Private sector has key role to play in Mekong economic cooperation

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Last updated at: (Beijing Time) Saturday, September 20, 2003

Private sector has key role to play in Mekong economic cooperation

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The private sector will have a major role to play in future economic cooperation in the Greater Mekong Subregion (GMS), as indicated by its participation in the 12th ministerial meeting of the GMS Economic Cooperation Program held from Wednesday to Friday in this southwest Chinese city.

For the first time in the ministerial meeting's 11-year history,the private sector was invited to attend. Jin Liqun, vice president of the Asian Development Bank (ADB), the event's organizer, said the arrangement was made at the request of the GMS governments, a strong demonstration of the importance the Mekong countries attach to the private sectors in subregional economic cooperation.

"This is a welcome initiative, and it should be set up as a norm that the private sector will be involved more closely in the GMS development process," Jin said.

Rajat M. Nag, director general of the ADB's Mekong Department, predicted that the next decade will see private sectors play an increasingly important role in the subregional cooperation.

"We believe that in the medium to long term, the private sectorwill drive economic growth. The GMS, with 250 million people and greater connectivity, lower trade and non-trade barriers, will offer great opportunities as a large market as well as efficient production base," he said.

During the meeting, representatives from the Mekong countries and the ADB officials have stressed time and again that the involvement of private sectors is welcomed and encouraged, and in response, the representatives of the private sectors also expressed their strong willingness to enhance their presence in the development process.

Started in 1992, the GMS program, involving China, Cambodia, Laos, Myanmar, Thailand and Vietnam, has achieved tangible resultsin such key areas as road transport, telecommunications and human resources development, and helped promote the economic integration between Mekong countries by increasing connectivity through infrastructure development and multilateral agreements.

As a major partner of the program, the ADB has, together with other development partners, invested over 3 billion US dollars into 15 major infrastructure projects.

Nag, however, predicts that total investment in infrastructure development alone will require 15 billion to 20 billion US dollars,which makes the participation of the private sector a necessity.

But capital deficiency is not the only reason that private sector involvement is being stressed. According to Jin, the role of the private sector is being increasingly recognized in both regional and global economic cooperation, and the GMS program should also timely involve the private sector, and the countries should also create for them an enabling environment including efficient and transparent governance, more developed legal and financial systems and environment for fair competition.

Jin said the public-private sector partnership is needed in alleconomic cooperation. The private sector will have a hard time thriving without the support of a good public sector, and it will also promote the public sector to improve its enabling environment.

Robert Boumphrey, director of governance, finance and trade division of ADB in the Mekong area, said the bank's development projects involved only the public sector two decades ago.

Now, although private involvement is still small compared with the overall operations, the proportion is on the gradual and steady increase, he said.

The ADB hopes as many as possible private businesses, either local or foreign, will participate in the GMS program projects, and in infrastructure construction in particular.

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