Towards Region wide Connectivity in the Greater Mekong Sub Region (GMS)

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Griffin Bates
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1 2 nd Ministerial Conference on Regional Economic Cooperation and Integration United Nation Conference Center, Bangkok, Thailand November 2017 Towards Region wide Connectivity in the Greater Mekong Sub Region (GMS) MR. OUDET SOUVANNAVONG CHAIRMAN OF THE GMS BUSINESS COUNCIL (GMS BC) PRESIDENT LAO NATIONAL CHAMBER OF COMMERCE AND INDUSTRY (LNCCI)

2 Established in October 2000, GMS BF is a private sector organization formed by National CCIs of six GMS countries and of corporate multinational enterprises operating in the GMS. GMS Business Council (GMS-BC) Its role is to provide needed private sector related products and services to facilitate the implementation of the GMS Economic Cooperation Program (ECP), which actions is specified in the GMS Strategic Frameworks. Its strategic focus and scope is to contribute to the effective implementation of the ECP through the involvement of the private sector in program activities and investment. The GMS BF has been up graded to a GMS Business Council at the 4 th GMS Summit in 2015 in Thailand. The GMS BC reports to the GMS Economic Corridor Forum (ECF) and the GMS Ministers Meeting annually. The GMS BC is mandated to organize the GMS Business and Investment Conference and report the results to the GMS leaders at the GMS Summit

GMS Land area:2,508,934 sq km Population: 325.

M GDP per capita: US$ 5,134 Thailand Land area: 676,577

0 M GDP per capita: US$ 6,005 Viet Nam Land area:

7 M GDP per capita: US$ 1,895 Lao PDR Land area: 236,800

3 GMS Land area:2,508,934 sq km Population: M GDP per capita: US$ 1,500 Yunnan Land area: 152,124 sq km Population: 47.1 M GDP per capita: US$ 4,230 Myanmar Land area: 676,577 sq km Population: 51.5 M GDP per capita: US$ 964 Quangxi Land area: 91,390 sq km Population: 47.5 M GDP per capita: US$ 5,134 Thailand Land area: 676,577 sq km Population: 67.0 M GDP per capita: US$ 6,005 Viet Nam Land area: 330,972 sq km Population: 90.7 M GDP per capita: US$ 1,895 Lao PDR Land area: 236,800 sq km Population: 6,8 M GDP per capita: US$ 1,512 Cambodia Land area: 181, 035 sq km Population: 15.1 M GDP per capita: US$ 1,042 THE GREATER MEKONG SUB-REGION Source: ADB Statistics

4 GDP Growth Vision and Goals GMS Strategic Framework Substantial progress to future global and regional trends. Commitments in national development plans to the promotion of Regional and Global Integration. A greater integration within ASEAN and the Asia Region. GMS countries envision a Mekong Sub region that is more integrated, prosperous, and equitable 1) an enabling policy environment and effective infrastructure linkages that will facilitate cross border trade, investment, tourism, and other forms of economic cooperation; 2) the development of human resources and skills competencies. Environment and Social Interests will be fully respected in the formulation and implementation of the GMS Program. FDI Growth

5 Outreaching Issues GMS, which comprises of five ASEAN Countries and two provinces in Southern China, has experienced impressive economic growth and development in recent years. During the past decade, the GMS road network has expanded by more than 200,000 km, and inland road freight has increased by two to three tiers. In the GMS Regional Investment Framework (RIF), more than 50 transport infrastructure projects (86% of total investment) has been identified with a value of 30 Billions US Dollars. Despite these progress and advances, remaining barriers to trade and transport continue to hamper the Sub region s full economic potential. The global business and economic landscape is transforming. at digital speed. The digital industry revolution is impacting on global and regional supply chains, and has enhanced the need for more efficient cross border facilities and services. The economic eco system is disruptive to traditional business thus hardly impact on the doing business of SMEs and MSMEs. There is a need to create more private sector led platforms to address the challenges.

6 Sector Priorities 1) Developing the Major GMS corridors as Economic Corridors; 2) Strengthening transport linkages, particularly roads and railways; 3) Developing an integrated approach to deliver sustainable, secure, and competitive energy; 4) Improving telecommunication linkages and ICT applications; 5) Developing and promoting tourism in the Mekong as a single destination; 6) Promoting competitive, climatefriendly, and sustainable agriculture; 7) Enhancing environmental performance; 8) Supporting HRD initiatives that facilitate the process of GMS integration.

7 Support Regional Connectivity GMS Railways Network

8 Support Regional Connectivity Initiatives Marine Roll On Roll Off (RoRo)

9 GMS Corridor Development Trade & Transport Facilitation Transport Facilitation: Expanding and streamlining exchange of traffic rights arrangements; Improving the Customs Transit System (CTS); Accelerating infrastructure construction and improved procedures at border posts; Pursuing the establishment of the GMS Freight Transporters Association (FRETA); Strengthening the road transport industry; Trade facilitation: Enhancing coordinated border management and aligning these to the ASEAN TTF measures, Enhancing the sanitary and phyto sanitary regime for GMS trade, Strengthening national and sub regional institutions for trade facilitation, and Developing an effective regional trade logistics strategy; and Capacity building and improving the legal and regulatory framework for TTF.

10 GMS Freight Transport Association (GMS FRETA) Facilitate the implementation of the CBTA Reduce the costs of logistics Facilitate the free circulation of qualified/standardized vehicles Capacity building and certifying of transport enterprises, managers and truck drivers Access to finance for the transport industry Trade and transport data base for monitoring Development of multimodal transport Exchange of truck head and trailers.

11 GMS FRETA Essential Practical Measures Border Operating hours: Time to be minimum 12 hrs. / 7 days a week in all major borders in the GMS Economic Corridors. This concerns CIQ and other related operations. Mutual recognition of trailers on all Economic Corridors: Truck trailers to be swapped at borders and pulled by home country truck units. This will apply on Trailers passport will need to be issued as for the vehicle passport. Rationalization of Maritime Container Trucking Operation: Maritime containers running between Thailand and Laos may only carry cargo in one direction thus automatically incur 50% empty running. An agreement is to be brokered between shipping lines, customs authorities and transport associations to allow round trip loading. Harmonization and mutual recognition of industry standards: Develop compendium/co mparison of truck and driver regulations and standards in each country Recommendation for upgrading transport industry standards, including green freight standards Recognition of all documents transferred by electronic means: In many borders hard copies of clearance documents to authorities are still required. Allowing recognition of electronic transferred documents will speed up clearance and remove the need of unnecessary long distance journeys.

Training of Transport Operators and Truck Drivers in cooperation with the Mekong Institute (MI) supported by the EU Switch Program GiZ to strengthen the capacity of

GMS FRETA by the Myanmar International Federation of Freight Transport Association (MIFFA) and the Thai Board of Trade (Logistic Chapter) successfully negotiated the

12 Training of Transport Operators and Truck Drivers in cooperation with the Mekong Institute (MI) supported by the EU Switch Program GiZ to strengthen the capacity of transport operators and truck drivers. GMS FRETA by the Myanmar International Federation of Freight Transport Association (MIFFA) and the Thai Board of Trade (Logistic Chapter) successfully negotiated the exchange of truck head and trailers from Mae Sot Myawaddy (Thailand Myanmar border) to Thilawa SEZ in Yangon. The pilot project illustrates that trailer swapping at Mae Sot Myawaddy border is one effective intermediate solution for border logistics. The Myanmar Times 29 August GMS FRETA Recent Initiatives

13 Integration of Cargo Flow Development of Logistics Hub Improvement of Major Logistics Routes Improvement of Transport Efficiency Provision of value added services at logistics hubs Business Stimulation Attraction of Foreign Logistics Business Strengthening of Domestic Logistics Business Strengthening of Logistics Administration Market Expansion Facilitation of GMS CBTA More Improvement of Cross Border Procedures Liberalization of Logistics Market Fulfilment and operationalizing mandates of CBTA which today is partial with focus on ASEAN Single Window via National Single Windows and Single Stops National Transformation & Regional Logistics Strategy to Address Challenges

Private Sector Led Platform Multimodal Trans shipment Hub (MTH) & Logistic Digital Market Place Physical Asset MTH: movement of assets, e.g. trucks, containers, handling the movement of shipment goods in the region.

14 Private Sector Led Platform Multimodal Trans shipment Hub (MTH) & Logistic Digital Market Place Physical Asset MTH: movement of assets, e.g. trucks, containers, handling the movement of shipment goods in the region. Includes Dry Port as part of MTH. Digital Market Place e Cargo Commerce: Real time Exchange of Data E.g. multi modal transporter schedules, shipment notices and Customs declaration. Help resolve imbalances and inefficiencies of empty containers (MTs), back haulage and LCLs. Optimization Capabilities Supply/demand matching for bid/buy/exchange between cargo and transporters based on best matched price performance. Regulatory Framework CBTA & ASEAN Single Window Implementation: A government approved body empowered and held accountable to operationalize the MTH and e cargo commerce platform through trade & transport facilitation and arbitration.

15 GMS BC Additional Private Sector Initiatives Focus on new business advocacy and new economy groups Young Entrepreneurs and Women Entrepreneurs to share opportunities to develop the platforms for the 8 sectors specified in the GMS Strategic Framework. GMS BC will organize its first Young Entrepreneur Forum in Platforms for Private Sector Development Access to Market Platform information sharing in all the GMS countries. A platform to support the access to knowledge and technology to accelerate development; Mentorship Platform to support the access to talent, and to make it easier for people to move among the region; Money & Capital Access and to initiate B2B on finance technology 02 HRD and capacity building of the private sector work with Mekong Institute (MI) for strengthening cross border transport and logistic under GMS FRETA. GMS BC and MI agreed to work together to develop a GMC Cross Border data base for commerce, logistic and finance.

16 GMS-BC GMS BUSINESS COUNCIL GMS Business Council Secretariat LNCCI Building, Kaysone Phomvihane Avenue Saysettha District, Vientiane Capital, Lao PDR bc.org THANK YOU!

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