Upgrade infrastructure to attract global manufacturing, GMS told

There is a significant need for Mekong region countries to upgrade their infrastructure to take on a larger share of global manufacturing, said Sok Siphana, chairman of independent Cambodian think-tank Asian Vision Institute (AVI).

“The promotion of the free flow of goods, services, investment and skilled labour within the Greater Mekong Subregion (GMS) could further support intra-regional trade that is currently low, even by Asean standards,” wrote Mr Siphana, a senior advisor to the Cambodian government, in Mekong Connect, AVI’s first publication.

While GMS is increasingly integrated into the Asean Economic Community, which is shaping the way businesses operate in Mekong countries in terms of regional and global value chains expansion, global dynamics and trends threaten to constrain GMS’ development trajectory.

The subregion needs to capture a bigger share of global manufacturing and, to do that, infrastructure development funding should be addressed, he said, adding that although the availability of such funds has risen, Mekong nations should encourage more infrastructure investment.

The current funds come mostly from the Asean Infrastructure Fund, Japan’s Partnership for Quality Infrastructure, China’s Belt and Road Initiative, and the Asian Infrastructure Investment Bank.

“These systemic impediments to Mekong growth require sustained efforts towards deeper multilateral cooperation across and beyond the GMS if they are to be alleviated,” Mr Siphana said.

He noted that several geopolitical trends are affecting GMS now and will continue to do so in the future, including a shift towards a multipolar global power structure, unresolved and overlapping territorial and maritime claims, ethnic and religious strife, and forced displacements.

“Cambodia is conscious of these regional and global challenges. Its economic growth and development journey will be determined by its ability to react to digital science and technology, and its adoption, believing that it is a key tool to transforming from an agrarian state into an industrial, knowledge-based economy,” said Mr Siphana.

He pointed out that Cambodia’s Industrial Development Policy 2015-2025 – which calls for the creation of the National Science and Technology Council, as well as the promotion of science, technology, engineering and mathematics (STEM) to schoolchildren – targets the objective quite clearly.

“To receive the full dividends from the national development strategies, Cambodia must further integrate itself into wider Asian and global value chains,” he said, stressing that the role of intra-Asian cooperation in promoting development in the Mekong subregion is indispensable.

Presently, the cooperation includes Cambodia’s membership in the Mekong-Lancang Cooperation framework, the 10-year relationship between the Mekong subregion and Japan, South Korea’s new southern policy, and the Mekong-Ganga Cooperation.

“South Korea’s policy is to diversify the political and diplomatic risk of great power dependency by improving closer ties with Asean and India. There is no doubt that the new policy offers opportunities to strengthen the foundation of Mekong-South Korea cooperation,” he added.

Dr Siphana said that achieving the ambitious goal of moving up the value chain and narrowing the intra-Asean development gap will require an unprecedented level of synergy for Mekong countries across the frameworks.

“It will also require sustained coordination and cooperation between key agencies and ministries, the private sector, development partners, the research community, and educational institutions,” he added.


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