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BIMP-EAGA Leaders: The Pandemic Has Not Deterred Robust Cooperation

Date Published
November 3, 2021

From left: His Majesty Sultan Haji Hassanal Bolkiah, Sultan and Yang Di-Pertuan of Brunei Darussalam, Malaysian Prime Minister Dato’ Sri Ismail Sabri Yaakub, Philippine President Rodrigo Duterte, Indonesian President Joko Widodo, ASEAN Secretary General Dato Lim Jock Hoi, and ADB President Masatsugu Asakawa

Backed by strong macroeconomic fundamentals and more projects, BIMP-EAGA is taking “bold actions” toward economic recovery. The rolling pipeline of priority infrastructure projects (PIPs) has increased 65% to 88 from 57 from 2017, with a combined value of $24.23 billion, as the subregion moves toward its Vision 2025 goals.

“We are encouraged that the pandemic has not deterred the impressive pace of BIMP-EAGA cooperation,” said His Majesty Sultan Haji Hassanal Bolkiah, Sultan and Yang Di-Pertuan of Brunei Darussalam, Indonesian President Joko Widodo, Malaysian Prime Minister Dato’ Sri Ismail Sabri Yaakub, and Philippine President Rodrigo Duterte, who gathered for the 14th BIMP-EAGA Summit held virtually on 28 October. The Summit was held under the chairmanship of Indonesia, 2 days after ASEAN’s meeting of leaders.

Despite the crisis, the implementation of priority projects remains on track, with almost a third or 27 projects completed; 8 large-scale projects with completed phases; 10 nearing completion; and almost half, or 43, in different stages of implementation.

The leaders noted the development and completion of the Sultan Haji Omar Ali Saifuddien Bridge, the Manado–Bitung Toll Road, the Balikpapan to Samarinda Toll Road, the ports of Manado and Puerto Princesa, the LNG ISO Tank Export Facilities in Bintulu Port, the Juwata International Airport, Mukah Airport, and the General Santos Aerotropolis Airport in Mindanao. The road projects are expected to reduce costs and travel time and lead to greater efficiencies and competitiveness; the ports will contribute to maritime connectivity; the LNG export facility will serve as a pioneering ASEAN port exporting alternative and renewable energy sources; and the airports will improve access to tourist destinations and movement of cargos.

“Amidst the challenges, we are committed to jointly addressing the impact of COVID-19 and lay the groundwork for economic recovery,” the leaders said. They committed to fortify cooperation in all sectors, build on achievements in connectivity, and strengthen economic corridors and special economic zones (SEZs) development to sustain trade and supply chains, attract quality investments, and promote inclusive growth in the new normal.

The subregion’s recovery and resilience measures will be aligned with the ASEAN Comprehensive Recovery Framework, which serves as the grouping’s “exit strategy” from the COVID-19 crisis.

Macroeconomic fundamentals

The BIMP-EAGA economy grew 6.9% before the pandemic but contracted by 3.5% to $322.8 billion in 2020. Total trade in goods fell by 11.4% to $95.3 billion last year on weaker demand.

Still, macroeconomic fundamentals remain robust, which helped the subregion weather the crisis. Foreign direct investments rose 32.0% to $12.8 billion while domestic investments jumped 33.3% to $9.2 billion in 2020.

“The increase in investments can help boost our economies to recover coupled with sustained infrastructure connectivity,” the leaders said.

Challenges

Reviving tourism is one of the challenges facing member countries as the sector is among the hardest hit by the pandemic. Arrivals plunged 76% in 2020 and tourism receipts shrank 79.1% to $6.2 billion from $29.7 billion in 2019.

The leaders pledged to support the creation of travel bubbles to revive tourism. They tasked officials to coordinate and oversee the operationalization of travel bubbles by developing common measures, ensuring health and safety protocols, and implementing strategies to regain travelers’ confidence.

They also noted the need to respond to the growing energy demand in the subregion. They welcomed the completion of the enclave interconnections of the Tideng Pale–Malinau Segment as part of the Tanjung Redep–Malinau 150 kV Transmission in North Kalimantan, the Mindanao 230 kV Transmission Backbone Upgrading in the Philippines, and the signing of the Sabah–Sarawak 275 kV Interconnection Power Exchange Agreement. The Sabah–Sarawak project supports the Borneo Grid and complements the Trans Borneo Power Grid Sarawak–West Kalimantan Interconnection Project, both vital to the ASEAN Power Grid project.

Amid the pandemic, the leaders also recognized the need for stronger border cooperation to sustain trade and ensure supply chains remain open. They said the One Borneo Quarantine Initiative will help ensure the safe opening of borders to trade and enhance protection from pests and diseases.

Steps to recovery

To stay on course to recovery, the leaders called for the following actions:

  • Support refinements in the BIMP-EAGA Vision 2025 to make sure it remains relevant and responsive to development needs and priorities, while being strategic in seizing opportunities and mitigating risks especially those caused by the COVID-19 crisis. The leaders also welcomed results of an ongoing midterm review of Vision 2025, which will continue to  guide countries’ economic recovery. Preliminary findings showed countries are on course to meet targets despite headwinds from the COVID-19 pandemic.
  • Be guided by the Bandar Seri Begawan Roadmap: An ASEAN Digital Transformation Agenda to Accelerate ASEAN’s Economic Recovery and Digital Economy Integration to prepare for the fourth industrial revolution. The roadmap can also be a guide in helping micro, small, medium enterprises in adopting digital technologies and programs. The leaders also committed to continue supporting startup ecosystems through the Startuphub@BIMP-EAGA by the ICT CEO Forum, the private sector initiative aimed at bolstering startups in the subregion.
  • Accelerate cooperation in the agriculture sector through the subregional value-chain approach in priority commodities at the project level. The leaders urged relevant agencies to provide support in increasing productivity, achieving competitiveness and sustainability, promoting high-value food industries, and exploring international market linkages in priority commodities.
  • Pursue a green recovery to help member countries become more sustainable and pandemic-resilient. Relevant agencies are tasked to support initiatives to turn Kendari, Kota Kinabalu, and General Santos City into green cities. The leaders also welcomed initiatives with local communities to adopt and replicate best practices on sustainable ecotourism, agriculture, and fisheries.
  • Recognize the importance of human resource and socio-cultural development in pursuing a cohesive, socially responsible, and people-centered community. The leaders underscored the importance of reskilling and upskilling the workforce and strengthening technical, vocational education and training, and higher education institutions.

The leaders also commended the active private sector engagement shown by the BIMP-EAGA Business Council (BEBC) and welcomed joint initiatives with development partners, including the People’s Republic of China, Japan, and the Republic of Korea.

The leaders also acknowledged the Asian Development Bank’s (ADB) commitment and assistance to member countries which included support for COVID-19 response, economic recovery, and resilience, among others. “ADB supports BIMP–EAGA’s work, aligned with ASEAN revitalization, to maintain open markets, strengthen supply chains, support vibrant economic zones, and promote digital integration,” said ADB President Masatsugu Asakawa in a speech at the Summit.

The leaders remain committed to strengthen the institutional capacity of the BIMP-EAGA Facilitation Centre (BIMP-FC) and look forward to finalizing the institutional arrangement to establish the BIMP-FC.

The Summit was also attended by ASEAN Secretary General Dato Lim Jock Hoi. It is held every other year. The 13th Summit was in Bangkok in June 2019.