2nd GMS Tourism Infrastructure

Cambodia, the Lao People’s Democratic Republic (Lao PDR), and Viet Nam (CLV) are endowed with diverse tourism assets and actively cooperate to promote tourism because of its substantial contributions to economic and social progress.
In 2016, CLV’s international visitor arrivals totaled 19.2 million, generating $22.1 billion destination expenditure and about 3 million jobs. Given CLV’s facilitative visa policies, improved connectivity with regional and long-haul markets, and strong outbound tourism demand in Asia, international visitor arrivals could reach 28 million in 2020 and generate $38 billion destination expenditure. Achieving these targets would provide jobs for over 5 million workers – the majority women employed by small and medium-sized enterprises (SMEs). Despite these strengths and opportunities, CLV rank low in the World Travel & Tourism Competitiveness Index. Consequently, their share of ASEAN’s international arrivals was just 19% in 2016, with Cambodia and the Lao PDR’s receiving only 8.0%. Key causes of low competitiveness and asymmetric growth are the lack of modern, well-maintained airports and ports, roads, sanitation and solid waste management, flood control measures, and clean water supply in secondary destinations. Vulnerability to climate change exacerbates these problems.

The project’s objective is to help transform secondary GMS central and southern corridor towns into economically inclusive, competitive international tourism destinations by improving road and water transport infrastructure, urban environmental services, and capacity to sustainably manage tourism growth. The project will boost trade in services and deepen regional cooperation and integration among the GMS and Association of Southeast Asian Nations (ASEAN).

The project has three outputs: (i) urban-rural access infrastructure and urban environmental services improved; (ii) capacity to implement ASEAN tourism standards strengthened; and (iii) institutional arrangements for tourism destination management and infrastructure O&M strengthened. Project areas in Lao PDR include Champasak, Luang Prabang and Vientiane provinces, all located along the GMS Central Economic Corridor.