MANILA, Philippines — The Asian Development Bank (ADB) is pushing for the adoption of a “coopetition” strategy in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN (Association of Southeast Asian Nations) Growth Area (BIMP-EAGA) to strengthen the role of economic zones in boosting trade, job creation and economic resilience in the four countries.
In its study titled Special Economic Zones for Shared Prosperity BIMP-EAGA, the ADB proposed the “coopetition” strategic approach, which is founded on both cooperation and competition, to strengthen the BIMP-EAGA corridors and economic zone programs.
“The underlying principle of the former is to establish a single market and production base in the subregion through cooperation, while the latter focuses on competition for investment in the economic zones,” the ADB said.
BIMP-EAGA covers the entire sultanate of Brunei Darussalam; the provinces of Kalimantan, Sulawesi, Maluku, and Papua of Indonesia; the states of Sabah and Sarawak and the federal territory of Labuan in Malaysia; and Mindanao and the province of Palawan in the Philippines.
Launched in 1994, BIMP-EAGA aims to address its socioeconomic development challenges and narrow development gaps with the rest of the BIMP areas through cooperation in the following: connectivity, agribusiness, tourism, environment, and sociocultural education.
According to the ADB study, there are 145 economic zones in the BIMP-EAGA subregion, with 64 being special economic zones located mostly in the Philippines and Indonesia.
“The analysis indicates that the BIMP-EAGA subregional program, even with the proliferation of economic zones, has not made the subregion significantly better off in relative terms despite considerable achievements in connectivity on the one hand and growth in gross regional domestic product per capita and reduction in poverty on the other,” ADB said.
Special economic zones in BIMP-EAGA are facing challenges including growing competition for foreign investment, international trade disputes, and digital transformation.
By adopting “coopetition” which incorporates the elements of both cooperation and competition, the ADB said BIMP-EAGA could overcome these challenges.
As part of the strategies under the cooperation approach, the ADB said the countries would need to integrate BIMP-EAGA into their national plans.
The ADB said the cooperation approach also includes addressing bottlenecks to micro, small and medium enterprises’ (MSMEs) production, technological, and marketing capabilities through cross-border cooperation.
The study recommends forming a digital consortia of subregional entrepreneurs, both large and small, in key industries to encourage networking among them and their participation in strategy building.
It also recommends facilitation of cross-border movement of goods, services, and factors to assist resource aggregation, research and development, and marketing and distribution.
“Creating a unified digital marketplace for MSMEs in BIMP-EAGA is highly recommended, which may be supported by digital free trade zones, harmonized product standards rules and regulations, and systematic approaches to building the capabilities of regional firms to participate in the digital marketplace,” the ADB said.