Lancang-Mekong Cooperation

By Lu Guangsheng



Lancang-Mekong Cooperation

By Lu Guangsheng

Six foreign ministers hand in hand. On November 12， 2015， the frst Foreign Ministers' Meeting on Lancang-Mekong River Cooperation was held in Jinghong， Yunnan Province.

On November 12， 2015， a Foreign Minister's meeting was held in Jinghong，Yunnan Province to officially launch the Lancang-Mekong Cooperation （LMC）， a new mechanism of sub-regional cooperation. Representatives from China and fve countries in the lower reaches of the Mekong River，namely， Myanmar， Laos， Tailand， Cambodia and Vietnam， attended the meeting.

Sub-regional cooperation， with Lancang-Mekong as the axis， appeared in the 1990s， and has now developed an array of cooperative mechanisms， such as the Greater Mekong Sub-Region （GMS）， ASEAN-Mekong Basin Development Cooperation （AMBDC） and Mekong River Commission （MRC）. In the future， the LMC will probably grow into an important platform for China and and Lower Mekong countries to further their cooperation.

History of LMC

Greater Mekong Sub-Region （GMS）， founded in 1992， refers to a sub-regional economic cooperation initiated by the Asian Development Bank （ADB） and involves the six countries fanking the Lancang-Mekong River. Its main characteristics are: frst， it focuses on economic cooperation， and seldom gets involved in political or social cooperation； second， it is one of the mechanisms of sub-regional cooperation that has gained the most remarkable achievements and the most advanced mechanisms. It is also one of the frst of its kind in which China has joined. Over the past two decades， the various countries concerned have cooperated to produce positive results in transportation，energy， telecommunications， tourism， environmental protection， agriculture， human resource development， trade facilitation and investment， contributing much to regional economic and social development. In recent years， however， the GMS arrangement began encountering new problems. First， how to continue to deepen the economic cooperation after so much progress， especially producing a sharp decline in tariff benefits. Second，how to extend the sub-regional economic cooperation into the felds of politics， security and social issues to deal with the increasing non-traditional security issues. In this context，it became natural to generate a new concept for sub-regional cooperation， producing the LMC. Te idea dates back to November 2014， when Premier Li Keqiang attended the 17th China-ASEAN Summit in Naypyidaw， Myanmar. He announced that China was willing to explore a new dialogue and cooperative mechanism in the Lancang-Mekong region within the ASEAN-China framework to boost sub-regional development.

On April 6， 2015， the first Senior Officials' Meeting of the Lancang-Mekong River Dialogue and Cooperation was held in Beijing. The theme was “Six Countries， One Community of Common Destiny: Establishing the Lancang-Mekong River Dialogue and Cooperation Mechanism to Promote Sustainable Development in the Sub-region”. Te countries concerned issued a fnal report，with the expectation that the meeting would help “enhance political mutual trust， economic and trade cooperation as well as social and people-to-people and cultural exchanges among sub-regional countries”. Thereafter，little public attention was paid to the new mechanism. However， the Ministry of Foreign Afairs of China and related departments were carrying out research and working to coordinate and prepare. On August 21， 2015， the second Senior Officials' Meeting was held in Chiang Mai， Tailand， to discuss the concept paper relating to the LMC， “early harvest”projects and arrangements for the frst Foreign Ministers' meeting.

On November 12， 2015， the first Foreign Ministers' meeting duly took place with the theme of “Nourished by the Same River，Linked by Common Destiny”， under which all parties carried out in-depth discussion and reached broad consensus. They agreed to launch the cooperation process， and announced the official establishment of the Lancang-Mekong cooperation mechanism. Besides， they issued the first Joint Communiqué on the Lancang-Mekong River Cooperation， in which three aspects deserve attention. First， the ministers welcomed the concept paper on the LMC， and decided to cooperate in the surest way in three major felds - politico-security issues， economic afairs and sustainable development， and social affairs；people-to-people exchanges； and working together to build a Lancang-Mekong community of common destiny for close cooperation and mutual benefit. They suggested that a multi-layer LMC framework be established and the frst LMC leaders' meeting be held next year. Second， the meeting discussed the LMC early harvest projects put forward covering areas like water resource management， poverty alleviation， public health， personnel exchanges，infrastructure， and science and technology. All parties expected to see an early implementation of the projects to beneft the people in the region. Tird， the foreign ministers agreed the LMC projects and the funding would be dealt with through consultation of the governments concerned， and that the support from other fnancial mechanisms and international institutions would also be considered.

Signifcance

First and foremost， the LMC is an innovative way for sub-regional countries to break through development bottlenecks and deepen their cooperation. At present， the sub-regional countries， except Thailand， still lag behind economically. Laos， Myanmar and Cambodia have long been handicapped by poor infrastructure， inadequate funds， large poverty-stricken population and difculties in sustainable development. There is still a long way to go to achieve mutual development and prosperity. Although an array of cooperative mechanisms promoting development has come into being， they either target at a certain area or specific issue， or are dominated by countries or institutions outside the region，which restrict the actions and create impose evident limitations. For example， China， in the upper Mekong reaches doesn't belong to the MRC. Tat to some extent impacts on the organization's effectiveness . Under the LMC framework， however， further discussion and cooperation can be achieved.

When compared with the original cooperative mechanisms， the LMC provides innovations in many ways. With regard to the right of leadership， the LMC is the frst of its kind to be mutually dominated and coordinated by six countries in the sub-region. In cooperation， the LMC features openness and inclusiveness， covering areas of economy， politics， social afairs and culture. Cooperation in water resources that draws much attention will probably be included under various headings. In terms of the cooperative goals， the LMC is committed to enhancing political mutual trust and mutual understanding， safeguarding peace and stability； promoting sustainable development， narrowing gaps in development；boosting people-to-people exchanges and encouraging people-to-people bonds. For the sub-regional countries， it ofers a vital opportunity to advance together for mutual beneft. It also provides new impetus for upgrades of existing cooperative mechanisms.

Secondly， the LMC is a boon for China to keep up with the times to play a constructive role. In October 2013， Chinese President Xi Jinping ofcially put forward the Belt and Road Initiative， regarded as one of the most important aspects of China's opening up. Countries in Southeast Asia， including the Lower Mekong countries， are important partners involved in the Belt and Road Initiative. However， judging from the current situation of the Mekong sub-regional cooperation， China is yet to play its “matching” role in leading and underpinning the development in terms of international status and comprehensive competence. In the meantime， the present GMS cooperation has shown signs of difficulty in sustaining or increasing funding. One of the reasons is that，as major projects， such as those involving transport infrastructure are completed， the ADB will probably transfer its limited funds to other areas that the bank believes should be given priority，afecting fund sources for the Mekong sub-region. In recent years， China has advocated and launched or participated in founding a number of funds and fnancial arrangements， including the China-ASEAN Investment Cooperation Fund， Special Fund for Regional Cooperation in Asia， Silk Road Fund， and Asian Infrastructure Investment Bank （AIIB）. They can be used as an important fund source for Mekong sub-regional cooperation.

In addition， China has shown its willingness to promote the upgrading of Mekong sub-regional cooperation under the Belt and Road framework， which is clearly expounded in the Vision and Proposed Actions Outlined on Jointly Building the Silk Road Economic Belt and 21st Century Maritime Silk Road published by the National Development and Reform Commission， the Ministry of Foreign Affairs， and the Ministry of Commerce in March 2015. According to the Vision， the role of Southeast China in the Belt and Road Initiative is to give full play to the unique advantages of the Guangxi Zhuang Autonomous Region as a neighbor of ASEAN countries，build an international corridor leading to the ASEAN region， create new strategic anchors for the opening-up and development of the southwest and mid-south regions of China，and form an important gateway connecting the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Drivers competing in the China-ASEAN International Auto Rally drove by the Independence Monument in Phnom Penh. After the rally began in Nanning they drove through fve countries - Vietnam， Laos，Thailand， Malaysia and Singapore.

The aim is also to make good use of thegeographical advantage of Yunnan Province，advance the construction of an international transport corridor connecting China with neighboring countries， develop a new focal point of economic cooperation in the Greater Mekong Sub-Region， and make it a pivot of China's opening-up to South and Southeast Asia. Obviously， to achieve these goals， China must give more attention to and provide investment for the Mekong sub-region. A case in point is the LMC.

Future Orientation

At the tactical level， on the one hand， the LMC represents a new alternative for China other than the current regional cooperative mechanisms， rather than discarding GMS and creating a new mechanism to replace it. A number of cooperative mechanisms in the sub-region have long played their respective roles to meet the multi-layer requirements and satisfy the interests of all parties. This reflects not only the highly complicated political and economic interaction in the sub-region， but also the game playing of foreign powers. In the short run， it is impossible for the LMC to replace those relatively mature counterparts with unique features. Terefore， the LMC and the existing mechanisms should complement each other. On the other hand， efforts should be made to explore possibilities to build the“community of common destiny” with neighboring countries where possible. Thanks to the sound foundation for cooperation， the LMC can quicken the pace of infrastructural construction to achieve connectivity between China and Mekong countries. Efforts can be made to enhance various interest links， such as political mutual trust， mutual economic benefts， non-traditional security cooperation and ecological protection， so as to enlarge the LMC‘s scope， form an interrelated regional structure，and thus build a community of interest and destiny together with neighboring countries. Tere are some principles of cooperation. First， besides continuing to reinforce economic interdependence， eforts should also be made to explore new areas of cooperation in an attempt to achieve more in political mutual trust and functional areas. In particular， issues that are seldom involved in the GMS operation，such as fnance and currency， maritime safety，cross border water resources， international poverty alleviation and border security control，should all be incorporated in the LMC. Second，China should play a constructive role in the LMC and work hard to enhance its capability in providing regional public goods， increase the possibility to beneft neighboring countries，and improve the quality of interdependence between China and Mekong countries.

As for the contents of cooperation， China hopes that， at present， the LMC can prioritize five aspects of connectivity， cooperation in production capacity， cross border economy，water resources， agriculture and poverty alleviation， and provide critical support in policy，fnance and expertise.

With regard to connectivity， at present， the Kunming-Bangkok Expressway is open to traffc. China and the fve Mekong countries have cooperated in expressway， railway and optical fiber communications development. In the future， they can implement overall planning on sub-regional connectivity in border areas，Mekong River valley， and along expressway and railway routes. The focus should be on upgrading the Pan-Asia Railway， the railways between China and Tailand， between China and Laos， and the and land and river gateways between China and Myanmar， and upgrading the level of power grid and optical cable connectivity. Meanwhile， agreements can be negotiated to facilitate sub-regional transportation in order to strengthen connectivity.

With reference to cooperation in production capability， given that most Mekong countries remain at the primary stage of industrialization and in great need of infrastructure construction， China can draw on its rich experience in this regard， and take advantage of its advanced industrial equipment and surplus mature and cost-efective production capacity in terms of iron， cement， electricity， transportation and shipbuilding. China is willing to carry out targeted cooperation in production capacity with sub-regional countries according to their development plans so as to help them accelerate the process of industrialization at a lower cost but faster speed.

For cooperation in the cross border economy， all parties should make full use of unique resources on shared borders， enhance economic and technical cooperation， and build cross border economic cooperative zones and industrial parks under the ACFTA framework. Chins is willing to take an active part in that.

With regard to cooperation in cross border water resources， the cooperation among six countries derived from and for water. Te precious resources should be protected and exploited by all parties to boost development and beneft people's livelihood through cooperation. China is willing to work together with Mekong countries to strengthen exchanges of experiences and technologies， building the Lancang-Mekong water resources cooperation center， help related countries to formulate planning on water resource utilization and food control， enhance the capability to utilize and manage water resources， and build the cooperation in water resources into a fagship of the LMC.

As for cooperation in agriculture and poverty alleviation， China hopes to continue its exchanges with Mekong countries in agricultural technology， build more agricultural cooperation centers， construct high-quality and high-yield demonstration felds and excellent crop variety demonstration stations， and help related countries to improve their level of agricultural development. China is willing to implement the East Asia Cooperation Initiative on Poverty Reduction and set some poverty reduction samples in Cambodia， Laos and Myanmar. Meanwhile， efforts should be made to enhance cross border joint control over infectious diseases， improve sanitary condition in poverty-stricken areas， and cultivate more professionals skilled in public health for Mekong countries.

Regarding political support， to achieve sustainable development， the LMC needs the six countries to show a common political will，establish a mechanism on intergovernmental dialogue and cooperation， promote the LMC leaders' meeting， formulate relevant policy planning， bring into full play the leading role of governments， and provide political underpinning and policy guidance for the LMC.

With reference to financial support， the root and impetus of the LMC lie in project cooperation. Te six countries should give more attention to and inputs for the LMC， make good use of various resources and natural strengths. China is willing to underpin LMC projects with non-reimbursable assistance， preferential loans， and regional cooperation funds， and actively seek the involvement of international fnancial mechanisms and development funds，such as the AIIB and the Silk Road Fund.

Regarding intellectual support， the LMC，as a new type of its kind， needs the six countries to work together to make innovation， enhance cooperation in personnel training， reinforce capacity building and enhance the role of think tanks to ofer intellectual support for the LMC.

About the author:

Director and Professor， Institute of Southeast Asian Studies， Yunnan University