Regional disparity and economic linkage in the Greater Mekong Sub-region

Abstract

Purpose – The Greater Mekong Sub-region (GMS) is noted as an investment destination recently. However, there are few surveys about this region. In particular, direction of the regional disparity and economic linkage cannot be found, although it is inevitable to formulate economic or business policies. The paper aims to discuss these issues. Design/methodology/approach – First, the author calculated the regional GINI coefficient of the GMS, converting the per capita GDP using the purchasing power parity. Then, the trend of intra-regional trade was calculated by using the data of Direction of Trade Statistics of IMF. In addition to that, to consider the trade structures, bilateral trades of Thailand with Vietnam, Laos and Myanmar were analyzed. Findings – This paper made clear that the regional disparity of the GMS has been gradually shrinking from serious level to moderate in recent years, although it is still larger than the disparity of ASEAN original members. Two Chinese districts and Vietnam played an important role to improve the disparity. As for the intra-regional trade, it used to be very poor in the early 1990s, but is increasing in these years. There may be some signs of starting of the intra-industrial trade between Thailand and Vietnam, although trades with lower developed countries such as Laos and Myanmar are led by natural resources-related products. Originality/value – This paper is the first survey to calculate the regional disparity of the GMS with time series data. The analysis of the intra-trade among the GMS members expresses the current situation of the economic linkage of this area.