Political and businesses leaders converged in Hanoi late last month as Vietnam played host to the World Economic Forum on the Mekong Region. Held October 24-27 in Hanoi, the Forum aims to enhance cooperation among leading firms in the region, thereby attracting capital for infrastructure development and to enhance connectivity along the Mekong River, one of the world’s largest and longest rivers. A stock take of the past week reveals a relatively bountiful harvest.
Greater cooperation between countries in the Mekong region is in the works. Laos and Vietnam announced plans to build a highway connecting their two capitals Vientiane and Hanoi. This highway will facilitate trade between the two countries that are chiefly dependent on the road network as the main mode of transportation.
Cambodia and Vietnam also signed an agreement to lower trade tariffs. This was inked on the sidelines of the ongoing ASEAN Summit in Hanoi, in an effort to boost trade volume between the two countries. Thirty-nine Cambodian products will enjoy duty-free access into Vietnam’s markets, including 300,000 tons of rice and 3,000 tons of dried tobacco. In return, Cambodia will provide duty-free access to 29 Vietnamese products. It remains unclear as to the specific Vietnamese products that will enjoy this preferential duty. In 2015, trade between Cambodia and Vietnam surpassed $3 billion, falling short of the targeted $5 billion.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
With substantial natural resources and a population of 240 million, the Mekong region holds much potential. While these projects are a step in the right direction, it remains to be seen if the respective governments can implement these changes sufficiently quickly to ride the wave of development.
There were also implications for the wider ASEAN region as well. For instance, WEF-Mekong witnessed the launch of the ASEAN Regional Business Council. Comprising of 25 ASEAN firms and 30 global companies, this Regional Business Council aims to boost public-private partnerships in issues facing Southeast Asia. Infrastructure building, facilitating cross-border trade and investment and promoting the digital economy will be key areas of focus.
According to CIMB chief Nazir Razak, who will also head the Council, a strategic infrastructure program that promotes the concept of ‘blended finance’ will be launched in 2017. Big regional players such as Malaysia’s AirAsia, Vietnam’s VinaCapital Group, Thailand’s PTT Public Company and Philippine’s SM Investments Corporations are represented in the Council.
As these ASEAN-wide initiatives take off, the WEF-Mekong meeting was a useful reminder that the Mekong will be a big and growing part of that story.