Building a Sustainable Energy Future

The Greater Mekong Subregion

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• Publisher: Asian Development Bank
• Year: 2009
• Print ISBN: 9789715617925
• eBook ISBN: 9789292547080
• Edition: 1
• Topic: Business
• Subtopic: Energy Industry
• Index: Business

An integrated, prosperous, and equitable Mekong subregion is the vision of the Greater Mekong Subregion (GMS) Economic Cooperation Program. Developing the energy sector is critical to realizing this vision. The results of the formal energy modeling exercise make a strong case for pursuing an integrated regional energy strategy. Targeted and sustained policy actions, including reforms, are necessary for a viable GMS energy strategy. Private sector participation is also key in accomplishing this goal. This book synthesizes the output of the consultative process undertaken by the Asian Development Bank's technical assistance to develop a GMS energy strategy, and proposes concrete actions for a cleaner, brighter energy future for the subregion.

1

Coming Together—The Greater Mekong Subregion

The Greater Mekong Subregion (GMS) Economic Cooperation Program (the Program) is the driving force in bringing together the six countries that share the Mekong River—Cambodia, People’s Republic of China (PRC), Lao People’s Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam. Within the subregion, the PRC is represented by the Guangxi Zhuang Autonomous Region (Guangxi) and Yunnan Province (Yunnan). The GMS covers 2.6 million square kilometers, which is roughly an area the size of the Eurozone, and is home to a total population of about 320 million (Table 1). The subregion has significant potential for rapid and sustained economic growth, given its abundance of human and natural resources and its strategic location that acts as a “land bridge” between South and East Asia.

Table 1. GMS Physical Indicators, 2005

km² = square kilometer, GMS = Greater Mekong Subregion, Lao PDR = Lao People’s Democratic Republic, PRC = People’s Republic of China.

Note: Density is defined as the number of persons per km².

Sources: ADB. 2007c. Key Indicators. Manila. and China Data Online 2008.

Despite the subregion’s geographic advantage, rapid rate of economic growth, and abundance of natural resources, about 15 million GMS inhabitants are still poor, surviving on less than the equivalent of $1 a day, with nearly 60% of the population earning less than $2 a day. The GMS Program thus envisions a more integrated, prosperous, and equitable Mekong subregion, and its goal is to achieve this by complementing national efforts in promoting economic growth and reducing poverty. As a result, the Program focuses on expanding trade and investment among member economies, facilitating cross-border movement of people and goods, and addressing common resource and policy requirements. The Program underscores the importance of the “three Cs”: greater Connectivity to enhance Competitiveness to help build a prosperous, cohesive Community.

The GMS Program is a results-oriented and pragmatic initiative guided by a set of general principles and institutional arrangements. Within this context, all member economies jointly plan and implement projects for their mutual benefit. Activities under the program focus on several strategic areas, and can be grouped into three major categories: (i) physical infrastructure (transport, power, and telecommunication facilities) to promote overall economic growth and greater trade, investment, and tourism flows; (ii) policy and institutional initiatives to maximize the benefits of physical infrastructure; and (iii) initiatives to address common concerns relating to social development and environmental sustainability.

In sum, the GMS Program helps realize the subregion’s potential for economic growth and social development. It does this by (i) creating policies that promote growth, (ii) strengthening infrastructure linkages that facilitate economic cooperation, (iii) developing the subregion’s human resources, and (iv) respecting the environment and the social interests of its member economies. The Program aims to ensure sustainable and equitable economic development.

At their first summit held at Phnom Penh, Cambodia in November 2002, the six GMS member economies formulated and endorsed a 10-year strategic framework that envisions an integrated and prosperous Mekong subregion free of poverty and committed to environmental protection. Its overall aim is to ensure that the economic benefits of regional cooperation and rapid growth are delivered within a context of rising income and continual improvement in the quality of life, and that both of these are shared as widely as possible.

Growth, Poverty, and Human Development

Energy is of crucial importance in fulfilling the Program’s vision of economic development and continuous improvement in the quality of life. While access to modern energy is not by itself a goal, it is a critical element in attaining virtually all of the Millennium Development Goals (MDGs). A common recommendation of the 10 Task Forces of the United Nations (UN) Millennium Project was to improve access to energy services as a means of meeting each MDG. Appendix 1 describes GMS’s progress in achieving these goals.

Some of the linkages between access to modern energy and achieving the MDGs are direct. For example, energy is a key input into industrial development, transport, and communications, all three of which are directly linked to economic development and poverty reduction. Effective health care service delivery requires access to modern energy sources. Media campaigns for spreading awareness of health threats from HIV/AIDS, malaria, and other communicable diseases are unlikely to succeed if the target population lacks access to electricity.

Indirect linkages between access to modern energy forms and success in achieving development-related goals also exist. Teachers and doctors are unlikely to serve in rural areas or isolated communities that lack access to modern energy sources. Electricity extends the working day for students, and access to modern cooking fuels saves time otherwise spent in collecting fuelwood. Similarly, unchecked use of traditional fuels leads to deforestation, soil erosion, and reduced soil fertility, and causes indoor pollution that leads to major health risks.

Access to energy is positively linked to fulfilling goals related to health and education. Several studies have established a link between the human development index (HDI) ranking of a country or province and access to modern energy sources. Figure 1 shows that most countries with high HDI rankings also have high levels of electricity consumption. In this regard, there is an important threshold level of annual per capita electricity consumption of 4,000 kilowatt-hours (kWh) that corresponds to an HDI value of 0.9.¹

Figure 1. Human Development Index and Global Per Capita Electricity Consumption, 2005

kWh = kilowatt-h...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Abbreviations
• Foreword
• Acknowledgments
• Executive Summary
• 1. Coming Together – The GMS
• 2. Emerging Challenges in the GMS
• 3. Why Integrate the Energy Sector?
• 4. The Economics of Energy Integration
• 5. Energy Trade under the GMS Integrated Scenario
• 6. A Shared Energy Future: What Will It Take?
• 7. A Shared Energy Future: Acting Now
• Endnotes
• Appendixes
• References
• Back Cover