BIMP-EAGA Charts Path to a Resilient Recovery

Date Published
December 5, 2022

Left to right: H.E Dato Seri Paduka Haji Khairuddin bin Haji Abdul Hamid, Deputy Minister of Finance
and Economy (Economy) of Brunei Darussalam; H.E Airlangga Hartarto, Coordinating Minister for Economic Affairs, Indonesia; H. E Secretary Maria Belen S. Acosta, Chairperson, Mindanao Development Authority, Philippines; Hon. Dato' Nor Azmie Diron, Director General, Economic Planning Unit, Prime Minister Department of Malaysia. Photo courtesy of Coordinating Ministry for Economic Affairs, Republic of Indonesia.

BIMP-EAGA is on its way to recovery with the subregional economy growing by 2.4% in 2021, compared to a 3.3% contraction in 2020. The implementation of priority investments projects (PIPs) is largely on track, and the rolling pipeline of projects is now valued at $32.8 billion.

At the 25th BIMP-EAGA Ministerial Meeting on 26 November in Pontianak, capital of the Indonesian province of West Kalimantan, the Ministers of Brunei Darussalam, Indonesia, Malaysia, and the Philippines said: “We are encouraged by BIMP-EAGA’s economic performance, despite challenging global and regional circumstances.”

The combined gross domestic product at current prices of the East ASEAN Growth Area was at $359.7 billion in 2021 and accounted for 18.3% of the GDP of member countries. Total trade in goods increased by $27.5 billion last year. Foreign direct investment rose by almost $1 million.

“We are grateful that despite the unprecedented challenges and socioeconomic impact brought about by the coronavirus disease (COVID-19) crisis, our cooperation remains unwavering,” the ministers said in a joint statement.

The ministerial meeting was chaired this year by Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto. The other BIMP-EAGA Ministers are Dato Seri Paduka Haji Khairuddin bin Haji Abdul Hamid, Deputy Minister of Finance and Economy (Economy) of Brunei Darussalam; Secretary Maria Belen S. Acosta, Chairperson of the Mindanao Development Authority, Philippines; and Dato' Nor Azmie Diron, Director General, Economic Planning Unit, Prime Minister Department of Malaysia.

Improved connectivity

Connectivity is the cornerstone of the BIMP-EAGA cooperation initiative, which was launched in 1994 to spur development in remote and less developed areas in the four countries. Investments in quality infrastructure in economic corridors are intended to create a resilient, inclusive, sustainable, and economically competitive subregion.

“The pandemic has not deterred the impressive pace of BIMP-EAGA integration, with 45 (43%) out of the 104 PIPs completed, five (5%) projects completing phases, five (5%) projects nearing completion and 49 (47%) in various stages of implementation,” said the ministers.

The number of priority projects has increased by more than 80% to 104 from 57 projects in 2017 when BIMP-EAGA Vision 2025 (BEV 2025) was adopted. In 2022, nine of these projects were completed and five PIPs are nearing completion. Ten new projects were added this year to “connect farms to markets, provide energy to rural communities, catalyze trade in the border areas, and boost visitor arrivals.”

Overcoming challenges

Aside from the lingering effects of the pandemic, the subregion also faces mounting challenges from climate change impacts, rising food and oil prices, and other external shocks. The ministers discussed initiatives to support competitiveness and climate resilience.

“All our initiatives in the medium and long terms shall be pursued in a pragmatic, inclusive, and integrated manner to address the increasingly complex opportunities and challenges facing our subregion,” the ministers said.

They expressed optimism that the tourism industry, the hardest hit sector in the region during the pandemic, will recover, especially after the easing of travel restrictions and joint efforts to strengthen the sector. “We look forward to the implementation of the BIMP-EAGA tourism recovery communications plan to attract travellers given our subregion is open, safe, and easy to visit.”

The subregion is working to revive air connectivity between Tawau–Tarakan, Pontianak–Kuching, Zamboanga–Kota Kinabalu, and Davao–Manado. New sea routes between Tanjung Silopo–Lahad Datu and Bongao–Lahad Datu are expected to promote travel and trade.

In addition, BIMP-EAGA has concluded the One Borneo Quarantine Initiative, which is expected to boost health security at the border. COVID-19 is a wake-up call for countries around the world to work together to stop diseases from crossing borders. The subregion is strengthening cooperation in monitoring and inspection in the quarantine system and enhance protection from pests and diseases. It is working toward the signing of the letter of intent to move this initiative forward in 2023.

Toward a green future

The Ministers support a green recovery in the subregion. “We firmly believe green recovery is crucial to BIMP-EAGA’s development agenda,” they said.

Measures include sustainable urban planning under the BIMP-EAGA Green Cities Initiative. The program has recently supported the development of the General Santos Green City Action Plan (GCAP), which identifies a pipeline of green investments that will make this port city in Mindanao, Philippines clean, green, and livable for residents. The Asian Development Bank (ADB) is supporting the program, which will also develop the Pontianak GCAP. ADB is also providing assistance to the Government of Malaysia in developing 14 green cities, including Kuching in Sarawak and Federal Territory of Labuan.

BIMP-EAGA is also strengthening cooperation in the energy sector. A study supported by the BIMP-EAGA Republic of Korea (ROK) Cooperation is looking at the market potential of tradeable renewable energy certificates in increasing clean energy investments.

The ministers commended “the completion of the major enclave interconnections in Tanjung Redeb–Tanjung Selor and the Mindanao–Visayas Interconnection Project.” They took note of a proposal for cross-border power grid interconnectivity to “help address the growing energy demands and provide sustainable and reliable energy access to communities.”

They are also studying recommendations from an ADB study on special economic zones cooperation, which are based on a coopetition strategy to develop investment havens and production networks in the subregion. Another study will be conducted to assess the viability of existing economic corridors and expanding growth corridors based on opportunities and required investments.