Social and Environmental Impacts of Economic Corridors, Regional Supports to

address the impacts of Economic Corridors in the Greater Mekong Sub-region

(GMS)*, South East Asia

Nga La Thi

Master Code Student of the Joint European Study on Comparative Local Development
(September 2008-March 2010)
University of Trento, Italy, and University of Ljubljana, Slovenia

Abstract

The Economic Corridors (ECs) especially highway roads and railways development
programs launched in the Greater Mekong sub-region (GMS) have brought many
positive changes in term of economic integration and development. The Asian
Development Bank (ADB) has played a crucial role in establishment of the GMS program
and mostly on infrastructure development. The trade and investment activities
especially private sector involvement significant increased, poverty reduction, income
of poor community and ethnic minorities were improved, associated with the increase
of the access to the social welfare services, as well promoted the software development
in term of improving the human resource and tourism in the region. The ECs had raised
the competitiveness of the formal local industries from less developed country
members to join the market in the region, and the global markets. However, along with
positive changes, there have been existing many negative impacts resulting from ECs
development: environmental degradation due to infrastructure development,
inadequate resettlement and displacement people along the corridors, the unfair
compensation to the affected people, local community’s cultural value and behaviors
eroded, the expansion of communicable diseases (HIV/AIDS STDs) and entertainment
services including commercial sex work, illegal migration and human trafficking are
also enormous phenomenon emerged as the pressing issues in the region. The social
impacts of economic corridors development are provisions in the GMS, the most
important tasks of the policy makers are to challenge and cope with the economic
integration’s impacts, bring the balance between the benefit and effects, while benefits
can be maximized and impacted effects can be minimized. There is a need for the
governmental efforts, donor’s policy and regional supports to address the problems
together through the consensus prior policies and step by step to emphasis in filling the
policy gaps.

Key words: Economic Corridors, economic integration, Greater Mekong Sub-region

(GMS)

* The paper is prepared by author and based on the previous work experience at the
Mekong Institute, it illustrates the social and environmental impacts of Economic
corridors in the greater Mekong sub-region though a series of secondary information
sources, published and unpublished reports of Mekong Institute’s research network as
well as assimilates the policy implications from two regional policies dialogues
organized by Mekong Institute, Khon Kaen, Thailand in 2006 and 2007, with the
support of the Rockefeller Foundation. The paper expresses the author’s views and does
not imply endorsement by the Mekong Institute on any expressed view.

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Abbreviations

ADB Asian Development Bank

CBTA Cross-border Transport Agreement
ECs Economic Corridors
EWEC East West Economic Corridors
FDI Foreign Direct Investment
GMS Greater Mekong Subregion
GPD Gross Domestic Product
GTZ Deutsche Gesellschaft für Technische Zusammenarbeit GmbH
(Germany Society for Technical Cooperation)
HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency
Syndrome
IDE-JETRO Institute of Development Economic, Japan External Trade
Organization
MI Mekong Institute
NSEC North South Economic Corridors
PFE Permanent Forest Estate
SEC South Economic Corridors
STDs Sexually Transmitted Diseases

1. Introduction

Economic corridors or infrastructure corridors were initiated by the Asian

Development Bank in early 1990s, was developed under the regional economic
cooperation of program for GMS. The strategic is to reduce the poverty reduction in the
less developed countries in the GMS and promote the trade and investment in this
region. The concept of Economic corridors were aimed to facilitate the link between the
“hard and software” improvement in the GMS, and based on the improvement needs of
the GMS’s infrastructure development, including the strengthen physical links between
most of cities and parts in the region, facilitate the cross border trade and investment,
promote private sectors and develop human resources and skills competencies.

In the GMS, there have three main economic corridors linked into the GMS countries: (1)
North-South Economic Corridors (NSEC 1 and NSEC 2): The NSEC consists two
corridors: NSEC 1- From Kunming (China)- Lao PDR- Myanmar territories-Bangkok;
NSEC 2- Kunming (China)-Hanoi-Hai Phong (Vietnam); (2) East West Economic
Corridors (EWEC): The long corridors of 1,450 km that link to four countries in the
GMS: Mawlamyine (Myanmar)- Mae Sot, Tak, Phisanoulok, Khon Kaen, Kalasin,
Kuchinarai, Mukdaharn (Thailand)- Savannakhet (Laos)-Quang Tri, Thua Thien Hue, Da
Nang (Vietnam); and (3) South Economic Corridors (SEC), includes two corridors: SEC
1- Aranyaprathe (Thailand)- Phnom Penh (Cambodia)- Ho Chi Minh city (Vietnam); and
SEC 2- Trad (Thailand)- Shianouville (Cambodia)- Sothern parts of Vietnam

Major parts of these three the Economic Corridors have mostly finished and the rest will
be completed by 2008. The provisions of Economic Corridors are obviously bringing the
positive changes in the economic integration and improvement in the GMS, knowing as
to bring the market and communication opportunity to local and ethnic communities,
improved the access to the basic social services, and developed rural as poverty
reduction, communication, transportation and trade facilitation. However, the negative
impacts on social and environmental were also enormous, and the poverty reduction is
approached? The question is needed to be answered. The upgraded of highways and
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new roads were most impacted on displacement of local people, migration problems,
cultural value and social behavior changed to the high risk groups of population
(affected communities, ethnic minorities and youth) along to the road, the expansion of
drug, HIV/AIDS and communicable diseases. Beside, the environmental impacts from
the Economic Corridors on protected areas, wildlife trade and forest destruction were
threaded and manifold in the long run of biodiversity and sustainable development.

2. Economic Corridor Perspectives in Economic distribution and integration

in the GMS

The Economic Corridors with three sub corridors with estimated total cost is $US 10-15
billion (ADB, 2005), they pass through most of big cities and major parts of the six
Greater Mekong Sub-region countries including Cambodia, Lao PDR, Myanmar,
Thailand, Vietnam and Yunnan province of China. The benefits of those three corridors
were much highlighted on infrastructure development, communication, trade and
investment, people’s livelihood, tourisms and human resource development as well.

The evidence of benefits from the economic

corridors ‘effectiveness regional distribution
of population and income level are large and
were illustrated in the table 1.

Laos, Thailand and Vietnam economies have

(Asian Development Bank)
Fig 1. Map of Economic Corridors in the
GMS
all part of economic corridors with
population of province along with corridors
as of 40.7 % (Thailand) and 35.6 %
(Vietnam). Cambodia is with 88.7% of total
province along the corridors, while Lao PDR
and Myanmar have less than 20% of
provinces along the corridor. The benefit of
Economic Corridors into the GMS are
different distribution and contribution,
however, the land-lock country like Lao
PDR, the East-West corridors have made its
distances to the harbors much closer. The
North-South corridor also made Yunnan
province better to access to harbor and link
to other parts of South East Asia, most of
provinces have the NSECs passed are
belonged to Thailand and Vietnam, with
around 47 million people and accounts for
19.3% of provinces (IDE-JETRO, 2005)

The road map of the Greater Mekong Sub-region by 2010

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 GMS roads map in 1992 GMS roads map in 2006 GMS roads map by 2010
Fig 2. GMS roads map (Source: Asian Development Bank)

Table 1. Population and Income level of provinces and prefectures along the Economic
corridors (ECs)
(Thousand persons/$US/%)

Economic Thailand Cambodia Lao PDR Myanmar Vietnam Yunnan GMS

Corridors Population Income Population Population Population Population Income Population Population
EWECs 16,123 799 834 4,247 2,412 258 15,336
(12.4) (14.7) (8.1) (3.0) (6.3)
NSEC 16,323 3,668 283 5,061 11,209 288 14,179 47,055
(25.7) (5.0) (9.7) (14.1) (32.7) (19.3)
SECs 9,921 4,860 10,142 1,117 9,308 28,373 586 38,815
(15,6) (88.7) (19.7) (17.8) (35.6) (22.5)
ECs 25,812 3,555 10,142 1,117 9,308 28,373 440 14,179 88,932
(40.7) (88.7) (19.7) (17.8) (35.6) (32.7) (34.8)
Total 63,430 2,008 11,438 5,679 52,171 79,000 440 43,331 255,776
(100) (100) (100) (100) (100) (100) (100)
(Source: JETRO, 2005)

The statistics of those income and population indicators were gathered during 2002, and
Cambodia in 1998, however, the Income level of Thailand was based on gross regional
product (GPD) per capita transformed into $US base, while Vietnam income level was
based on monthly income per capita transformed into annual and $US bases

In 2006, the GMS’s GDP per capita is US$ 1, 453 (Excludes Myanmar), while individually
the Cambodia with the GDP capita is US$ 510, and Yunnan GDP per capita is US$ 1,135,
Vietnam is US$ 724, Myanmar is US$ 255 (2005), and Thailand is US$ 3,133. Obviously,
there have great changes in the import and export values economic values, trade and
cooperation activities. The exports from the seven GMS economies rose from $26.2
billion in 1990 to $153 billion in 2005 - at a compound annual rate of 12.3%, twice as
fast as the rise in world exports (ADB, 2008)

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 Fig 3. Exports, imports and trade openness in the GMS (exclude Myanmar, Jean Pierre
Verbiest, Asian Development Bank, 2008)

However, the disparity of the economic development gaps are still huge between those
countries, the Economic Corridors launch with a promise bring a balance in economic
distribution, integration to the most population of the region.

The Economic Corridors have attracted many investors and donors to pay attention and
invest in the GMS, there have brought many changes in logistic improvement in the
GMS, the improvements had contributed a lot in internally and externally integrated
logistics including the competiveness performance improvement, reducing the
transportation cost, carrying cost, warehousing cost and other trade investment in the
Indo-China1. In Laos, FDI (Foreign Direct Investment) in Agro-forestry sector has seen a
rapid increase in the last year both in terms of number of projects and total investment
values. There were 21 projects of $US 17.3 million value approved in 2—5, and approval
39 projects with $US 458.5 million value in 2006 while many investors in the agro-
forestry sector as small-scale operations a number of large scale agro forestry
companies have recently moved into Laos (Glenn Hunt, 2007)

Within the region, Thailand is the largest import and export partner of Cambodia and
Laos, and Myanmar, while Vietnam is also an important trade partner as second largest
import and export partners of Laos and Cambodia. Response to trade balance, the
amount of imports from Vietnam is 4.5 times that of exports from Cambodia, and the
ratio is 1:1 times that for the Lao PDR.

In term of access the public services on education, health care services and
opportunities of local communities. The indicators shown that the education
improvement are higher in the GMS, Thailand Vietnam, and China have higher
education literacy enrollment ratio (95%; 92.7%; 85%), However, Cambodia, Laos and
Myanmar still remained as low education and low ratio of literacy enrollment (less than
70% for Cambodia and Laos, Myanmar 85%). The average time to schools and market
decrease about 40 % , the average time to of local community to approach health care
services has fallen about 30% ( Mekong Institute, 2007)

 North South Economic Corridors (NSEC)

During the construction period from 2002- 2007, the total cost of this corridors is
around $US 95.8 million with 4-party cost sharing: Thai government ( $US 30 million);

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PRC government ($US 28.5 million); ADB ($US 30 million), and Lao PDR government
($US 7.3 million) (Manubu Fujimura, 2006).

The North South Corridors connect the Northern and Southern parts of the GMS and it
has played critical roles of economic development in Yunnan province, China, Vietnam.
The east route Kunming-Hanoi-Hai Phong has embraced one central city (Kunming) and
three sub-central cities: Yuxi, Mengzi and Wenshan. The statistics indicates that the GDP
of Kunming in 2005 reach RMB 106.2 billion while its per capita income was as much as
RBM 17,588 while the GDP of Yuzi prefecture in 2006 reached RMB 41.59 billion, the
GDP of Honghe prefecture in 2005 reached RMB 31.1 billion, remaining over 10%
growth rate, the middle rout, Kunming-Bangkok including Khunming, Yuxi, Simao,
Zishuangbanna, the GPD of Simao in 2005 was RMB 10.63 billion, new gross revenue
was recorded RBM 1.118 billion, with annual growth rate at 23.9 %, for the GPD of
Xishuangbanna in 2005 was RMB 7.88 billion and annual growth rate at 9.2 %.2

Add to the results of NSECs, the trade activities between Vietnam and Yunnan had
increased sustainability in the last 15 years. The total trade volume had rose over 20%
from $US 3.5 million (1991), to $US 8739 million in 2006, a substantial jump of trade
investment and trade values of China in Vietnam is the top list of trading partners of
Vietnam, with 58 agreements at the governmental level on the expanding trade
activities have been signed up to 2006 (Tuan Bui, 2007).

The NSEC is also the gate way to promote trade flows and goods between Vietnam-
China and other ASEAN countries in the Asia. Response to the GMS cooperation and
economic integration of the NSECs, the exports from Kunming to Myanmar, Vietnam,
Laos and Thailand count for 48.9 %, 17.8%, 9.2 % and 5.8 % respectively, and those
four GMS country members are forth largest export partners for Yunnan with the sum
of 81.7 %. Counting the trade balance, exports from Yunnan to Myanmar is 3.3 times
those of exports from Myanmar to Yunnan, and Yunnan to Vietnam is 5.6 times while
Yunnan to Thailand is 6.3 times, Yunnan to Lao PDR is 12.9 times, these countries
shown an obvious trade surplus with Yunnan (JETRO, 2005). The trade deficits of CLM
(Cambodia, Laos, and Myanmar) will increase as the result of the development of the
Economic Corridors. However, the increase trade of those CLM countries is not
sustainable development effectively and logically with shortage of currencies. There
have many changed in industrialization and diversification of exports items from these
least developing countries, this is also promise an active economic participatory in
internalization development. The latest development of NSECs has contributed the
trade facilitation of transport infrastructure networks which connect most between
provincial and other count`ries in the region. The bilateral trade volume of Yunnan and
other GMS counties grow 20% annually $US 1 billion (2004) with 28% growth rate, it
was indicated that, the Economic Corridors and regional cooperation have brought
great chances to Yunnan to join the trade and investment activities as 87 items of
investment project in three GMS countries (Lao PDR, Vietnam and Thailand). For the
Yunnan- Laos, the bilateral trade between two sides had reached $US 33.76 million
(2004), and $ 27.76 million during first three quarters of 2005 with a substantial
growth rate of 19.3 %. There have more than 20 cooperation project between Yunnan
and Vietnam while many of them were focused on technological cooperation and
agriculture sector. For the side of Yunnan-Thailand, there had 123 investment project
that equal total input of $US 60 million (2003).2 While there is an increase of 20-3-% of
household incomes of sugar and corn farmers in the back side of market integration
between the Yunnan and Lao PDR (Xing Lu et al, 2007)

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Regarding to the productiveness and competitiveness, there have more increase the
competitiveness on local production, joining the global market and using the labor-
intensive, applying new technologies and efficiency the management methods among
the GMS members, obviously those are benefited to the domestic economy and in the
process of integration into the region and global.

The tourism and other services also increased between Vietnam and China, it was
reported that, during 2005, there were 717,400 tourists from China to Vietnam, with
around more than 50 tourism companies and branches located in Lao Cai provinces
(Tuan Bui, 2007)

Response to the social services changes to local communities, the great improvement of
transport infrastructure have placed down a fundamental base for further development
of the ethnic minority inhabited in boundary areas. The fixed social capital for ethnic
minority increased from $US 1.28 billion in 2000 to $YS 5.37 billion in 2004. Other
facility as electricity transfusion, TV broadcasting, hospital and other educational
services obtained increased remarkable as achievements. Beside, an increase of public
finance has been assisted much for Ethnic minority communities along the corridors
(Wang Shilu, 2007).

 East West Economic Corridors (EWEC)

The East West corridors with 1450 kilometer long that link from central parts of
Vietnam (Da Nang) to Lao PDR and North East Thailand to border Myanmar to
Mawlamyine. The East-West Economic Corridor also connects with main north-south
roads, including Yangon – Dawei and Chiang Mai – Bangkok of Thailand, Road 13 of
Laos, and National Highway No.1A of Vietnam.

The corridor's commercial activities focus on six major localities, including

Mawlamyine, Phitsanulok, Khon Kaen, Savannakhet, Hue, Danang and some other small-
scale towns. The findings of infrastructure development on trade volume was shown
that, there was moving from the median to the top 25th percentile in the raising of 68%
of trade volume overall doubling transport costs from the median value reduces trade
volume. The trade activities were marked by bilateral, trilateral trade activities among
Vietnam, Lao DPR, Thailand and Myanmar, known as the regional economic integration
and facilitation of the Cross border transport agreement (CBTA) and currently applying
at Lao Bao gate (border gate of Vietnam with Laos) signed by Thailand, Laos, Cambodia
and Vietnam. Up to 2006, there have around 60 companies have invested in Quang Tri
province of the Lao Bao Economic border zone (Lam, 2006).

The East West corridors among Laos, Vietnam and Thailand, which include national
road No. 9, No. 13 and Mekong international bridge, have brought great contributions
on trade facilitation and investment. Most benefits from EWECs include the logistic
development of the “special economic zones”- Mukdahan (Thailand), and Savannakhet
economic development zone (Laos) as well Lao Bao economic zones (Vietnam), job
creation for most of ethnic communities and local communities along the corridors. As
the result of EWECs, is expected to create incentives for farmers to produce a surplus
livestock to transport and trade to urban areas, there have more commerce and formal
trade activities and agricultural goods given a room for those communities have access
the services (Jonathan, 2006). Obviously, the informal trade has played significant role
on trade, investment, goods movements and job creation for border communities near
by the corridors, especially the border areas between Thai-Lao (Sirivanh, 2007).
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  The Southern Economic Corridors (SEC)

The Southern Economic Corridors, that interlink to the Southern parts of the GMS
(Vietnam, Cambodia and Thailand). In Cambodia, road improvement along Southern
Economic Corridor (SEC) increases local communities’ access to basic healthcare,
education, and markets during the past three years. The average time required to reach
local healthcare services has fallen by 30 percent, while travel times to schools and
markets decreases about 40 percent (Kov Phyrum, 2007). There is a huge potential for
Cambodia in agro-industrial development and tourist promoting from Central Vietnam,
Thailand to this country, beside, the cross bilateral trade activities also emphasized
much.

3. Social Impacts of Economic Corridors

3.1 Displacement of people, Land values and Land Speculation

The social analysis of 14 infrastructure projects made by Mekong Institute (2007)

shown that, the total population in the project areas is 50,060, 824 people3, while the
three ECs passed through areas of total 256,951 people in Cambodia; along the SEC is
about 80.8% population along the corridor, Southern parts of Laos along the Road No, 3
NSEC covered mostly ethnic communities with more than 90% (IDE, 2005).

According to NGOs Forum in Cambodia (2006)4, the high way road No. 1 as a part of the
SEC, during the implementing of project, there was no compensation on land but a little
compensation was actually given for affected families living on the SEC1 in Prey Veng
province, the affected people complained that it was insufficient for their relocation.
While the impacts of improvement National road No. 5, and No. 6 relocated around
2,100 households with more than 3,400 people, the people claimed that the full
compensation were not given to the relocated communes, many found as a limited
compensation and few complained they have received nothing called compensate cost.
Most of affected people find themselves without any plots behind their present location
to reinstall their sustainable life (Rithy & Sauth Sophone, 2007).

The budget for social components for land acquisition and resettlement compensation
of those infrastructure projects are usually low or limited, as an indicator of the average
total budget for resettlement is about 5 %. There are some projects with 0.456% of
social action plan including budget for land acquisition and resettlement as well as it
covers the budget for HIV/AIDS awareness program, road safety awareness,
environmental protection and non-formal education (Keoamphone, 2007). However,
the existing of many risk factors to the affected people and affected communities along
the corridors are enomous; many people lost their livelihoods, land and physical assets,
jobless, homeless and food security as well other related health risk factors.

3.2 Highways, back and beside of the Poverty reduction

The poverty reduction program is however improved in the backside of the ECs
development. There is an increase both formal and informal trade activities,
commodities exchanges, small business involvement to contribute the income
generation in local communities, border communities, and some portion of ethnic
minorities. The opportunities of income generation is much involved in job creation and
cross border migrants as the individual workers could earn around $US 3.5-4.5 during a
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busy day, and it was also estimated that around 60-70% of labor migrants could earn
3,000-5,000 Baht/ month and around 10% could earn higher than 5,000 Baht, and 40%
of their wage is contribute for the saving and remit a saving home, as it was shown that
70% of labor migrants regularly make a remittance aimed to support their family at the
home village (Sirivanh Khonthapane, 2007).

However, the question how infrastructure development has caused poverty, whether
the ECs will bring the poverty reduction in the GMS? It is hard to answer the question,
and who will be responsible to answer. In the GMS, average infrastructure access
indicators are below 50 percent, of those, infrastructures access indicator for Cambodia
is only at 24.5 percent5.

Overall in the GMS, about 28 percent of population lives are under poverty (ADB, 2005).
More than 5,000 villagers affected mitigation by ADB’s policies as the adverse project
impacts: insufficient compensation, loss of livelihood, debt burden (Doi Toshiyuki & Kol
Leakhana, 2007), while the reviewing the poverty impact of regional economic
integration in Lao PDR (East West corridor) by the National Economic Research
Institute of Lao PDR shown that 44.3% of provincial population in Savannakhet still live
under the poverty line, and almost one in two person did not consume enough to meet
basic needs. In Saravan, the survey indicated that there was around 42% of total
provincial population as the same line of the close relation between poverty and
regional and village characteristics, most of the population in those provinces are
involved in rural activities and nearly one in two people is considered as the poor. The
border and other districts a long the Lao-Vietnamese border, and Lao-Thai border in
both provinces, as the poverty rate is 17 and 23% of poor lived in the border districts
respectively. Another indicate shown that 30% of poverty in Savannakhet or almost one
in three poor in the province still live in the district along the road No. 9, and very small
number of people in communities along the road No. 9 still enable to utilize of road
access. The poverty situation is inferior in districts along Lao-Viet border of Sanavan
almost 90% of population in these districts did not consume enough to meet the basic
need (Sirivanh Khonthapane, 2007).

Among the GMS countries, Vietnam even though has the most impressive changes on
poverty reduction with a drop from 58% of population below the poverty line in early
1990s to 20% in 2004 (European-Commission 2007), however, there is a large cluster
of population around the poverty line indicated a high level of vulnerability for the
people to slip back into poverty, particularly in the rural areas, and rural poor as a vast
majority of them whose income to crop failure and especially women agricultural
laborers whose income is 60% of their male counterparts (Patrick Kilby, 2007).

3.3 Highways and local community’s safety

The infrastructure development of these corridors brought more means and tools for
local communities and poors to have access to the market and other related welfare
services. However, there have more challenges, threatens to local communities to adopt
with the changes on their livelihood and approach the new technologies. The road
safety and road related regulations have existed many problems to the policy makers,
the policy is step by step to be formulated in the place but it is still lack of consensus on
the regulation and rules. The research by the Ministry of Communication Transport Port
and Construction, Lao PDR in 2006 shown that, along the EWECs, the more increase of
vehicle speeds, the more severe accidents seen. Along the NR 8, in 2005, there have
around 5,000 accidents, with more than 7,300 injured cases and around 500 death. In
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Savannakhet, and NR 9, with around 1000 accidents and 2000 injured with almost
hundred cases death in the same year (Sisamouth, 2006).

Reckless vehicles’ driver also makes the EC’s highways unsafe for local communities
who live along the highway. The survey by Mekong Institute 2006 shown that, assets of
the local can also be harmed more easily than before, those threats are common on
EWEC both sides of Vietnam and in Savannakhet, Lao PDR, where there is an increase of
serious accidents occurred along the road during and after construction of the high way
(Mekong Institute’s field study, 2006)

3.4 Social vulnerability & cultural values deterioration

Response to the social vulnerability, it is seen as a key relation poverty indicator along
with human capital, housing, assets. In the GMS, a large amount of people on the margin
and are in the line of poverty, especially ethnic minorities (make up to 14% of
population and account for 29% of poor in Vietnam) (Patrick Kilby, 2007). The social
risks are also identified as the associated factors of project’s risk factors as the
resettlement issues, compensation, land and assets acquisition during the constructing
phases of the corridors. There is an existing the institutional risks for local affected
communities and ethnic minorities known as the capacity building and training for the
affected still limited and deficiency based on the needs, which is only 0.015 % of the
total budget of 10 projects (Keoamphone, 2007).

In the Vietnam sides, the road No. 9 cross the Lao Bao township where have nearly 50%
of Bru ethnic minority, the report shown that people along the road No. 9 heavily
involved in illegal trading, and in some village, the poverty rate is still high (40%) in
compared with the government standard. Since the new road emerged, many challenges
to local communities has founded: The selling labor, and nature of the jobs changed into
the social behavior changed into the commercial and money orientation (illegal
activities of gold mining and market intrusion, commercial sex work and HIV/AIDS
expansion, child labor exploitation for the gold mining and road construction as well the
local communities are very high risk and vulnerable to the social economic changes
along this corridor (Giang, 2006).

The social and cultural deterioration as the negative impacts of EC, it is considered as
the most pressing phenomenon germinated from the economic integration, the
commercial sex, drug abuse, alcohol consumption, etc, those behaviors have been
increasing rapidly along regional cooperation process, and most of the outbreak cases of
HIV/AIDS and STD infections were found in the integrated areas along the Thai-Lao
border, Road No.9 and No. 13, etc. Along with borderless among the ECs, the informal
migration and human trafficking are most concerned in term of social impacts. There
have many Cambodia, Laotian and Myanmar staying illegal in Thailand. Most of those
migrants are considered as low-skilled workers and are high risk of vulnerability to the
living conditions, health risk factors and personal security.

In Laos, the EWECs promise a great contribution on poverty alleviation, however, by

2007, the poverty portion of communities along the road number 9 is still ranking from
30- 40% of total population of savannakhet. There have challenges between
competitiveness and local affected, along the road No. 9 (EWECs), local communities are
more risky to gain credit as their productions are mainly for household consumption
rather than commercial production, they would prefer their own saving in term of cash,
livestock and other property as a source of production investment rather than accept
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the new approach, even in the fact, it is difficult to get the local financial sources or
credit programs (Sinavanth, 2007). In Thailand, the survey in 7 provinces shown that,
the social impacts are most affected to the local communities along the EWEC due to
drug and social behavior problems HIV/AIDS and high risk with communicable diseases
along the road (Yaowalak, 2007).

In term of gender dimension due to the socio-economic integration create the role
change of some focal groups. There is an estimate of over 80% of small business shop in
local communities owned by women, and more than 80% of cross border trade are also
owned by women, more than 60% of migrant workers are women, and between 20-
30% of household are headed by women, the functions of woman are varied as taking
the double roles, women have to involve in household work, keep their traditional
function as well as do the economic activities and contribute to household income. It
was shown that, 40% of family income in the border communities is contributed by
women work and women’s economic activities (Srivanh Khonthapane, 2007), however,
response to the equality between men and women, in many ethnic minorities, the role
between men and women are still subordinated to the men, women are still excluded
from the decision-making process at all levels (household, community, and higher).
Beside, the degree of high risk factors of communicable disease infection, HIV/AIDS,
STD and other health problems are still high with woman. The commercial sex is an
outstanding problems in the border communities of Laos between Vietnam and Thai
border areas, the women and youth are vulnerable to HIV/ADIS, and communicable
diseases that mostly related to regional economic integration as well human trafficking
and child labor. The ministry of Health, Committee for Control HIV/AIDS and STD
estimated that, there are around 2 % of services women in those areas should live with
HIV/AIDS and half of them should live with STDs, the trend increasing due to more
trade, good, and people mobility (Srivanth Khonthapane, 2007).

The new roads are opened and roads are wider expanded, to expect improving life
quality’s local communities and ethnic minorities in the GMS, however, it is enormous in
changing the transformed lifestyles and change the way of life, it is included the internal
and external migration phenomenon as well changing in traditional livelihoods, cultural
heritage with money and market driven. The economic disparities and integration in the
GMS are also tremendous; Thailand is the attractive destination and labor shortage in
comparing with other neighboring countries, while Laos, Cambodia and Myanmar are
surplus in cheap labor sources. Trans-border migration including illegal migration,
smuggling, human trafficking in the GMS, along with that the increase of communicable
disease and non-communicable diseases generated during migration processes
emerged as the important issues, many of that, it was found many Cambodians,
Laotians and Burmese in Thailand, while Vietnamese mostly migrated inter-
generations, and temporary in Laos and Cambodia. Due to the development of GMS
context and the complex political situations, the trans-border agreements, policies and
regulation between the GMS member countries (bilateral, multiple lateral agreements
and MOUs) are step by step tailored and adapted to mange the illegal migration, human
trafficking.

3.5 Environmental impacts of highways and Economic corridors

Through the promise of economic development along the routes also affect critical
ecosystems and protected areas, depletion of forests and high diversified areas. In the
EWEC as the “western loop” especially along the Salween River and its tributaries inside
Burma are threaded with inundation from hydropower development, the construction
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of the roads into these remote regions have caused severe damage on road lead to soil
erosion, facilitate hunting and wildlife trafficking (Earth Rights International, 2005)

The Economic Corridors have severe impacts on environment in the long run, the
biodiversity and protected areas were threaded. The wildlife trade is increased within
the borderless in this region. It was reported the land sliding and forest decreased areas
were affected by the NSEC2 with total of 50.5 km road along the corridors (the NR 3 in
Xishuangbana), the land decreased with the time in the buffer zones of 4 km to the road
and forest is closer to the road, while the rubber plantation increase more in the zones
of 6 km to the road, and the buffer zones are closer to the road of 7 km (Zhu hua, 2006)

Institutionally, In Laos, the increasing investment in the agro-forestry sector has

negative problems with concession development. The road upgrading and deforestation
is also severe and great destruction of forest areas in Laos as the project
implementation with cutting the forest trees along the road, and both sides of the roads
were being cleared. In other hand, the monoculture of crop production was promoted as
the large mount of forestland and plain land devoted for some industrial crops, there
was 5000 ha coconut plantation run by a Chinese-Lao business man and 3500 ha palm
oil plantation formerly run by a Malaysian investor, both plantations have logged rich
forest and planted unvariable and unmanaged plantation (Glenn Hunt 2007 cited
Anonymous 2006).

In Bokeo province, during the survey in April 2006 survey, there have more than 30
sites of forest areas were burned and also the 2006 GTZ report on State Land Leases
and Concession in the Lao PDR shown as systematic problems of multiple government
ministry and authority to grant concession, the report also highlighted the low rates of
land leasing that was indirectly impacts on both agricultural and forest land are being
lost to plantation development, the mining industrials and operation activities in Laos
are also speeded up due to the road improvement. There has more than 200 companies
engaged in mining activities and operation and also speed up the industrial sector
(19.5%) (Phonethip Phetsomphou, 2007). Those operations had increased the great
pressures and impacts on environmental degradation and erosion in Laos.

In Siem Riep province, it was claimed that ‘more than half of Banteay Srey district’s
29,000 hectares of Permanent Forest Estate (PFE) have been illegally occupied by
private landowners’6. In many places in the projected areas it was complained about the
environmental urban pollutants, in Phitsanulok (Thailand), there have problems on air
pollution and it affected to the local traffic and transportation. Similar problems
happened with the congestion and overuse of natural resource, increase pollutant leads
in industrial zone in Lao Bao (Vietnam)

4. Policy implications and regional supports to address problems

The regional policy implication and regional supports with possible proposed policy
options, it needs the involvement of local governments and donor’s policy and
protocols, regional and inter-governments in formulating and adapting and amending
the prior related policies to improve the infrastructure development impacts. The policy
options were assimilated during two regional policy dialogues organized by Mekong
institute and illustrated and summarized, in the efforts to minimize the social and
environmental impacts of infrastructure corridors in the Greater Mekong Subregion, the
role of national policy and government regulation on those development projects are

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important and it can be improved to solve and resolve the conflicts priorities in
different phases of implementing projects:

Infrastructure
Projects’ policies Possible Effects Policy Options
Status in GMS
# Infrastructure Increase evident social # Develop competencies
policies with impacts resulting from particularly local authorities and
insufficient social inadequate assessment enforcers to better manage and
inclusion and support policies execute SIA, formulate mitigation
policies and plans with inclusion of
# Enforcement of all concerned
Social Impact
Assessment (SIA) is # Lessons learned on trends of
inadequate social problems on pro-poor
communities should be included
and applied when SIA are
conducted.
# Absent of national Increase number of Set up national resettlement
resettlement policy involuntary policies/plans and strengthen the
and slow process of resettlements and cases enforcement that are responsive to
land entitlements, of land titles immediate and long-term needs
resettlements and related to compensation, basic
compensation for the services, livelihoods, and life skills
displaced people development support
#Policies stipulate that (Resettlement policies should aim
# Resettlement dislocated families are to conserve livelihood and cultures
policies suffer from not entitled and lead to linked to poverty reduction
slow enforcement, poverty strategies)
conflict with existing # Establish proper monitoring
regulations and #Increase cases of land mechanisms to implement
incomprehensive grabbing by elite and resettlement policies and plans
policies powerful groups
Increase of land loss # Ensure entitlement in priority
# No laws on land and lead to poverty areas are hastened in compliance
property rights or law with the donors’ resettlement
are not well enforced policy guidelines
# Review and amend existing
policies, simplifying bureaucratic
procedures. Give priority to
certain areas with high rate of
poverty
# Development plan # Changes in livelihoods # Increase capacity building
for impoverished of the poor and ethnic activities/components to deliver
groups and ethnic minorities policies and practice on ethnic
minorities are minorities
inadequate # Ethnic minorities are
moving towards # Integrate highly vulnerable
market-based livelihood groups such as ethnic minorities
activities, wherein with and those in the high poverty belt
little or no bargaining into the mainstream program

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 power they became # Create corresponding policy
increasingly vulnerable actions on local communities’
to exploitation and coping mechanisms to changes,
economic decline cultural integration and changes,
impacts on identities, social
systems (culture and values) and
extent of integration of ethnic
minorities in infrastructure
development
# Infrastructure # Increase responses to # Historical data and evidence of
policies lack strategies new economic common social trends should be
to increase awareness opportunities along the used to describe a dynamic social
or preparedness of road spawn and context before, during and after
local communities exacerbate social any major new change being
along the new problems such as assessed in an area.
transport corridors prostitution and drug
abuse, trafficking and
# Policy on funding border crimes. # The awareness on common trend
provisions of Social # Road accidents of people’s responses to improved
Action plan is increased alongside the transport should also be
inadequate rise in vehicular traffic
forecasted. The development of
and roadside GMS infrastructure should be able
settlements to map out trends on certain areas
and identify possible social
problems on local communities.
# Increase funding provisions for
SIA and social action plan (enforce
1 percent policy of infrastructure
projects on HIV/AIDS)
# Inadequate # Overexploitations on # the awareness on environmental
protection of natural resources protection should be accelerated
environment as the (deforestation, sole with the public participatory, the
stress result of crops, loss project’s regulation on
economic change, biodiversities, threat environmental protection and
market driven agro- protected areas, awareness should be included in
business and impacts national parks areas) the guidelines of the project
of infrastructure # Environmental protocols.
development degradation (increase # The coordination, consultation
the pollution loads, and sharing concerns information
industrial zones, and on environmental impacts among
economic zones in those those GMS countries are needed.
economic corridors) The bilateral and trilateral
agreements on the related issues
are also needed to enforce.

(Regional policy dialogues’ policy implications, Mekong Institute, 2007)

The prior policies strategies and challenges are needed to focus to improve and
maximize the local community’s benefits, those are social (local communities are well
being and minimize the possible social problems) and economical, and environmental
benefits (poverty reduction and improve human resource development, better off

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conditions, and have access good social services, better environmental quality) from
infrastructure development in the GMS region:

 The Poverty-focused Policies and Ethnic minority policies and social

integration (tailor policies)

In the GMS, average infrastructure access indicators are below 50 percent. Of those,
infrastructures access indicator for Cambodia is only at 24.5 percent. 7 The challenge is
how to maximize or optimize the community or ethnic minority have access to those
public development (health care and education services, have access to employment
opportunities), while the highest risks and concerns are on social problems and cultural
habit changes of local minorities along the corridors. Such factor is conducive to unclear
result of how poverty reduction program come about when observing the poverty
reduction program on infrastructure projects. Some case of GMS government that sector
identified transport projects as a national priority in country poverty reduction while
others are not. When excluding the cases that are not, how can policy makers do more
to ensure poverty reduction in the non-priority areas? 8

Infrastructure policies related to poverty reduction can consider the synergy between
current vulnerabilities and social impact mitigation plans, contribution of infrastructure
development in poverty reduction and changes in access to public services and
resources. The social risks, vulnerability and funding set of some items are inadequate,
these costs are not usually part of the loans of infrastructure projects, funding allocation
for these parts is sometimes small, absent, or competes with other national budgets and
priorities. The choice implicit in the infrastructure projects however should emphasize
more on calling forth for interpretation of the costs – whether it is fundamental or
additional cost of infrastructure projects. They are factors contributing to practices that
minimize social impacts on region development at large, by minimizing costs of social
problems on individuals, communities, and region as a whole.

The tailored social and economic integration polices in cooperating with related poverty
reduction policies must be considered as the most priorities in the GMS members to
address the social problems: illegal migration, significant cross-border movements,
cross-border marriage and significant wedding to foreigners, human trafficking (in man,
women and child) and border communities social behaviors changes, communicable
diseases speeding (HIV/AIDS, STDs, STI, etc) due to the borderless under the
infrastructure development and promoting the local income generation (poverty
reduction) by providing more opportunities or outputs for local communities to
approach the market-driven locally, regionally and internationally.

 Policy Reforms and filling up the policy gaps

Policies reforms are needed to minimize and fill up the policy gaps on healing the social
impacts of infrastructure might be varied among GMS countries, and it depends on each
Government’s policy priorities, and economic context. For instance, in Cambodia,
national policy on resettlement is absent and there is no legal regulation on land laws, in
Vietnam the resettlement policies sometimes are inappropriate with different formal
and informal channels of fair or unfair compensation. The policies gaps among the GMS
are tremendously and different between members (Thailand, China and Vietnam&
Cambodia, Laos and Myanmar), the gaps are enormous in economic disparities, income
gaps, health gaps, knowledge gaps, and gaps in rights, opportunities, communications,
negotiation power. In infrastructure development, the resettlement reforms should go
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beyond emphasizing the enforcement of existing comprehensive policies, and adaptive
policies accordingly the public perception and practical elements. In most GMS
countries, resettlement policies are at the practicing and early stage of development, the
National policies are not consistent with donor policies, even though the donor policy
existed, the potential problems generated due to the practicing processes of
development, and it would not be in a good shape without the timing, financial, breadth
and depth of public participation particularly of affected communities, and local ethnic
minorities.

 Institutional Development

Institutionally, most of GMS countries’ Implementation of infrastructure development

with poor management, for instant the multi-million dollar is political corruption by
PMU 18 project (Vietnam), or without land rights and regulation legally toward to
rehabilitation (Cambodia), forced resettlement and displacement people of Myanmar
and in Laos, those elements and policy gaps illustrated the poor intuitional functions
and hindered by poor governance. Good governance is one of the recognition that needs
to use as the tools and innovative means to formulate the policy in place. The priority is
given to manage governance, it is not a single entity but the attempt to improve
infrastructure policies requires on-going institutional development, and concerned
stakeholders’ responsibilities. This requires a growing involvement of public, increase
capacity building on good governance and a system of reward and punishment through
public hearings. The integration of good governance recognition and dissemination of
best practices of infrastructure practice is still widely needed in the GMS region.

5. Conclusions

Development of infrastructure and economic corridors have generated great

contributions to local governments and communities as well as ethnic minorities
related policy improvement on poverty reduction in the GMS, however, during the
implementing and planning processes of projects have also created negative impacts
enormously on social and environmental problems to local communities. The
challenges and alternative strategies should involve more supports from donor’s initiate
research, guidelines, policy protocols and enhancing the with public participatory in
formulating and reforming the policies process that make sure the local communities’
livelihood and capacities toward into economic integration are developed, beside the
friendly environmental development are also accompanies during all the phases of
infrastructure work. The regional supports and involvements are needed to address
those integrated problems, and filling the policies gaps from the in charged
stakeholders’ supports of all sectors, local governments and regional inter-
governments.

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ENNOTES
1 Det Wattanachaiyingcharoen (Sept, 2006), ‘A SEIA Model the Logistics distribution center of Phitsanolok
under the Indo-China’s service city policy ‘, the paper presented at the regional policy
formulation meeting on “Social and Environmental impacts of Economic Corridors”, Mekong
Institute, Khon Kaen, September 18-20th, 2006. pp19.
2 Wang Shilu (May, 2007), ‘GMS Economic Corridors Construction in Yunnan: Progress, Problems and

Policy Implications”, MIRAC research paper; pp61.

3 Keoamphone Souvannaphoum (2007), Mekong Institute, ‘ Social Analysis of Transport Infrastructure: A

case study of funding provision on Social Compoenents for Local communities in the Greater
Mekong Sub-region’, the paper presented at the Conference ‘ A greater Mekong? Poverty,
Integration + Development’ (September 2007), University of Sydney, Australia. Pp17.
4 Nuth Youthy & Sauth Sophon, NGOs Forum on Cambodia and Coservation Development of Cambodia

(2006), ‘A case study of Highway One Improvement project’, the paper was presented at the
Second Regional Policy Formulation meeting on Social and Environmental impacts of Economic
Corridor, Mekong Institute, Khon Kaen, Thailand (September 2006)
5 Jones, Stephen (March, 2006): ‘Infrastructure Challenges in East and South Asia’, topic paper 1., 21: pp

4-5
6 Vong Sokheng and Liam Cochrane (2005), ‘Rich and Powerful snatching land illegally in Siem Riep area’,

Phnom Penh post page 1 (April 22, 2005).

7
Jones, Stephen (March, 2006): ‘Infrastructure Challenges in East and South Asia’, topic paper 1., 21: pp
4-5
8
Keoamphone Souvannaphoum, (March 2007): ‘Social Analysis of Transport Infrastructure: A Case of
Funding Provision on Social Components for Local Communities in the Greater Mekong
Subregion’ Mekong Institute Research Paper, pp 9-11

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