The vision of the BIMP-EAGA initiative is to realize socially acceptable and sustainable economic development and the full participation of the subregion in the ASEAN development process.
BIMP-EAGA’s short- to medium-term goal is to become a major location in ASEAN for high-value-added agro-industry, natural resource-based manufacturing, and high-end tourism. The longer-term goal is to ensure that non-resource-based industries are established in the subregion.
The strategic objective is to accelerate economic development, improve export competitiveness and enhance the attractiveness of the subregion to local and foreign investors by:
- Maximizing the participating countries’ comparative advantages with respect to regional and global markets
- The energetic exploitation of economic complementarities within the subregion
- The extensive and sustainable use of shared natural resources, technology, and information
- Dynamic joint action to overcome constraints to economic development
- The active expansion of intra-industry and intra-businesses trade through the specialization and regionalization of production.
Strong Public-Private Partnership
One of BIMP-EAGA’s defining characteristics is the strong partnership between the private and public sectors, with each playing a clearly defined role.
Since its inception, BIMP-EAGA recognized for growth in the subregion to be sustainable it must be market-driven and private sector-led. The private sector is thus considered as the primary engine for BIMP-EAGA’s growth.
The role of the public sector is that of facilitator and enabler. As such, the participating governments are committed to provide BIMP-EAGA with:
- A facilitative framework created by coordinating and harmonizing public policy to establish a unified business climate conducive to investment
- Adequate physical infrastructure needed to link the businesses of the subregion and to improve their access to regional and global markets
- An effective commercial infrastructure, by providing avenues for financing, information, and skills to improve entrepreneurial capacity and capability.
Early Gains and Achievements
The strong commitment of the four participating governments enabled EAGA to demonstrate tangible results within three years after its inception. National policies were modified, cooperative agreements were facilitated and cross-border arrangements were explored.
Among other achievements, the participating governments facilitated the liberalization of the transport sector to allow for greater mobility of people, goods and services. Within a short period, new and direct commercial air and sea linkages were established between major urban areas in the subregion. Several airport and seaport infrastructure facilities throughout EAGA were upgraded to accommodate the expected increase in passenger and cargo traffic. To facilitate intra-EAGA trade, uniform port tariffs in selected ports were established. To support tourism and promote travel within the sub region, policies on travel, including procedures and documentary requirements, were streamlined and exit taxes for travel within EAGA were waived.
Another achievement was in telecommunications. Major telecom firms operating in the EAGA areas implemented substantial tariff reductions on long distance calls within the subregion, enabling greater interaction among businesses.
Of the productive sectors in EAGA, tourism initially benefited the most, with significant increases in both domestic and cross-border investments in hotels and other tourism-related facilities and activities. EAGA-wide cultural events, trade fairs, tour exchanges and sports events were held by various public and private tourism organizations. This raised awareness not only of the subregion’s world-class destinations, but also of investment opportunities in tourism.
By the end of 1996, optimism was running high, and BIMP EAGA was seen to be on the verge of an economic take-off. EAGA cooperation activities and cross-border investments had quickly developed, aided by the perception of economic stability and optimistic forecasts for sustained growth for the participating countries and the ASEAN region in general.
The 1997 Asian financial crisis, however, seriously disrupted the growth momentum. As the economic environment in Southeast Asia weakened, governments refocused their attention on national issues.
The twin weather phenomenon of El Niño and La Niña of 1998 inflicted even worse damage than the financial crisis. The severe droughts, forest fires, and the resulting haze contributed to sharp declines in the growth of the largely agriculture-based economies of most EAGA focus areas.
Small and medium enterprises or SMEs comprise the large majority of the private sector in BIMP-EAGA and these enterprises bore much of the burden of the financial crisis and the El Niño/La Niña. To minimize the impact, many firms downsized or postponed their expansion programs.
These factors combined with reduced government spending on subregional development activities resulted to the slowing down of EAGA activities.
BIMP EAGA Revitalized
By the end of 2000, the BIMP-EAGA countries had recovered significantly from the crises. As conditions improved, there was renewed attention on the less developed areas. Given the urgent need to address poverty and security issues in the subregion, the leaders of the EAGA countries committed to revitalizing economic cooperation activities.
Support also came from the leaders of ASEAN. At the 7th ASEAN Summit held in Brunei Darussalam in November 2001, the regional leaders announced their renewed commitment and support for the revitalization of cooperation initiatives in BIMP-EAGA as part of the larger ASEAN initiative to integrate the region’s economies. Furthermore, the Leaders identified BIMP-EAGA as a test-bed for ASEAN economic integration. The idea is that if EAGA is able to successfully implement its economic cooperation program, then such cooperation can also be achieved in the broader ASEAN context. In the same year, ADB was designated by the ASEAN as the Regional Development Advisor for BIMP-EAGA.
On 7 October 2003, in demonstration of political support at the highest level, the first BIMP-EAGA Leaders Meeting was held in Bali, Indonesia.
Several measures were put into action to bolster the revitalization efforts. Institutional reforms were implemented to strengthen coordination and consolidation of cooperation development activities. Linkages with strategic partners were established, alongside closer collaboration with the ASEAN Secretariat and the Asian Development Bank (ADB). New development strategies and directions were put on the agenda, namely:
- Improving transport linkages, both within and outside the subregion;
- Consolidating the subregion’s comparative advantages in the agro-industry and tourism sectors;
- Promoting the development of external trade; and
- Instituting more attractive trade and investment regimes.
Clearly, BIMP-EAGA is back on the development track.
Roadmap to Development
BIMP-EAGA Roadmap to Development (2006-2010): Medium Term Thrusts and Directions
To ensure the effective implementation of the new strategies and directions, the 2nd BIMP-EAGA Summit in December 2005, the BIMP-EAGA Roadmap to Development (2006-2010) was launched. The development roadmap establishes the broad economic and sector-specific targets and guides the identification and implementation of priority cooperation projects and activities including “flagship projects” which have been identified to have the most positive impact on the subregion’s economic and social development in the short- and medium-term. Also in line with the roadmap, direct trade and investment relations with ASEAN’s dialogue partners have been enhanced, while participation of SMEs in EAGA development is being strengthened.
Under the roadmap, BIMP-EAGA will pursue the following strategic objectives:
- Promote intra- and extra-EAGA trade, investments and tourism in selected priority sectors, namely: agro-industry and natural resources, tourism, transport, infrastructure and ICT, with particular emphasis on SME development in these sectors;
- Coordinate the management of natural resources for sustainable development of the subregion;
- Coordinate the planning and implementation of infrastructure support to economic integration, with active participation of the private sector; and
- Strengthen the BIMP-EAGA institutional structures and mechanisms for effective implementation of the EAGA roadmap and action plan.