Comment on “Regional Cooperation and Integration in the Mekong Region”

Abstract

JEL codes: F15, F55, F35, O19The Mekong River originates in China, crossing three of its provinces before reaching the Lao People's Democratic Republic (PDR), Myanmar, Thailand, Cambodia, and eventually Vietnam. Verbiest (2013) provides an accurate and stimulating account of the key issues and initiatives for regional cooperation and integration (RCI) focused on the five Association of Southeast Asian Nations (ASEAN) Mekong countries.One important aspect to be stressed about the Mekong region is the presence of several important common features shared by its individual economies, together with striking differences. The Mekong River itself is a major economic asset shared by the countries it belongs to. Verbiest (2013) illustrates several important initiatives aimed at the joint management of Mekong-related natural resources, such as energy and environmental projects, which have important implications in terms of infrastructure development, regional security, and related social issues. In addition, ASEAN Mekong countries do share several development challenges, as highlighted by a recent study of the Asian Development Bank Institute (ADBI, 2013). The ADBI study suggests that fostering human capital, developing infrastructure, and diversifying their economies are common challenges for all ASEAN Mekong countries as they move along the next two decades of economic development.At the same time, the ASEAN Mekong region is also marked by pronounced structural differences across countries, which deeply affect the effectiveness of regional cooperation initiatives. Cambodia and Lao PDR together cover only less than 5% of total gross domestic product and export of the five ASEAN Mekong economies, less than 10% of the total population, and less than 25% of their total land mass. Thailand, by far the most advanced economy in the region, plays a vital role for its dynamism, serving as a hub for production networks and other economic activities. For example, in 2011, Thailand was responsible for more than 80% of intraregional exports among the five countries, and accounted for about 58.5% of total foreign direct investment (FDI) cumulated flows to the region.The presence of structural differences among ASEAN Mekong countries is an important factor to understand the evolution of the key issues analyzed by Verbiest. For example, managing intraregional labor migration may become increasingly difficult in †Correspondence: Giovanni Capannelli, Asian Development Bank Institute,

Association of Southeast Asian Nations' New Frontiers: Editors' Overview

“…Giovanni Capannelli () identifies the common development challenges for ASEAN Mekong countries as including fostering human capital, developing infrastructure, and diversifying their economies. He argues that the effectiveness of regional cooperation programs to deal with these challenges is affected by the pronounced structural differences across the countries in terms of GDP, population, and their level of economic development.…”