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Cambodia Eyes Southern Mekong ‘Corridor’

Six countries within the Greater Mekong region are working together to create three economic corridors, with a so-called southern corridor linking Cambodia to Laos, Thailand and Vietnam.

The other countries of the region, Burma and China, link with the other four in two other corridors, and Commerce Minister Cham Prasidh told a forum last week Cambodia had gained little so far from the southern corridor.

“Compared to other corridors, we see that they are working faster than ours,” he said. “It means we are working slower than others.”

With financial and technical assistance from the Asian Development Bank, the six Mekong countries have agreed to cooperate with each other to turn the three corridors into economic hubs. The countries will improve transportation facilities, tourism, hydropower and disease control, under a deadline of 2020.

Arjun Goswami, head of the ADB’s regional cooperation and integration group, said corridor development would benefit around 330 million people through job creation, commercial activity, investment and development.

Between 1992 and 2008, the ADB has provided more than $11 billion in loans to the six Mekong countries, with $243 million going to Cambodia for improving infrastructure in the southern corridor, which will link 21 provinces to six province each in Laos and Thailand and four provinces in Vietnam.

Bilateral trade has significantly increased between Cambodia and Vietnam, the ADB said, but only the border area of Bavet has seen an increase in commerce and tourism.

Meanwhile, the east-west and north-south corridors have seen significant improvement in trade and investment, benefitting more China, Laos, Thailand and Vietnam.

Ros Silva, deputy secretary-general of the Ministry of Economy and Finance, said Cambodia faces challenges generating benefits from the southern corridor.

“First, the southern corridor has just developed,” he said. “Second, infrastructure of the southern corridor is still weak. The other problem is related to cross-border issues, which are slowly progressing.”

Paul Apthorp, who develops strategy for TNT Express Worldwide, a cargo carrier, said the southern corridor has the most disadvantages of the Mekong corridors, deriving from, in part, unnecessary documentation required by various customs agencies.

“That is not because of the infrastructure,” he said, “but because of the bureaucratic nightmare that we are faced with in Cambodia, about getting stamps from different agencies, which totally are not necessary.”

All of that leads to the slow of trade in imports and exports, meaning Cambodia loses out, he said.

To make the southern corridor more viable, border cooperation must be improved, especially among regional and local officials, said Virachai Viraameteekul, minister of the office of the Prime Minister.

Cham Prasidh said Cambodian officials are working on the issue.

The ADB’s Arjun said that more rapid improvement of the southern corridor would attract investment and increase exports from Cambodia.

“First of all, of course, the southern economic corridor has infrastructure requirements,” he said. “Secondly, by linking Cambodia more effectively with the sub-regional markets into the Asian markets, it is going to be a benefit, because, as you know, in the aftermath of the global economic crisis, there have been difficulties for Cambodian exports going to traditional markets. So it is important for rebalancing the process in terms of regional markets to start develop.”

After two days of corridor talks last week, the ministers of the six Mekong countries agreed to work toward shifting the three corridors from transportation to true economic corridors, to include agricultural industry, tourism, special economic and industrialized zones, telecommunications development, power, and others.