SBR- Content.pmd - INBO

State of the Basin Report - 2003Economic growth, industrialisation and regional economic integration. Economic growth isthe central development objective of the LMB governments and is closely linked with strategies forindustrialisation and integration of riparian economies at the regional and international levels.Diversification of agriculture to higher value crops and export-oriented production are essential toensure food security in the region and to generate revenues. However, economic growth is and willbe led by industrialisation. Thailand and Viet Nam are focusing on rural industrial development in theLMB such as agro-processing, construction materialsand other resource-based industries, and similar initiativeswill occur in Cambodia and Lao PDR. Tourism is anothergrowth sector that has great potential for developmentin the LMB.Continued economic growth in the LMB will meetgrowing needs for job creation and non-farmemployment, and will reduce poverty through increasedincomes. It will lead to closer economic ties amongriparian countries through increased trade, investmentand market interconnection within the region. At the sametime, economic growth must be closely monitored tobalance demands on water and other natural resourcesamong competing agricultural, industrial and other usesin different parts of the basin. Industrial expansion inthe LMB will be a significant driver of more intensiveuse of natural resources, and issues of environmentalquality will become more important.Paid employees and the self-employedrepresent only 10 percent of the labour forceUrbanisation and urban-rural linkages. Within the next twenty years, approximately one-third ofthe LMB population will be living in urban regions. Urban centres are primarily located in the lowlandsof the Mekong and its principal tributaries. Rapid urban growth will occur not only in the major cities ofPhnom Penh and Vientiane, but also in numerous secondary centres along the rivers. The concentrationof industries in cities and their peri-urban regions,and the higher incomes of many urban residentswill increase demand for water and other services.The expansion of densely populated areas willlead to the conversion of valuable agricultural landto urban uses. Unplanned development of lowlandurban areas will increase the risks associated withfrequent flooding.The expansion of densely populated areas is leadingto the loss of valuable agriculture landAlthough the majority of the basin population willcontinue to live in rural areas, the social andeconomic linkages will become stronger betweenurban and rural areas. Cities attract peopleseeking work, including migrants from rural areasand commuters from the outskirts of urban areas.Urban enterprises rely on demand from rural customers, while access to urban markets and servicesis essential for rural farmers. The interactions linking cities and rural areas are most intense in theareas immediately surrounding cities. These areas are characterised by changes in land use andfarming systems, changing patterns of labour force participation, social change and changing demandsfor infrastructure. These changes, in turn, place new and increased pressures on water and otherresources, including the capacity of natural resource systems to absorb urban-generated wastes.72