Third Meeting of the Subregional Investment Working Group

27-28 February 2001

Ho Chi Minh City, Viet Nam

Introduction
The Third Meeting of the Subregional Investment Working Group (SIWG-3) was held on 27-28
February 2001 at the New World Hotel in Ho Chi Minh City, Viet Nam. The objectives of SIWG-3
are to: (i) review investment trends and policy developments affecting the investment climate in
the GMS in order to assess current priority thrusts and activities in GMS investment
cooperation; (ii) review the status of priority projects and activities, refine their scope, and agree
on financing and implementation modalities; (iii) engage the private sector, through the GMS
Business Forum (GMS-BF), in a dialogue and solicit their cooperation in supporting SIWG
projects and activities; and (iv) present the results of the East West Economic Corridor preinvestment study and discuss the role of the SIWG in EWEC development. The Meeting agenda
is in Appendix 1.
The Meeting was co-chaired by Dr. Nguyen Van Phuc, Deputy Director, Foreign Economic
Relations Department, Ministry of Planning and Investment of the Socialist Republic of Viet Nam
and Mr. Myo Thant, Senior Programs Officer, GMS Unit, Programs Department West Division 3,
of the Asian Development Bank (ADB). Participants to the Meeting included officials in the GMS
countries responsible for investment policy and promotion, representatives from the GMS
national chambers of commerce and industry, representatives from international organizations
and donor institutions, and ADB staff. Representatives from some foreign chambers of
commerce and industry from Ho Chi Minh City also participated as observers. The list of
participants is in Appendix 2.
Opening Session
Dr. Nguyen Van Phuc welcomed the participants to the Meeting on behalf of the Government of
Viet Nam. He reviewed the beginnings of the GMS Program in 1992 and cited the many projects
that have been achieved so far, with assistance from the ADB and other donors. The demand
for investment funds in the GMS however, remains to be a major challenge and it is in this area
where the SIWG can play a major role. Viet Nam's growth in recent years has been positive
despite the impact of the regional financial crisis and major natural disasters. This growth was
partly the result of Government's efforts to overcome structural weaknesses in the economy and
to mobilize resources, both from domestic and international sources, to finance development.
Global competition for resources however, continue to pose a major challenge to developing
countries, including for the GMS. Dr. Phuc reiterated Viet Nam's continuing support for the GMS
Program and expressed the hope that investment cooperation under the Program can
contribute to resource mobilization efforts for mutual benefit.
Mr. John Samy, Resident Representative of the ADB Resident Mission in Viet Nam welcomed
the participants on behalf of the ADB. He described how the changing environment of the GMS
Program is challenging new roles and modalities for regional cooperation. The GMS Program
was intended to establish a "growth zone" in the subregion initially through the promotion of
infrastructure linkages. In the wake of the difficulties resulting from the Asian crisis, the ADB

placed emphasis on the "software aspects" of cooperation, namely, facilitation of cross-border

movement of goods and people, trade and customs cooperation, investment facilitation, and
private sector development. This is in recognition of the fact that while the GMS remains to be a
potentially attractive investment area, its attractiveness is limited by uncertainties in the
environment. Effective cross-border business facilitation will help in stimulating private sector
responses to economic opportunities.
Mr. Chanpheng Bounnaphol, Chairperson of the GMS-BF, explained the role of the Forum
launched in October 2000 under the framework of the GMS Program. As reflected in its terms of
reference, the GMS-BF would serve as a forum for pursuing three fundamental objectives,
namely; (i) capacity building for private sector associations; (ii) development of a private sector
network within and outside the region to promote business opportunities and investments; and
(iii) serve as a direct and regular channel of communication with the GMS governments on
policy issues, public-private sector partnerships, investment and trade facilitation, and
infrastructure investment, among others. Capacity building and networking are equally important
dimensions of the Forum. He stressed that that the Forum does not only have the full
endorsement of the GMS governments but is fully recognized as a dialogue partner. Through
the Forum, the views and suggestions of the private sector are systematically brought to the
attention of and discussed with the Governments.
In his opening remarks, Mr. Myo Thant, Senior Programs Officer, ADB outlined the objectives of
the Meeting. The first objective is to review investment policies and trends in the GMS in order
to set the context for discussing the SIWG's priority projects and the direction of future
cooperation. He stressed the need for the SIWG to help mobilize resources for other GMS
priority sectors---in particular, transport, telecommunications, energy and tourism---which
require huge amounts of investment capital, and where private sector financing can play a major
role. A second objective of the Meeting is to initiate a process of dialogue with the private sector
who are important partners in the development of the GMS. The Meeting provides participants
with the opportunity to be acquainted with the objectives and activities of the GMS-BF and to
expand the public-private sector network. The third objective is to present the findings of the
pre-investment study of the East West Economic Corridor Project (EWEC) and to discuss ways
in which the public and private sectors can work together to promote investments in the
Corridor. He cited the need for greater collaboration with other development agencies in the
GMS towards common goals for the subregion.
Review of Recent Developments in Investment Policies and Trends in the GMS Countries
The GMS countries exchanged information on recent developments in investment policies and
trends in their respective countries with the view to determining further opportunities for regional
cooperation. The country presentations assessed the post-crisis performance and outlook for
foreign direct investments (FDI), changes in investment policies and regulations, and the issues
and challenges faced by the GMS countries in the context of regional and international
developments. They also shared their plans for enhancing the future attractiveness of FDI.
Dr. Hing Thoraxy, Director, Project Monitoring Department of the Cambodia Investment Board
explained that Cambodia's investment policy recognizes that peace, stability, freedom, and
human rights and crucial elements for promoting the long-term sustainable development of the
country. Among the key elements of Cambodia's investment policy are: (i) promotion of good
governance, including laws to curb corruption; (ii) budget and fiscal reform to mobilize domestic
savings; (iii) prioritization of areas where Cambodia has comparative advantage, namely: agro-

industry, labor-intensive industry, processing industry, and tourism; and (iv) building institutional
capacity. Investment promotion strategies are specifically directed to the power sector and
infrastructure development, establishment of industrial zones, and privatization of key sectors
such as water and electric utilities. Efforts to integrate Cambodia into the global economy are
expected to increase the country's attractiveness as an investment location, promote higher
productivity, and develop further the country's comparative advantage.
Ms. Yang Ningning, Project Officer, International Department of the Ministry of Foreign Trade
and Economic Cooperation of the People's Republic of China (PRC), explained that while FDI in
China declined in 1997 on account of the Asian economic crisis, it has gradually recovered by
2000. Wholly-owned foreign enterprises account for about half of FDI flows, followed by
Chinese-foreign joint ventures which account for more than one-third, and Chinese-foreign
cooperative ventures, with less than a 20 percent share. Major sources of FDI are Asean
countries/regions, USA and EU. Policy thrusts on foreign investments include: (i) promotion of
technology innovation of existing FDI enterprises; (ii) intensifying financial support to FDI
enterprises; (iii) encouraging investments in the middle and western regions; and (iv) improving
administrative services. China continues to face the challenge of overcoming the negative
impact of the Asian crisis. In addition, the country continues to face challenges in attracting
more technology-intensive FDI and building industrial capacity for further market access. China
expects that with its accession to the WTO, further improvements in the legal framework,
incentives regime and liberalization policy could take place.
Daw Si Si Win, Director, Directorate of Investment and Company Administration, Ministry of
National Planning and Economic Development of Myanmar indicated the following objectives of
investment policy in the country, namely: (i) promotion and expansion of export; (ii) exploration
of capital-intensive natural resources; (iii) acquisition of technology; (iv) support for capitalintensive production and services; (iv) promotion of employment opportunities; (v) rationalizing
energy consumption; and (vi) regional development. FDI performance in Myanmar showed
positive trends during the post-crisis years primarily because the bulk of FDI come from the
ASEAN countries which have started the process of recovery. Despite the Asian crisis, the
economy also realized positive growth on account of timely macro-economic policies. Myanmar
is basically an agriculture country and priority is given to the development of the sector.
Emphasis is also given to the promotion of labor-intensive, capital-saving small and medium
enterprises.
Dr. Viravan Khamthanh, Director, Investment Promotion and Information Division, Foreign
Investment Management Committee of the Lao People's Democratic Republic (Lao PDR),
informed the Meeting that FDI in the country is highly concentrated in a few sectors, but it is
gradually diversifying. FDI trends are affected by discrepancies between approved and
actualized inflows, resulting primarily from inadequate infrastructure and business services. In
recent years however, the country has been able to achieve macroeconomic stability and to
manage its inflation rate. It is also taking steps to change its land-locked status by linking with
neighboring countries through road infrastructure. Post-crisis recovery measures that have
implemented by the Government include streamlining investment procedures, improving
incentives schemes, and institution and capacity building.
Ms. Pannee Chengsuttha, Senior Investment Promotion Officer, Office of the Board of
Investment of Thailand cited that FDI levels in 1999-2000 have increased compared to the
1997-1998 levels. Wholly-owned foreign companies comprise the bulk of FDI, although its share
to the number of FDI projects have declined. BOI-approved projects in 2000 were concentrated
in three sectors: metal products and machinery, electric and electronic products, and light

industries including textiles. Thai investment policy has been revised last year. Areas of
improvement under the new investment policy include: (i) changes in the BOI promotional
zones; (ii) more incentives to firms locating in industrial zones; (iii) conformity with international
quality standards to enhance global competitiveness; and (iv) relaxation of restrictions on
foreign shareholdings. As regards investment facilitation, Thailand has established a One-Stop
Service Center for Visas and Work Permits with a three-hour processing time. Transparency is
promoted through numerous publications and provision of up-to-date information on the
Internet. In the context of cooperation in the GMS, Thailand has conducted fact-finding missions
to the GMS countries, seminars on investment opportunities in GMS countries, development of
GMS promotional packages, and training programs for officials of investment promotion
agencies in the GMS.
Mr. Nguyen Manh Hung, Senior Expert, Legal Department, Ministry of Planning and Investment
of Viet Nam explained that the country's investment policy is evolving as part of its transition
from a centrally-planned to a market-based economy. Investment policy is aimed at
strengthening Viet Nam's ability to compete with other countries in attracting FDI, and ensuring
a level playing field for investors. The legal framework is comprehensive and covers banking,
taxation, environmental protection, investment protection, and economic contracts. Viet Nam is
a member of international organizations such as ASEAN, Asia Pacific Economic Cooperation
(APEC) and Asia-Europe Meeting (ASEM), and has applied for membership to the WTO.
Investment processing in Viet Nam has been improved, involving 15 to 45 days for approval of
investment licenses depending on the project classification, and 3-15 days for evaluation of the
project. Investment approval authority is vested in the Prime Minister, the Ministry of Planning
and Investment, and the Provincial People's Committees depending on the amount of
investment to be approved.
Following the country presentations, Mr. Myo Thant presented an overview of the recent
developments in the GMS Program and its implications for investment cooperation in the GMS.
Major transport infrastructure projects are in various stages of implementation, and agreements
to facilitate cross-border movements of goods and people have been initiated among certain
countries in the GMS. In the medium-term, the objective is for the GMS countries to adopt a
common framework agreement for facilitation of cross-border movements. Cooperation in
telecommunications sector is also taking a fast track to help the GMS countries to keep pace
with the revolution in information technology. In the energy sector, the GMS countries are
preparing for a regional power market over the long-term that would pool resources for greater
efficiency and reliability of energy supply. To complement investments in infrastructure, the
GMS Program has given increasing attention to trade and investment facilitation in order to
enhance the investment attractiveness of the subregion. The development of economic
corridors also provides a tangible focus for investment cooperation. A key challenge for the
SIWG is to implement cooperation initiatives for enhancing FDI flows to the subregion with the
view to making the GMS the "growth zone" that it was envisioned to be.
The participants exchanged views on the country presentations, specifically on the following
points:
a) There was interest expressed in obtaining more information on PRC's investments in
the GMS countries. In this regard, PRC explained the government's "go abroad" policy
for China's investors, including to the GMS. Investments in the middle and western
parts of China are being encouraged; in this regard, the Kunming-Chiang Rai Road
Project via Lao PDR and the further development of the north-south corridor will play
an important role in linking China's provinces with the rest of the GMS.

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b) The role of central and local governments in investment promotion was also discussed.
Thailand explained that although the investment approval process is centralized in
Bangkok, post-approval requirements (e.g. release of tax-free imported machinery,
equipment and raw materials, permits for foreign personnel) are delegated to local
authorities. The Board of Investment also provides training to local staff on investment
processing.
c) The participants shared experiences on the use of the Internet for investment
promotion. Thailand stressed the importance of maintaining regular updating of
websites to provide timely and accurate information. Thailand's website can be
accessed in six languages.

Mr. Hans-Peter W. Brunner, Senior Project Economist, Financial Sector and Industry Division,
Infrastructure, Energy, and Financial Sectors Department West, (IWFI), ADB summarized the
highlights of Session II through three games matrices. The countries are making strong efforts
to improve their investment incentive regimes, but in an uncoordinated way. As an investor, it
becomes difficult to locate based on different incentive regimes. Moreover, as Mr. Brunner
illustrated with the first game matrix (payoffs), investment incentive competition among GMS
countries could lead to a negative sum game. A third matrix illustrated cooperative conditions
among GMS countries for a positive sum game. Moving close to one "market" in specific
investment sectors would lead to a positive sum game.
Review of the Status of Priority Projects
Mr. Somphong Wanapha, Senior Executive Advisor of Board of Investment of Thailand, served
as moderator for this session. The GMS countries reviewed the six priority projects endorsed at
the Second Meeting of the SIWG (SIWG-2) and agreed to take steps to bring these projects
forward. These projects are as follows:
Project #1: Building Institutional Capacity for Investment Promotion and Facilitation in the
GMS
Project #2: Improving the Information Architecture for Investment Facilitation Strengthening
the Regulatory and Incentive Structure in the GMS
Project #3: Support to the GMS Business Forum
Project #4: Strengthening the Regulatory and Incentive Structure in the GMS
Project #5: Design and Implementation of an Investment Cooperation Mechanism in the GMS
Project #6: Design and Implementation of a Fast-Track Approval Procedure for Investment in
the GMS
The Meeting noted that some of the projects have made progress (e.g. #1, #3, and #6) while
some projects have yet to start. They assessed whether the projects continue to be relevant in
the context of the investment environment in individual countries as well as in the subregion.
Representatives from international organizations also shared their activities on similar or related
projects.
Project #4: Strengthening the Regulatory and Incentive Structure in the GMS
The GMS countries shared the view that investment incentives would be difficult to harmonize
considering the diverse legal framework, and differences in investment promotion strategies. It
is possible however to prepare a compendium of investment incentives in the GMS using a

common format that is easily understood by investors. The Meeting also agreed that GMS
cooperation should focus on investment regulation for specific sectors (e.g. agro-industry,
tourism) or geographic areas e.g. (EWEC industrial zones). Regulations on visa requirements,
work permits, and labor requirements could be considered as possible starting points since
these are the basic entry requirements for investors. In selecting the sectors of focus,
duplication with other GMS working groups and forums should be avoided. Cooperation
activities should also be realistic and take into account capacity constraints in the GMS
countries.
Project #2: Improving the Information Architecture for Investment
Strengthening the Regulatory and Incentive Structure in the GMS

Facilitation

The Meeting noted that ASEAN is already doing substantial work in the area of investment
information, among them the launching of the ASEAN Investment Portal later in the year,
harmonization of investment statistics and various publications on this, and training and
institution building especially for Cambodia, Lao PDR, Myanmar, and Viet Nam. Five GMS
countries who are ASEAN members are participating in these activities, and special attention is
being devoted by ASEAN to assisting the new members. A modality for involving Yunnan
Province, which is not an ASEAN member, in these activities, will be explored by ADB.
Project #5: Design and Implementation of an Investment Cooperation Mechanism in the
GMS
The Meeting noted various activities of ESCAP and ASEAN in the field of investment promotion.
ESCAP stressed the need for strengthening investment promotion mechanisms at the national
level, and to focus on specific products for investment promotion. Near-term investment
promotion opportunities which the GMS countries may take advantage of include the Kunming
Trade Fair, and the ASEAN Investment Year. The ASEAN Investment Year consists of multiprogram activities and events directed at promoting awareness of investment potentials in the
region, image building, perception correction, and confidence enhancement. The GMS countries
should be taking advantage of these investment promotion events since investment promotion
is a continuing activity for the countries.
Project #1: Building Institutional Capacity for Investment Promotion and Facilitation in
the GMS
Mr. Jorg Meyer-Stamer, SIWG Consultant, provided a comprehensive framework for
understanding and relating investment promotion and facilitation initiatives at the national,
provincial and regional levels. He proposed a focused approach to investment promotion that
would target specific sectors (e.g. agriculture, agro-industry, and tourism), and specific potential
investors. He argued that a conventional approach seeking to remove policy and regulatory
obstacles to investment are not likely to happen in the near future since the costs are more
apparent than the benefits; he proposed instead a more practical approach that would involve
stakeholders in a learning process. Short-term measures would include speeding up the
investment permit process, developing tangible benefits from participation in the GMS-BF (e.g.
service discounts available GMS-wide), and organizing a group of government officials to
benchmark business transaction costs, including developing measurement tools adapted to
conditions in the subregion. Medium- and long-term measures would include capacity building
for local officials involved in the EWEC, assessment of unintended and positive effects of the
EWEC and organizing initiatives to enhance locational conditions in the area. Mr. MeyerStamer's work will provide the basis for designing Project #1.

Project #3: Support to the GMS Business Forum

Mr. Hans-Peter W. Brunner provided a briefing on the purposes of the GMS-BF, which is
composed of GMS national chambers of commerce and industry as core group members and
foreign chambers of commerce and industry as associate members. The GMS-BF is being
assisted by ADB and ESCAP and will have its Secretariat offices inaugurated in Vientiane
around June 2001. Services provided by the GMS-BF to its members include communications
and translation services, export promotion (in collaboration with the ITC/UNCTAD/WTO)
through business to business contacts; customs information and border point grading and
mapping; assisting the private sector to get involved in GMS Program infrastructure
development; assistance to visiting trade missions; publications (including the GMS Business
Handbook) and other customized services against fees. Governments can benefit from linking
with the GMS-BF by having access to legitimate investor needs, and having a communications
channel with the business sector. Governments get this service for free, as the private
organizations self-finance their activities. Therefore, governments should indirectly encourage
activities of the GMS-BF and provide access to information.
Elaborating further on the export promotion activity, Mr. A. Chevalier, Project Coordinator, ITC
explained the methodology involved. This involves the following steps: (i) quantitative and
qualitative inventory of export products with complementarities within the GMS and between the
GMS and selected trading partners (trade flow analysis); (ii) field validation of the trade flow
analysis among the stakeholders; (iii) prioritization of trade opportunities; (iv) identification of
national trade support institutions and agreement on the list of products; training for actual
demand and supply surveys; (v) supply and demand service, on a product and country basis,
through field research; (vi) buyers and sellers meetings, including the identification of barriers to
business; and (vii) drawing up of business plans and other follow up assistance to enterprises
and trade support institutions.
Activities of International Organizations on Investment Promotion and Facilitation in the
GMS
Representatives from some international and regional organizations shared information on their
activities on investment promotion and facilitation in the GMS countries that support the
objectives of some of the SIWG priority projects. The activities of these organizations are
building blocks for further pursuing the SIWG priority projects and offer opportunities for greater
collaboration with ADB and the GMS countries.
Mr. Marc Proksch, International Trade and Industry Division of the UN Economic Commision for
Asia and the Pacific (UN-ESCAP) explained that his organization has been working to enhance
private sector development and FDI in the GMS under the so-called "Hi-Fi Plan". The current
focus of ESCAP's activities is in the area of investment promotion and improving investment
implementation at the provincial, national and regional levels. The importance of assisting
provincial and municipal authorities was emphasized because of their role in the post-approval
implementation process that could ultimately affect the profitability of foreign investment
projects. Under the Indochina Investment Biennium 2000-2001 Project, ESCAP is organizing a
series of national workshops directed among others, at forging stronger cooperation between
central and local government and foreign investors, documenting issues of concern to investors
and identifying solutions at the national and local levels, and enhancing awareness of national
and local government officials of post-approval needs and concerns of foreign investors. Two
workshops had already been organized, in Cantho and Ho Chi Minh City in early February. The

workshops had revealed inter alia, the urgent need for strengthening coordination between
central and local governments in investment implementation and for the design of a targeted
and focused investment promotion strategy, both at the national and provincial levels, aimed
initially at dispelling lingering negative images abroad of the investment climate in Indo-China
countries. Two more workshops in Hanoi and Da Nang were pending in early March, one
workshop in Lao PDR in April and in Cambodia in May 2001. A programmatic approach to be
jointly implemented by ADB, ESCAP, MPDF/IFC, UNIDO, UNDP and other agencies would be
required to ensure the long-term sustainability of assistance in the area of investment promotion
and implementation to the three Indochina countries and to the GMS at large.
James Crittle, Senior Investment Policy Officer, shared the experiences of the Foreign
Investment Advisory Service (FIAS) on investment policy reform in Southeast Asia, and the
GMS in particular. In general, investment incentives in the region are ineffective and redundant,
complex, selective and discretionary. Among the major findings of FIAS are: (i) incentives is
only one of many determinants of FDI; (ii) other significant determinants are macroeconomic
stability, market size, input availability and cost and infrastructure adequacy; (iii) profit may not
be the determining factor; (iv) incentives vary in their importance and attractiveness depending
on industry and market orientation. It was explained that "regional" fiscal incentives can
undermine the advantages gained by one country and could push tax rates downwards, thus
leading the investor to make location decisions knowing they will pay little tax wherever they go.
FIAS concluded that incentives are used in the region to differentiate environments in the
market place. This is a negative sum game across the GMS in that costs exceed the benefits.
The group should look for principles which would regulate the degree of differentiation in the
region and so limit the costs.
Reacting to FIAS' presentation, Dr. Wee Kee Hwee from the ASEAN Secretariat commented
that to date, the conclusion on the use of investment incentives in attracting FDI flows has not
been conclusive. While incentives is not the main reason motivating FDI, there is strong
empirical evidence suggesting that it is relevant in encouraging FDI flows in relation to
supporting national industrial development goals. Despite the evidence supporting the relevance
of incentives however, countries should not engage in "incentives granting" competition and
should not be allowed to be played off against one another by foreign investors.
Dr. Wee Kee Hwee, Assistant Director, ASEAN Secretariat, informed the Meeting on some of
the major ASEAN-level investment promotion events undertaken recently. These are: (i)
publication of a set of investment literature which aims at enhancing transparency and better
understanding of the region's investment environment; and (ii) high-level joint ASEAN
investment promotion events to Japan, USA, and Europe in 2000. In addition, he also
highlighted two major ongoing investment promotion initiatives, namely: (I) ASEAN Investment
Portal which is a project under the purview of the ASEAN Investment Area Ministerial Council;
and (ii) ASEAN Investment Year 2002 with year-long multi-programs of events and activities on
ASEAN. The year-long investment year campaign will comprise events such as high-level
investment forums, trade marts, seminars, symposiums, workshops, capacity building, and
private sector networking activities.
The East West Economic Corridor Pre-Investment Study
Highlights of the Pre-Investment Study on the East West Economic Corridor (EWEC)
In his introduction, Dr. George Abonyi, ADB GMS Unit Senior Advisor and moderator for the

Session, provided the background for the introduction of the economic corridor concept within
the GMS Program framework. The economic corridor approach represents an attempt to
package the hardware and software aspects of GMS cooperation into a geographic space, and
to focus public-sector cooperation through concrete business opportunities.
The highlights of the pre-investment study was presented by Mr. Myo Thant, ADB. The rationale
for the economic corridor approach is to facilitate transnational movement of goods, services,
finance, people and information within a well-defined geographic space, linking production and
trade potentials. The EWEC area spans about 1,600 km cutting across border provinces in Lao
PDR, Myanmar, Thailand, and Viet Nam and features a road transport route that would connect
the Pacific Ocean with the Andaman Sea. The benefits of the corridor include access to raw
materials, regional economic development, increase in trade and investment, and changes in
economic space (gateway access, and new economic opportunities). Opportunities for
subregional cooperation in the EWEC are in agriculture and agro-processing, resource-based
light manufacturing, cross-border trade and investment, tourism, establishment of border zones
and marketing of existing industrial estates, and shared development of transportation routes,
power grids, and telecommunications services. To realize these opportunities, the report
outlined high, medium and low priority tasks in seven strategic components, namely: (i) spatial
planning; (ii) physical infrastructure development; (iii) policy and procedural reform; (iv)
supporting programs (e.g. e-commerce mechanisms for SMEs, trade and investment
information system, etc.); (v) skills development; (vi) capital and financing; and (vii) institutional
development. In the area of trade and investment, the study made the following
recommendations: (i) the establishment of an EWEC Group within the GMS Business Forum;
(ii) implementation of AICO schemes (e.g. for agro-industry); (iii) accelerated implementation of
the AIA for the EWEC: (iv) establishment of trade and information systems; and (v) systematic
procedures for EWEC investment approval. The findings and recommendations of the study will
be presented to a workshop involving the four EWEC countries to be held in Bangkok on 13-14
March 2001. The workshop will further deliberate on the Study's recommendations and
modalities for implementation.
Thailand suggested that tourism may be a key area of focus for EWEC cooperation. In addition,
facilitation measures could also be addressed, with initial application to visa requirements and
work permits. Myanmar emphasized the importance of developing special economic zones. As
to the studies of other economic corridors, the ADB indicated that priority has been given to the
East West Economic Corridor, but that it would be willing to consider studies of other economic
corridors in due time if requested by the countries. Viet Nam stressed the importance of
institution building especially for customs facilities at the border. This is an area that is presently
being addressed by the Trade Facilitation Working Group.
Project #6: Fast Tracking Investment Approval Procedure in the EWEC
The participants discussed the project on Fast Tracking Investment Approval Procedures in the
EWEC, one of the SIWG priority projects. The ADB indicated that that it will further refine the
project as part of the follow-on work to the pre-investment study of EWEC.
Private Sector Panel: Investment Opportunities in the EWEC
Four representatives from the national chambers of commerce in Lao PDR, Myanmar, Thailand
and Viet Nam shared their views on the opportunities and constraints in investing in EWEC.
Mr. Chittichone Volasay, Deputy Director of the Lao National Chamber of Commerce and

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Industry (Lao NCCI) raised the issue of cooperation between the SIWG and the GMS Business
Forum to realize the investment potential of the East West Economic Corridor. Private business
continues to face several difficulties, among them, insufficient capital, and access to credit. For
Lao PDR, infrastructure development will play a major role in transforming the country from
landlocked to landlinked. Road transport will contribute to reduction in transport costs, and
facilitate regional and international traffic. The ongoing study of the special economic zone in
Savannakkhet province around the location of the Second Mekong Friendship Bridge will
likewise facilitate trade and investment promotion.
U Wai Phyo Central Executive Member, Myanmar Federation of the Chamber of Commerce
provided a situationer on agro-industry, tourism, and industrial estate sectors in Myanmar. He
presented the private sector perspective on investment incentives, and importance of
information, the difficulties experienced by enterprises at the micro-level. He stressed the need
to consider local capacities of business in developing and promoting opportunities in the EWEC.
Mr. Phairush Burapachaisri, Deputy Secretary General of the Thai Chamber of Commerce
indicated that the Thai business sector has continued to seek business investment opportunities
in the GMS (e.g. power in Lao PDR, tourist hotels and airline services in Cambodia, etc.). Thai
investors are involved in industrial parks, feedmills and agricultural products. He stressed the
importance of looking for a local business partner and in this regard, the GMS Business Forum
will play an important role. The TCC is also providing training to neighboring countries in
collaboration with the TCC University.
Ms. Nguyen Thi Phan Chung, Manager of the ASEAN Department, Viet Nam Chamber of
Commerce agreed that the business community will benefit from the EWEC. Agriculture, in
particular will benefit from the EWEC. For example, Viet Nam's requirements for technology and
raw materials from Thailand can be facilitated once the EWEC is implemented. Financing and
technical assistance for SMEs in Viet Nam is an important challenge if SME's are to benefit from
the development in the EWEC. The proposal to set up a cross-border entity led by the private
sector is not appropriate. Details (including the proposed EWEC Commission) will be discussed
at the 13-14 March 2001 meeting in Bangkok. The national chambers could play and important
role in disseminating information on EWEC to the business sector in their respective countries.
Mr. Thant summarized important points raised by the panelists. Tourism is an important area of
opportunity but facilities are still inadequate. There is a need to spread the good news about the
EWEC, through websites and seminars. It is significant to note that Thailand is collaborating
with the local universities to provide training for local enterprises in the neighboring countries.
The need to provide financial and technical assistance to SMEs should also be given priority.
Financing Investments in the East West Corridor
Mr. Anil Sinha, Regional Manager, shared the experiences of the Mekong Project Development
Fund (MPDF) in financing private investment in Viet Nam and Lao PDR. MPDF provides
intensive, firm-level assistance to selected companies in raising finance, business planning and
technical assistance. It also provides support services to small and medium enterprises (SME)
through management training, bank training, institutional development, and SME analysis. He
described the alternative sources of finance for the private sector in Lao PDR and Viet Nam.
Issues in financing experienced in Lao PDR include a fragile macroeconomic environment, need
for improvements in the implementation of the foreign investment law, and lack of confidence in
law enforcement.

11

Closing Session
The SIWG Work Program
Mr. Jiro Tsunoda, Capital Markets Specialist, ADB, outlined the next steps for the six priority
projects of SIWG. In general, the Meeting agreed that the six priority projects or areas of
cooperation continue to be relevant to the participating countries; however, there was a need to
refine the scope of activities and to link up with the work of international and regional institutions
who are engaged in similar or related activities. ADB indicated that it will provide financing
support for Project #1 (Capacity Building) and will work with UNIDO to implement it. For Project
# 2 (Information Architecture) ADB, in cooperation with the ASEAN Secretariat, will consider the
possibility of providing assistance to Cambodia, Lao PDR, Myanmar, and Viet Nam for setting
up their investment promotion websites. ADB will also explore modalities for linking Yunnan
Province to the ASEAN Investment Portal and other FDI-related initiatives in ASEAN. Project #3
(Support to the GMS Business Forum) is well underway and will continue with its planned
activities with the support of ADB and ESCAP. The implementation approach for Project #4
(Strengthening the Regulatory and Incentives Structure) and Project #5 (Investment
Cooperation Mechanism) will have to be discussed further in view of national level prerequisites. The implementing and funding agencies for these two projects will also need to be
identified. Project # 6 (Fast-Tracking Approvals for the East West Economic Corridor) will be
studied further by the ADB as part of the follow-up work for the pre-investment study on EWEC.
The SIWG Work Program reflecting the status and details of future action for the six priority
projects is in Appendix 3.
Closing Remarks
Mr. Hans-Peter Brunner thanked the participants for their active participation and contribution to
the Meeting which made possible the accomplishment of the Meeting's objectives. The
agreement to move the priority projects forward was noteworthy as this signified the continuing
commitment of the GMS countries to pursue investment cooperation under the GMS Program
framework. Carrying out the detailed future activities outlined in the work plan would be a major
challenge, and in this regard, the participants were encouraged to continue regular contact and
utilize the network that has been established by the Meeting. He expressed the hope that
cooperation between the SIWG and the GMS Business Forum could be strengthened in the
future, especially after the Forum secretariat would have been fully operational. Finally, he
thanked the Government of Viet Nam for the excellent preparations made in hosting the
Meeting, including the organization of a field visit to Tan Thuan Indsutrial Park which would
provide a useful learning experience for the participants.
Mr. Phairush Burapachaisri, Deputy Secretary-General of the Thailand Chamber of Commerce
noted that the two-day meeting has been very productive and has covered a comprehensive
range of topics. He stressed the importance of the GMS Business Forum as a mechanism for
private sector involvement in the GMS Program. He called on the SIWG to contribute to the
implementation of the EWEC through various support programs and expressed the hope that
the investment opportunities in the Corridor could be realized. He expressed appreciation to the
ADB and the Government of Viet Nam for their leading role in the Meeting.
Dr. Nguyen Van Phuc thanked the participants for their active participation in the Meeting. He
expressed appreciation to the efforts of the ADB staff in organizing the Meeting and for

12

contributing to its success. He also cited the valuable contributions of the participants from the
GMS government, the national chambers of commerce and industry, and representatives from
international and regional organizations, and expressed optimism on future collaboration for
GMS activities. He said that the Meeting's success will pave the way for stronger investment
cooperation in the GMS.

13
Appendix 1

Program and Agenda

Chairperson of the Meeting:
Dr. Nguyen Van Phuc Deputy Director, Foreign Economic Relations Department Ministry of
Planning and Investment (MPI), Viet Nam
Co-Chairperson of the Meeting:
Mr. Myo Thant Senior Programs Officer, GMS Unit Programs Department West, Division 3
(PW3), ADB

0830-0900

Registration

Session I:

Opening Session

0900-0945

Welcome and Opening Remarks

Dr. Nguyen Van Phuc Deputy Director, Foreign Economic Relations
Department Ministry of Planning and Investment (MPI), Viet Nam
Mr. John Samy Resident Representative ADB Resident Mission in Viet
Nam
Statement from the Private Sector
Mr. Chanpheng Bounnaphol President Lao National Chamber of
Commerce and Industry (Lao NCCI) and Chairperson of the GMS
Business Forum
Statement from Asian Development Bank
Mr. Myo Thant Senior
(West) Division 3

Programs

Officer Programs

Department

0945-1000

Coffee Break

Session II:

Review of Recent Developments in Investment Policies and Trends

in the GMS Countries
Moderator:
Mr. Wang Yang
Ministry of Foreign Trade and Economic Cooperation, PRC

1000-1130

Country

Presentations

on

Investment

Policies

and

Trends

14
(10 minutes each)

Kingdom of Cambodia
People's Republic of China
Lao People's Democratic Republic
Union of Myanmar
Kingdom of Thailand
Socialist Republic of Viet Nam

Discussions
1130-1145

GMS Program Review: Recent Developments and Implications

for Investment Cooperation in the GMS
Mr. Myo Thant Senior Programs Officer Programs Department
(West) Division 3 Asian Development Bank
Discussions

1145-1200

Summary of Presentations and Discussions for Session II

Mr. Hans-Peter W. Brunner Senior Project Economist Financial
Sector and Industry Division West (IWFI) Infrastructure, Energy, and
Financial Sectors Department West, Asian Development Bank

1200-1330

Lunch

Session III:

Review of the Status of Priority Projects

Moderator:
Mr. Somphong Wanapha
Senior Executive Advisor of Board of Investment
Thailand

1330-1430

1. Investment Facilitation
Review of SIWG Investment Facilitation Projects
a. Strengthening the Regulatory and Incentives Structure
b. Improving Information Architecture on Investment Facilitation
c. Design and Implementation of an Investment Cooperation
Mechanism
- PRC
Discussions

1430-1500

2. Capacity Building for Investment Promotion

Representative from Thailand
Mr. Jorg Meyer-Stamer SIWG Consultant, ADB
Discussions

1500-1515

Coffee Break

1515-1545

3. Support to the GMS Business Forum: Follow-Up Actions

Mr. Chanpheng Bounnaphol President, Lao NCCI and Chairperson of

1545-1630

15
the GMS Business Forum
Mr. Hans-Peter W. Brunner Senior Project Economist IWFI, ADB
Discussions
Activities of International Organizations on Investment Promotion
and Facilitation in the GMS
1. Indo-China Investment Biennium 2000-2001
Mr. Marc Proksch International Trade and Industry Division, UN
Economic and Social Commission for Asia and the Pacific
2. Investment Incentives and Competitiveness
Mr. James Crittle Senior Investment Policy Officer Foreign Investment
Advisory Service (FIAS) Asia Pacific Regional Office

1630

Close of Day 1 Session

1800

Reception hosted by Asian Development Bank, New World Hotel

Day 2: 28 February 2001, Wednesday

Results of the Pre-Investment Study of the East West Economic Corridor
0800-0830

Registration (for newcomers)

Session IV:

The East-West Economic Corridor Pre-Investment Study

0830-0915

Highlights of the Pre-Investment Study of the East West Economic

Corridor
Mr. Myo Thant Senior Programs Officer Programs Department
(West) Division 3 Asian Development Bank
Discussions

0915-0930

Fast Tracking Investment Approvals in the East West Economic

Corridor
Viet Nam
Discussions

0930-1015

Investment Opportunities in the EWEC: the View from the Private

Sector (Panel Session)
Moderator:
Dr. Nguyen Van Phuc
Deputy Director, Foreign Economic Relations Department
Ministry of Planning and Investment, Viet Nam
Mr. Chittachone Volasay Deputy Director Lao National Chamber of
Commerce and Industry
U Wai Phyo Central Executive Member Myanmar Federation of
Chamber of Commerce and Industry
Mr. Phairush Burapachaisri Deputy Secretary General Thai Chamber of

16
Commerce
Mrs. Nguyen Thi Phan Chung Manager, ASEAN Department Viet Nam
Chamber of Commerce and Industry
Open Forum

1015-1030

Coffee Break

1030-1045

Financing Investments in the East West Economic Corridor

Mr. Anil Sinha Regional Manager Mekong Project Development Fund
Facility (MPDF)

Session V:

Closing Session
Moderator: Ms. Lucja Cannon
Private Sector Development Specialist
ADB

1045-1115

The SIWG Work Program

Mr. Jiro Tsunoda Capital Markets Specialist IWFI, ADB
Discussions

1115-1145

Cosideration and Adoption of the Summary of Proceedings

1145-1200

Closing Remarks
Mr. Hans-Peter W. Brunner Senior Project Economist, ADB
Mr. Phairush Burapachaisri Deputy Secretary-General, Thailand Chamber
of Commerce
Dr. Nguyen Van Phuc Deputy Director, Foreign Economic Relations
Department MPI, Viet Nam

1200-1315

Lunch

1330

Depart for Tan Thuan Industrial Park

1630

Return to New World Hotel

1900

Dinner hosted by the Government of Viet Nam

17
Appendix 2

List of Participants
GMS Countries
Cambodia
Mr. Hing Thoraxy, Director, Project Monitoring Department, Cambodia Investment Board
Mr. Hav Dina, Deputy Chief, GMS Office, International Relations Department, Ministry of
Planning
People's Republic of China
Ms. Yang Ningning, Project Officer, International Department of MOFTEC
Mr. Wang Yang, Representative, Foreign Economic and Trade Department of Yunnan
Province
Lao People's Democratic Republic
Dr. Viravan Khamthanh, Director, Investment Promotion and Information Division, Foreign
Investment Management Committee
Mr. Meckham Silykhoune, Deputy Chief, International Financial Institution and ODA Division,
Ministry of Foreign Affairs
Myanmar
Daw Si Si Win, Director, Directorate of Investment and Company Administration, Ministry of
National Planning and Economic Development
U Tin Ko Win, Assistant Director, Directorate of Investment and Company Administration,
Ministry of National Planning and Economic Development
Thailand
Mr. Somphong Wanapha, Senior Executive Advisor of Board of Investment
Ms. Pannee Chengsuttha, Senior Investment Promotion Officer, International Affairs Division,
Office of Board of Investment
Ms. Sumitra Pooltong, Assistant Director, Regional Economic Development Cooperation
Committee Office, Office of the National Economic and Social Development Board
Ms. Nitcharee Saipratoomtip, Policy and Plan Analyst, Regional Economic Development
Cooperation Committee Office, Office of the National Economic and Social Development
Board
Viet Nam
Mr. Nguyen Van Phuc, Deputy Director, Foreign Economic Relation Department, Ministry of
Planning and Investment
Mr. Nguyen Manh Hung, Senior Expert, Legal Department, Ministry of Planning and
Investment
Mr. Hoang Tuan Anh, Vice Chairman of Da Nang People's Committee
Mr. Lam Quong Minh, Deputy Director, Department of Planning and Investment
Mr. Hoang Tan Trung, Head of Foreign Economic Relations Division, Department of Planning
and Investment of Quangtri Province
Mr. Hoang Viet Khang, GMS Senior Expert, Foreign Economic Relation Department, Ministry
of Planning and Investment

18

GMS National Chambers of Commerce

Mr. Chanpheng Bounnaphol, President, Lao National Chamber of Commerce and Industry
Mr. Chittachone Volasay, Deputy Executive Director, Lao National Chamber of Commerce
and Industry
U Wai Phyo, Central Executive Committee Member, Union of Myanmar Federation of
Chamber of Commerce and Industry
Mr. Phairush Burapachaisri, Deputy Secretary General, Thai Chamber of Commerce
Mrs. Nguyen Thi Phan Chung, Manager, ASEAN Department, Viet Nam Chamber of
Commerce and Industry
Observer
Bilaterals
Mr. William Ping Wang, Director, Taipei Economic and Cultural Office in HCMC, Taipei, China
Mr. Hiroyuki Yoshitsune, Chief, Technical Cooperation Division, Trade and Economic
Cooperation Bureau, Ministry of Economy, Trade and Industry, Japan
Mr. Jamaluddin Sabeh, Consul General, Consulate of Malaysia in Ho Chi Minh City, Viet Nam
Mr. Ong Yew Kheng, Consul, Consulate General of the Republic of Singapore
Mr. Fernando Mier Durante, Economic Counsellor, Spain
Dr. Dominique Jordan, First Secretary, Embassy of Switzerland
Multilaterals
Dr. Wee Kee Whee, Assistant Director, Association of Southeast Asian Nations (ASEAN)
Mr. Alain Chevalier, Project Coordinator, International Trade Centre
Mr. James Crittle, Senior Investment Policy Officer, Foreign Investment Advisory Service
(FIAS)
Mr. Anil Sinha, Regional Manager,Mekong Project Development Facility, MPDF Ho Chi Minh
City Office
Mr. Marc Proksch, Economic Affairs Officer, Trade Policy Section, International Trade and
Industry Division, United Nations Economic and Social Commission for Asia and the
Pacific (UN-ESCAP)
Ms. Ikue Toshinaga, Industrial Development Officer, United Nations Industrial Development
Organization (UNIDO ITPO, Tokyo)
Private Sector
Mr. Philippe Serene, Administrator, French Chamber of Commerce and Industry
Mr. JB Patoir, Administrator, French Chamber of Commerce and Industry
Asian Development Bank
Mr. John Samy, Resident Representative, Viet Nam Resident Mission
Mr. Myo Thant, Senior Programs Officer, Programs Department (West), Division 3
Mr. Hans-Peter Brunner, Senior Project Economist, Infrastructure, Energy and Financial
Sectors Department (West), Financial Sector and Industry Division
Mr. Jiro Tsunoda, Capital Market Specialist, Infrastructure, Energy and Financial Sectors
Department (West), Financial Sector and Industry Division
Ms. Lucja Cannon, Private Sector Development Specialist, Financial Sector Department
(West)
Ms. Ma. Dolores M. Del Rosario, Assistant Project Analyst, Infrastructure, Energy and
Financial Sectors Department (West), Financial Sector and Industry Division

19

ADB Consultants/Meeting Secretariat

Mr. George Abonyi, Senior Advisor, GMS Economic Cooperation Program, GMS Unit,
Programs Department (West), Division 3
Mr. Jorg Meyer-Stamer, Consultant (Investment Specialist), Infrastructure, Energy and
Financial Sectors Department (West), Financial Sector and Industry Division
Mr. Micheal Guth, Consultant (Investment Specialist), Infrastructure, Energy and Financial
Sectors Department (West), Financial Sector and Industry Division
Ms. Carolina S. Guina, Consultant, GMS Economic Cooperation Program, GMS Unit,
Programs Department (West), Division 3
Ms. Ma. Cristina M. Pascual, Project Assistant, GMS Economic Cooperation Program, GMS
Unit, Programs Department (West), Division 3