Vietnam has got better connected with other countries in the Greater Mekong Sub-region (GMS) thanks to a wide range of projects on transport infrastructure development conducted within this cooperation framework.
Vietnam is the only country in the GMS that has participated in all three economic corridors. They include the north-south corridor that connects Vietnam with China, the east-west to link Thua Thien-Hue province and Da Nang city in the central region with Laos and all the way to Thailand and Myanmar and finally the southern one bridging HCM City with Phnom Penh and Bangkok.
According to Vietnamese Deputy Minister of Transport Le Dinh Tho, with financial aid from sponsors, especially the Asian Development Bank (ADB), and concerted efforts, Vietnam has been completing works within these important connectivity corridors. Connecting with China, Vietnam put the Kunming – Lao Cai – Hanoi – Hai Phong expressway into use in December 2015.
Notably, the Hanoi – Lao Cai expressway with a total length of 264 km and investment of US$1.2 billion sourced from the ADB was considered a strategic part of the Kunming – Lao Cai – Hanoi – Hai Phong road corridor under the cooperation programme between the six GMS countries, namely Vietnam, Laos, Cambodia, Thailand, Myanmar and China.
The expressway, the longest of its kind in Vietnam, was put into operation in September 2014 as part of the North – South Economic Corridor (NSEC), helping reduce travel time between Hanoi and the northern border province of Lao Cai from seven to three hours and facilitating the transport of goods.
It is not only important to Vietnam but also the whole GMS region by changing the economic panorama of localities in northern Vietnam and southern China through enhancing transport connectivity, trade exchanges, investment and tourism cooperation.
The Nanning – Lang Son – Hanoi – Hai Phong and Hai Phong – Ha Long – Van Don – Mong Cai – Pingxiang expressways are set to become operational before 2020.
The East-West Economic Corridor (EWEC) features Da Nang Port – Dong Ha (along National Road No.1) – Lao Bao International Border Gate – National Road No. 9 of Laos – Thailand – Dawai Port of Myanmar route with a total length of 1,450 km. This is an important corridor that helps shorten road travel time from the Pacific Ocean to the Indian Ocean to three hours.
Another route in the east-west corridor running along National Road 217, funded by the ADB, will be completed soon.
On the basis of the east-west corridor linking the Pacific Ocean and the Indian Ocean, Vietnam and Laos have put forth an initiative to build another corridor from Myanmar to Laos via Thailand, running along Paksan (Laos) – Thanh Thuy International Border Gate – Vinh (Vietnam’s Nghe An province) section to Vung Ang Port in the central province of Ha Tinh. It is a branch of the Hanoi – Vientiane expressway.
To connect with Cambodia, the Southern Economic Corridor (Southern Coastal Corridor – SCC) has been built with the ADB’s support. Vietnam and Cambodia have signed an agreement on accelerating the construction of the 180-km Ho Chi Minh City – Phnom Penh expressway. The route runs from Ho Chi Minh City through Cai Mep – Thi Vai Port to Phnom Penh and then to Thailand before joining the SCC.
Transport infrastructure development a priority of Vietnam
Addressing a session on infrastructure development and financing as part of the GMS Business Summit in Hanoi on March 30, Vietnamese Minister of Transport Nguyen Van The said infrastructure plays an important role in socio-economic development of a nation and infrastructure development is a priority of many developing countries, including Vietnam.
|Vietnamese Minister of Transport Nguyen Van The addresses a session on infrastructure development and financing as part of the GMS Business Summit in Hanoi on March 30.|
In recent years, the Vietnamese Government has spent about 9%-10% of its annual GDP on transport, energy, telecommunications and water infrastructure, he said.
However, the transport infrastructure system in Vietnam is still small in terms of scale with asynchronous connections. The country has only 756 kilometres of expressway while the railway system is out-of-date.
According to the minister, Vietnam plans to step up development of high-quality transport infrastructure to spur its socio-economic growth. It will continue completing its expressway system. Between now and 2020, the country expects to finish construction of about 654 kilometres out of 1,300 kilometres of the north-south expressway in the form of public-private partnership (PPP).
It also considers the building of new roads and high-speed railways to get connected with ASEAN, GMS and trans-Asia road systems, while paying attention to airport development, including the construction of Long Thanh International Airport with annual capacity of 100 million passengers and 5 million tonnes of cargo in the southern province of Dong Nai, The said.
He revealed that Vietnam needs an estimated VND1,015 quadrillion (US$44.7 billion) in investment to develop transport infrastructure in the 2018-2023 period.
Of the total, VND651 trillion is for road development, VND119 trillion for railways, VND101 trillion for air transport, VND68 trillion for sea routes and more than VND33 trillion for inland waterways.
About VND300 trillion (US$14 billion) is expected to come from non-budget sources inside and outside the country, especially foreign investment.
Therefore, Vietnam calls on businesses, investors and development partners to invest in developing transport infrastructure in Vietnam as well as other GMS nations, thus turning the GMS into a prosperous and developed sub-region, The stressed.
Enhancing transport connectivity for prosperous GMS
Transport connectivity is a top priority of the GMS Economic Cooperation Programme. At the time when the programme was launched, most of the sub-region’s infrastructure was in very poor quality. In response to this, the GMS adopted the Transport Master Plan in 1995, which identified priority transport links – mostly road projects – designed to generate the greatest and most immediate connectivity improvements.
This was an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, especially by reducing travel times and costs. As the countries have moved from a strategy of self-sufficiency to regional cooperation, major efforts have been made to develop infrastructure linking the GMS and beyond, particularly through the identification of economic corridor projects.
A GMS transport strategy for 2006-2015 was developed to build a seamless GMS transport network, connecting not only sub-regional nations but also neighbouring countries and regions.
Now, the GMS transport strategy towards 2030, with a vision of “seamless, efficient, reliable, and sustainable GMS transport system”, recommends expanding road and railway connections, focusing on multimodal transport development and integrating climate change assessments into transport development projects.
The sub-region’s member nations have pledged to implement the GMS Cross-Border Transport Facilitation Agreement (GMS-CBTA) to boost economic cooperation and development.
Turning the countries’ infrastructure into economic corridors, generating jobs, developing tourism and trade, creating cohesion in terms of interest and promoting peace in the region are among the GMS’s goals.
“Infrastructure is the key of the GMS connectivity, especially the inland connectivity. It is the trend of our sub-region to enhance the inland connectivity,” Tak Sriratanobhas, a member of the Thai Chamber of Commerce and Board of Trade told the Vietnam News Agency on the sidelines of the GMS Business Summit, which took place in Hanoi on March 30 as part of the sixth GMS Summit.
The key is turning infrastructure from transport corridors to economic corridors, meaning hardware and software infrastructure must combine, he said, adding that the hardware is the efficiency of roads linking the countries while the software is how to go through the border easier, faster and cheaper.
“If we make the border crossing more efficient, faster and less costly, it is the key to successfully turning the region into a real economic corridor,” he noted.
According to Chris Malone, Partner and Managing Director at the Boston Consulting Group, the GMS countries need to work together to have a win-win solution so all of them benefit from further infrastructure connectivity and contribute to economic development as well as the harmony of people in the Mekong River.
Transport infrastructure development will help optimise the supply chain of companies, reduce their costs and make them more competitive, said Casaba Bundik, Vice Chairman of the Central and Eastern European Chamber of Commerce in Vietnam.
“A better linked infrastructure will make people’s life and companies’ operation easier,” he noted.
The current trade among the GMS countries could double if there is better infrastructure in the region, according to Htun Zaw, Deputy Director General of the Foreign Economic Relations Department under the Ministry of Planning and Finance of Myanmar.
“There is a huge opportunity to increase infrastructure connectivity in the region but the real challenge is funds,” he said.
Meanwhile, Japanese Ambassador to Vietnam Umeda Kunio said at the session on infrastructure development and financing of the GMS Business Summit in Hanoi on March 30 that his government has put forth an initiative to promote quality infrastructure and made efforts to improve connectivity in the GMS region.
As a partner of the GMS, Japan has provided support for fostering regional economic growth, contributing to narrowing the development gap as well as boosting investment and trade through infrastructure projects.
Japan’s assistance not only covers hard infrastructure such as expressways and bridges but also human resources training and development of areas along the economic corridor, he said.
The ADB has for years been a major sponsor of the GMS. ADB President Takehiko Nakao said his bank plans to provide US$7 billion over the next five years for a range of projects supporting transportation, tourism, energy, climate change mitigation and adaptation, agribusiness value chains and urban development in the sub-region.
The sub-region is expected to receive US$66 billion in investment to strengthen regional economic cooperation in the next five years, Alfredo Perdiguero, Director of Regional Cooperation and Operations Coordination Division, Southeast Asia Department, told Vietnamese media.
The sum increased by US$2 billion compared to what ministers of the six member countries agreed in the action plan framework for 2018-2022 late last year.
It will more than triple the total sum of US$21 billion mobilised for the region since the GMS economic cooperation programme was first launched by the ADB in 1992.
Besides the ADB, the amount is also expected to be contributed by many other partners, together with the governments of the GMS countries, he noted.
The GMS cooperation was launched in 1992 as an initiative of the ADB. The GMS Cooperation Programme is the most complete cooperation programme that involves Vietnam, Laos, Cambodia, Thailand, Myanmar, and China’s Yunnan and Guangxi provinces. The programme prioritises infrastructure development, energy, telecommunication, tourism, trade-investment, human resources, and environment.