs and the areca nut, called ‘supari’ in Hindi and proper management strategies

Mekong-Ganga Policy Brief November 2016 1 would ensure that cultural assets could a variety of commodities, images, and several meanings, but what people do be preserved and also contribute fashions that simultaneously derive from or make depends ultimately on how significantly to the material well-being multiple centres. These multi-directional they think. Culture consists of what as well as the stability of their societies. flows of popular culture have intensified to people hold in their heads, how they The Mekong region and India could work reach consumers in different national and think about the world, and society, and together to share their best practices linguistic areas, and have substantially themselves. While the political culture of in the area of CRM. Technological and decentralised the region’s popular Vietnam owes far more to Confucianism, professional cooperation could enhance culture market. As a result, consumers Buddhism has shaped the worldviews of understanding and improve sustainable are exposed to various popular cultures the majority of people in Cambodia, Laos, CRM. to a great extent and are characterised Thailand and Myanmar. Thus, to a large by a diversity of consumption habits extent, political culture is rested upon Intercultural Communication and lifestyles. The production and patronage and personal relationships. distribution of these flows, however, is Patronage may take many forms, but Second important issue is intercultural very unpredictable. all depend ultimately on access to communication. Since the beginnings The massive production and either wealth or power. Political parties of civilization, when the first humans consumption of popular culture has had in these countries have incorporated formed tribal groups, intercultural contact a major impact on the way governments the political culture of patronage and occurred whenever people from one tribe perceive commodified culture. Cultural hierarchy. Vietnamese political culture, encountered others and discovered that policies represent ways for governments however, is centralised and delegated. they were different. These ideas of cultural to emphasize and reinforce nation- However, issue of corruption is there as differences have long been recognised, building or prevent the infiltration of well. Though, this is a sensitive matter, but in the absence of accompanying foreign cultures either on moral or political policymakers could devote more attention cultural knowledge, this recognition grounds. In the name of defending the to improve political communication. most often elicited the human propensity best interests of civil society and deterring Institutional collaborations would enhance to respond malevolently to those encroachment from undesirable outside transparency and enrich political culture. differences. Everyone is quick to blame forces that may threaten their nations’ the alien. This penchant to blame the cultural life, governments have resorted Going Forward: Opportunities alien is still a powerful element in today’s to censorship. Moreover, to promote social and political rhetoric. For example, culture, governments take various other for Cooperation it is very common to hear charges that measures such as building museums and In today’s web of interconnected immigrants are responsible for all of monuments, establishing folklore studies, world, human life has improved and the perceived social and economic promoting national sports, or designing communication has become very fast. problems affecting society. Furthermore, national school curriculums. However, More and more people in more and culture is a dynamic thing and it changes the success of the cultural industries has more places are enjoying better lives with time and circumstances. Cultural generated a major shift in official thinking. than ever before. We are witnessing groups face continual challenges from Indeed, there is a realisation among increasingly overlapping areas of such powerful forces as environmental governments that cultural industries are commonality among people and regions upheavals, pandemics, wars, migration, a great source for enhancing countries’ with similar aspirations. Policy makers the influx of immigrants, and, the growth soft power and have the potential of should work proactively to highlight of new technologies. As a result, culture cultivating lucrative export enterprises. the positivity and good things that are changes and evolves over time. More Indeed, culture is linked to both the happening in their countries and engage importantly, due to lack of intercultural developmental idea of amassing national more constructively to address pressing communication, the knowledge remains wealth and enhancing the national transnational problems. Cultural aspect limited. Intercultural communication is image by promoting the export of of external interface is a powerful tool vital to develop a better understanding of national cultural products. As a result, in governments’ diplomatic scheme. A each other’s practices and sensitivities, government-led discourses of cultural pragmatic cultural policy could drive likes and dislikes, and thus, it could policy, culture and cultural products a convergence of interests towards be very helpful in boosting mutual throughout the region have acquired both cooperation in finding common solutions. interaction. economic and political value. In fact, the The fusion of cultural past could be external dimension of culture has become enriched further through a robust Cultural Industry an important tool for enhancing national cooperation between the Mekong region image. How the cultural industries of the and India at present. Third important issue is dealing with Mekong region and India collaborate will the cultural industry. Both Southeast depend much on governments’ policies Asia and India have experienced an and support. Certainly, it requires a Rajeev Ranjan Chaturvedy, Research explosion of popular cultural products greater coordination and structured Associate, Institute of South Asian Studies such as movies, pop music, animations, approach. (ISAS), National University of Singapore (NUS), comic, television programmes, and Singapore. Opinions expressed in this article are fashion magazines that have expanded Religion and Traditions on those of the author, and do not necessarily reflect and deepened their reach, not only the views of ISAS. AIC, RIS. Usual Disclaimers Political Culture apply. domestically but also across national and even regional borders. Today, there Finally, the fourth important issue is is no one dominant stream of products influence of religion and traditions on originating from any single location, but political culture. The term ‘culture’ has References given on page 5

2 Mekong-Ganga Policy Brief November 2016 India’s Cultural Connect with the Mekong Region

he Mekong Region comprises of a positive past. India’s endeavours (ITEC) Programme. Laos alone gets 210 both coastal and inland countries at building bridges with her eastern slots under this scheme every year, while Tof Southeast. Cambodia, Lao PDR, neighbours, be it through India-ASEAN Vietnam gets around 150, Cambodia Thailand and Vietnam are the Mekong or India-Mekong region (through MGC), gets 96 slots and Myanmar gets around countries based on the fact that Mekong need deeper connections based 30 slots. Demand seems to be increasing river flows through them. No other river on not only economic linkages but and it has been announced that India in Southeast Asia has such immense through further deeper connectivity. By will train one representative each importance as the Mekong, and the river connectivity, it not only means physical from Cambodia, Lao PDR, Myanmar, has nourished not only the economies of infrastructural connectivity, it also means Vietnam and Thailand in museology and the Mekong countries, it also has been connections between communities, conservation techniques under the ITEC a catalyst to ancient civilizations that groups, societies and the people. This Programme.2 This will help create experts spin around powerful and culture-loving is possible through academic channels, to take care of the heritage of the region, kingdoms of Funan, Khamboj, Champa, institutional exchanges but even more which has elements of India-Mekong Subarnabhumi. Probably such similarities intensively through sports, cultural region ancient contacts. Besides, such could be drawn with ancient riverine platforms, travel and tourism. The idea expertise will help taking care of the civilisations of the Nile, the Tigris or the is not to confine the contacts to the recently founded MGC Traditional Asian Euphrates. In context of India’s relations intelligentsia, or the professionals or the Textile Museum at Siem Reap in 2014.3 with the Mekong region, the ancient bureaucracy. It must involve the people - India also proposes to supplement the relations have been identified with common people who can help in existing capacity building programmes Ganga. The river Ganga continues to be developing a better sense of integration in the areas of law enforcement, the lifeline of India and an indispensable between the two sides – India and the financial markets, IT and space. A total part of Indian civilization and culture. Mekong. India has already taken some 50 scholarships have been provided There is the need to take the policy decisions in taking those primary by Indian Council for Cultural Relations relationship forward in the contemporary strides in establishing the ‘human (ICCR) and the scheme has been times. In tune with the gradual contact’. extended till 2016.4 A total 6 scholarships acceptance of sub-regional initiatives, To begin with, the 2nd Ministerial are offered for studying at the Nalanda the Mekong-Ganga Cooperation (hereon Meeting of MGC that drew the outline University. At present, 4 students are MCG) was launched in 2000. What needs of cooperation in the sectors identified enjoying this scholarship.5 There are to be espoused here is the primacy through the Hanoi Action Programme other scholarship slots for individual of civilisational contacts. Symbolic of ensured that education, culture, tourism Mekong countries under the Colombo the civilisational aspect, the MGC was (apart from connectivity) received Plan, the Mekong Ganga Cooperation launched at Laung Prabang, the ancient constant attention. Scholarship Scheme and the General capital of Laos, located on the banks Education especially higher Cultural Scholarship Schemes (both by of Mekong, on occasion of their festival education has been an important element ICCR). of lights. It drives home the importance in India’s policies towards the region. India’s cultural relations with the of ancient civilisation and culture as Capacity building has now a more unique Mekong countries have also started components that would constitute approach that involves inculcating ethical gaining momentum. It has certain the backbone of this cooperation values, developing professional attitudes visible components and activities. framework. It is, therefore, very apt that and skills, environment conscious Capacity building is a part of the cultural the fundamental areas that have been approach and a democratic orientation programme, where the role of ICCR is identified are tourism, education, culture in decision making because India has a very vital. Conservation and restoration of and transportation. strong democratic culture. The impact of heritage sites in some Mekong countries The relations are age old and a Indian value system would help to create constitutes another important ingredient. rich repository of scriptural, epigraphic, a more positive mindset towards her. Following respective MoUs, temple numismatic and architectural evidences The establishment of Entrepreneurship complexes at Vietnam, Myanmar, Lao help one chart the magnitude and depth Development Centres (EDCs), Centres PDR and Cambodia are being restored of this historical relationship. One of for English Language Training (CELTs) such as at My Son6, the Ananda Temple, the strongest bases of the present day and Vocational Training Centres (VTCs) the Vat Phu temple, and the Ta Phrom interactions between India and Southeast are substantial steps. These centres Temple. Bilateral cultural exchange Asia is the long trajectory of socio-cultural will be supplemented with new Centres agreements have also been signed with contacts within the region. of Excellence in Software Development the Mekong countries. With Lao PDR, A somewhat detailed description and Training.1 Scholarships constitute a Cultural Exchange Programme for of the historical links between India and a major component in India-Mekong the years 2011 to 2013 was signed in the Mekong countries is not unjustified cooperation programmes. It is noted 2010, India-Vietnam Cultural Exchange because it is based on the firm belief that about 900 scholarships are already Programme 2011-2014, India-Cambodia that the present can build and sustain being offered by India under the Indian Cultural Exchange Programme 2013- inter-state relations only on a base of Technical and Economic Cooperation 2015, India-Thailand Cultural Exchange

Mekong-Ganga Policy Brief November 2016 3 Programme 2016-2019. Film Festivals, Archival Resource Centers (CARCs)) (SMEs); they await Plan(s) of Action for Festival of India, individual troupe dance and courses on history of the region have implementation. performances, etc. have showcased been designed accordingly. The above the Indian culture in the Mekong mentioned MGC Museum at Siem Reap, Going Beyond the Threshold: countries. For instance, Indian Film Cambodia was constructed by India at a Imagining New Pastures Festival was arranged in Laos in 2012. cost of U$ 1.772 million. Documentaries Such a film festival was also arranged to highlight the importance of the MGC Browsing the literature those are relevant in Vietnam in 2015. A festival of India Museum titled ‘Power of the 6’ has been to understand the significance of the was organised in 2014 showcasing commissioned, DVDs made and copies cultural relations in the MCG region makes Indian dance, performances by Sangeet distributed to the member states. India cause for advocating for more. This is Natak Academy, Buddhist Festival by believes it will reiterate the point of not to discount the ongoing activities, Central Institute of Himalayan Cultural civilisational contacts. but yes to the MGC being an ‘imagined Studies, Food Festival, folk dance by Culture is expected to encourage community’ of sorts that straddles to Kalbelia Group, Mehendi, and Yoga. people to people contact as much as regions, its civilisation, culture and the All elements of the festival received an tourism. The India-ASEAN Cultural people-to-people contact that matter overwhelming response in Vietnam. An Framework has provided the background utmost. They are the building blocks of Indian dance performance took place in for promotion of tourism between India this entity. Now, it is for the government(s) Vietnam in 2014. Again, in Myanmar and and the Mekong Region. It is believed that of the day to build on this approach in in Cambodia, cultural exchanges have tourism has a potential to promote India’s order to take forward the MGC. One of the most vital things in bringing the taken place in the form of dance troupe cultural diplomacy. Yet, the starting point people of the region closer is the ability performances by both the sides. receives a jolt when one looks at the to move hassle-free of both goods or Indian cultural centres shoulder the state of connectivity and measures that humans. It would need a proactive responsibilities of cultural exchanges could boost tourism in the region. Air government and also sustainable and other activities that help India fulfil connectivity is not very promising. For funding. In a region that comprises of its goals. While Myanmar and Thailand instance, an observation shows that there less developed to developing countries, each has a cultural centre, Hanoi, Phonm were no direct flights between India and public private partnership would help Penh and Vientiane are yet to have their Vietnam until 2014, following a revised solve some of the financial issues. Given respective Indian cultural centres. But Air Services Agreement in 2013.7 In the fact that private investors may not be that has not hampered substantive steps 2015, India and Cambodia have signed interested in investing in large or long- in building the blocks of India-Mekong bilateral treaties aimed at promotion of duration infrastructure projects, we must cultural relations. Especially, Buddhism tourism. Yet, the Indian government sees invite private operators of tourism and has emerged as a strong component of the lack of adequate air connectivity education. the cultural link. For instance, a Chair between India and the region so as to Information Technology being one on Buddhist and Sanskrit Studies has not only boost tourism but also to support of India’s core advantages, the premiere 8 been set up at Preah Sihanouk Raja India’s Act East Policy. A substantive institutes like the Indian Institute of Buddhist University that has been literature is available on how Northeast Technology (IITs) will have promising operational since October 2010. India India is absolutely crucial for the entire future in the region. So would be the has donated a16-foot sandstone Buddha roadmap of connectivity. Buddhism has Indian management institutes like the to Myanmar, which has been placed in a strong potential in promoting tourism. Indian Institute of Management (IIMs), the Shwegadon Pagoda, Yangon. The The Buddhist Circuit has the potential Indian Institute of Foreign Trade (IIFT) or International Conference on Buddhist of attracting number of Buddhist some other professional institute like the Cultural Heritage was organised in followers to India. As early as 2010, National Institute of Fashion Designing 2012. Myanmar was invited with other the Government of India had started (NIFD). India could help promote the members of the MGC as Guest of Honour promoting Buddhist tourism by arranging research agenda by introducing institutes th at the 5 Buddhist Conclave, which was for Buddhist Tourist trains for travel like Indian Institute of Oceanology, The held in Varanasi in October 2016. Indian companies to familiarise with the pilgrim Energy Resources Institute (TERI) or Tata Prime Minister has acknowledged the sites. There have been government Institute of Social Science (TISS). There leadership of Vietnam in facilitating the projects to promote Buddhist Tourism is also enough scope for universities inscription of the Archaeological Site of in Uttar Pradesh and the Ajanta Ellora to assist the education systems in Nalanda Mahavihara. India has confirmed Caves. The recently held International the MGC countries, Universities and a project to preserve and conserve Buddhist Conclave was a big platform for educational institutes, particularly from stone inscriptions and temples of King launching plans pursuant to that. In line East and Northeast India, can play a Mindon and King Bagyidaw of Myanmar with the government’s Swadesh Darshan forthcoming role. There is also a need in Bodh Gaya would be undertaken (auspicious sights of the homeland) to establish a series of India Studies by the Archaeological Survey of India programme, India is preparing to Centre in the Mekong countries, which (ASI) with financial support from the develop a trans-border Buddhist circuit will be an umbrella study centre for study Government of India. The two sides have across South and Southeast Asia for and researching on a wide variety of also agreed on joint technical support people. streams and issues on India.9 It would for preservation and conservation of The Quick Impact Projects play a crucial role in showcasing India, its the two stone inscriptions. The Nalanda undertaken by India also cover history, culture, politics, etc. Thailand has University is gradually being turned into education, culture, tourism, development already established India Studies Centre a centre for archival resources (Common and Small and Medium Enterprises at the Chulalongkorn University, Bangkok.

4 Mekong-Ganga Policy Brief November 2016 Nobel Laureate Rabindranath One must also understand attracting mea.gov.in/Portal/ForeignRelation/ Tagore’s travels to Southeast Asia students, young scholars, performers of MCG_N_2016_.pdf, accessed on produced Jatri; his literature is respected the region will not enhance her image 19.11.2016. in the East, including Southeast Asia. but help the region wean away from the 5 Ibid. There is ample scope to take up research overarching influence of other culture to 6 My Son, a monument of ancient Hindu projects on Indian literature not only a certain extent. A little careful planning Cham civilisation is considered as a Tagore’s but of literary figures from the and execution will not only yield positive symbol of the historical ties between region. Translation projects could help dividends for India but also the MGC India and Vietnam. disseminate ideas about societies of will emerge as a successful example 7 “Towards a Stronger Cultural Link”, these regions. of socio-cultural integration within the Ch.12, ASEAN-India Development It is well known that India has yet to parameters of South-South cooperation. and Cooperation Report 2015, unleash all its potential in tourism and ASEAN-India Centre, RIS, published that is not happening until the physical Endnotes by New York, Routledge, 2016, connectivity is established. In fact tourism p.134. in India should not be limited to Buddhist 1 Remarks by the Minister of State for 8 Minister of State for External Circuit only. There is immense scope External Affairs Dr. V. K. Singh at the Affairs Dr. V.K. Singh underlined for ecotourism, sports and adventure 7th Mekong-Ganga Cooperation the importance of maritime and tourism, medicinal tourism, and, perhaps, Finance Ministers Meeting in air connectivity at the 2016 MGC also historical tourism, wherein packages Vientiane, Lao PDR on July 24, 2016. Ministerial Meeting at Vientaine, could be offered based on historical 2 Ibid. Laos. See, “India asks MGC states to periods and regimes. It would need some 3 Further India has proposed increase maritime, air connectivity”, amount of research and imagination to workshops to integrate traditional india today in, available at, http:// design out novel packages. Especially textiles with other art forms like indiatoday.intoday.in/story/india- Northeast India could be turned into a hub painting, literature, puppetry and asks-mgc-states-to-increase- of tourism, especially many communities other performing arts and fashion maritime-air-connectivity/1/722841. of the region naturally relate to people trends. There is also a plan to build html, accessed on, 21.11.2016. across the borders. what is called a ‘LIVE’ section to 9 Chulalongkorn University has an Small steps like indigenous food showcase textiles artisans. Remarks India Studies Centre, and there is festivals, theatre festivals, art exhibitions, by Secretary (East) at the Inaugural one Centre for Indian Studies at the local art and handicrafts’ displays of the MGC Museum of Asian ISEAS Vietnam. involving indigenous cuisines along Traditional Textiles in Siem Reap, Ishani Naskar, Associate Professor, Rabindra the border regions provide valuable Cambodia, April 7, 2016. 4 “Mekong Ganga Cooperation”, Bharati University (RBU), Kolkata. Opinions input in weaving people-to-people expressed in this paper are those of the author, contact. Archiving is important so that Government of India Report, July and do not necessarily reflect the views of RBU. extinct indigenous art forms, music, 2016, available at, https://www. AIC, RIS. Usual Disclaimers apply. performances do not get lost. It is important to form some form of digital Mekong-Ganga Cultural Fusion (continued from page 2) networking between known and unknown sources of valuable data, documentation, References audio-visual materials that help construct the cultural currents within the region. An Acharya, Amitav, Civilizations in Embrace: The Spread of Ideas and the Transformation archive at Nalanda University perhaps is of Power, Singapore: ISEAS, 2013. not enough to nourish the culture of the ASEAN Secretariat. Mid-Term Review of the ASEAN Socio-Cultural Community region. Other universities need to be part Blueprint (2009-2015), Regional Assessment Adopted by the ASEAN Leaders at rd of the documentation process. Another the 23 ASEAN Summit, Jakarta, 2014. extremely vital element is involving Mahbubani, Kishore and Lawrence H. Summers, “The Fusion of Civilizations: The Case stakeholders in the MGC. As of now, the for Global Optimism”, Foreign Affairs, May/June 2016, pp.126-135. MGC seems to be a somewhat top-down Miksic, John N., Geok Yian Goh and Sue O’Connor (eds.), Rethinking Cultural Resource process (as in most cases about regional Management in Southeast Asia: Preservation, Development, and Neglect, London: integration in this part of the world), where Anthem Press, 2011. the organisation is not only member Mittal, Pankaj, Ravi Bhushan and Daisy (eds.), Mekong-Ganga Axis, New Delhi: DK driven but also policy driven from the top. Printworld, 2015. A bottom-up approach involving the real Otmazgin, Nissim and Eyal Ben-Ari (eds.), Popular Culture and the State in East and stakeholders in designing the integration Southeast Asia, Oxon: Routledge, 2012. process is also necessary. It increases Pongsudhirak, Thitinan, “The Mekong Region”, Foreign Affairs, Jan/Feb 2014, pp.45- awareness amongst the people of the 50. region. Awareness about MGC should be Sanyal, Sanjeev, The Ocean of Churn: How The Indian Ocean Shaped Human History, there amongst the new generation, and, Gurgaon: Viking, 2016. therefore, MGC and integration of this Serena, Maria I. Diokno and Nguyen Van Chinh (eds.), The Mekong Arranged & region ought to be a part of the academic Rearranged, Chiang Mai: Mekong Press, 2006. curriculum in higher studies. Needless Stuart, Martin-Fox, “Historical and Cultural Constraints on Development in the Mekong to say, India as a democratic pluralist Region”, Paper prepared for the seminar “Accelerating Development in the society has an important role to play. Mekong Region—the Role of Economic Integration”, Siem Reap, Cambodia, 26- 27 June 2006.

Mekong-Ganga Policy Brief November 2016 5 Mekong-Ganga Cooperation Activities Mekong-Ganga Cooperation: A Dynamic and Effective Platform for Sub-regional Cooperation

t is a matter of great satisfaction on an annual basis under the bilateral connectivity between MGC countries for us that the MGC Museum has and multilateral tracks. The schemes as well as India and transforming the been functioning effectively. It not are administered by the Indian corridors of connectivity into corridors I Council of Cultural Relations and for economic cooperation. only showcases our shared cultural heritage but is active in conducting ITEC. We are happy to announce 50 Excellencies, I urge you all to educational workshops to familiarise new scholarships for MGC countries, avail of the US $1 billion Line of Credit participants with textiles, fibres, in areas such as culture, tourism, announced by our Prime Minister materials and designs through a touch engineering, management teachers’ in November 2015 for connectivity and feel approach, arranging sessions training, film directing, sound, lighting projects to digitally bond with India. of storytelling based on the narratives and stage. These are areas that you Proposals on promoting digital as well display, as well as holding exhibitions have expressed interest in. We urge as physical connectivity may be shared and other events. all MGC partner countries to optimally through official channels at the earliest. I am also happy to announce that utilize these scholarships, which will In this context, I am also pleased India will train one representative each not only serve as a stepping stone for to announce that India will host a from Cambodia, Lao PDR, Myanmar, capacity building but also enhance seminar on the MGC focusing on Vietnam and Thailand in museology mutual understanding. building stronger connectivity and and conservation techniques, under Numerous projects on capacity enhancing our multi-dimensional ties the Indian Technical and Economic building are being undertaken by India at the ASEAN-India Center in New Cooperation (ITEC) Programme of in Cambodia, Lao PDR, Myanmar Delhi in September/October 2016. Government of India. We hope that and Vietnam as part of the Initiative Two representatives from each country for ASEAN Integration – Narrowing these representatives will thereafter would be invited to participate to the Development Gap. We have set be able to use their skills at the MGC brainstorm on how to take the MGC up Centers of English Language Museum. process forward. and IT Training in CLMV countries A key initiative under MGC is Excellencies, I would further like to the Quick Impact Projects for CLMV which will be supplemented with new take this opportunity to invite our MGC countries. I am pleased to note that Centers of Excellence in Software partners to participate as Guests of these have taken off, with 6 projects Development and Training, which Honour in the 5th International Buddhist in Cambodia and 5 in Vietnam already are under implementation. Existing Conclave. This biennial initiative of under implementation. In addition, 3 capacity building programmes in law our Ministry of Tourism to promote projects in Lao PDR and 2 in Myanmar enforcement, financial markets, ICT and and showcase our Buddhist Heritage have been identified and I hope that in space, can also be supplemented to can serve as a launch pad for further the coming months, these will also be meet the requirements of MGC partners. implemented. Excellencies, enhancing connecti- discussions on developing a Mekong- It was agreed during the 6th MGC vity between the Mekong region and India Buddhist trail. Finally, with a view Ministerial Meeting in New Delhi to India is a matter of priority for India. to time bound delivery, our officials widen areas of cooperation in the fields India became the third dialogue have worked out a draft Plan of Action of Rice Germ Plasm and Enhancing partner of ASEAN in 2013 to initiate for the MGC for the period 2016-18. I Rice production through Mechanization an ASEAN Connectivity Coordinating seek your approval to formally endorse and downstream processing, MSMEs, Committee-India Meeting. While India this Plan of Action. Before I conclude, Health and cooperation in pandemics has made progress in implementing I would like to congratulate Myanmar management and creation of a the India-Myanmar-Thailand Trilateral on assuming the Chairmanship of the Common Archival Resource Centre Highway and the Kaladan Multimodal MGC. We stand ready to contribute at Nalanda University. The revised Project, we would seek your assistance and assist in any way we can to take concept papers on all these themes in early finalization of the Motor this mutually beneficially partnership were circulated to MGC SOM Leaders Vehicles Agreement to facilitate soft forward. and we look forward to convening the connectivity issues pertaining to the Joint Working Group Meetings in the Trilateral Highway. This is also important Dr. V. K. Singh, Minister of State for External Affairs of India. respective fields as soon as our MGC if we seek to extend the Highway to (Excerpted from the speech delivered at the partners give us the go-ahead. Cambodia, Lao PDR and Vietnam. 7th Mekong-Ganga Cooperation Finance Excellencies, India provides over Equally important is the imperative Ministers Meeting in Vientiane, Lao PDR, July 900 scholarships to MGC countries to increase maritime and air 24, 2016)

6 Mekong-Ganga Policy Brief November 2016 Joint Statement of the 7th Mekong-Ganga Cooperation Ministerial Meeting

1. The Seventh Mekong Ganga MM and tasked the SOM to identify a 10. Recognising the significance of Cooperation Ministerial Meeting (7th list of potential cooperation activities. maritime connectivity between the MGC MGC MM) was held on 24 July 2016 in The Ministers agreed to strengthen countries, the Ministers instructed SOM Vientiane, Lao PDR. The Meeting was cooperation in agriculture and food to consider the establishment of an MGC preceded by the Senior Officials Meeting security with the aims to assist member Joint Working Group to explore ways to on 23 July, 2016. countries in joining global, regional food enhance maritime cargo transportation 2. The Ministers endorsed the supply chains, developing high-tech and and related issues amongst MGC SOM Report and emphasized that climate-smart agriculture and ensuring countries. collaboration under MGC must be given food safety. 11. The Ministers took note of the a sense of urgency since it actively 6. The Ministers recalled that tremendous potential for collaboration in supports the Initiative for ASEAN the 6th MGC Ministerial Meeting had the preservation of world heritage sites in Integration, and the Master Plan on recognized the wealth of natural resources MGC countries, given their civilizational ASEAN Connectivity, that helps the and expertise available in the MGC heritage and the expertise in this area. narrowing of the development gap, and sub-region, and the complementarity They recalled Thailand’s offer made at contributes towards the implementation amongst small and medium enterprises the 6th MGC Ministerial Meeting to work of the ASEAN Community Vision 2025. (SME) in MGC countries in terms of with India in this important area and 3. The Ministers welcomed the product, technology, human resources tasked the Senior Officials to take follow- completion of construction by India of and market. They concurred with the up action. the MGC Textiles Museum in Siem Reap, concept note circulated by India after 12. The Ministers agreed to Cambodia, thanked all partner countries the 6th MGC MM and instructed SOM enhance tourism cooperation among on its operationalisation and decided to to consider the establishment of MGC MGC countries through jointly conducting jointly collaborate on the promotion of the Joint Working Group of the Cooperation tourism marketing and promotional Museum as a popular tourist attraction in Micro, Small and Medium Enterprises activities, exploring tourist destination for through effective ways. The Ministers to review and monitor cooperation in the outbound tour operators and media of appreciated the short documentary film SME sector, including the participation of MGC countries and developing Mekong on the Museum commissioned by India. the private sector, wherever applicable, tours for Indian tourists. An early harvest 4. The Ministers appreciated and promote exchange of best practices. “Buddhist Trail” tour should be explored India’s contribution to capacity building .7. Minister had recognised at the as a starting point and in this regard, and human resource development in 6th MGC Ministerial Meeting, the need Ministers took note of Myanmar’s offer to the CLMV countries, including over 900 for sharing information and cooperation serve as the coordinator on the initiative. annual scholarships under the Indian in Pandemics Management through the The Minister instructed SOM to designate Technical and Economic Cooperation threat of drug resistance in Malaria. The point of contact for tourism cooperation. (ITEC) programme. The Ministers agreed Ministers tasked SOM to examine the 13. The Ministers took note of on the need for effective utilization of Concept Note circulated by India and progress made towards the revival of these scholarships including those consider convening an Expert meeting Nalanda University, and commended granted to study at Nalanda University. to discuss the Threat of Drug Resistant it being inscribed as a UNESCO World Ministers welcomed the suggestion of Malaria. Heritage Site on 15 July 2016. To India that scholarships be utilized to 8. The Ministers noted that the preserve the rich heritage of intra-Asian train faculty members for the Centres guidelines for the utilization of the India- interactions, the Ministers welcomed for English Languages Training (CELTs), CLMV Quick Impact Projects Fund were India’s proposal on the establishment of Entrepreneurship Development Centres circulated by India and that 20 projects a Common Archival Resource Centre at (EDCs) and the Vocational Training have been identified for the fund (5 for Nalanda University to facilitate research Centres (VTCs) established by India so as Vietnam, 10 for Cambodia, 3 for Lao on the Mekong Ganga deltaic region. to provide them long term sustainability. PDR and 2 for Myanmar). 5 projects in 14. The Ministers tasked SOM 5. The Ministers recognised the Cambodia and 5 in Viet Nam are already to review and update the Vientiane significance of ensuring food security under implementation. The Ministers Declaration, the Hanoi Plan of Action and the Phnom Penh Roadmap to better for the citizens of the MGC countries. committed to kick start project work in reflect the new regional context and They acknowledged that despite rice 2016-2017. respond to the development needs of being the most important crop in MGC 9. The Ministers welcomed member countries. countries, rice production continues to the consultation between ASEAN 15. The Ministers adopted the Plan face many challenges and also the need Connectivity Coordination Committee of Action to Implement Mekong-Ganga to cooperate among others, in research and India and agreed to discuss the Cooperation (2016-2018), which contains and development on production of quality extension of the Trilateral Highway the future direction of Mekong Ganga seeds, short duration and stress-tolerant through Cambodia, Lao PDR and the Cooperation for the next three years. varieties. The Ministers welcomed new highway to Viet Nam. In this regard, the concept note on project of rice the Minister agreed to step up efforts (Excerpted from Joint Statement of the 7th production and downstream processing towards enhancing connectivity between Mekong-Ganga Cooperation Ministerial Meeting, circulated by India after the 6th MGC India and the Mekong Sub-region. Vientiane, 25 July 2016)

Mekong-Ganga Policy Brief November 2016 7 News on Mekong-Ganga Cooperation

Indian Firms Urged to Invest in Kingdom

Cambodian officials and private sector potential here in this growing economy, Kingdom’s attractive incentive and tax representatives met a visiting Indian such as the energy sector, infrastructure, policy – a nine-year tax holiday and 20 business delegation to pitch for more food processing and agriculture,” Bhatia per cent corporate tax – was the lowest Indian investment in the country and said. He said the meeting would give in the region. While Indian investors were to explore ways of increasing the Indian investors a better idea of export already looking at the garment sector relatively low level of bilateral trade and import opportunities, adding that in Myanmar, Cambodia could attract and investment. “We have only $88 total bilateral trade between the two investments in the tourism sector, he said. million in investment from India so nations was about $160 million a year. This could entail, he suggested, aiding far, which is a small amount, so we Local investment officials told their Cambodian counterparts in training want to attract more investors from the visiting delegation that Cambodia the tourism workforce. Another sector India,” explained Commerce Minister would welcome more Indian investment, that could see potential investment is Sun Chanthol, who highlighted the particularly in its agro business, the agro sector, where Indian businesses Kingdom’s favourable investment laws tourism and manufacturing sectors. could provide consultancy services and macroeconomic stability. Sanjay Suon Sophal, Director of Public Relations to farmers, helping them address Bhatia, President of the Federation and Investment at the Council for issues such a fertiliser use and crop of Indian Chambers of Commerce Development of Cambodia (CDC), planting. “Indian investors should invest and Industry, said that the delegation said Indian investors could tap into in these focus sectors, which have the represented multiple sectors and that the Cambodia’s potential to produce rice, most potential,” he added. two Memoranda of Understanding signed corn, cassava, sugarcane, rubber, during Indian Vice President Mohammad cashew nut and peppercorn, as well as (Excerpted from www.phnompenhpost.com on Hamid Ansari’s visit in September was livestock farming and aquaculture. He 9 December, 2015) a good starting point. “There is huge ended his pitch by adding that the © Phnom Penh Post

Thailand Turns to Mekong Neighbors, Cambodia Attracts Myanmar to Diversify Exports US$ 3.3 Billion Thai policy makers have found a way to reverse a slump in exports, close to Thai Investment border of about $170 billion market that is growing by more than 6 percent a year. As shipments to China, Europe and the U.S. slow, Thailand’s government is Cambodia attracted investment projects crafting a strategy to deepen links with Cambodia, Laos, Myanmar and Vietnam, an with a total capital of 3.3 billion U.S. economic bloc known as the CLMV. Thailand is spending about $83 billion over the dollars in the first six months of 2015, next seven years to build new railways, roads and customs checkpoints to remove according to the figures of the Council for bottlenecks that hamper trade with its neighbors. It’s also negotiating with China the Development of Cambodia. Domestic and Japan to construct high-speed rail networks that may connect the nation’s investors topped the chart among all manufacturing and shipping hubs with buyers and suppliers stretching from investors in Cambodia with a total venture Yunnan in southern China to India’s northeastern frontier. “With these new rail and of 2.92 billion dollars, followed by China road links to our neighbors, we will have very strong potential markets,” Commerce with 254 million dollars, Vietnam with 28 Minister Apiradi Tantraporn said in an interview on Oct. 2. “Thailand is in the heart million dollars and Japan with 25 million of ASEAN and Asia, so we have to make the most of the location.” dollars. The figures said some 2.53 billion The CLMV economies are projected to expand at more than twice that pace, dollars were invested in infrastructure, according to World Bank data. The fastest-growing, at 8.5 percent, is Myanmar, 360 million dollars in industries, 352 which emerged in 2010 from half a century of military rule and will hold a general million dollars in agriculture and 74 election next month. Imports to the CLMV region rose to about $167 billion in 2014, million dollars in tourism. The Southeast according to the bank. “If Thailand can become the leader of the Mekong region, Asian country has been encouraging there will be great potential,” Kyoichi Tanada, head of Toyota Motor Corp.’s unit in investments in agriculture, agro-industry, Thailand, told reporters at a factory in Samut Prakarn province near Bangkok. India transport, energy, export-oriented is seeking to deepen economic partnerships with ASEAN member states as part processing and manufacturing, tourism of President Narendra Modi’s “Act East” policy. “Thai people are more familiar with and oil and gas. China, and we need to introduce and get them familiar with the Indian market,” Apiradi said. (Excerpted from www.news.xinhuanet.com on 18 September, 2015 ) (Excerpted from www.bloomberg.com on 6 October, 2015) © xinhuanet.com © www.bloomberg.com

8 Mekong-Ganga Policy Brief November 2016 News on Mekong-Ganga Cooperation

India to Boost Investment in Vietnam Given India, Cambodia Sign Improving Economic Status Two MoUs Vietnam will soon be an international India has had 15-20 business delegations Hon’ble Vice-President Hamid Ansari investment magnet that Indian from 20 sectors visiting Ho Chi Minh on signed two Memorandums of enterprises cannot ignore when looking City alone, she said. Another business Understanding — on tourism, and on the around Asia for a destination, experts delegation will visit Vietnam in the coming Mekong-Ganga Cooperation Initiative said at a seminar in Ho Chi Minh City. weeks to study the local market, she — with Cambodian Prime Minister Hun The attractiveness of the 90-milion-strong told Tuoi Tre News. Some areas where Sen following a session of delegation- market, of which the full potential will likely India sees potential still to be tapped level talks. The Mekong-Ganga MoU be realized following the signing of many include textiles, leather, pharmaceuticals, related to five ‘quick impact projects’, free trade pacts, is hard to overlook, they tourism and agriculture, she added. “We one of which was a $50,000-grant to said at the conference on “Vietnam Trade are also looking at long-term partnerships Cambodia for the upgradation of an and Business Outlook 2015 – 2016” on in energy and infrastructure development October 7, 2016. Vietnam has signed free and IT sectors,” she said. The Indian Entrepreneurship Development Centre. trade agreements (FTAs) with South Korea government has recently set up a Special The other four projects included two in and the Eurasian Economic Union, while Purpose Vehicle (SPV) mechanism to healthcare, especially to do with malaria, actively negotiating an FTA with the EU attract Indian investment in Vietnam one on agriculture and one on women’s and another with 11 other countries under and other regional countries, including empowerment. The tourism MoU was the Trans-Pacific Partnership, said Tran Cambodia, Laos, and Myanmar, she said. aimed at boosting tourist movement Quang Huy, General Director of the South With regard to boosting connectivity between the two countries. Following West Asia & Africa Markets Department and cultural relations, Vietnam and the meeting with Mr Hun Sen, Mr Ansari under the Ministry of Industry and Trade. India should beef up cooperation in also addressed Cambodia’s Council Vietnam is one of the fastest-growing tourism and entertainment, which would of Ministers, the first such address economies in the region, enjoying a be a win-win situation, the diplomat by a high-level foreign dignitary. degree of macroeconomic stability with remarked. “For that we would need some “There is good scope for sharing vast potential for future development, visa waiver conditions as Indians often experiences for mutual benefit said Smita Pant, Consul General of India become major travelers and spenders,” between our two countries. Agriculture in Ho Chi Minh City. Similarly, India is she said. “I have been informed that and agro processing sector, mining, registering good growth and its economy Bollywood producers are ready to come oil and gas, and small and medium is expected to grow faster than other and film in some of the locations offered enterprises offer opportunities for trade major emerging economies, Consul by the ASEAN region,” she added. and investment by Indian business General Pant said. This creates strong ties Small steps like business visas or direct between the two countries within the ‘three flights would go a long way in furthering houses,” he said in his speech. Cs’, Commerce, Culture, and Connectivity, trade and investment, which have been The Vice President also mentioned which are the defining features of this identified as priority areas of cooperation a Special Purpose Vehicle with regard relationship, she said. Cooperation in by the leadership of the two countries, to the CLMV (Cambodia, Laos, trade and investment has been identified Consul General Pant said. Myanmar and Vietnam) countries, a as a priority, and the two nations have set decision initially announced by Finance (Excerpted from www.tuoitrenews.vn on 10 up institutional mechanisms for enhancing Minister Arun Jaitley in his Budget. “As December 2015) these opportunities, she added. In 2016, © tuoitrenews.vn part of our initiatives, the government has recently set up a Special Purpose Vehicle to attract Indian investments to Further Readings Cambodia and other CLMV countries. We hope to launch this new initiative soon l Vietnam seeks Indian investment in infrastructure, IT and education and I am confident that in the near future, sectors, , 11 November 2014. The Economic Times more Indian companies will explore l CMLV countries unified market soon, Business Standard, 20 March 2015 the investment opportunities,” the Vice l Myanmar extends e-Visa to business, TTR weekly, 15 July 2015. President said. l Understanding Laos’ Special Economic Zones: Untapped Potential, The Vice-President on Wednesday ASEAN Briefing, 5 October 2015 l North east is a ‘natural partner’ in India’s Act East Policy: Sushma Swaraj, attended a ceremonial welcome by Mr. Business Standard, 7 October 2015 Hun Sen at the historic Peace Palace, l India to boost investment in Vietnam given improving economic status, prior to which he laid wreaths at the tuoitrenews.vn, 10 December, 2015 Independence Monument and the Royal l India eyes investment opportunities in Cambodia, Laos, Myanmar, Vietnam, Memorial. Asia News Network, 19 January, 2016 l Thai Smile expands India services, TTR weekly, 7 October 2016 (Excerpted from www.thehindu.com on l Myanmar makes progress on new airport, TTR weekly, 6 September 2016 17 September, 2015) © The Hindu

Mekong-Ganga Policy Brief November 2016 9 News on Mekong-Ganga Cooperation

Finance Minister to Take up US$ 6 Billion Plan India Plans to Set up to Build NE-Thai Road Linkage SEZ in Myanmar

The finance ministry will shortly consider government will also execute the 431-km- It is not just Iran’s Chabahar port and a proposal moved by Minister for Road long east-west industrial corridor in the connectivity to Eurasia that has caught Transport and Highways and Shipping same region. Government officials also attention of the Modi government. India Mr. Nitin Gadkari to invest $6 billion in hinted that roads in Arunachal Pradesh plans to set up a SEZ in Sittwe in Myanmar building roads and related infrastructure would be built separately with Rs 25,000 where it has already built a port. The across northeast extending up to the Thai crore investments because they were proposed SEZ by India will rival Chinese border via Bangladesh, Bhutan, Nepal not subject to funding from multi-lateral SEZ located 80 km down of strategically- and Myanmar. As per the proposal, agencies like World Bank and ADB after located Sittwe as Delhi plans to make it as an economic hub. The aim of the Asian Development Bank (ADB) has China stated its objections 4 years back. SEZ is to help expand India’s footprints come forward to provide $3 billion in These projects are part of larger in South East Asia amid China plans soft loans over the next five years. Since plan to strengthen the road network and for massive road and port connectivity India does not have border connectivity infrastructure in the northeastern states with Thailand, Myanmar is being roped projects in the region as part of its One that are being looked at as a gateway Belt One Road initiative. India’s plan for in to facilitate this extension, officials to South and South East Asian trading involved in negotiations said. “Myanmar SEZ was explained by MoS External and investment partners. The finance is not averse to extension of Bangladesh, Affairs VK Singh at the India-Asean minister will also consider making an Bhutan, India, Nepal (BBIN) road network Foreign Ministers meet at Laos. allocation of at least $1 billion in the up to the Thai border. We propose to invite “India remains committed in its next budget for development of road Myanmar officials for the BBIN meeting support for implementation of the master next month in Siliguri to bring them networks and related infrastructure plan on Asean connectivity as well as on board,” a top official told Financial across the N-E states. The BBIN motor and the post-2015 agenda for Asean Chronicle on Sunday. vehicles agreement was signed on June connectivity. Even as we work to enhance Apart from extending the BBIN 15 in Bhutanese capital Thimphu. The our physical connectivity and explore project up to the Thai border via Myanmar, draft protocol finalised on September the extension of the India-Myanmar- the government last week accorded in- 8-9, 2015, at Dhaka would be concluded Thailand Trilateral Highway into Lao PDR, principle clearance to expand and four- between four countries at a meet to be Cambodia and Vietnam, I urge Thailand lane the Itanagar-Banderdewa stretch held in Siliguri where Myanmar will be and Myanmar to join hands and find on National Highway 52A. It would also represented. The project connecting solutions for the conclusion of the motor consider a proposal to double-lane the Kolkata with Bangladesh, Bhutan and vehicles agreement and I would like to 407-km-long Potin-Pangin project with an Nepal is already under implementation. invite Asean countries to participate in investment of Rs 2,000 crore. The Centre the Sittwe SEZ,” he said. will also execute the 2,100-km-long road (Excerpted from www.mydigitalfc.com on (Excerpted from www.economictimes.com on between Mago and Vijaynagar to connect 8 November, 2015) 2 August, 2016) Tawang and Changlang districts. The © mydigitalfc.com © Economic Times

Vietnam Affirms Close Cooperation in Transport with Laos, Cambodia

The transport ministries of Vietnam and visions towards 2030, and the opening of transport. Meanwhile, the Long Binh – Laos have affirmed close cooperation a transnational transport route connecting Chrey Thom bridge connecting border in all aspects of the transport sector at Ha Tinh (Vietnam), Khammouane localities of the two nations was set to an annual bilateral ministerial meeting in (Laos) and Nakhon Phanom (Thailand) become operational soon. Hanoi on August 22. Vietnamese Minister provinces. They pledged to promptly Both host and guest said they of Transport Dinh La Thang and Lao complete the investment research of would propose an around-the-clock Minister of Public Works and Transport a railway project linking Vientiane–Tha custom procedure applied at all border Bounchanh Sinthavong reviewed Khet (Laos) and Mu Gia-Tan Ap–Vung gates as part of a bilateral agreement transport cooperation between the two Ang (Vietnam), while closely working in on water transport. On the occasion, countries in recent time and defined the prefeasibility study for the highway the King of Cambodia decided to grant tasks in the next period. They agreed route between Vientiane–Pac San (Laos) orders to Minister Thang and his deputy to promote transport infrastructure and Thanh Thuy (Vietnam). Nguyen Van The for their contributions to connectivity between the two countries They agreed to speed up expanding cooperation between the two through the early signing of the Vietnam- the organisation of a bilateral session on ministries. Laos Memorandum of Understanding traffic connectivity agreement and the (Excerpted from www.english.vietnamnet.vn (MoU) on cooperative strategy in amendments to a protocol implementing on 23 August, 2015) transport in the 2016-2025 period with Vietnam-Cambodia pact on road © vietnamnet.vn

10 Mekong-Ganga Policy Brief November 2016 News on Mekong-Ganga Cooperation

Tata Group Set to Focus on Vietnam, Myanmar India to Build Satellite Tata Sons have zeroed in on Vietnam by many as the third pillar of economic Tracking Station in and Myanmar as markets that need to growth within Asia, after China and India,” be penetrated into. Growing economies said Shashank Tripathi, partner and strategy Vietnam and an expanding middle class, as well leader at PwC. In an interview to its quarterly as pacts with global powers and tax in-house magazine, Tata Group Resident India will set up a satellite tracking and incentives have made these countries Director for the Asean region, KV Rao imaging centre in southern Vietnam that important for firms that seek to reach out said: “From a group perspective, we have will give Hanoi access to pictures from further into the ASEAN and global markets. identified two focus markets: Vietnam and Indian earth observation satellites that “The demographics and the economic Myanmar.” The group has a memorandum cover the region, including China and the development stage of these countries of understanding each in the two countries South China Sea, Indian officials said. represent a market for several products for power projects. “We are now working While billed as a civilian facility - earth and services from the Tata Group,” a Tata on deepening the engagement with these Sons spokesperson said. “Tata companies markets from a strategic and operational observation satellites have agricultural, such as Tata Power, Tata Projects, Tata point of view,” he added. scientific and environmental applications Chemicals, Titan, Tata Motors, Rallis (and) The Vietnam-EU Free Trade Agreement, - security experts said improved imaging Tata International, among others, are either signed in Brussels on December 2 after technology meant the pictures could also active or are exploring opportunities in nearly three years with 14 rounds of be used for military purposes. the Vietnam and Myanmar markets,” the negotiation, will remove nearly all tariffs “In military terms, this move could spokesperson said in an e-mail, responding between the Southeast Asian country and be quite significant,” said Collin Koh, a to ET’s queries. For the business house, the EU once implemented by 2018. The marine security expert at Singapore’s Singapore is the nodal country for its ASEAN country becoming a global trade partner for S. Rajaratnam School of International markets that include more than 660 million the US, EU and China in exports makes it people with a $2-trillion economy. ASEAN important for Indian firms. While recent years Studies. “It looks like a win-win for both members include Indonesia, Malaysia, the have been a bit sluggish for many ASEAN sides, filling significant holes for the Philippines, Singapore, Thailand, Brunei, countries affected by global economic Vietnamese and expanding the range Myanmar, Cambodia, Laos and Vietnam. conditions, Vietnam was among the few to for the Indians.” The state-run Indian “The region has recorded more than record robust GDP growth 6% in 2014. Space Research Organisation (ISRO) 5% GDP growth on average since the year will fund and set up the satellite tracking 2000 and, when combined, Asean nations (Excerpted from www.economictimescom on and data reception centre in Ho Chi Minh would represent the world’s seventh-largest 10 February, 2016) City to monitor Indian satellite launches, economy. The region, is therefore, regarded © Economic Times the Indian officials said. Indian media put the cost at around $23 million. India, RIS Study on Prospects for a CLMV Fund: whose 54-year-old space programme is Implementation of Its Recommendation accelerating, with one satellite launch scheduled every month, has ground The Union Cabinet chaired by the Indian Prime Minister Narendra Modi gave its approval stations in the Andaman and Nicobar to create a Project Development Fund (PDF) with a corpus of Rs.500 crore (US $75 islands, Brunei, Biak in eastern Indonesia million) for catalysing Indian economic presence in the Cambodia, Laos, Myanmar and Mauritius that track its satellites in and Vietnam (CLMV). The setting up of the PDF is in accordance with a study by RIS1, the initial stages of flight. prepared for Department of Commerce, Ministry of Commerce and Industry, Government of India, titled ‘India’s Strategy for Economic Integration with CLMV’ which recommended “This is at the beginning stages, such a policy step. The study recommended putting in place a Project Development we are still in dialogue with Vietnamese Company (PDC) in order to optimise on the existing Trade Institutions/infrastructure in authorities,” said Karnik. India has CLMV countries to get access to countries/regions where India does not have presence extended a $100 million credit line for and help create Regional Value Chains (RVCs). Hanoi to buy patrol boats and is training The PDF shall be housed in Department of Commerce and operated through the Vietnamese submariners in India while EXIM Bank. The PDF shall be governed by an Inter-Ministerial Committee under the Hanoi has granted oil exploration blocks chairpersonship of the Commerce Secretary. CLMV countries have a unique position in to India in waters off Vietnam that are the regional value chains and offer a gateway for market access to China, the European disputed with China. Under Prime Union and other markets due to various trade agreements. While opportunities are a plenty in CLMV region, Indian entrepreneurs’ endeavours in these countries have, thus Minister Narendra Modi, India has shown far, been limited due to limited information, infrastructure and other contingent risks. The a greater willingness to step up security PDF shall benefit India’s industrial community for business expansion, and to maintain ties with countries such as Vietnam, cost competitive supply chains, besides integrating with global production networks and overriding concerns this would upset serving as a conduit of regional economic integration in consonance with India’s Act East China, military officials said. Policy. (Excerpted from in.reuters.com on 25 January 1 Das, Ram Upendra (2015) “India’s Strategy for Economic Integration with CLMV”, Department of 2016) Commerce, Ministry of Commerce and Industry, Government of India. New Delhi. © Reuters.com

Mekong-Ganga Policy Brief November 2016 11 Resources India’s Foreign Policy and toward Asia, with India playing a Mekong-Ganga Axis Regional Multilateralism pivotal role. In this book CSIS presents Pankaj Mittal, Ravi Bhushan, Daisy, Arndt Michael, Palgrave Macmillan key recommendations in the areas of D.K. Printworld, 2015 Basingstoke, 2013 diplomacy and security, infrastructure ISBN: 8124608199 9788124608197 ISBN: 9781137263124 1137263121 and energy, and enhancing people- The contents of this book Mekong-Ganga Arndt Michael examines to-people collaboration among India, Axis centre around India’s association the genesis and evolution ASEAN, and the United States. with most of the countries of the region, of the organizations, such especially those on either side of the as, South Asian Association ASEAN-India: Deepening Mekong River. Most of the South-East for Regional Cooperation, Economic Partnership in Asian countries were the Bay of Bengal Mekong Region influenced by more than Initiative for Multi Sectoral- Prabir De, Research and Information two foreign cultures, Economic Cooperation, System for the Developing Countries, though they have an the Indian Ocean Rim-Association for New Delhi, 2014 indigenous culture. The Regional Cooperation and the Mekong ISBN: 9788171221028 8171221025 Chinese and Indian Ganga Cooperation Initiative, by using The Mekong countries cultures had impacted the theoretical perspective of norm comprising Cambodia, them the most, in localization. The study focuses especially Lao PDR, Myanmar, addition to the European on India - a founding member in all four Thailand and Vietnam influence. However, only India s impact organizations - and traces the impact of grew rapidly during the was peaceful and, to a great extent, non- India’s foreign policy on the discourse, last decade. With the political. This paved the way for many the development and the institutional exception of the years developments in architecture, religious designs of regional multilateralism. of global financial crisis, engagements, inter-culturality, syncretism magnitude of growth rates and duration of cultures, inter-literariness, composite Greater Mekong Subregion: are remarkable in Mekong history. Given literary cultures, religious arts, trade From Geographical to a long historical and cultural link between relations and so on. Socio-economic Integration India and Mekong countries, there are Omkar Lal Shrestha and Aekapol ample scopes for co-operation and so ASEAN-India Cultural Links: Chongvilaivan, Institute of Southeast also potential gains. The book presents Historical and Contemporary Asian Studies, 2013 the strategy to strenghten the partnership Dimensions ISBN: 978-981-437968-7 between India and Mekong countries. ASEAN India Centre (AIC) and This book aims to Research and Information System for assess the recent Look East to Act East Policy: the Developing Countries (RIS), 2015 economic, social and Implications for India’s AIC - RIS published the proceedings of political developments Northeast the ASEAN-India Cultural Links: Historical in the GMS and identify Gurudas Das and C. Joshua and Contemporary Dimensions. This emerging opportunities Thomas, Routledge, 2016 volume has the collection of research and challenges facing ISBN: 978-1-138-10045-9 papers presented by the successful transition This volume captures the success eminent scholars from towards a market-driven economy. The of India’s Look East Policy (LEP) in ASEAN countries, India deliberations here shed light on the promoting economic engagement with and several other countries development stages and offer policy neighbouring countries in Asia and at the Conference. This recommendations for pushing forward simultaneously its limitations in propelling single volume would be subregional cooperation. growth in the bordering North Eastern a valuable reference for Region. It analyses the instrumental scholars and researchers Enhancing India-ASEAN role of LEP in bringing as well. Connectivity a tectonic shift in Ted Osius and Raja C. Mohan, India’s foreign trade by India’s Strategy for Economic Rowman & Littlefield, 2013 redirecting the focus from Integration with CLMV the West to the East, thus ISBN: 978-1-4422-2509-1 Ram Upendra Das leading to a fundamental With Myanmar’s opening and improved Ministry of Commerce and Industry, relations between India change in the nature of India’s economic Government of India, 2015 and Bangladesh, an Historically, India and Cambodia, Laos, opportunity exists for interdependence. Besides discussing Myanmar and Vietnam (CLMV) region India to boost trade and foreign trade, it expounds as to how LEP have had civilizational, cultural and security ties with mainland made India play an important role in the economic relations since ancient times. and maritime Southeast emerging Asian security architecture and The Report provides analytical and Asia. The United States is liberated Indian foreign policy from being empirical basis for India’s economic committed to rebalancing centred on South Asia.

12 Mekong-Ganga Policy Brief November 2016 Resources integration with the CLMV Plan on ASEAN Connectivity 2025 (MPAC ways to further strengthen the economic region and suggests 2025). partnership. It primarily deals with the certain policy steps economic integration issues between that could harness the ASEAN-India Air Connectivity ASEAN and India, and vast commercial and Report assesses policy priorities, developmental potential ASEAN India Centre (AIC) and effectiveness, implemen- that this relationship offers. Research and Information System for tation imperatives and the Developing Countries (RIS), 2016 challenges. Each chapter Ganga to Mekong: A Cultural AIC - RIS published a Report titled in this book tries to capture Voyage through Textiles “ASEAN-India Air Connectivity Report”. essential features of the Hema Devare, Manohar Publisher, The Report addresses the issues and crosscutting issues and attempts to draw 2016 challenges concerning the air connectivity some policy implications. ISBN: 9350981084 978-9350981085 between India and ASEAN, especially Over the centuries, textiles relating to air cargo that would help to The Lao PDR Visit: turned into vehicles of unlock the trade potential of the region Constructing the Arc of a New culture that built the by removing constraints Asian Century foundation for an enduring and bottlenecks to growth. Ministry of External Affairs (MEA), multi- layered and multi- It also provides a set Government of India, 2016 coloured relationship. The of recommendations to Prime Minister Narendra Modi visited painted textiles from the strengthen air connectivity Vientiane from 7-8 September 2016 at the Coromandel coast, the between India and invitation of H.E. Mr. Thongloun Sisoulith, block-printed fabrics and the double-ikat ASEAN, and enhance Prime Minister of Lao PDR, to attend the patola from Gujarat enticed Southeast economic integration twin summits - 14th ASEAN-India Summit Asian royalty and masses alike. These between ASEAN and and 11th East Asia Summit. The Summits trade textiles, considered ritually powerful India. was attended by Heads of and imbued with magical qualities played State/Government of the an integral role in binding India with An Eastern Journey: Strength- 10 ASEAN and 18 East Southeast Asia while becoming a part ening Bilateral and Multilateral Asia Summit participating of the regional folklore, ceremonies and Diplomacy countries respectively. rituals. This books argues that the cultural Ministry of External Affairs (MEA), On the sidelines of the amalgam was here to stay as solid as the Government of India, 2016 summit, Prime Minister rocks of Borobudur and Konark and as At the invitation of Prime Minister Nguyen Modi also held bilateral meetings with intricately woven as the double-ikat patola Xuan Phuc, Prime Minister Narendra which is the cultural legacy of India in several leaders.This book presents the Modi paid an Official Visit to the Socialist Southeast Asia. annotated facts of Indian Prime Minister’s Republic of Vietnam visit to Lao PDR. from 2-3 September Master Plan on ASEAN 2016. Covering the full Connectivity 2025 Enhancing India-Myanmar range of bilateral and Border Trade: Policy and The ASEAN Secretariat, Jakarta, 2016 multilateral cooperation Implementation Measures Since the adoption of the in their discussions, the Ram Upendra Das, Master Plan on ASEAN two leaders shared the Ministry of Commerce and Industry Connectivity 2010 (MPAC view that Vietnam - India and RIS, 2016 2010), notable progress relations have been built ISBN: 81-7122-116-3 has been made. However, on a firm foundation, with close links in India-Myanmar border much remains to be done culture, history and civilization, mutual trade assumes special to realise the vision of a trust and understanding as well as the significance. This study seamlessly connected strong mutual support in international ASEAN. Particular areas and regional forums. situates border trade to be addressed include the various in a broader context by highlighting some services sectors, which are lagging Celebrating the Third Decade conceptual contours goods sectors in terms of connectivity as and Beyond: New Challenges to relating to development zone approach; a result of tighter investment restrictions, ASEAN-India Economic a paradigm of peace creating prosperity; as well as challenges relating to the Partnership mobility of skilled labour, and energy two-way causality between domestic Prabir De and Suthiphand and rail connectivity. The remaining 52 and external imperatives; combining uncompleted initiatives in MPAC 2010, Chirathivat, Knowledge World, 2016. export-led growth with growth-led export which have a clear sector owner and ISSN No: 9789383 949983 strategy; and adopting an integrated do not overlap with the newly proposed This book reviews the past of ASEAN- approach towards trade in goods, trade initiatives, are included in the Master India relations and suggests the in services and investment.

Mekong-Ganga Policy Brief November 2016 13 Statistical Indicators

Socio and Macro Indicators of MGC Countries, 2014 Description India Thailand Cambodia Lao PDR Myanmar Vietnam Population, total (million) 1300.00 67.73 15.33 6.68 53.44 90.73 GDP (current billion US$) 2042.44 40.43 16.77 11.716 64.33 186.20 GDP (PPP current billion US$) 7347.14 1067.03 50.19 35.72 - 512.58 GDP per capita (current US$) 1576.82 5969.94 1094.58 1751.4 1203.84 2052.32 5-Year GDP Growth Rate (%), (2000-2014) 7.20 3.60 6.98 7.90 - 5.90 Agriculture, value added (% of GDP) 17.39 10.50 30.43 27.67 - 17.70 Industry, value added (% of GDP) 30.01 36.89 26.99 31.43 - 33.21 Services, value added (% of GDP) 52.60 52.73 42.58 40.90 - 39.04 Saving Rate (GDS as % of GDP) 31.11 30.76 17.61 20.89 - 30.11 Investment Rate (GCF as % of GDP) 34.09 24.15 22.00 30.12 - 26.83 Trade (% of GDP) 48.80 131.94 129.03 90.13 - 169.53 Inflation Rate, (%) 6.35 1.89 3.86 4.14 5.47 4.09 Source: World Development Indicators, The World Bank

Intra-Regional Trade ASEAN MGC BIMSTEC SAARC Year Value Share Value Share Value Share Value Share (US$ Billion) (%) (US$ Billion) (%) (US$ Billion) (%) (US$ Billion) % 2005 165.46 25.3 12.15 4.9 11.85 5.2 8.51 6.5 2015 285.43 23.8 54.37 8.2 35.77 6.7 23.36 7.0 CAGR (2005-2015), % 5.60 16.20 11.70 10.60 Source: Calculated based on DOTS, IMF

India’s Total Trade with Regional Blocks

80 69 2015 70 2010 60 53 2005 50

40 2000 28 US$ Billion 30 20 19 21 11 17 20 13 7 8 10 7 1 4 3 2

0 ASEAN MGC BIMSTEC SAARC

Source: Drawn based on DOTS, IMF

14 Mekong-Ganga Policy Brief November 2016 Statistical Indicators

India’s Export to India’s Import from MGC Countries by Partners* MGC Countries by Partners*

80 80

2005 2015 2005 2015 65 58 60 56 56 60 in % in %

40 36 40 33 28 30

20 20 11 9 7 6 1 2 0 1 0 0 0 1 0 0 Combodia Lao PDR Myanmar Thailand Vietnam Cambodia Lao PDR Myanmar Thailand Vietnam

Note: * Share in Total Export to MGC Note: * Share in Total Import from MGC Source: Drawn based on DOTS, IMF Source: Drawn based on DOTS, IMF

India’s Outward FDI Stock to MGC India’s Inward FDI Stock from MGC Countries (2000 to 2014) Countries (2000 to 2014) 200 200 188.22

166.7

150 150

114.29

100 100 US$ Million US$ Million 70.48 58.99

50 50

4.58 8.96 0 0 0.32 0 0 Thailand Cambodia Lao PDR Myanmar Vietnam Thailand Cambodia Lao PDR Myanmar Vietnam

Source: Drawn based on ASEANstat Source: Drawn based on DIPP

India’s Export to MGC Countries (US$ Million) CAGR CAGR CAGR Country 2000 2005 2010 2015 (2000-2005), % (2005-2010), % (2010-2015), %

Myanmar 48.05 111.32 273.26 857.77 18.3 19.7 25.7 Cambodia 7.90 22.68 61.07 145.78 23.5 21.9 19.0 Lao PDR 5.00 4.77 8.23 51.57 -1.0 11.5 44.3 Thailand 509.98 1031.83 2144.92 3132.52 15.1 15.8 7.9 Vietnam 208.03 657.00 2485.12 5334.00 25.9 30.5 16.5 Source: Calculated based on DOTS, IMF

Mekong-Ganga Policy Brief November 2016 15 India’s Import from MGC Countries (US$ Million) CAGR CAGR CAGR Country 2000 2005 2010 2015 (2000-2005), % (2005-2010), % (2010-2015), %

Myanmar 179.18 495.95 1121.00 1066.38 22.6 17.7 -1.0 Cambodia 1.03 0.64 7.68 32.02 -8.9 64.2 33.1 Lao PDR 0.00 0.09 20.04 128.36 0.0 194.2 45.0 Thailand 335.38 1125.16 3948.74 5666.95 27.4 28.5 7.5 Vietnam 12.18 120.16 996.62 2893.50 58.1 52.7 23.8 Source: Calculated based on DOTS, IMF

Mekong-Ganga Policy Brief An RIS Publication on Mekong-Ganga Cooperation (MGC)

The Mekong-Ganga Policy Brief seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of AIC or RIS. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is available from AIC or RIS or can be downloaded from www.ris.org.in. About RIS Research and Information System for Developing Countries (RIS) is a New Delhi-based autonomous policy research institute that specialises in issues related to international economic development, trade, investment and technology. RIS is envisioned as a forum for fostering effective policy dialogue and capacity-building among developing countries on global and regional economic issues. The focus of the work programme of RIS is to promote South-South Cooperation and collaborate with developing countries in multilateral negotiations in various forums. RIS is engaged across inter-governmental processes of several regional economic cooperation initiatives. Through its intensive network of think tanks, RIS seeks to strengthen policy coherence on international economic issues and the development partnership canvas. For more information about RIS and its work programme, please visit its website: www.ris.org.in About AIC Considering the work of the ASEAN-India Eminent Persons Group (AIEPG), and its Report with recommendations for forging a closer partnership for peace, progress and shared prosperity, the Heads of the State/Government of ASEAN and India at the ASEAN-India Commemorative Summit 2012, held at New Delhi on 19-20 December 2012, recommended the establishment of ASEAN-India Centre (AIC) using existing resources at New Delhi. AIC was set up at RIS. AIC serves as a resource centre for ASEAN Member States and India to fill the knowledge gaps that currently limit the opportunities for cooperation.AIC undertakes policy research, advocacy and networking activities with organizations and think-tanks in India and ASEAN, with an aim to promote the ASEAN-India Strategic Partnership. For more information please visit http://aic.ris.org.in ______Contact us at:

ASEAN-India Centre at Research and Information System Core IV-B, Fourth Floor, India Habitat Centre for Developing Countries (RIS) Lodhi Road, New Delhi-110 003, India http://aic.ris.org.in Ph.: +91-11-24682177-80, Fax: +91-11-24682173-74 E-mail: [email protected] website: http://www.ris.org.in

Editorial Team Editor: Dr. Prabir De, Professor/Coordinator, AIC Managing Editors: Dr. Beena Pandey, RIS and Dr. Durairaj Kumarasamy, AIC

16 Mekong-Ganga Policy Brief November 2016 No.8 August 2019

Special Article ASEAN-India Maritime Cooperation: Broad Contour SEAN and India have a rich history freedom of navigation in international Plus (ADMM-Plus), in line with the 2015 of maritime trade and ancient waters, over flights, threat or use of force EAS Statement on Enhancing Regional Acultural linkages. India is closest to intimidate, reducing piracy along Maritime Cooperation. maritime neighbour of Mekong countries the Malacca Straits, cooperating in India is a member of the Expanded as well as ASEAN. Today, over 2/3rd of addressing traditional and non-traditional ASEAN Maritime Forum (EAMF). their merchandise trade has been carried security challenges, including in areas Moreover, India is also active participant through oceans. Maritime cooperation of de-radicalization, prevention of violent in non-ASEAN centric regional fora such thus occupies an important place in extremism, cyber crime and natural as the Indian Ocean Rim Association ASAN-India cooperation as well as India- disaster management. (IORA); Indian Ocean Naval Symposium Mekong relations. East Asia Summit (EAS) has been (IONS); BIMSTEC; and the Council for Economic ties between India and giving focus on maritime security and Security Cooperation in the Asia-Pacific ASEAN are always in the forefront and cooperation. It has been discussed (CSCAP). Maritime security and safety have been deepening day by day. In 2018, also in other ASEAN-centric regional are vigorously debated in these fora. ASEAN was India’s 4th largest trading fora such as ASEAN Defence Minister’s Notwithstanding the past partner, accounting for 10 percent of Meeting Plus (ADMM-Plus), ASEAN activities, the ASEAN and India have to India’s total trade. In the same year, India Regional Forum (ARF) and Expanded undertake collective efforts to address was ASEAN’s 7th largest trading partner. ASEAN Maritime Forum (EAMF). At the three aspects of maritime commons: In 2018-19, total trade between ASEAN 10th East Asia Summit (EAS), held on connectivity, security and cooperation. and India has increased to US$ 96 billion 22 November 2015 at Kuala Lumpur, The key priority of maritime cooperation from less than US$ 65 billion in 2015- Malaysia had recognized enhancing should be to build a safe, sustainable 16. In the same period, India’s export to maritime security as an important and efficient maritime transport system ASEAN has increased to US$ 37 billion element of maintaining peace and in the region as well as maintain the in 2018-19 from US$ 25 billion in 2015- stability in the region and adopted the security in the ocean. According to the 16. The Free Trade Agreement (FTA) in ‘EAS Statement on Enhancing Regional National Maritime Foundation (NMF), goods, implemented in 2010, and the Maritime Cooperation’. The 11th EAS, “the enhancing regional Maritime Domain services trade and investment agreement held on 6-8 September 2015 at Vientiane, Awareness (MDA) could be undertaken between ASEAN and India thereafter adopted declarations on promoting through focused measures such as represent an important effort to enhance maritime connectivity, and certain setting up Coastal Radar Surveillance ASEAN-India economic integration. India specific issues relating to maritime System (CSRS) including radars, electro- has also signed bilateral CEPAs/CECAs security and safety. At the 13th East Asia optic and Automatic Identification System with Japan, Korea, Singapore, Malaysia, Summit (EAS), the leaders welcomed (AIS) sensors; regional agreement on along with the regional FTA with ASEAN. the inclusion of maritime cooperation White Shipping information (unclassified India is a partner of the Regional as a new area of cooperation under the merchant ship information) culminating in Comprehensive Economic Partnership Manila POA, which includes practical a cooperative information Fusion Center (RCEP), which is a comprehensive and comprehensive action lines to (IFC) with linkages with other similar free trade agreement being negotiated promote this area of cooperation. The global centers; and use of a collective between the 10 ASEAN members and leaders expressed support for further data center for Long Range Identification ASEAN’s FTA partners. strengthening maritime cooperation and Tracking (LRIT) of ships on lines Maritime security and cooperation among EAS participating countries in a of the EU (European Union) LRIT Data is necessary element in both foreign collective and holistic manner through Center.” ASEAN-led mechanisms such as the and security policy frameworks. ASEAN At the ASEAN-India Commemorative ASEAN Regional Forum (ARF), and the countries and India have been working Summit, held on 25 January 2018, ASEAN Defence Ministers’ Meeting- closely in securing the trade routes, leaders of ASEAN and India have outlined

Mekong-Ganga Policy Brief August 2019 1 the vision on the future of ASEAN-India Box 1: Sagarmala Strategic Partnership, wherein they have designated ASEAN-India Cooperation India has taken several important initiatives in developing the country’s maritime sector. in the Maritime Domain as one of the One such project is Sagarmala project to modernize India’s ports and shipping sector. key areas of this partnership. India has The programme aims to promote port-led development in the country by harnessing endorsed ‘Blue Economy’ as a new and India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways central pillar of the country’s economic and strategic location on key international maritime trade routes. Components of activity. It encompasses both, the coastal Sagarmala Programme are: (i) Port Modernization & New Port Development: De- areas and the linked hinterland. India has bottlenecking and capacity expansion of existing ports and development of new emphasized the ‘SAGAR’ (Security and greenfield ports; (ii) Port Connectivity Enhancement: Enhancing the connectivity of Growth for All in the Region) concept, at the ports to the hinterland, optimizing cost and time of cargo movement through the Shangri La Dialogue in Singapore in multi-modal logistics solutions including domestic waterways (inland water transport 2018, which reaffirmed India’s key role and coastal shipping); (iii) Port-linked Industrialization: Developing port-proximate in strengthening Blue Economy in the industrial clusters and Coastal Economic Zones to reduce logistics cost and time India-ASEAN region. Given the economic of EXIM and domestic cargo; and (iv) Coastal Community Development: Promoting potential of the oceans, a number sustainable development of coastal communities through skill development & of countries are investing enormous livelihood generation activities, fisheries development, coastal tourism etc. financial, technological and human Source: Ministry of Shipping, India capital to develop maritime economies and are striving to leverage their unique strengths. integration through higher trade and cooperation with ASEAN and MGC At the bilateral level, India and investment, promotion of tourism, and in particular, with respect to tourism, Myanmar have signed the standard building seaports and shipping networks, maritime security, disaster management, operating procedure (SOP) for India- cooperation for improving efficiency of etc. Several ASEAN ports and shipping Myanmar Coordinated Patrol (IMCOR). ports joining ASEAN Ro-Ro and Cruise companies are running terminals and The signing of the pact formalizes a key Network, etc., ASEAN and India may also carry international trade. part of ongoing maritime cooperation decide the possibility of developing RoRo ASEAN and India shall conduct between India and Myanmar in the Bay terminals, ports and building connectivity more cooperation and capacity of Bengal. India has already signed between islands under the Sagarmala building in aquaculture and deep-sea bilateral agreement with Indonesia project (see Box 1). fishing. Besides, greater hydrographic and Thailand for maritime coordinated India has taken steps to augment cooperation through training, capacity patrols. Myanmar is another country with capacity at major ports across building and joint surveys would which India has signed an agreement on the country. New cargo terminals help both to refine the knowledge maritime coordinated patrols. Thus, two of are under construction at ports in and understanding on the maritime the Mekong countries, namely, Myanmar Kamarajar, Ennore, Visakhapatnam, cooperation. These are the areas where and Thailand, have signed agreement V.O. Chidambaranar, Tuticorin, Paradip India can extend effective support to with India for maritime coordinated and Kolkata. Partnership with ports Mekong countries. patrols. Cambodia and Vietnam may located in Myanmar, Thailand, Indonesia, ASEAN countries and India shall consider signing similar agreement with Singapore and Malaysia can make Indian examine national approaches to the India. Recently, coast guards of Vietnam ports important gateways to ASEAN responsible development of marine and India took part in search and rescue countries and vice versa. The ongoing resources including the utilization drill operation to strengthen the maritime Kaladan Multi-Modal Transit Transport of marine-based renewable energy. security ties. project is likely to improve connectivity Emerging technologies are opening Enhancing regional connectivity and between Indian ports on the eastern sea up new frontiers of marine resource trade through direct short-sea shipping board and Sittwe Port in Myanmar, which development leading to mining of and shipping facilitation agreements would not only promote trade links with seabed mineral resources. Low carbon would strengthen maritime connectivity Myanmar but also facilitate transit of shipping, regional fisheries agreements, between ASEAN and India. At present, goods to and from the North East India. ocean surveillance, information sharing, ASEAN and India have been negotiating ASEAN-India maritime connectivity marine biotechnology, cyber security the ASEAN-India Maritime Transport agenda shall consider strengthening and IT services are some of the areas for Cooperation Agreement (AIMTCA). This connectivity between the islands. cooperation. Agreement may provide greater access Islands can be turned into centers of To conclude, ASEAN countries and to maritime services; facilitate the flow of excellence if we implement a stronger India have to identify all such challenges trade through sea; and encourage private inter-island connectivity programme. and plan collaborative responses, in investments in the areas of maritime ASEAN-India islands connectivity has terms of cooperation among naval transportation, port development, etc. gained momentum in recent years with forces, coast guards and other law- ASEAN and India shall take up issues ASEAN’s investments in infrastructure enforcement agencies, capacity-building, such as coastal shipping network (short in its islands, and India’s investments de-confliction of naval encounters, and sea shipping), development of maritime in infrastructure, tourism, agriculture confidence-building at sea. cargo routes, etc., which hold immense (organic and fisheries) and renewable potential. energy development in area Andaman Strengthening maritime connectivity and Nicobar Islands region. There are Prabir De, Professor, RIS would lead to strengthen economic scope to unlock the vast potentials of (Views are author’s own. Usual disclaimers apply)

2 Mekong-Ganga Policy Brief August 2019 Activities Remarks by External Affairs Minister at the 10th Mekong-Ganga Cooperation Ministerial Meeting

ince its inception in the year 2000, Excellencies, we seek your help in We should look at launching it before Mekong Ganga Cooperation has sourcing copies of historical documents January 2020. come a long way. This oldest S and replicas of art works and artefacts We plan to organize a regional sub-regional cooperation organization for the CARC. These artworks and conference on traditional and turns 20 next year. The MGC is as artefacts will be made digitally available complementary medicine in November much a celebration of our long and rich by the CARC to scholars from around the this year, where we will be inviting health history of trade, cultural and people- world interested in academic research regulators and traditional medicine to-people exchanges as it is a vehicle on India-Southeast Asia historical and practitioners. There would also be an to advance modern day cooperation civilisational linkages. exhibition on the sidelines. to bring progress and prosperity to our RIS, New Delhi is working with peoples. We warmly welcome Viet Nam’s The first MGC Business Forum, held Vietnam Academy of Social Scineces suggestion that the 20th anniversary in New Delhi in January 2018, was very (VASS), Hanoi to host the third of MGC should be commemorated well-attended. We should plan to hold international conference on ASEAN-India in a befitting manner with a series of this event perhaps biennially, and orgnise Cultural and Civilisational Linkages in meaningful celebratory events. the second edition in Vietnam to coincide Hanoi in October 2019. My colleague, with a large trade event. The MGC Quick Impact Projects H.E. V. Muraleedharan, Minister of State Connectivity is a major focus area of (QIPs) are moving at a steady pace. A for External Affairs will represent India at our cooperation. We look forward to the total of 24 projects have been completed the conference. so far, including 15 in Cambodia and 9 in early completion of the India-Myanmar- Nalanda University is actively Viet Nam. In addition, currently one project Thailand Trilateral Highway and its working with the ASEAN University in Cambodia and 3 projects in Lao PDR extension to Cambodia, Lao PDR and Network (AUN), Bangkok and universities are under implementation. I am pleased Viet Nam. The Jakarta-based Economic both in India and ASEAN Member States to inform that we have signed MOUs for Research Institute for ASEAN and East towards creating an ASEAN-India 18 additional projects in Cambodia and a Asia (ERIA) had been tasked to study University Network (AIUN). I am happy to further 5 projects with Vietnam are under the feasibility of developing the planned note that a collaborative project involving consideration. In Myanmar, though we highway as a vibrant economic growth Mandalay Technological University do not have any QIPs at the moment, corridor. We look forward to the full (MTU), Ho Chi Minh City University we are implementing several community report, expected to be completed early of Technology and Indian Institute of development projects bilaterally next year. We need to quickly finalise Technology (IIT), Roorkee will be moved under the Rakhine State Development the India-Myanmar-Thailand Motor forward as a pilot project. It is particularly Programme (RSDP) and our Border Area Vehicle Agreement to facilitate seamless relevant that this project is beginning Development Programme. movement of goods and passengers from among our MGC Partners. across borders, thus leading to greater All the scholarship schemes offered The MGC Textiles Museum in Siem trade and tourism at the next meeting in by India for MGC member countries have Reap, Cambodia is doing significant October this year. seen active utilization. We are increasing work to preserve and showcase the the number of scholarships for Master’s Excellencies, India had announced rich and vibrant textile heritage of the Programme at Nalanda University from 6 a USD 1 billion Line of Credit (LOC) Mekong-Ganga region. We are working to 20. for connectivity projects in ASEAN. To with Cambodia to make the Museum identify bankable projects, we have The setting up of CESDTs in CLMV financially self-sustaining, including offered to facilitate discussions on the countries by Centre for Development of by promoting the Museum as a tourist terms, conditions and modalities for Advance Computing (C-DAC) is also attraction. We seek artefacts and exhibits drawing on this credit line, including by making good progress. We have already from all MGC countries to enhance the sending specialists from our Exim Bank established these Centres in Cambodia displays, and your help in making the to interested countries for discussions. and Lao PDR and will be deputing IT Museum a hotspot by hosting academic We must work to enhance direct trainers to these centres soon. We have and cultural events at this venue. also requested Myanmar and Vietnam air connectivity as it would make travel Excellency Co-Chair, following to expedite necessary approvals to easier for our peoples for business and a suggestion at the last MGC SOM facilitate early operationalization of the tourism. I am happy to inform that IndiGo in New Delhi, we have commenced CESDTs in Myanmar and Vietnam. is going to start direct flights on the work on developing an MGC website New Delhi-Ho Chi Minh City sector from We are working on early to disseminate information about joint October this year and daily services from operationalization of the Common cooperation activities, as also important Archival Resource Centre (CARC) trade and travel fairs and cultural events. Continued on page..7 at Nalanda University. To this end,

Mekong-Ganga Policy Brief August 2019 3 MGC Plan of Action (2019-2022)

his Plan of Action implements the n Promote training in traditional systems Cooperation in Water goals and objectives of the MGC of medicine through exchange of Resources Management Partnership for the next three years faculty and students among national T n India will conduct training programmes (2019-2022) by laying out activities to institutions. and workshops to exchange be undertaken by all parties to further n Organize workshops and training experiences and best practices in deepen and enhance cooperation in the programmes in digital connectivity community farming and water resource MGC priority sectors. and ICT infrastructure development management. Cultural Cooperation for government officials from MGC n Undertake collaborative projects countries. n Organize a textile exhibition along in the areas of sustainable water with cultural activities to showcase the n Launch a website dedicated to MGC management, water harvesting, varied hand-woven fabrics of the MGC which would contribute to branding water data collection, climate change countries of the regional grouping and provide adaptation and mitigation, integrated n Promote capacity building and useful information on the various joint water resources management, exchange best practices in programs and activities. groundwater management, transboundary basin management, preservation of historical and cultural Cooperation in Public Health monuments water quality monitoring, flood and and Traditional Medicine drought management and disaster n Establish a Common Archival Resource n Organize the 2nd workshop-cum- reduction etc. Center (CARC) at Nalanda University training for MGC countries’ officials in as a repository of information India on eradication of communicable Cooperation in Science and n Invite craftsmen and cultural troupes and non-communicable diseases Technology from MGC countries with high incidences at the National n Host an Innovation Forum in one of n Cooperate in the field of radio and Institute of Malaria Research, New the MGC countries to promote social television broadcasting Delhi. innovations in agriculture, transport, n Develop a joint calendar of important n Send Indian Ayurveda specialists communication, industrial know-how Travel Fairs and Cultural Festivals under the Indian Technical and transfer, e-commerce, information in MGC countries for information Economic Cooperation Programme and communication technology (ICT), dissemination and promotion. (ITEC) of the Ministry of External health, energy and environment, food n Organise an MGC Conference on Affairs, Government of India to Mekong etc. Heritage Conservation Techniques countries upon request. Cooperation in Transport and in 2020 at the MGC Asian Traditional n Organize a regional workshop Communications Textile Museum at Siem Reap, on traditional and complimentary n Examine the feasibility of extending Cambodia medicine focusing on issues the India-Myanmar-Thailand Trilateral n Organize events and activities to related to regulatory systems and Highway to Cambodia, Lao PDR and celebrate the 20th Anniversary of MGC standardization procedures involving Viet Nam, and its development as an in 2020 traditional medicinal systems of the economic growth corridor. region. Tourism Cooperation Explore ways and means for the n Organise trips of travel agencies and Cooperation in Agriculture and conclusion of the India-Myanmar- media familiarization visits to prominent Allied Sectors Thailand Motor Vehicle Agreement to Buddhist sites in MGC countries facilitate seamless movement of goods n Organise a workshop on preservation and passengers across borders, thus n Showcase and popularise the rich of rice germplasm and productivity leading to greater trade and tourism. culinary traditions of the MGC countries enhancement through mechanization n by organising food festivals. by Crop Science Division, Indian Organise training programmes for MGC n Encourage exchange of students Council for Agricultural Research. countries on preparation of feasibility studies and detailed project reports for through offer of scholarships for n Organise a workshop on sustainable highway projects and construction and diploma and certificate courses in fisheries and dairy by Fisheries maintenance of highways at the Indian tourism and travel management, Science Division/Animal Science Academy of Highway Engineers, hospitality management etc. Division, Indian Council for Agricultural NOIDA. n Develop institutional contact between Research. n Promote exchange of experiences National Hospitality/ Tourism n Organise training courses/workshops and information on policies and Management Institutes on ‘Integral Rural Development and management regulations of ICT Sustainable Development Goals Cooperation in Education industry, popularization of public (SDGs)’ at National Institute of n Promote the 50 MGC scholarships services, development of ICT Rural Development & Panchayati offered by the Indian Council for infrastructure, e-governance, Raj, Hyderabad for MGC countries’ Cultural Relations (ICCR) to enhance e-commerce, e-education and other professionals utilisation by students from the Mekong related e-services. countries.

4 Mekong-Ganga Policy Brief August 2019 MGC Plan of Action (2019-2022)

Enhance connectivity and cross-border n Conduct exchange programmes vocational training institutions and skill ICT services to promote e-commerce as on innovation and market access development authorities. well as social and cultural exchanges. for MSMEs as well as on software n Organise annual training programmes training and online payment system Cooperation in MSMEs on the topics related to MGC areas of development. cooperation as well as other relevant n Organize an MGC Trade Fair either n Organize an MGC Business Forum issues which are in line with the SDGs in India or any other MGC country in focusing on MSMEs on the sidelines under Thailand’s Annual International conjunction with a prominent trade of ASEAN-India Business Expo and Training Courses – AITC. exhibition focusing on MSMEs. Summit to be organized by Viet Nam Quick Impact Projects Scheme n Task the Jakarta-based Economic in 2020. n Encourage joint identification of Research Institute for ASEAN and Skill Development and Capacity projects, their monitoring and timely East Asia (ERIA) to conduct research Building implementation of the Quick Impact studies on ‘Integration of MGC MSMEs n Organise training and scholarship Projects scheme of the Ministry of into a Regional Production Chain: programmes for MGC countries in the External Affairs, Government of India Potential and Challenges’. areas of national accounts statistics under the MGC framework. n Enhance cooperation in MSMEs and large scale socio-economic (Excerpted from Mekong Ganga Cooperation sector with special focus on Youth sample surveys. (MGC) Plan of Action (2019-2022) at the 10th and Women empowerment among the n Facilitate knowledge sharing through Mekong-Ganga Cooperation (MGC) Ministerial MGC countries. exchange visits by experts from Meeting in Singapore, 2 August 2019) News Vietnam’s Loss is India’s Gain as US Regulates Illegal Shrimp Imports

The US’s move to introduce measures this year. The programme mandates forward shipping to America after value to prevent illegal, unreported and additional data requirements to trace the addition) come both from registered and unregulated (IUU) fishing and supply chain of seafood from the point unregistered farms and thereby hampers misrepresented seafood from entering of harvest to the point of entry into the Vietnam’s re-export prospects to the US the country is likely to help Indian US. For the period ended March 2018, (owing to the lack of traceability). This shrimp exports because new regulations 2,433 aquaculture farms totalling 12,509 is expected to support a shift in shrimp will hurt exports from Vietnam, India’s hectares of farmed area in India were exports from Vietnam to India,” said main competitor. The key market for registered under the Coastal Aquaculture Pavethra Ponniah, vice-president and global seafood producers, the US, has Authority (CAA). sector head, ICRA Ltd. introduced the Seafood Import Monitoring (Excerpted from www.business-standard.com Programme (SIMP), covering 13 species, “Most of Indian shrimp exports to the on 28 June, 2018) including shrimp. SIMP becomes US and EU are from registered farms; applicable for shrimp on December 31 however, shrimp exports to Vietnam (for © Business Standard India Likely to Launch More Quick Impact Projects in East Asia and Other Countries The government plans to launch more health, sanitation or community Under the Mekong-Ganga quick impact projects (QIPs) in East development sectors. The short gestation Cooperation (MGC) an initiative by Asia and other countries under its projects are aimed to directly benefit six countries – India and five ASEAN locals, with immediate and visible results. developmental assistance programme countries, namely, Cambodia, Lao PDR, as part of an effort to reach out to build Three QIPs in Lao PDR, two in Myanmar, Thailand and Vietnam -- it its influence in these countries, many of Myanmar, and five projects in Cambodia has been decided to offer Indian grant which are of strategic importance, and to and Vietnam are in the works. “Quick assistance for implementation of small fight the impression that New Delhi lags Impact Projects similar to the Small behind in terms of completing projects, Development Project (SDP) have shorter projects with capital cost of US$ 50000 officials familiar with the programme said. gestation period and the results are for (about Rs 34 lakhs) under the QIP. The QIPs mostly cover upgradation everyone to see”, said one of the officials (Excerpted from www.hindustantimes.com on of physical infrastructure such as who asked not to be identified. This roads, local community centres, social person added that India’s focus on such 12 August 2018) infrastructure such as in the education, projects has increased. © hindustantimes

Mekong-Ganga Policy Brief August 2019 5 News

India Rice Rates Nudge Up, Vietnam Prices Ease from Multi-Year Highs

Rice export prices rose in India on hopes know when it will happen.” China last Meanwhile, Thailand’s benchmark 5 for increased buying from China, while week agreed to amend a protocol on percent broken rice was little changed rates in Vietnam eased from a multi-year phytosanitary requirements, which will between $430 and 435 per tonne this peak with the outlook for higher domestic allow Indian exporters to ship non- week, free on board (FOB) Bangkok, supply. Rates for India’s 5 percent broken basmati rice to Beijing. The monsoon from $430-$432 last week. Traders in has not been progressing well and could parboiled variety rose by $5 to $398- Bangkok said demand from abroad was $402 per tonne this week, after hitting the delay planting of summer-sown rice, said still flat this week following sales to the lowest level for the year last week due another exporter based at Kakinada in Philippines earlier this month and last to sluggish demand from neighbouring Andhra Pradesh. month. Slow logistics due to rain also Bangladesh. India was the biggest In Vietnam, the world’s third-largest meant slow trade, traders said. Thailand’s supplier of rice to Bangladesh in 2017. exporter of the grain, prices of 5 percent rainy season starts in late May and lasts Imports by Bangladesh will likely slow as broken rice fell to $450-$455 a tonne this the government imposed a 28 percent week after climbing to the highest since until mid-October. “It’s been raining, so tax on rice imports to support its farmers January 2012 at $465-$475 the week ships can’t sail here to pick up orders. after local production revived. before. “Prices are expected to ease Now the warehouses are full, with trucks “Last year, Bangladesh was buying a further in the coming weeks on rising lining up outside waiting to offload more lot of Indian rice. With new duty, imports domestic supplies, as the spring-summer rice. It’s all stuck, so the market is still,” a would fall,” said M. Adishankar, executive harvest will peak late this month,” a Ho trader said. director at Sri Lalitha, a leading rice Chi Minh City-based trader said. Vietnam (Excerpted from in.reuters.com on 14 June, exporter located in the southern Indian exported 763,707 tonnes of rice in May, state of Andhra Pradesh. “Chinese up 5.9 percent from April, according to 2018) imports will boost demand but we don’t the government’s official customs data. © Reuters

India Signs MoU with Cambodia for MGC Projects

The Indian government has provided refer to as MGC. The MoU covers six inaugurated in 2014 in Siem Reap town. Cambodia a grant for 18 projects worth projects under the Ministry of Health; four “Cambodia is committed to strengthening nearly $900,000 to implement the Quick under the Ministry of Rural Development; sub-regional cooperation based on Impact Projects (QIPs) under the Mekong- two under the Ministry of Water Resources practical activities which will be beneficial Ganga Cooperation (MGC) framework. and Meteorology; and two under the for Cambodia and the Mekong region as The two governments a memorandum Ministry of Posts and Telecommunications. a whole.” of understanding (MoU) for the grant It also covers two projects under the Manika Jain, the Ambassador of at the Ministry of Foreign Affairs and Ministry of Women’s Affairs; one under the India to Cambodia, said the Indian International Cooperation. The ministry’s Ministry of Culture and Fine Arts; and one government has various engagement secretary of state Luy David said that under the Ministry of Environment. David programmes with Cambodia including MGC is advancing smoothly with strong said since the launch of the QIPs under assistance programmes for the cooperation. “The real value of these small MGC in 2015, Cambodia has received a Kingdom’s socio-economic development. projects is very important for Cambodia total of 34 projects in the fields of health, It has been providing assistance since to create tangible results and promote the agriculture, education, environment, skills 2015. “The Indian government will livelihoods and contribute to the welfare development, women’s empowerment, continue to support and cooperate of Cambodians,” he said. David said the rural development, water resources with the Cambodian government under 18 projects – worth a total of $895,145 – and ICT. Several projects have been the framework of the Mekong-Ganga will be implemented for 2019-2020. completed and the remaining have Cooperation,” she stressed. made substantial progress, he said. A India is the first country to collaborate (Excerpted from www.phnompenhpost.com on practical achievement that stems from with the Greater Mekong Subregion 20 June 2019) nations and establish the first Mekong the cooperation, he said, is the “Asian © phnompenhpost cooperation framework – which we now Traditional Textile Museum “, which was

6 Mekong-Ganga Policy Brief August 2019 News

India, Laos Agree to Strengthen Bilateral Ties India and the Lao People’s Democratic areas of mutual interest and cooperation. Lao PDR especially in the commercial Republic (Lao PDR) agreed to strengthen Both the leaders agreed that India-Lao and cultural fields,” the statement added. their bilateral relations through political PDR enjoy excellent bilateral relations India and Lao PDR enjoy warm dialogue and increased trade and which need to be strengthened further and friendly ties characterised by the investment respectively. through constant political dialogue and exchange of regular visits at all levels. The Accompanied by a delegation of through increased trade and investment, two countries share age-old civilisational senior officers from her ministry, External the statement said. The External Affairs ties best symbolised by the relic of the Affairs Minister Sushma Swaraj, visited Minister assured Laotian Prime Minister Buddha encased in the That Luang Stupa, Lao PDR on November 22-23, a statement Thongloun Sisoulith that India will stand the national emblem of Lao PDR, and the from the Ministry of External Affairs read. by Lao PDR in its quest for development Vat Phou Temple Complex, an ancient During the visit, Shri. Swaraj co-chaired and growth and will be happy to assist Shiva temple, whose earliest structures the 9th India-Lao PDR Joint Commission through soft loans projects aimed date back to the 5th and 6th Century AD, Meeting (JCM) along with her Laotian at building Lao PDR’s infrastructure and which is currently being renovated counterpart Saleumxay Kommasith. The including roads, agriculture and irrigation, and restored by the Archaeological meeting reviewed the India-Lao PDR IT, human resource development and any Survey of India. “In recent decades, relations comprehensively and took note other sectors. bilateral cooperation has grown in many of all that has been achieved and the “During the visit, Shri. Swaraj areas including India’s role in assisting current state of the various cooperation addressed the Indian community in Lao PDR in infrastructure building, human programmes. The meeting also laid out Vientiane. The community was very resources capacity building, agriculture the roadmap for future cooperation and happy to interact with the minister and and irrigation, Information Technology (IT) enhancement in bilateral relations. The warmly reciprocated the feeling. She and education among others. Trade and economic cooperation have also been agreed minutes of the JCM were signed asked the Indian community to forget growing steadily,” the statement further by the two ministers at the end of the all differences and work together as a said. meeting. community to promote the welfare of the Shri. Swaraj also met Laotian Indian community in Lao PDR and also (Excerpted from www.business-standard.com Prime Minister Thongloun Sisoulith and work towards contributing to the increase on 23 November 2018) discussed bilateral relations and various of bilateral contacts between India and © Business Standard

Continued from page..3 Direct Flight Launched between India and Kolkota to Yangon from late September. Vietnam We have also notified IndiGo and Vistara as designated Indian carriers under the Giving a special boost to tourism partnership to a comprehensive India-Cambodia bilateral Air Services between the two nations, a direct strategic partnership. I believe Agreement. We encourage them to flight from Kolkata to Hanoi is that the relationship will continue start direct flights based on the airlines’ commercial considerations. set to start from 3 October 2019, to grow,” he added. He further according to Vietnam’s Ambassador highlighted how President Ram We are pleased to accept Thailand’s invitation for India to join the Ayeyawady- to India, Pham Sanh Chau. We Nath Kovind became one of the first Chao Phraya-Mekong Economic have launched direct Indigo flights leaders to address the Vietnamese between Kolkata and Hanoi, that Cooperation Strategy (ACMECS) Initiative Parliament during his visit to the as a Development Partner. I am told our will be starting from October 2019. nation around six months ago. Senior Officials have had preliminary We have also launched an online “The India-Vietnam relation is at discussions on the ACMECS Master Plan platform for Indian travellers to all weather good and expands the 2019-2023. apply for a visa on arrival”. relationship through practical steps. (Excerpted from the Remarks by External “It was three years back when Affairs Minister at the 10th Mekong Ganga PM Modi came to Vietnam. He (Excerpted from www.indiatoday.com on Cooperation Ministerial Meeting, H.E. (Dr) decided to uplift the India-Vietnam 20 June 2019) Subrahmanyam Jaishankar, External Affair Minister, Government of India at the 10th relationship from a strategic © India Today Mekong-Ganga Cooperation (MGC) Ministerial Meeting in Singapore, 2 August 2019)

Mekong-Ganga Policy Brief August 2019 7 News

India, Vietnam to Strengthen Cooperation in Atomic Energy, Defence and Security

India and Vietnam agreed to further defence and security, peaceful uses of rules-based regional architecture based strengthen cooperation in defence atomic energy and outer space, oil and on freedom of navigation and overflight, and security, peaceful uses of atomic gas, renewable energy, agriculture and unimpeded economic activities and energy and outer space, oil and gas and innovation-based sectors, it said. peaceful settlement of disputes in renewable energy as Vice-President M. Vietnam is an important trade partner accordance with international law, the Venkaiah Naidu on Sunday concluded of India and their bilateral trade stood statement said. his four-day visit to the Southeast Asian at nearly USD 14 billion last year having Vietnam’s leaders appreciated India’s country. nearly doubled from USD 7.8 billion three long-standing development partnership During his visit, Mr. Naidu held years ago. Vice-President Naidu and engagement, especially scholarships and talks with his Vietnamese counterpart Vietnam Prime Minister Phuc expressed training programmes. They also thanked Dang Thi Ngoc Thinh, Prime Minister commitment to enhancing trade and India for extending concessional Lines of Nguyen Xuan Phuc and Chairperson of investments and agreed to facilitate Credit for defence industry cooperation the National Assembly Nguyen Thi Kim direct air connectivity to promote tourism, and implementing other socio-cultural Ngan. “Vice-President’s talks with his trade and people-to-people relations. infrastructure projects in Vietnam under Vietnamese interlocutors were extensive Both sides reiterated the importance of Indian grants-in-aid. and productive and covered whole range building a peaceful and prosperous Indo- of bilateral and multilateral cooperation,” Pacific region on the basis of respect for (Excerpted from www.thehindu.com on 12 May said a statement issued by the Ministry national sovereignty and international 2019) of External Affairs. Both sides agreed law, and expressed full commitment to further strengthen cooperation in to an open, transparent, inclusive and © The Hindu

India Committed to Building Cooperative Relationship with Vietnam India is committed to building its fields. “Over the years, Vietnam has India one of the most favorite investment cooperative relationship with Vietnam in been successful in making huge socio- destinations in the world. India has diverse fields, Vice President Venkaiah economic advances. Sustained high become the fastest growing large Naidu said Thursday, pointing that levels of economic growth, combined with economy in the world. We will be a USD agricultural growth has been a key driver vision and foresight of its leadership, has 5 trillion economy by 2030, he added and in the remarkable progress achieved by ensured rapid progress, development gave a detailed overview of the progress the South East Asian country. In his first and prosperity,” he said. achieved in various sectors. engagement after arriving here on a four- Pointing out that agricultural growth The vice president said the Indian day visit, Naidu addressed the Indian has been a key driver in the remarkable community in Vietnam, though small in community in the country, highlighting progress achieved by Vietnam, he said their role and importance in promoting number, has numerous achievements to India was privileged as a development cultural understanding and harmony its credit and was well respected. He said partner to have contributed to Vietnam’s between India and Vietnam. Describing Indians and Indian business and industry agricultural revolution and food security. the ties between India and Vietnam in Vietnam have been instrumental in He said that an Archaeological Survey of as civilisational and historic, the vice promoting bilateral understanding and India team has been working in Vietnam for president said, Our partnership has stood creating opportunities for the local the past three years for the conservation the test of time. More than 2000 years economy and society. He urged the and restoration of the UNESCO World ago, Indian monks and traders brought Indian diaspora to contribute and join in Heritage Site of MySon in Vietnam. with them the message of peace and the development agenda back home. compassion of Lord Buddha to Vietnam.” Expressing his satisfaction over the Describing Indians living abroad as Naidu said that successive doubling of the trade between the two our cultural ambassadors, he told them generations of leaders from Ho Chi Minh nations from USD 7.8 billion in 2016 to continue to cherish their Indian roots and and Mahatma Gandhi to the current nearly USD 14 billion last year, he said rich cultural traditions and at the same leaders have built upon this trust and both the nations must come together with time nourish the socio-economic and goodwill. Referring to the comprehensive pride and purpose and help each other cultural life of Vietnam. grow and prosper. strategic partnership between the two (Excerpted from www.business-standard.com countries, Naidu stated that India is Referring to India’s growth story, the on 9 May 2019) committed to building its cooperative Vice President said that an ambitious relationship with Vietnam in diverse and transformative vision was making © Business Standard

8 Mekong-Ganga Policy Brief August 2019 News

India, Thailand to Firm up Maritime Security Cooperation

Expanding maritime security cooperation, million in 2014 and $23.12 million last she said cooperation between the two joint defence production, counter- year in India in real estate, infrastructure, countries in the Indian Ocean is already terrorism strategy and boosting trade food processing, chemicals, hotels “very strong” and ways to further enhance and investment will be major focus of and hospitality. Thailand’s “Look West” it may be explored. Saran said Thailand Thai Prime Minister Prayut Chan-o-Cha’s policy complements the “Act East” has shown interest in joint ventures in three-day visit to India. Chan-o-Cha will mission of Prime Minister Narendra Modi, defence production and procurement of have extensive talks with Prime Minister building on the “Look East” policy of his defence platforms from India. The issue Narendra Modi on Friday on a slew predecessor. Next year, the two countries may figure in the talks besides ways of issues including enhancing overall will be celebrating 70 years of bilateral to combat terrorism. There could be defence and security cooperation and the relations,” according to a recent article pacts during the PM trip for establishing South China Sea situation amid China’s on this visit in Thailand’s leading English sister relations between Surat in Gujarat aggressive posture there. Counter-terror Daily Bangkok Post. and Surat Thani province in Thailand, cooperation is emerging as a key area of The Thai Prime Minister will visit Bodh according to the Bangkok Post. The areas partnership between Delhi and Bangkok Gaya, a major place of pilgrimage for of expansion of trade will be sectors like with Thai government extraditing key Buddhists, in Gaya district of Bihar before steel, banking and food processing. India fugitives. returning to Thailand on June 18. It will be was keen on attracting Thai investment The Thai Prime Minister is Chan-o-Cha’s (a former military general) in the infrastructure sector. Another issue accompanied by a high-level delegation first India visit as the PM. While USa that will momentum with this visit is India- comprising the Deputy Prime Minister, traditional Thai ally has been lukewarm Myanmar-Thailand highway. five senior ministers and a big business towards this regime in Bangkok, both Saran said there was huge potential delegation. The two sides will also Russia and China are extending support for expanding bilateral cooperation in deliberate on expanding cooperation in to the government. India on the other hand the tourism sector. Currently, around one trade and tourism sector. India is keen on stays neutral and says it is internal matter million Indians visit Thailand annually enhancing connectivity between the two for Thailand. Prime Minister Yingluck while the number of Thai people visiting countries and promoting the Buddhist Shinawatra visited India in January 2012 India is around one lakh. The Thai tourist circuits. and she was the Chief Guest for the Prime Minister will also address an event Republic Day celebrations. Issues relating to the proposed free organised by industry chambers FICCI trade pact between the two countries may Secretary (East) in the Ministry of and CII where a joint business forum of also figure in talks at the PM level. The External Affairs Preeti Saran told media the two countries will be formed which volume of current annual bilateral trade on the eve of the visit that India regards will give its recommendations on ways to between the two countries is nearly $ 8 Thailand as “central pillar” of India’s boost trade. billion. Thailand is India’s second largest ties with ASEAN countries and a host of (Excerpted from www.economictimes. trading partner in ASEAN after Singapore. issues ranging from maritime security, indiatimes.com on 9 May 2019) “Indian companies invested $63.45 million trade and investment, education, tourism in 2014 and $37.53 million last year in and space research are likely to figure © Economic Times Thailand. Thai companies invested $23.72 prominently in talks. On maritime security, Cambodia, the Home of Angkor Vat, has Potential to be the Fifth Hindu ‘Dhaam’ The home of the holy Angkor Vat temple, a shrine as revered as Angkor Vat amd the fifth pilgrim place of Hindus.” It is Cambodia is fast on its way to being mountain Kulen, Cambodia deserved noteworthy that to organise the event that developed as the Fifth Dhaam (pilgrim to be the fifth pilgrim spot for Hindus. was attended by Hindu followers from a spot) of Hindus. A major initiative in this He also stressed awareness about the number of countries across the world, direction has been taken by Shailesh glorious heritage and spread of Hindu 500 acres land had been acquired and Hiranandani of SRAM MRAM Ltd., in values. 1,008 Shivalingas with different names step with the campaign of the Rashtriya On the occasion, Mr. Hiranandani were installed. Chief guest Indresh Kumar Swayamsevak Sangh (RSS). said, “Tourists from all over the world said after the Bhumi Pujan that with such The effort of holding a grand event visit Cambodia to experience the mystic extensive preparation, the day was not far to promote the cause was lauded by charm of Angkor Vat temple. There is a when Cambodia could be recognised as member of the RSS national committee Mr. lot in Cambodia that defines Hinduism. the fifth Hindu dhaam. Indresh Kumar, as he witnessed the huge It is commendable the way support is (Excerpted from www.outlookindia.com congregation in Cambodia. Appreciating being extended from various quarters on 6 June, 2018) the efforts made, Kumar said that with to the initiative of turning Cambodia into © Outlook India)

Mekong-Ganga Policy Brief August 2019 9 News

Educational Cooperation, Trade, Reduced Visa Fees Needed to Boost India, Myanmar Ties

Recognising each other’s educational two nations have mutually decided to Asian Nations. Four North Eastern degrees, reducing visa fees to boost work on signing an MoU on educational states -- Arunachal Pradesh (520 km), tourism and a motor vehicle act to cooperation which should include Manipur (398 km), Nagaland (215 km) facilitate seamless trade are among recognition of educational degrees and and Mizoram (510 km) -- have unfenced the stepping stones on the way to facilitation of students in each-other’s borders with Myanmar A senior diplomat deeper India-Myanmar ties, say officials educational institutions,” Pukhrem, who at the MEA said the conference effectively and experts. Participants at a recent was part of the Indian delegation, told. As positioned businesses and academia conference in Imphal also agreed on the of now, the two countries do not recognise between the two nations. need for better air connectivity, enhanced each other’s educational degrees. She Current bilateral trade between personnel deployment at the Integrated added that a motor vehicle agreement, India and Myanmar stands at USD 1.75 Check Point (ICP) in the border town of which will ease vehicular movement billion, mainly comprising pulses, meat, Moreh and overhauling the existing import between the two neighbours, was also in products, timber and pharmaceuticals. mechanism to help farmers in Myanmar the pipeline. Though the two nations agreed on grow pulses and betel nuts. “The Myanmar side asked India to boosting trade ties on several occasions, The conference, which took the ensure concerns of Myanmarese farmers no concrete steps were taken till late decision to work towards enhanced ties growing pulses and betel nuts must be last year. According to Khriezo Yhome, between the neighbours and speed up taken into account to facilitate better a senior research fellow at New Delhi- development in Myanmar and India’s import mechanism,” she said. “Similarly, based Observer Research Foundation eastern region, was attended by a high- there was consensus on improving air (ORF), it is important that they ensure powered delegation, including the Chief connectivity between Imphal and Delhi early completion of existing projects. Minister of Magway region Dr Aung so that Myanmar tourists who are coming “The idea that cooperation between India Moe Nyo, and the ambassadors of both to Imphal via road can visit Bodhgaya as and Myanmar should begin at the borders nations. part of their Buddhist pilgrimage,” she is not new. The renewed focus towards Moe Nyo emphasised that India and added. The two sides also agreed to translating the ideas into reality in recent Myanmar need to explore the possibility expedite work on starting a bus service years need to be sustained with periodic of cooperation in education and health between Mandalay to Imphal, a decision assessments of cross-border projects,” sectors. “Medical services are much taken in 2012. Yhome, a prominent Indian expert on cheaper in India as compared to other An agreement was reached on setting Indo-Myanmar affairs, told. countries like Thailand and Singapore. up an Indian Consulate or Visa office in “Even as some infrastructure projects Both the countries need to take concrete Kaley in Sagaing division of Myanmar. have seen progress in the recent past, the steps and collaborate in health and “There was a detailed discussion on fact remains that many significant projects education sector,” he told. allowing tourists with e-Visas to cross into such as Imphal-Mandalay bus services or The June 11 event was organised India from Myanmar across land border the trilateral highways are yet to see the by India Foundation, a New Delhi via Moreh as well as reduction of Visa light of the day,” he said. “As new projects based think-tank that has signed an fee for Indian tourists visiting Myanmar,” are initiated, it is important to ensure MoU with the Manipur government on she said. “Also, there was a call from that ongoing projects are expedited as developing a strategic vision for the the Myanmar side to have a full-fledged completion of these decade-old projects state in collaboration with the Ministry of foreign exchange facility at Moreh is will boost confidence among local people External Affairs. Shristi Pukhrem, a senior required,” she added. Myanmar, the only and the business community,” he added. research fellow at India Foundation, said Southeast Asian country which shares (Excerpted from www.economictimes. the discussants agreed to further deepen a 1,600-mile border with India, serves indiatimes.com on 21 June 2019) as its gateway to the other 10-member their ties and work in a way so Yangon © Economic Times gains from India’s Act East Policy. “The states of the Association of Southeast

India-CLMV Business Forum Meets to Promote Economic Ties in the Region Deputy Prime Minister Mr. Hor Namhong Speaking during the fifth edition of a vast market. “The India-CLMV Business urged companies in Cambodia, Laos, the India-CLMV Business Forum, which is Forum serves as an important vehicle to Myanmar and Vietnam (CLMV) to look to being hosted in Phnom Penh from May 21- promote economic ties between India and India for potential business opportunities 22, 2018 Mr Namhong encouraged local CLMV countries,” said Mr Namhong, who and partners, arguing that the South companies to seek new partnerships with is presiding over the event together with Asian giant is a key ally in the economic Indian companies to benefit from their ...Continued on page 18 development of these countries. business experience and gain access to

10 Mekong-Ganga Policy Brief August 2019 News

Mekong-Ganga Countries to Boost Ties in Water Resources Management

Six countries of the Mekong-Ganga activities, tourism promotion, and MGC India and the India-Myanmar-Thailand Cooperation (MGC), namely Cambodia, trade fairs. The MGC Ministerial Meeting Trilateral Highway to Cambodia, Laos Laos, Myanmar, Thailand, Vietnam also recognised India’s wish to cooperate and Vietnam, and starting talks on a land and India, have agreed to enhance with the Mekong River Commission, transport agreement. He also called cooperation in managing and sustainably particularly in sharing experience in on them to facilitate trade, cooperate using water resources. Foreign ministers collecting water resources data, and the in customs clearance and quarantine, of the MGC countries reached the proposal to organise the first meeting and foster partnership in environmental consensus at their ninth meeting on 2 on management and sustainable use of issues, climate change response, flood August 2018 within the framework of the water resources in New Delhi. and natural disaster management, and 51st ASEAN Foreign Ministers’ Meeting Addressing the event, Vietnamese management of water resources. At the and related meetings in Singapore. They Deputy Prime Minister and Foreign end of the meeting, the ministers adopted also agreed to bolster cooperation in Minister Pham Binh Minh stressed that the a joint statement and agreed to hold the agriculture, tourism, culture, transport, two sides’ cooperation potential remains 10th MGC Ministerial Meeting in Thailand businesses, and health care. huge. He suggested the MGC nations in 2019. Joint activities proposed at the focus their cooperation on enhancing (Excerpted from www.vietnamplus.com on meeting included building a joint data connectivity, especially expanding 2 August 2018) centre at Nalanda University in India, a the East-West Economic Corridor and conference on rice germplasm, training the Southern Economic Corridor to © vietnamplus

Opinion

With US Sanctions, India Has Perfect Window of Opportunity for Defence Deals with Vietnam

For the Vietnamese government, defence since Hanoi will now be circumspect the ground break ceremony of the Army ties are a cornerstone of the relationship about turning towards American arms Software Park in Nha Trang that is being with India. So, the substantive movement susceptible to sanctions, even as it goes built with Indian financial support to the on weapons sales and co-production slow on new Russian military imports tune of $5 million. These relationships initiatives shown by Defence Minister till it is able to put in place CAATSA have not only given India an insight into Nirmala Sitharaman during her recent workarounds. Whether India is able to Vietnamese defence requirements but visit is long overdue. Sitharaman said take advantage of this opportunity will, of have also served to underpin the trust “this is the best time for us to come here course, depend on its ability to overcome between the two sides. Given India’s own with the technologies we have”. It is a legacy issues constraining exports and energy interests in Vietnam, as well as the demonstration that India is indeed serious offer genuine value to the Vietnamese. need to uphold freedom of navigation in about ‘Acting East’. Overall, military exchanges between the SCS, bolstering Vietnamese defence India and Vietnam are quite robust, with capabilities makes strategic sense for But Vietnam hasn’t exactly been the two sides conducting their first-ever India. lacking suitors either, with Russia being bilateral land warfare and naval exercises Convergent interests coupled with its current top supplier and the United respectively earlier this year. Vietnam’s rising military expenditure States wooing it constantly. But, with the Vietnam, which is under maritime means that India can build its own position US bringing into force the ‘Countering pressure from China’s revanchist in the global arms market by focusing on America’s Adversaries Through Sanctions activities in the South China Sea (SCS), Vietnam. At the moment, Indian defence Act’ (CAATSA) — a move that is likely to wants India to deepen its military transfers to Vietnam include the supply mount secondary sanctions on nations engagement further and sees defence of some ten patrol boats by L&T, with dealing with Russia in defence and industrial ties as a key component of the the sale facilitated by a $100 million line energy — a window of opportunity has same. India is also involved in various of credit (LoC) extended by India, as opened for India. training programs, besides helping well as upgrade packages for Vietnam’s India can hope to corner a significant Vietnam augment its cyber capabilities. Russian-origin Petya Class Surface share of the Vietnamese defence market During her visit, Sitharaman attended Combatants. Given the pool of common

Mekong-Ganga Policy Brief August 2019 11 Opinion

Coordinated Patrols Put India-Thailand Naval Ties into Focus

India and Thailand have already understanding and interoperability on both sides as well as a range established a base for defense between the two partner navies in of professional interactions, sports collaboration, with the inking of a addition to jointly safeguarding the games, ship visits, and cultural events. memorandum of understanding on security of the Indian Ocean. Over time, Fewer specifics were provided on the defense cooperation between the two they have discussed ways to further particularities of the engagement this sides back in January 2012 and a range enhance engagement in this area as well. time around. But on the Indian side, there of exercises, joint patrols, exchanges, The last iteration of Indo-Thai CORPAT was mention of the fact that the Indo-Thai and dialogues in place. That overall was held back in January 2018. During CORPAT had culminated with the arrival defense cooperation includes the the exercise, one ship and one aircraft of the RTN ship HTMS Longlom at Haddo maritime domain, where both sides have from both navies participated and the Wharf in Port Blair, where the Andaman previously discussed strengthening areas interactions themselves involved a series and Nicobar Command is located. That of cooperation such as on hydrography of exercises including a visit board search provided the Thai naval delegation and the exchange of white shipping and seizure by combined boarding teams to meet with officials, including the information despite the challenges that at sea and other harbor activities such as Commander in Chief of the Andaman and remain. a visit by the Indian naval delegation to the Nicobar Command Vice Admiral Bimal 3rd Naval Area Command Headquarters One of those engagements is Verma, as well as for the holding of other in Phuket. coordinated patrols between the two events including a debriefing and closing countries. The Indian Navy (IN) and the From June 16 to June 22, both sides ceremony. Royal Thailand Navy (RTN) have been held the 26th edition of the Indo-Thai participating in coordinated patrols or CORPAT. The engagement occurred (Excerpted from thediplomat.com on 25 June, CORPATs in the Indian Ocean region along similar lines and involved a series 2018, authored by Prashanth Parameswaran) since 2005, and the expressed objective of interactions between the two sides, of the Indo-Thai CORPAT is to enhance including meetings between officials © The Diplomat

Finding India in Cambodia

It seems so much like home. That that vie with each other to grab your similarity to those of Hinduism. Both the was the thought that ran through our attention. religions of Hinduism and Buddhism minds as we drove from Phnom Penh As we explored Cambodia and are the influences that crossed the International Airport to downtown Phnom interacted with the locals, we discovered seas from India. The kings of the Penh. The roads seemed strangely the roots of the Indian connection Funan Kingdom, as well as the Pre- familiar though it was our first visit to running deeper and deeper, all the way Angkor and Angkor periods, were Cambodia. It was probably the sight of to the 4th century and beyond. The mostly Hindu kings who built massive the ubiquitous symbol of Indian roads, heritage of India and Cambodia seem temples that expounded Hinduism the Bajaj autorickshaw that triggered to be linked intrinsically and date back a and highlighted the various gods and this thought. But it was more than long period in time. Ancient Indian texts goddesses of the Hindu pantheon. that. The billboards along the streets mention the region as well as the people The early kings followed Brahmanism and the boards of the shops were in a who inhabit it. If you talk to the locals, and this is evident from the sculptures script that tugged at the heartstrings many similarities in the culture are and reliefs found across the temples of and reminded one of home. It was, of visible, even in small things. Be it the Siem Reap. Shiva, Vishnu and Brahma course, the Khmer script which has an folded-hands greeting or the similarity iconography dominate the early Hindu uncanny similarity to scripts of Kannada in funeral or death rites. temples. However, in the 12th century, and Telugu languages. The Khmer during the reign of Jayavarman VII, one Cambodia is the home of Khmer script is derived from the Pallava script of the greatest kings of Khmer empire, people who now practise Theravada which was developed in Southern India Buddhism gained more prominence Buddhism, which has direct link to the around the 6th century. If you drive and Buddhist themes started appearing Buddhism tenets expounded by the along the riverfront of Phnom Penh, on the temples. The king himself Buddha himself. Today, almost 95% you will not miss the plethora of Indian followed Buddhism and his kingdom of the Cambodian population follows restaurants. Indigo Indian Restaurant, was declared a Buddhist state. Buddhism. But many aspects of the Flavours of India, Mother India and However, both Hinduism and Buddhism culture and religion bear a striking Namaste India are some of the names co-existed in harmony in Khmer empire. ...Continued on page 13

12 Mekong-Ganga Policy Brief August 2019 Opinion

Around Two Rivers The Mekong-Ganga Cooperation was Further deepening its commitments, competition on tourism in India found established on November 10, 2000, India agreed to offer five more favour. Such initiatives shall further at Vientiane, Laos, at the First MGC scholarships to Mekong countries in contribute to India’s Act East policy. Ministerial meeting. It comprises six museology and conservation techniques, Other areas of cultural cooperation member-countries ~ India, Thailand, which could significantly benefit the MGC among MGC countries could be a Myanmar, Cambodia, Laos and Vietnam. Asian Traditional Textile Museum in Siem photography competition on tourism in The four areas of cooperation are tourism, Reap, Cambodia. India, conducting media programmes culture, education, and transportation. The other sphere in which India on Buddhist and North-East circuits, The organisation takes its name from the has been offering assistance is in the and organising tourism markets of MGC Ganga and the Mekong, two large rivers setting up physical IT infrastructure, countries in India. Gen Singh highlighted in the region. Since its inception as a digital connectivity and ICT infrastructure the importance of tourism in secondary subregional group of six countries, India development in Mekong countries. has attached the greatest importance, cities in order to expand the industry. Following India’s lead, Thailand and this has achieved tremendous Earlier, Prime Minister Narendra Modi has been organising training courses success and resonance. The Mekong had announced the establishment of in tourism management, food security, and the Ganga river basins share close digital villages in Mekong countries as climate change, SDGs, and Sufficient civilizational and cultural links, which part of India’s efforts to promote digital Economy Philosophy (SEP). Indeed, there provide a strong basis for cooperation in connectivity. India organised the 1st is a greater need for better coordination the present times. MGC Policy Dialogue, a track 1.5 event, to reap maximum benefits if the MGC The joint ministerial statement for countries cooperate sincerely through on the theme “Stronger Connectivity, the 9th MGC meeting in Singapore their respective ministries. Enhancing Ties” on 8 April 2017 in New appreciated the progress made towards Delhi. It would be meaningful if this is Many of the MGC countries are the successful implementation of the Plan converted into an annual event that could endowed with rich cultural heritage of Action 2016-18. transform the dialogue into a think-tank and preserving these assets requires to carry out research and provide policy As a logical extension of its Act shared efforts. It is a matter of pride that recommendations on specific subjects East policy, India has been providing the Common Archival Resource Centre assistance in capacity-building in the (CARC) will be established at Nalanda for the governments of the MGC countries SME and MSME sectors to the Mekong University. The MGC countries are sharing to consider. countries and is ready to share expertise with India information and materials There is immense trade and in setting up regional value chains in on areas such as archaeological sites, investment potential in the Mekong sectors such as automobile components. world heritage, settlement history, history countries. Closer collaboration between At the first MGC meeting in November of trade, population, data on religious India and the Mekong region in 2017, the joint declaration had called distribution, and historical linkage. All trade promotion activities, Customs for cooperation in malaria and dengue such information will be preserved at inspections, sanitary and photo-sanitary management. It was proposed that the the CARC for the benefit of humanity. support, clearance regulations to address JWG meetings may be held in the MGC India proposed and others welcomed trade bottlenecks and regional supply countries on a rotational basis. At the its suggestion to hold a meeting on chains can create a win-win situation for same time, the MGC Business Forum Rice Germplasm in the second week all stakeholders. Economic development has been trying to promote trade and of November, besides cooperating in being the priority, the six MGC countries investment among MGC countries. fisheries and animal husbandry. along the Mekong River adopted in April Cooperation in the education sector Underscoring the importance 2018 an ambitious investment plan worth is another thrust area in which the leaders of promoting tourism among MGC $ 66 billion over the next five years, $7 of the member- countries are committed. countries, the ministers supported the billion of which is expected to come from In particular, India being the largest idea to organise MGC Tourism Week in the Asian Development Bank and the rest nation endowed with high quality human four metropolitan cities of India in 2019. from governments and the private sector. resources has a special responsibility in Establishing the trail of Buddhism could The 10th MGC Ministerial Meeting helping the small member-nations of the boost tourism. shall be held in 2019 in Thailand on the GMC. India’s proposal to organise activities margins of ASEAN Foreign Ministers’ such as celebrating India- ASEAN Year of India is aware of its responsibility and conference. The date and venue shall be has been extending assistance in the Tourism 2019 with training programmes notified through diplomatic channels in education sector and contributed towards for chefs from MGC countries in Indian due course of time. capacity building and human resource cuisine and hotel management, inviting development in CLMV countries. The plan craftsmen from MGC countries to (Excerpted from www.thestatesman.com on 18 envisages 900 scholarships annually and participate in the Surajkund Craft Mela in August 2018 authored by Rajaram Panda) the setting up of physical infrastructure. February 2019, organising photography © thestatesman

Mekong-Ganga Policy Brief August 2019 13 Opinion The Opening of an India-Myanmar Land Border Crossing: A Boon for Northeast India The recent opening of two land-border connect it with pre-existing highways all The Northeastern states are strikingly crossings between India and Myanmar the way to Da Nang in Vietnam. beautiful and many people in Myanmar at Tamu/Moreh in the state of Manipur Third, this will give a leg-up to the and other ASEAN nations in the future and Rihkhawdar-Zowkhawtar in Mizoram Indian involvement in Myanmar, especially could visit the Northeast Indian states. will go a long way toward bringing India in the field of infrastructure, where Beijing Fifth, this will help in the growth of and Myanmar closer. According to a seems to have stolen a march over New medical tourism in the Northeastern states statement issued by the Indian Embassy Delhi. The India-funded Kaladan Multi- of the country, which offer high quality in Myanmar, “the landmark Land Border Modal Transit Transport Project, which will medical services at reasonable rates, Crossing Agreement between India allow for sea-access for the landlocked something which may interest people and Myanmar, signed on May 11, 2018, Northeastern states of India via the living in the border regions of Myanmar. has been brought into effect with the Kaladan river in Myanmar, has been simultaneous opening of international plagued by delays. The opening of the Finally, the opening of these land entry-exit checkpoints at the Tamu-Moreh land routes will strengthen New Delhi’s routes also reflects the rapid growth in and the Rihkhawdar-Zowkhawtar border case when it comes to the actual delivery India-ASEAN ties, which was exemplified between Myanmar and India.” of projects and initiatives. by the presence of the heads of state of First, Myanmar shares an almost Meanwhile, the Narendra Modi all the ASEAN states at India’s Republic 1,600km border with four Northeast government after taking office in India in Day celebrations earlier in January this Indian states: Arunachal Pradesh, 2014 had renamed the “Look-East Policy” year for the ASEAN-India commemorative Nagaland, Manipur, and Mizoram. Many as the “Act-East Policy.” The central summit. of the people who live in these provinces government, in concert with the state Relations have indeed moved a long of India have brethren living across the governments, has also been given a big way since 1992 when New Delhi became border in Myanmar (like in the case of the push to infrastructure development in the a sectoral dialogue partner of ASEAN. Nagas of Nagaland). Northeastern region. In May last year, Steps like these will aid India’s outreach Second, Myanmar is crucial for Modi inaugurated the Bhupen Hazarika to the ASEAN countries. Myanmar is Setu bridge in Assam, which connects New Delhi’s connectivity initiatives in India’s land bridge to ASEAN and hence upper Assam and the eastern reaches of the region, particularly in light of its non- closer connectivity with Myanmar is sine the border state of Arunachal Pradesh. participation in the Beijing-led Belt and qua non for the success of India’s “Act- At 9.15 km across, this bridge is India’s Road Initiative. India, Myanmar, and East Policy.” Thailand are working on the trilateral longest bridge. India-Myanmar-Thailand highway, which Fourth, the opening of these land (Excerpted from www.thediplomat.com on 13 is expected to be see completion by the border crossings will help in the growth of August 2018 authored by Rupakjyoti Borah ) end of next year. There are also plans to tourism in Northeast India and Myanmar. © The Diplomat

What’s Next for Vietnam-India Defense Relations? Vietnam and India have been looking March 2018 respectively. In June, India’s to improve ties further in various aspects, to advance their existing defense Defense Minister Nirmala Sitharaman also including with respect to bilateral ties in relationship as part of their wider ties, visited Vietnam which saw the defense terms of areas such as maritime security, which were elevated to a comprehensive aspect of ties highlighted again. defense industry collaboration, science strategic partnership in 2016. Defense The relationship was in the spotlight and technology, and training. ties have grown in recent years to include again when Vietnam’s deputy defense Apart from the areas of collaboration, not just the traditional components of minister, Nguyen Chi Vinh, was on a visit to some of the headlines, particularly in ties like exchanges and port calls but India. Though the visit, which lasted from India, were unsurprisingly focused on the also the training of personnel, capacity- July 31 to August 2, saw Vinh participate state of potential deals on defense items building funding and equipment, coast in a series of engagements, the highlight between the two sides, as well as the guard collaboration, and pacts on areas was when both sides chaired the 11th wider geopolitical implications of closer such as white shipping and outer space. iteration of the Vietnam-India Defense India-Vietnam ties for New Delhi’s broader That trend in defense ties has continued Policy Dialogue at the Indian defense relationships, including its ties with China. on into 2018. The defense component ministry. According to official accounts As I have observed previously with of the relationship has featured in high- of the meeting, both sides used the respect to such interactions, inroads level exchanges between the two sides, opportunity to review the state of defense both sides are continuing to make should including visits to India by both Vietnam ties to date, including progress on the not obscure the broader realities and Prime Minister Nguyen Xuan Phuc and implementation of already agreed areas of structural constraints that exist, including President Tran Dai Quang in January and collaboration. They also discussed ways ...Continued on page 18

14 Mekong-Ganga Policy Brief August 2019 Events

Interaction with Tamu Border Authority

Mr. Nandan Singh Bhaisora, Consul General meeting at Border Trade Chamber of Commerce, Tamu by visiting 4 member Study Team, led by Dr Prabir De, Coordinator, ASEAN- India Centre (AIC) at RIS along with Prof. Priyaranjan Dash, Manipur University regarding a study on Trilateral Highway and Its Implication on India’s Northeast region and further its extension of Trilateral Highway from India- Myanmar-Thailand to Laos, Cambodia and Vietnam for seamless movement of goods and people across Group photo with Mr. Nandan Singh Bhaisora, Consul General, Mandaley; India Study Team the borders- an economic corridor. head by Dr. Prabir De, Coordinator, AIC and Prof. Priyaranjan Dash, Manipur University with The meeting was attended by District Tamu Border Authority and other stake holders. Collector, Tamu; Department of Trade, and Myanmar. Deliberations were completion of connectivity projects, Customs; Trade Chambers from Moreh held on border trade, procedures, e-visa, border pass, air and bus and Tamu, and other stake holders impediments, setting up a Joint Border connectivity, Motor Vehicle Agreement and business community from India Trade Committee, Rupee Trade, early & various other issues.

10th Mekong-Ganga Cooperation Ministerial Meeting

The 10th Mekong-Ganga Cooperation of Cambodia; H.E. Mr. Saleumxay eration in the seven areas of MGC (MGC) Ministeral Meeting was held Kommasith, Minister of Foreign cooperation, namely tourism and at Bangkok, Thailand on 1st August Affairs of the Lao PDR; H.E. Mr. Kyaw culture, education, public health 2019. The Meeting was co-chaired by Tin, Union Minister for International and traditional medicine, agriculture H.E. Pham Binh Minh, Deputy Prime Cooperation of the Republic of the and allied sectors, transport and Minister, Minister of Foreign Affairs of Union of Myanmar; and H.E. Mr. Don communication, MSMEs as well the Socialist Republic of Viet Nam and Pramudwinai, Minister of Foreign as three new areas of cooperation, H.E. Dr. Subrahmanyam Jaishankar, Affairs of the Kingdom of Thailand. i.e. water resources management, External Affairs Minister of India, and During this meeting, new MGC Plan science and technology, skill attended by H.E. Dr. Sok Siphana, of Action 2019-2022 was adopted development and capacity building. Advisor to the Royal Government that envisages project-based coop-

Mekong-Ganga Policy Brief August 2019 15 Resources

Mekong-Ganga Cooperation: Celebrating the Third Decade Outcome Document of Breaking Barriers and Scaling and Beyond: New Challenges Mekong-Ganga Cooperation: New Heights to ASEAN-India Economic “Stronger Connectivity, ASEAN India Centre (AIC) and Partnership Enhancing Ties” Research and Information System for Edited by Prabir De and Suthiphand ASEAN India Centre (AIC) and the Developing Countries (RIS), 2017, Chirathivat, Routledge, 2018 Research and Information System for ISBN: 8171221289 ISBN: 9781138484788 the Developing Countries (RIS), 2017 In view of India’s Act East This book is a timely ISBN: 8171221289 Policy, India has been initiative to review the past This is an outcome strengthening its economic and suggest the ways document of the policy integration with Southeast to further strengthen the dialogue entitled and East Asian countries. economic partnership. It “Stronger Connectivity, Over the years partnership primarily deals with the Enhancing Ties”, with ASEAN in general and economic integration held on 8 April, 2017 countries in Mekong region issues between ASEAN at New Delhi. This in particular has made considerable and India, and assesses policy recommended hosting movement. This Report discusses various priorities, effectiveness, implementation of an MGC seminar focusing on building aspects of India-Mekong relations such imperatives and challenges. Each stronger connectivity and enhancing our as India-Mekong trade, strengthening chapter in this book tries to capture multi-dimensional ties. The ASEAN-India regional value chains, facilitating essential features of the crosscutting Centre at RIS was entrusted with the foreign direct investment, connectivity, issues and attempts to draw some task of convening such an interaction harnessing border economic zones, policy implications. It will be a valuable and providing a platform for sharing of Mekong- Ganga cultural fusion, among reference for policymakers, academics views, ideas and proposals aimed at others. The comprehensive Report makes and practitioners. strengthening MGC. This volume has significant policy recommendations for several policy suggestions for the way further strengthening of Mekong-Ganga Assessing Economic Impacts forward. Cooperation (MGC). of Connectivity Corridors: An Empirical Investigation Cultural and Civilisational Myanmar’s Integration with ASEAN India Centre (AIC) and Links between India and the World: Challenges and Research and Information System for Southeast Asia: Historical Policy Options the Developing Countries (RIS), 2018 and Contemporary Edited by Prabir De and Ajitava ISBN: 817122136X Dimensions Raychaudhuri, Palgrave Macmillan, This study has examined Edited by Shyam Saran, Palgrave 2017 the developmental Macmillan 2018 ISBN: 9789811051333 impact of existing East ISBN: 9789811073168 This book comprehensively West Corridor (EWC) The books presents the investigates the challenges and the proposed cross- study undertaken by to Myanmar’s access to the border corridors such the ASEAN-India Centre global market. Myanmar is as Trilateral Highway (AIC) at Research and a late entrant in the global (TH), Kaladan multi- Information System for trade and investment modal transit transport corridor, and Developing Countries scenario after years of Bangladesh–China–India–Myanmar (RIS) on India’s cultural isolation. However, it has large untapped Economic Corridor (BCIM-EC) on the links with Southeast Asia, potentials for trade and investment in Indian states with particular focus on with particular reference to historical minerals, agro and forest based industries, the NER states based on economic and contemporary dimensions. The other labour intensive industries, services geography model. The study finds that book traces ancient trade and maritime like tourism, IT, etc. Chapters of the book corridor-based development projects links, Chola Empire and Southeast Asia, explore the implication of democratic may generate economic activities and religious exchanges (the Hindu, Buddhist transition of Myanmar, the progress of regional development, which, in turn, and Islamic heritage), language, scripts Myanmar’s industry and infrastructure, would influence economic growth through and folklore, performing arts, painting its international linkages and feasible higher production and consumption. The and sculpture, architecture, role of the options for integrating more in regional study has important policy implications Indian Diaspora, contemporary cultural economic groups and also analyses how in promoting economic activities and interaction, etc. far Myanmar could exploit the global regional development. value chain.

16 Mekong-Ganga Policy Brief August 2019 Resources

Integrating South and East particular reference to ASEAN-India trade, both at the country Asia cultural heritage. This and sectoral levels. The Report has also Edited by Jayant Menon and Srinivasan book presents a set analysed the regulatory environment, T.N., Oxford University Press, 2018 of papers which were identified the regulatory gaps and has presented at the 2nd presented a series of recommendations ISBN: 9780199474127 International Conference in order to ease the burden of NTMs on This book evaluates the on “ASEAN-India the ASEAN-India trade. economic implications of Cultural Links: Historical increasing cooperation and Contemporary Dimensions”, held at between the two regions, Jakarta on 19 January 2017. Sailing to Suvarnabhumi: providing empirical Cultural Routes and Maritime analyses for informed Landscapes policy decisions and Non-Tariff Measures (NTMs): Himanshu Prabha Ray and Susan improved outcomes. Evidence from ASEAN-India Mishra, ASEAN India Centre (AIC) and Exploring the role of market forces Trade Research and Information System for as well as domestic and regional ASEAN India Centre (AIC) and the Developing Countries (RIS), 2019 policies, it examines how integration Research and Information System for The book presents the helps in spurring inclusive economic the Developing Countries (RIS), 2019 study undertaken by development in small economies. It also ISBN: 81-7122-145-9 the ASEAN-India Centre focuses on the prospects for India’s (AIC) at Research and This Report presents integration with East Asia, elaborating on Information System for perspectives of exporting its role as the biggest driver of integration Developing Countries and importing firms on in the sub-region. (RIS) on ‘Sailing to ASEAN-India trade and Suvarṇabhūmi: Cultural their experiences on Routes and Maritime Landscapes’, Act East: ASEAN-India Shared NTMs that are hindering which covers various themes of India Cultural Heritage the trade between them. and Southeast Asia interactions and the ASEAN India Centre (AIC) and The Report has used array of collection of bibliography. The Research and Information System for both primary and secondary data. The Working Paper series and Bibliographies the Developing Countries (RIS), 2019 Report has also reviewed awareness of the ASEAN countries prepared to date ISBN: 81-7122-140-8 and perception on NTMs, FTAs and trade have been uploaded on the AIC-RIS facilitation related issues. The Report This book presents essays on India’s website at http://aic.ris.org.in/culture- has used various methods to assess the cultural links with Southeast Asia, with and-civilization. incidence of NTMs and its impacts on

...Continued from page 13 Our interaction with local Khmer of seven generations descend on people revealed that there were earth. People pay their respects to The most famous of the Indian quite a few similarities in customs, connections can be found in the their ancestors during this period beliefs and rituals. Khmer people, spectacular ancient temples of by making offerings to monks with Cambodia, including the magnificent too, believe in reincarnation much the belief that these will reach their Angkor Wat Temple in Siem Reap. like the Hindus. Traditional marriages ancestors. This festival echoes with The design of Angkor Wat simulates involve matching of horoscopes just similar rites and customs of Hinduism a representation of Mount Meru, the like traditional Hindu marriages. After in India. The Cambodian experience centre of the universe and the abode death, the body is cremated; a part was, in many ways, a different sort of the gods, surrounded by mountain of the ashes is immersed in the river of homecoming as we explored the ranges and oceans. The origins of and the rest is kept inside a stupa. All Indian connection in a land where this design can be traced to many families have such a stupa. One of the thousands of years ago the culture of important religious festivals of Khmer of the temples of India. Motifs of the India had travelled to. famous ‘churning of the ocean’ by people is Pchum Ben that lasts for 15 (Excerpted from www.deccanherald.com devas and asuras are seen across days. During this period, offerings of various ancient temples; you can also balls of rice mixed with sesame seeds on 5 January 2018 authored by Sandy N find images of Garuda and numerous are made. It is believed that during Viyay) other Hindu deities. this period, the spirits of ancestors © deccanherald

Mekong-Ganga Policy Brief August 2019 17 Statistical Indicators

Socio and Macro Economic Indicators of MGC Countries, 2017 Indicator India Cambodia Lao PDR Myanmar Thailand Vietnam Population, total (million) 1338.66 16.01 6.95 53.38 69.21 94.60 GDP (current billion US$) 2652.55 22.18 16.85 66.72 455.28 223.78 GDP per capita (current US$) 1981.50 1385.26 2423.85 1249.83 6578.19 2365.62 GDP (PPP current billion $) 9596.84 64.35 48.25 329.50 1240.05 648.74 Agriculture and alied, value added (% of GDP) 15.62 23.36 16.20 23.33 8.33 15.34 Industry, value added (% of GDP) 26.50 30.85 30.91 36.29 35.28 33.40 Services, etc., value added (% of GDP) 48.45 39.72 41.53 40.37 56.40 41.26 Trade (% of GDP) 40.77 124.79 75.83 47.95 122.52 200.38 GDP Growth Rate (%), (2000-2017) 4.66 5.03 8.73 6.49 2.60 6.18 Gross capital formation (% of GDP) 30.94 22.89 29.04 32.76 22.84 26.58 Gross domestic savings (% of GDP) 29.99 21.49 21.90 28.74 34.90 25.46 Inflation, consumer prices (annual %) 2.49 2.89 0.83 4.57 0.67 3.52

*2015 data represented here, due to unavailability of 2016 data. Source: World Development Indicator, World Bank.

Intra-regional Trade

ASEAN-India BIMSTEC MGC SAARC Year Value Value Value Value Share (%) Share (%) Share (%) Share (%) (US$ Billion) (US$ Billion) (US$ Billion) (US$ Billion) 2000 8.99 2.17 3.92 3.42 3.95 3.19 2.20 4.62 2005 22.90 4.09 9.65 4.29 9.63 3.94 8.34 6.37 2010 58.40 5.83 23.67 5.38 31.30 6.28 16.07 6.03 2018 86.04 11.47 47.58 7.48 73.42 8.67 32.08 8.13 Source: WITS Database ...Continued from page 14 India being just one partner for Vietnam ...Continued from page 10 within its wider omni-directional foreign policy, the limits of strategic alignment Mr. Pan Sorasak, the Cambodian Minister manufacturing, processing, engineering, between New Delhi and Hanoi across of Commerce. Other high-profile guests consultancy and construction. As a specific issues, and the remaining to the event include Mr. Suresh Prabhu, result of discussions and negotiations conducted at the India CLMV Business obstacles to development in particular Hon’ble Minister of Commerce, Mr. Than areas of defense cooperation on both Myint, Myanmar’s Minister of Commerce, Forum in 2009, the flow of investment from India to ASEAN increased by 9.4 sides despite the sunny rhetoric. and Mr. CaoQuoc Hung, Vietnam’s Vice- Nonetheless, engagements at various percent from 2015 to 2016, according Minister of Industry and Trade. levels, including this dialogue at the to the Cambodian Minister of Commerce deputy ministerial level, continue to Apart from promoting new business Mr. Pan Sorasak. partnerships, the forum aims to provide opportunities for both sides to (Excerpted from www.khmertimeskh.com on provide a platform for decision makers manage this aspect of ties. 22 May, 2018) in CLMV countries to interact with (Excerpted from www.thediplomat.com Indian companies involved in trading, © Khmertimeskh.com on 20 June 2019 authored by Prashanth Parameswaran) © The Diplomat

18 Mekong-Ganga Policy Brief August 2019 Figure 1: India’s Total Trade with Regional Block 120 2000 2010 2018 Figure 1: India’s Total Trade with Regional Block 100 96.79 120 80 2000 2010 2018 100 96.79 60 56.24

80 Billion US$ 39.34 40 29.69 56.24 27.59 60 18.64 20 11.69 13.83

US$ Billion US$ 39.34 7.06 40 1.36 3.22 2.45 27.59 Statistical29.69 Indicators0 18.64 20 11.69 13.83 ASEAN MGC BIMSTEC SAARC 7.06 1.36 3.22 2.45 Source: Export Import Data Bank, Government of India India’s0 Total Trade with Regional India’s Import from MGC Countries ASEAN MGC BIMSTEC SAARC Blocks by Partners Source:Figure Export 1:Import India’s Data Bank,Total Government Trade with of India Regional Block Figure 2: India’s Import from MGC countries by Partner 120 8.00 7.442 7.192 Figure 2: India’s Import from2000 MGC2010 countries2018 by Partner 7.00 100 96.79 2008 2018 8.00 7.442 7.192 6.00 807.00 2008 2018 5.00 6.00 56.24 60 4.00

5.00 Billion US$

US$ Billion US$ 39.34 40 3.00 2.704 4.00 27.59 29.69 2.00

US$ Billion US$ 18.64 20 2.704 13.83 3.00 11.69 0.929 7.06 3.22 1.00 0.521 0.409 1.36 2.45 0.043 2.000 0.003 0.001 0.001 0.00 0.929 1.00 ASEAN MGC 0.521BIMSTEC 0.409SAARC 0.043 CAMBODIA LAO PDR MYANMAR THAILAND VIETNAM Source: Export0.003 Import 0.001Data Bank,0.001 Government of India Source:0.00 Export Import Data Bank, Government of India Source:Source: Export Export Import Import Data Data Bank, Bank, Government Government of India of India CAMBODIA LAO PDR MYANMAR THAILAND VIETNAM Source:Figure Export 2: Import India’s Data Import Bank, Government from MGC of India countries by Partner Figure 3: India’s Export to MGC countries by Partner India’s8.00 Export to MGC countries by FDI Inflows to India: 2000-2017 7.442 7.00 Figure 3: India’s ExportPartners to MGC countries by Partner7.192 Figure 4: FDI Inflows to India 2000-20176.507 7.00 2008 2018 7.00 2008 2018 6.00 6.507 6.00 400 2008 2018 5.00 364.32 6.00 4.441 5.00 350 5.00 4.00300 4.00 4.441 250 US$ Billion US$ 4.00 3.00

3.00 2.704 US$ Billion 200 1.938 3.00 2.00 Million US$ 1.739 US$ Million US$ Billion 2.00 150 1.938 1.205 2.00 0.929 1.739 1.00 0.521 0.409 1.00100 0.043 0.001 0.001 1.205 0.196 0.039 0.222 0.003 500.047 0.009 0.001.00 0.00 10.34 8.97 0.196 0.039 0.222 4.76 0.047 0.009 CAMBODIA0 LAO PDR MYANMAR THAILAND VIETNAM 0.00 CAMBODIA LAO PDR MYANMAR THAILAND VIETNAM Source: Export Import Data Bank, Government of India Thailand Cambodia Myanmar Vietnam CAMBODIA LAO PDR MYANMAR THAILAND VIETNAM

Source: Export Import Data Bank, Government of India Source: Department Department of ofIndustrial Industrial Policy1 Policy & Promotion & Promotion (DIPP), (DIPP), Government Government of India Figure 3: India’s Export to MGC countries by Partner of India 1 7.00 FDI Outflows6.507 from India: 2008-2016 2008 2018 6.00 Figure 6: Ease of Doing Business Index, 2018 Figure 5: FDI Outflows from India 185 180 EDB: Overall 500 2008-2016 171 5.00 154 411.744.441 152 400 138 137 4.00 300 104 200.76 200 141.7 77

3.00 Million US$ 69

US$ Billion 100 12.88 14.11 1.938 39 2.00 0 1.739 27 Cambodi Laos 1.205Myanmar Thailand Vietnam 1.00 a Cambodia India Lao PDR Myanmar Thailand Vietnam 0.047 0.196 0.009 0.039 0.222 0.00 Source: Source: Department Reserve Bankof Industrial of India, GovernmentPolicy & Promotion of India (DIPP), Source:World Bank Values in US$ Million GovernmentCAMBODIA of India LAO PDR MYANMAR THAILAND VIETNAM

Mekong-Ganga Policy Brief August 2019 19 1

Mekong-Ganga Policy Brief An RIS Publication on Mekong-Ganga Cooperation (MGC)

The Mekong-Ganga Policy Brief seeks to disseminate the policy-related research, news, viewpoints, and information about resources among the policy circles and think-tanks to promote the cause of deeper cooperation between India and Mekong countries. Views expressed by the authors in this policy brief are their personal, and do not represent the views of AIC or RIS. The information contained has been compiled from various sources, as cited, purely for education and dissemination, and not for commercial purposes. The copyrights of the material included remain with the original sources. Mekong-Ganga Policy Brief is available from AIC or RIS or can be downloaded from www.ris.org.in. About RIS Research and Information System for Developing Countries (RIS) is a New Delhi-based autonomous policy research institute that specialises in issues related to international economic development, trade, investment and technology. RIS is envisioned as a forum for fostering effective policy dialogue and capacity-building among developing countries on global and regional economic issues. The focus of the work programme of RIS is to promote South-South Cooperation and collaborate with developing countries in multilateral negotiations in various forums. RIS is engaged across inter-governmental processes of several regional economic cooperation initiatives. Through its intensive network of think tanks, RIS seeks to strengthen policy coherence on international economic issues and the development partnership canvas. For more information about RIS and its work programme, please visit its website: www.ris.org.in About AIC Considering the work of the ASEAN-India Eminent Persons Group (AIEPG), and its Report with recommendations for forging a closer partnership for peace, progress and shared prosperity, the Heads of the State/Government of ASEAN and India at the ASEAN-India Commemorative Summit 2012, held at New Delhi on 19-20 December 2012, recommended the establishment of ASEAN-India Centre (AIC) using existing resources at New Delhi. AIC was set-up at RIS. AIC serves as a resource centre for ASEAN Member States and India to fill the knowledge gaps that currently limit the opportunities for cooperation. AIC undertakes policy research, advocacy and networking activities with organizations and think-tanks in India and ASEAN, with an aim to promote the ASEAN-India Strategic Partnership. For more information please visit http://aic.ris.org.in Contact us at: AIC ASEAN-India Centre at RIS Core IV-B, Fourth Floor, India Habitat Centre Lodhi Road, New Delhi-110 003, India Ph.: +91-11-24682177-80, Fax: +91-11-24682173-74 E-mail: [email protected]; [email protected] Website: www.ris.org.in

Editor: Prof. Prabir De, Coordinator, AIC Editorial Team Managing Editors: Dr. Beena Pandey, RIS and Dr. Durairaj Kumarasamy, RIS Research Support: Ms. Sreya Pan, RIS

20 Mekong-Ganga Policy Brief August 2019