Effectiveness and Challenges of Three Economic Corridors of the Greater Mekong Sub-region

Since the Greater Mekong Sub-region (GMS) program began in 1992, activities have expanded and flourished. The three economic corridors are composed of the East-West, North-South, and Southern; these are the most important parts of the flagship program. This article presents an evaluation of these economic corridors and their challenges in accordance with the regional distribution of population and income, population pyramids of member countries, and trade relations of member economies.

Sources of Regional Income Disparity in Rural Vietnam: Oaxaca-Blinder Decomposition

This paper investigates determinants of regional income disparity in rural Vietnam, with special emphasis placed on the roles of human capital and land. We apply a decomposition method, suggested by Oaxaca and Blinder. We found that returns to assets rather than endowments, especially those of human capital, are one of the leading factors to account for income differences across regions. We also found that substantial improvements of returns to human capital in the Red River delta region are a driving force to catch up with Mekong River delta region. Unexpectedly, differences in land endowment do not strongly correlate with regional income disparity because better access to land in a region was partially offset by lower returns.

Thailand's Economic Cooperation with Neighboring Countries and Its Effects on Economic Development within Thailand

Thailand's economic cooperation with neighboring countries, including not only trade and investment but also economic assistance, is tied inseparably to regional development within Thailand. Assistance to develop infrastructure along economic corridors, for example, promotes Thai regional development. This study examines the trade and investment relationships between Thailand and its neighboring countries, as well as related economic policies of Thailand. The study also examines the type of economic assistance being extended, and the resulting regional development taking place. And lastly, the study considers policies for further cooperation by Thailand and the implications this has for Japanese economic cooperation.

Border Industry in Myanmar: Turning the Periphery into the Center of Growth

The Myanmar economy has not been deeply integrated into East Asia’s production and distribution networks, despite its location advantages and notably abundant, reasonably well-educated, cheap labor force. Underdeveloped infrastructure, logistics in particular, and an unfavorable business and investment environment hinder it from participating in such networks in East Asia. Service link costs, for connecting production sites in Myanmar and other remote fragmented production blocks or markets, have not fallen sufficiently low to enable firms, including multi-national corporations to reduce total costs, and so the Myanmar economy has failed to attract foreign direct investments. Border industry offers a solution. The Myanmar economy can be connected to the regional and global economy through its borders with neighboring countries, Thailand in particular, which already have logistic hubs such as deep-sea ports, airports and trunk roads. This paper examines the source of competitiveness of border industry by considering an example of the garment industry located in the Myanmar-Thai border area. Based on such analysis, we recognize the prospects of border industry and propose some policy measures to promote this on Myanmar soil.

Evaluating the Effectiveness of GMS Economic Corridors: Why is There More Focus on the Bangkok-Hanoi Road than the East-West Corridor?

Since the inauguration of the Greater Mekong Sub-region (GMS) Economic Cooperation Program in 1992, road infrastructure projects have played a very important role. Their economic significance, especially, has become a focal point after the introduction of the concept of the three economic corridors in 1998: the East-West Economic Corridor; the North-South Economic Corridor; and the Southern Economic Corridor (Figure 1). The completion of the Second International Mekong Bridge between Mukdahan, Thailand and Savannakhet, Laos was an epoch-making event in the development of the East-West Economic Corridor. The business community, however, has paid more attention to the Bangkok-Hanoi Road than the East-West Economic Corridor. This study examines the reasons why the former has received more focus than the latter, by using criteria such as population density and the economic scale at a provincial or state level. Thereafter, the effectiveness of other economic corridors is examined, by applying the same criteria.

Infrastructure Development of Railway in Cambodia: A Long Term Strategy

Infrastructure development means for the making of living environment, transport and communications, disaster prevention and national land conservation, agriculture, forestry and fisheries, and energy production and supply. Transport infrastructure development in Cambodia involved with (1) road, (2) railway, (3) port, inland-water way and (4) aviation. All model of transport infrastructure have special different kinds of importance. Railway is different from other base important of railways are transport passengers and traffic freight especially transport for heavy goods in huge capacity and in long distance by safer and faster. Transport in Cambodia for traffic freight export import base from Thailand and other via Sisophon and Shihanoukvill port. Traffic is increasing rapidly during nowadays railway condition in adequate of demand required. This is why Railway is selected as the topic of this paper to prevent monopoly of road transport. This paper, does review about infrastructure development plan for Railway in Cambodia as a long term strategy by review and analysis forecast on the previous performance of Royal Railways of Cambodia (RRC) transport traffic involved with condition of infrastructure development of railway in Cambodia. And also review the plan of development RRC but just only detail a plan of rehabilitation that is immediately needed. Suggest some recommendation at the last part. As Cambodia is a member country of ASEAN and also Mekong sub-region. For make sure that transport networks work effectively with a progress of economic integration, we make clear what is important for infrastructure development of railway in Cambodia from the standpoint of the development plan of Mekong sub-region. This paper is organized by 4 sections. Section 1 review about Infrastructure Development of Railway in Cambodia (IDRC) Historical Background, Follow by Section 2 will review the Current Situation of IDRC and some analysis of transport performance from previous years, Then Section 3 review of the focusing on traffic transport of RRC in the future, Section 4 review Infrastructure Development of Railway in Cambodia Future plans in long term; at last conclusion and recommendation. In section 1 does review history background of RRC from the rail first begun. But why is needed to review? Because of history background is involved infrastructure development of RRC in present time. History background made big gaps constraint and obstacle for socioeconomic development and poverty reduction, also left Cambodia with tragedy and left developed behind. After that remain infrastructure development needs huge fund and long time for restoration, reconstruction, rehabilitation and development into new technology as most of world practice.

Development of Border Economic Zones in Thailand: Expansion of Border Trade and Formation of Border Economic Zones

In the wake of economic globalization and development in Thailand, movement of people and commodities at the Thai borders is also becoming pronounced. Economic interdependence between Thailand and neighboring countries is growing through border customhouses. As a policy, Thailand is trying to stimulate trade and investment with neighboring countries following the ACMECS (Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy) scheme. In this report, first, movement of people and goods at the borders will be examined. Second, clarification of where and how development is proceeding will be presented. Last, this study will attempt to review the perspectives of policies on neighboring countries after Thaksin.

Border Trade and Economic Zones on the North-South Economic Corridor: Focusing on the Connecting Points between the Four Countries

The North-South Economic Corridor (NSEC), the road between Bangkok and Kunming, China, including the Laos route (R3B) and the Myanmar route (R3B), has been developed since 1998 following the GMS program. The region covering Yunnan Province in China, Shan State in Myanmar, Northern Laos and Northern Thailand has historical and ethnic closeness, and is a comparatively poor mountainous, boundary area. In the wake of the development of the NSEC, however, the region has started to show signs of change. Consequently, a review is to be carried out concerning the movement of people and cars, border trade and the situation concerning the progress of border economic zones at the five nodal border points in the four countries, and over three routes: R3A, R3B, and the Mekong River route.

Chapter 1 Economic Integration and Industry Location: Theories, Empirical Results, and Implications for CLMV

Trade affects the internal location of industry in two ways: it induces firms to specialize and it expands the set of markets that firms serve. If there are industry-specific external economies, firms in related industries will spatially agglomerate (Hanson 1996a). In the context of economic integration, diminished barriers to trade affect industry location particularly in less developed countries. As described below, regional agreements in North America and Europe have caused frontier regions to expand. These regions, which include border regions and port cities, have advantages over internal regions in terms of access to foreign markets. Since trade liberalization induces many firms in developing countries to participate in production networks and to specialize in labor-intensive activities such as assembling and processing of foreign-made components, their inputs as well as final products need to be carried across borders. Therefore, the best industry location, one that minimizes transport costs, is likely to shift to frontier regions. In East Asia, China has developed rapidly since it opened up to international trade. Simultaneously, a large amount of foreign direct investment (FDI) has been attracted and industry agglomerations have been formed in coastal regions, that is, frontier regions linked to the global market by sea, leaving many internal regions behind. Similarly, Cambodia, Laos, Myanmar, and Vietnam (CLMV) have joined AFTA and/or the WTO and liberalized international trade since the 1990s. Moreover, transport infrastructures such as the East-West Economic Corridor, the Southern Economic Corridor, and the North-South Economic Corridor have been built and narrowed economic distances in the Greater Mekong Subregion (GMS). As a result, frontier regions are likely to increase their location advantages and lure labor-intensive operations from neighboring countries. It is expected that, as has happened in North America and Europe, economic integration in East Asia will significantly affect internal geography in CLMV. In this study, I first review theories relevant to economic integration and industry location within a country. In particular, emphasis is placed on the new economic geography (NEG). Secondly, empirical results for North America and Europe are surveyed since they have preceded East Asia in regional integration and a substantial number of studies have been conducted on these regions. The final section summarizes and discusses implications for internal geography in CLMV.

Chapter 6 Economic integration and changes in industrial location in Vietnam

Vietnam has been praised for its achievements in economic growth and success in poverty reduction over the last two decades. The incidence of poverty reportedly fell from 58.1% in 1993 to 19.5% in 2004 (VASS [2006, 13]). The country is also considered to have only a moderate level of aggregate economic inequality by international comparisons. As of the early 2000s, Vietnam’s consumption-based Gini coefficient is found to be comparable to that of other countries with similar levels of per capita GDP. The Gini index did increase between 1993 and 2004, but rather slowly, from 0.34 to 0.37 (VASS [2006, 13]). Yet, as the country moves on with its market oriented reforms, the question of inequality has been highlighted in policy and academic discourses. In particular, it is pointed out that socio-economic inequalities between regions (or provinces) are significant and have been widening behind aggregate figures (NCSSH [2001], Mekong Economics [2005], VASS [2006]). Between 1993 and 2004, while real per capita expenditure increased in all regions, it grew fastest in those regions with the highest per capita expenditures and vice versa, resulting in greater regional disparities (VASS [2006, 37]). A major contributing factor to such regional inequalities is the uneven distribution of industry within the country. According to the Statistical Yearbook of Vietnam, of the country's gross industrial output in 2007, over 50% belongs to the South East region, close to 25% to the Red River Delta, and about 10% to the Mekong River Delta. All remaining regions share some 10% of the country's gross industrial output. At a quick glance, the South East increased its share of the total industrial gross output in the 1990s, while the Red River Delta started to gain ground in more recent years. How can the government deal with regional disparities is a valid question. In order to offer an answer, it is necessary in the first place to grasp the trend of disparities as well as its background. To that end, this paper is a preparatory endeavor. Regional disparities in industrial activities can essentially be seen as a result of the location decisions of enterprises. While the General Statistics Office (GSO) of Vietnam has conducted one enterprise census (followed by annual enterprise surveys) and two stages of establishment censuses since 2000, sectorally and geographically disaggregated data are not readily available. Therefore, for the moment, we will draw on earlier studies of industrial location and the determinants of enterprises’ location decisions in Vietnam. The remainder of this paper is structured as follows. The following two sections deal with the country context. Section 2 will outline some major developments in Vietnam’s international economic relations that may affect sub-national location of industry. According to the theory of spatial economics, economic integration is seen as a major driver of changes in industrial location, both between and within countries (Nishikimi [2008]). Section 3, on the other hand, will consider some possible factors affecting geographic distribution of industry in the domestic sphere. In Section 4, existing literature on industrial and firm location will be examined, and Section 5 will briefly summarize the findings and suggest some areas for future research.

Mapping agricultural value chains with international input-output data

In recent years, the analysis of trade in value added has been explored by many researchers. Although they have made important contributions by developing GVC-related indices and proposing techniques for decomposing trade data, they have not yet explored the method of value chain mapping—a core element of conventional value chain analysis. This paper introduces a method of value chain mapping that uses international input-output data and reveals both upstream and downstream transactions of goods and services induced by production activities of a specific commodity or industry. This method is subsequently applied to the agricultural value chain of three Greater Mekong Sub-region countries (i.e., Thailand, Vietnam, and Cambodia). The results show that the agricultural value chain has been increasingly internationalized, although there is still room for obtaining benefits from GVC participation, especially in a country such as Cambodia.