Poverty along the Mekong – What are the Reasons and how to Alleviate Poverty

Rivers are considered to be the life line of earth and to bring prosperity to the people living next to it. In history river regions, for example the Nile in today’s Egypt, often were the center of civilization and formed economical hubs. However the Greater Mekong Sub-region (GMS) is poorer than the close by regions bordering. This appears odd, but there are logical explanations for it ranging from politics and history to economic issues.

The Mekong often forms the border or crosses countries with a difficult recent history.

The Mekong origins from the Tibetan Plateau, crosses the Chinese provinces Guangxi and Yunnan, forms the borders of Burma and Thailand to Laos, flows through Cambodia and finally enters the South Chinese Sea in Vietnam.
Having a closer look on these countries and regions it’s getting more apparent why they can be considered rather poor. For example China’s West has not seen as much of the industrializing as the East of the country, Myanmar/Burma was for decades on sanctions by the international community with actually just China as the only country to do trade with, Laos is in a difficult geographical position being land-locked and was for long not open for a free market and Cambodia still has to deal with the aftermath of their civil war (Khmer Rouge), which had devastating impact on the people. Additionally borders within the GMS were long closed to formal trade, with hostilities and the Mekong as a natural barrier holding back development along some stretches, border regions remain impoverished.
Next to that all six members of the GMS are rather rural and have a high share of population in rural areas averaging about 70 percent overall. This means that agriculture is important throughout the sub-region which is not bad simply by that, but however the productivity gains are considerably smaller than in the industry and/or the agriculture in Western countries and as basic economics teaches the main factor behind low economic growth is weak productivity gains. So it can be said that human, physical and natural resources are absorbed in low-yielding activities. Read the rest of this entry »