Leaders set to agree on regional development fund at summit

Leaders set to agree on regional development fund at summit

The five leaders attending the 8th Acmecs Summit will on Saturday approve setting up a fund for regional development.

Deputy Prime Minister Somkid Jatusripitak on Friday told a CEO forum that the so-called Acmecs Infrastructure Fund and Trust will become a mechanism to help raise funds to fuel development in the region.

Acmecs stands for Ayeyawady-Chao Phraya-Mekong Economic Cooperation. The bloc consists of five member countries in the Mekong sub-region, namely Cambodia, Laos, Myanmar, Vietnam and Thailand or CLMVT. It was created to bolster economic growth and reduce income disparity in the region.

Mr Somkid, who oversees economic affairs, said that as the host nation of the 8th Acmecs summit, Thailand was ready to help raise money for the fund.

The fund will be jointly supervised by the Neighbouring Countries Economic Development Cooperation Agency (Neda) which will also serve as the point of contact for financial institutions interested in contributing to the fund.

The deputy premier said each member country and financial institutions, including the Asian Infrastructure Investment Bank (AIIB), the Asian Development Bank (ADB), and the Japan International Cooperation Agency can contribute to the fund.

According to the ADB, the Acmecs member countries need US$150 billion (about 4.8 trillion baht) or 6% of the sub-region's GDP per year for infrastructure development.

"Acmecs needs to work harder to attract infrastructure financing. Acmecs members must closely consult with its development partners, particularly Japan, China, Australia and the US to find the best way to model and mobilise funds for project execution under the master development plan," Mr Somkid said.

Acmecs needs to catch up with the trend of rising Asia. The five-member countries need to prepare themselves for rapid progress in Asia.

CLMVT nations are located in the centre of all regional economic frameworks. This includes China's One Belt, One Road (Obor) policy, Japan's proposal of an Indo-Pacific strategy, the Regional Comprehensive Economic Partnership (Rcep) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

During the 8th Acmecs summit, approval of the first master development plan strengthening economic growth, reducing income disparity, and cooperation on tourism is also expected to pass. Some 35 million visitors are expected to pass through Thailand this year who contribute to 20% of the overall gross domestic product.

"If CLMVT countries work more closely together under the same tourism package, [I believe] 10 million visitors who pass through Phuket [in Thailand] will travel further to Myeik [formerly known as Mergui] in Myanmar.

"And another 10 million tourists from Chiang Mai [in Thailand] will travel further to other tourist attractions in Laos and Myanmar," Mr Somkid added.

On the matter of business investment, Mr Somkid said he was told by many foreign investors in Thailand that they are interested in bringing their business to CLMV countries.

Moreover, the master plan is aimed at enhancing financial cooperation and creating an ecosystem that helps facilitate trade and investment amongst Acmecs member countries.

Measures which are expected to have greatest impact in the region are the use of local currencies for payment and the promotion of the fintech industry, he said.

The plan also covers cooperation and development of capital markets, small and medium enterprises and start-up development in the region.

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