Cambodia-Laos-Vietnam: economic reform and regional integration

Cambodia-Laos-Vietnam: economic reform and regional integration

Cambodia, Laos, and Vietnam (CLV), reemerged to be part of the center of economic gravity of the Asia Pacific region. With continued economic reform and trade openness, CLV has achieved remarkable growth in the last decade with about 8 percent of annual Gross Domestic Product. Due to such high development, CLV is regarded as the new frontier for growth in the region within the context of ASEAN regional generic integration. Such growth contributes to narrowing development gap or disparity in the region. However, during the process of economic transition and integration, these countries have faced with challenges and problems associated with privatization, marketization, sustainable development, and poverty reduction.

This paper aims to examine the current economic reform and development in CLV and the cooperation and integration among the three countries in contributing to the dynamic ASEAN regional integration process.

Geographical linkages, traditional friendship, and sub-regional economic relations connect Cambodia, Laos, and Vietnam in many ways. CLV is becoming a new front line of regional integration in Southeast Asia. Continued economic policy reforms together with regional integration are taking the center stage of the governments in the sub-region. While the region is emerging as an additional economic center to the region, it continues to face the issue of development gap, inequality and high poverty rate.

Regional cooperation on development has contributed to narrowing the development in the region through mainly investment infrastructure. The new dynamic has been undergoing in CLV with the increasing flows of investment and expansion of international trade from the region and beyond. CLV Growth Triangle is emerging to be a factor in linking border areas to promote trade, tourism, agriculture, and other sectoral cooperation schemes and narrowing the development gap within the countries since the border regions are less developed.

Measures to strengthen CLV cooperation include political reform, economic reform, confidence building measures, together attracting foreign direct investment and official development assistance in order to integrate CLV into a single entity. Such development and cooperation can reduce the development in the region and move towards the realization of ASEAN community by 2015.

The challenges, though, for CLV are how to effectively and timely transform from economic development to poverty reduction and social protection. Investing in human resources and technology are necessary for CLV to move from cheap labor intensive industries and primary products exported economies to knowledge based and services economy. CLV need to increase labor productivity and better mechanism of wealth distribution. Inclusive growth and sustainable development need to be conceptually integrated into development and integration discourses and implemented at local, national and regional levels.

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