The first grant worth $400,000 will help prepare a blueprint for reviving economic cooperation in BIMP-EAGA, with refocused priorities in line with new economic trends.
A second grant worth $600,000 will be used to improve coordination mechanisms for the BIMP-EAGA Economic Cooperation to enable the four governments, their respective participating regions, and the private sector to work in harmony.
The increased coordination between the public and private sectors should improve the flow of resources.
Finally, $500,000 will be released to create an information center for trade and investment expansions. This will facilitate the exchange of information among companies, particularly small-and medium-scale enterprises, as well as enable the private sector to communicate more effectively with customers or investors outside the region.
These follow a TA for $260,000 approved at end-2001 to strengthen sub-regional cooperation in the transport sector, and also a series of TAs to support the formulation of the BIMP-EAGA SME Development Strategy.
Together, the three new projects will examine how to prioritize emerging opportunities for cross-border cooperation.
"By reexamining Southeast Asia’s development needs in this context, such cooperation initiatives have the chance to fulfill the potential foreseen in the’economic miracle’ days of the early 1990s," said Ayumi Konishi, director of the Governance, Finance and Trade Division at ADB’s Southeast Asia Regional Department.
When the BIMP-EAGA initiative was launched in 1994, the aim was to harness synergies of one of the world’s most economically dynamic regions.
"The concept of sub-regional groups was that it would bring development to the more remote and deprived areas of the region that were closer to each other than to their respective capitals," Konishi said.
Progress in the sub-regions, which also included the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) that started in 1993, was impressive up to the mid-1990s while the economies were relatively strong and the global environment bullish.
However, when the Asian crisis struck in 1997, sub-regional priorities gave way to domestic concerns as growth faltered, unemployment and poverty rose, and currencies depreciated.
"In the face of the Asian crisis, the public-private partnership was weaker than expected, and the private sector was unable to lead the regional cooperation strengthening process," Konishi explained. "Other crises, such as the El Niño and La Nina weatherphenomena, compounded the difficulties."
The Asian crisis slowed the momentum of sub-regional cooperation, but did not bring it to a halt. Growth continued in areas where export-oriented local economies benefited from currency depreciations.
As Southeast Asian economies continue to recover from the crisis, there has been renewed interest in reviving these cooperation zones.
In late January, during a bilateral meeting in Manila, the heads of state of Brunei Darussalam and the Philippines highlighted the revival of BIMP-EAGA as a crucial step toward spurring economic growth.
"Sub-regional groupings offer a wealth of economic advantages, such as lowering costs when investing jointly in common or complementary resources," according to Konishi. "In the process, they strengthen regional stability by improving relations between participating countries, offering the chance to create a climate that will spur local investment – a prerequisite for attracting foreign investment."