Technical Assistance Inception Meeting, Nanning, Guangxi, PRCNovember 25-26, 2010Robert L. Wallack, Institutional Development and Capacity Building Specialist, Unites States of America, robert.wallack@rlw-international.com

Cross Border Economic Zones:Institutional Development and Capacity Building

Hekou, Yunnan, PRC-Lao Cai, Viet NamPingxiang, Guangxi, PRC-Lang Son,Viet Nam

I. BackgroundII. PurposeIII.Work PlanIV. International ExamplesV. Conclusion

Border Trade Increasing

Pingxiang, PRC-Lang Son, Viet Nam US $840 million (2007)

Hekou, PRC-Lao Cai, Viet Nam US $477 million (2006);estimate: US $800 million (2015)ADB----------------------------------------------US $1 billion+: Langbang-Cao Bang (2007) Dongxing-Mong Cai ------------------------------------------- Total EnterprisesLang Son-697Lao Cai-802(Vietnam Statistics Office, 2009)

Contributing to Trade CAFTA:1.9 b. people;US $4.5 trillionNanning-Singapore Econ. CorridorGuangxi Beibu Gulf Economic Zone

ADB Ministerial Meeting North-South Economic Corridor (NSEC) by Developing

Cross-Border Economic Zones (CBEZ):

Hekou, Yunnan, PRC-Lao Cai, Viet Nam

Pingxiang, Guangxi, PRC-Lang Song, Viet Nam

Borders are the Weakest Link along CorridorsInstitutional and Infrastructure Constraints:1)Cross-Border Transport Agreement (CBTA)2)Coordination and Capacity Among Agencies3)Private Sector Participation and Investments4)Facilities, Equipment, Modern IT & C

Systems5)Uneven Development Across Borders:6)Dry Ports: CAFTA Pingxiang Logistics Park

Institutional Development & Capacity BuildingBuild Effective and Functioning CBEZs by:

1. Establishing PRC-Viet Nam Joint Committees2. Organize Training, Study Tours, Workshops3. Main Topics: Planning, Design,

Management, Operations, Awareness of ADB Programs,other international organizations, and Concepts (marketing, investment promotion, supply chain)

Joint Commission/Committee/Subcommittees for Collaboration, Coordination and Interfaces by regular meetings and by electronically involving all public and private stakeholders for CBEZs

-Clearly defined roles & responsibilities to implement the CBTA and CBEZ (central:local)

-transport, trade, commerce, finance, ports, logistics environment,Customs, inspections,phytosanitary, & private sector, financial companies, banks, international organizations- so that all are “on the same page”

Our Joint CBEZ Institution is building on the:Economic Corridors Forum, GMS Ministers, 2008NSEC Enhanced Organizational Effectiveness forDeveloping Economic Corridors which is to:Serve as a venue for networking and sharing of information and

views among central and local officials, business people and international agencies on strategies, approaches, programs and projects to accelerate economic corridor development

Only meets yearly: Joint Committees of CBEZ to confer regularly

Joint CBEZ Institution & 4 Layers of Main Issues:1.) Intergovernmental Agreements• Hekou-Lao Cai and Pingxiang-Lang Son CBTA2.) Institutional• Customs, Inspections, Land, Envir., Investment3.) Infrastructure• Roads, yards, facilities, utilities4.) Operational• Processes, material handling,WWW,

performance measurements (ADB, World Bank)

Activities

November2010

December

January2011

February

March April

InceptionMeeting

25-26Nanning

Borders &Capitals

27-30PRC

1-8PRC/VN

Best Practices

Research/Write

Research/Write

DesignInstitution

Research/Write

Implement

Implement

AssessCapacities

Meet Officials

Design Training

Workshop/materials

Workshop/materials

Final Report

Submit with comments

Work Plan

North America: U.S.A.-Canada 5,552 miles of cross-border trade: $1 million of good/services cross the border each minute ($1.5 billion/day; over $500 billion/year (2003)-128 border crossing

Cross-Border and Corridor Cooperation1) International Mobility & Trade Corridor Project2) CAN/AM Border Trade Alliance3) Ports to Plains Trade Corridor4) North America’s Corridor Coalition (NASCO) economic development organization

U.S.A.-Mexico: 2,000 miles of cross-border trade-Cooperation between developed-developing1)San Diego-Tijuana-San Diego Free Trade Zone-

maquiladora/TVs/power plant/LNG-California2)McAllen Foreign Trade Zone-30 years/F. 500s-Reynosa, Mexico to markets:C. and South AmericaCANAMEX Trade Corridor: 1,700 miles-US fundsUS $1 billion produce/1,200 truckloads of crops/yr.Investment: U.S FDI-Canada $273.7 billion (2006)

International Mobility Trade Corridor Project

Suggested Institutional Framework

Working Group

Committees

UrbanBorder Trade

Joint Border Development Commission

(JBDC)

Steering Committee

Core Group

General Assembly

Funding Sources 1999-2009 ($38 million)US Federal Highway-$7.1 million-50%Transport Canada-$2.6 million-19%B.C. Province $2.4 million-17%WA State-$1.3 million-10%Local B.C. & WA-$180,429-!%Other $375,000-3%

Private Sector Participation at Border CrossingFederal Express Corporation at U.S.-Mexico

FedEx Transborder Distribution Service:El Paso,Texas-Ciudad Juarez, Mexico Border CrossSupply Chain Solution to simplify transportation,

distribution and brokerage for traders at bordersFedEx on line tools/automation; consolidate

invoices: cargo from maquila to U.S. in 1-5 days

Lessons Learned in Establishing Institutions:- One single organization with clear mandate to

regulate the CBEZ operations- Autonomous and independent decision-

making in setting policy for quick implementation

- Close relationship with other national agencies with mechanisms for coordination

- Close relationship with the private sector- Promotional rather than regulatory mindset(USAID Report on Assessing FTZ Program,2004)

• Inner Mongolia Highway and Trade CorridorRussia-Manzhouli-Hailar Cargo Transfer Terminal• Baotou, Inner Mongolia Inland Container Depot

Operational Difficulties for Lack of Marketing Plan & Strategy (Advertising-Pricing of Services)

• China-Kazakhstan Horgos International Border Cooperation Center-mutual exchange in planning, design, construction, management and operations

2012 to 2018: 528 hectares (185 KAZ-343 PRC)

I. Cross-Border Trade is Increasing: Pingxiang-Lang Son and Hekou-Lao Cai :

Markets

II. CBEZ initiative by ADB GMS NSEC development

III.Constraints at the border-crossing are overcome by better organization of the public and private sectors

IV.The Work Plan for TA 7356-RETA: public and private sectors determine best practices to apply to the situation

V. Establish /Implement Institutions with Targeted Training

Thank You

Question & Answers with Discussion

Asian Development Bank, TA 7356-REGRobert L. Wallack, Institutional Development and Capacity Building Specialist,United States of America, robert.wallack@rlw-international.com