This chapter characterizes and evaluates the internationalization process on going for twin cities located across the Thai-Lao border and on the Greater Mekong Subregion (GMS) corridors. Two corridors implemented within the Asian Development Bank (ADB) GMS framework at the beginning of the 1990s have a great importance for Thailand and Lao PDR, i.e. the North South Economic Corridor (NSEC) linking Bangkok to Kunming via Lao PDR or via Myanmar's Shan State, and the East West Economic Corridor (EWEC) linking Moulmein port in Myanmar to Danang port in Vietnam via Thailand and Savannakhet Province in Lao PDR (cf. Taillard, Map 2.2 in this volume).

The “twin cities” can be defined according to multiple criteria. The first characteristic used for this article is the fact that the selected cities are border towns, i.e. located on an international border (the Mekong River between Thailand and Lao PDR) and with some functions directly related to the presence of this border. Furthermore, the other criterion used is a geographic one, implying the existence of two urban centres facing each other on each side of this international border. If they can be linked by an institutional agreement (“twin cities” or “sister cities” agreement), this institutional aspect is an optional requirement, compared to the interactions (formal and informal) existing between the two cities. Finally, the expression “twin cities” should be nuanced as it implies a resemblance or symmetry between the two urban centres, which is limited in reality, in terms of population, urban landscape or economic activities.

This chapter will try to discuss this theoretical frame by studying an example of these so-called “twin cities”, Mukdahan and Savannakhet, focusing on their characteristics, functions and interactions.

Since the end of the 1980s, development of border regions has been supported by national governments as well as international institutions such as the ADB to promote decentralization and enhance cross-border trade and economic cooperation with neighbouring countries (Maneepong 2010, p. 1). In the case of Thailand, border towns have been identified as economic gateways since the 7th National Plan, established for the 1992–96 period (NESDB 1999). For Lao PDR, the largest border towns have been developed under the ADB Secondary Towns project at the end of the 1990s.

China's agriculture has grown rapidly over the last three decades. This is due to the liberalization of markets, rapid technological change, and the “household responsibility system”. When economies grow, they vary in how much the growth benefits the poor. In the recent growth of the Chinese economy, the growth in agriculture benefitted the poor three and half times as much as the growth of the rest of the economy (World Bank, 2008, p. 6). The growth in China's agriculture has been largely responsible for the decline in rural poverty from 250 million in 1978 to 14.78 million in 2007, according to the official poverty line and income indicator. China has largely eliminated the fear of hunger in the country. But these achievements are being threatened by climate change. Some parts of the country are more affected than others. One type of area that is especially sensitive to climate change is the ecotone, that is, where two different ecological communities (e.g., forest and grassland) border and overlap. Poor people who live in such areas are finding it even more difficult to overcome their poverty. The Chinese government's efforts to mitigate climate change often unintentionally make life more difficult for them.

CLIMATE CHANGE, FOOD PRODUCTION, AND POVERTY

Influence of Climate Change on Food Production

Climate change will cause productivity in the farming of major food crops to decline and be unstable in China. As a result of the increase in temperature and the decrease in water and arable land expected for the next twenty to fifty years, the period of crop production will be shortened and food production will be threatened. The production levels of China's three main food crops (rice, wheat, and maize) are expect­ ed to decrease by 14 per cent to 23 per cent, not taking into account possible adaptation measures (Lin Erda et al. 2008). See Table 3.1.

Southeast Asia and East Asia have been hailed as success stories of economic growth, but poverty, the environment, and climate change remain major challenges. Poverty reduction is often said to compete with efforts to save the environment and respond to climate change. It is also argued that policies on the environment and climate change should not be carried out at the expense of eradicating poverty or promoting economic growth. This book tries to show that it is possible to reduce poverty, protect the environment, and respond to climate change at the same time — if certain policies are followed. The book provides evidence from Southeast Asia, East Asia, and the Pacific as a basis for recommending triple-win development policies. To emphasize the relationships between the three “wins”, the book introduces a spatial approach to poverty, one that focuses on the environments in which the poor live, i.e., regions where the environment — often aggravated by climate change — are major determinants of poverty. These areas are flood-prone and disaster-affected lands, uplands, coastlands, dryland, and slums.

“Environments of the Poor” was the theme of a conference which the Asian Development Bank and seventeen development partners organized on 24–26 November 2010 in New Delhi. 1 The papers on Southeast Asia, East Asia, and the Pacific at this conference were revised and edited for this publication. The papers on South Asia make up a separate volume, being jointly published by Oxford University Press of India and the Asian Development Bank. A third volume will be published that includes papers of a more general nature, including the conceptual background. The main title shared by all three volumes is The Environments of the Poor.

This volume is published jointly by the Asian Development Bank (ADB) and the Institute of Southeast Asian Studies (ISEAS), with co-financing from the ADB Institute. Armin Bauer of ADB is editor- in-chief for the whole project, and he also designed the book cover.

Lao PDR lies in the centre of the Greater Mekong Subregion (GMS), an area which has received substantial investment from the Asian Development Bank (ADB) and other institutions with the aim of further integrating the GMS member states’ economies. Economic corridors (i.e. regional transport infrastructure) are a key element of the ADB's strategy and Lao PDR is traversed by three of these: the Northern Economic Corridor (NEC, linking Northern Thailand with Southwest China via Northwest Laos), the North-East Economic Corridor (linking Northern Thailand with Northeast Vietnam via Vientiane and Northeast Laos), and the East-West Economic Corridor (EWEC, linking Eastern Burma with the port of Danang in Central Vietnam via Northeast Thailand and Savannakhet Province, Southern-Central Laos). In the eyes of the ADB and the Lao government, the planned road grid in the GMS will place Lao PDR at the centre of the Subregion's transport network and thus transport the country out of her geographic and economic isolation, one of the chief causes (in the view of political and economic decision-makers) of its structural vulnerability.

This chapter focuses on a border area straddling the districts of Sepon and Hướng Hoá between southern Laos (Savannakhet Province) and central Vietnam (Quảng Trị Province) (see Map 16.1). Hướng Hoá-Sepon area is traversed by Road No. 9, which forms the backbone of the East-West Economic Corridor. This border area includes two border towns: Lao Bảo on the Vietnamese side and Densavanh, its twin town on the Lao side. The populations living in this area comprise the Bru, an upland population, who belong to the Austro-Asiatic ethno-linguistic family; the Phutai, a Tai-speaking population, who mainly live in the lowlands of Sepon district; and the Kinh, the dominant ethnic group in Vietnam, who reside in both the uplands and the lowlands of Hướng Hoá district.

Roads in developing countries have generated contrasting comments. Governments and international aid agencies generally stress the beneficial impacts of new or upgraded roads on local economies and communities. On the other hand, these positive effects are being frequently downplayed, if not downright refuted, by NGOs and academics (Colombijn 2002, pp. 595–98).

The poverty headcount ratios of the emerging market economies of Thailand and Vietnam have declined impressively (World Bank 2008). However, the rural areas are still much poorer than their urban counterparts (Healy and Jitsuchon 2007). Furthermore, the environments in which the poor live make them more dependent on agricultural and natural resources. Hence, climate change is especially affecting the rural poor (Millennium Ecosystem Assessment 2005; Nguyen 2010). But little is known about how the poor perceive climate change or how it affects their livelihood. In general, vulnerability to poverty remains a major problem in emerging market economies such as Thailand and Vietnam, especially in the low-potential and poorer geographical areas, where infrastructure is weak and insurance and credit markets are often missing. For example, it was found in Thailand that agriculture in low- potential areas is often performed by the elderly, as part-time farmers who adjust their farm organization in response to the outmigration of younger household members (Gödecke and Waibel 2011). Such farmers are probably less inclined to adopt the sort of new agricultural technology that could reduce the negative effects of climate change.

In this essay we analyse the perceptions of the members of rural households in Vietnam and Thailand as expressed in a comprehensive set of panel data collected in 2007 and 2008 from some 4,400 households. We look at how rural households, especially the poor and vulnerable among them, experienced economic, environmental, and idiosyncratic and covariate shocks. We raise three questions that bear on the planning and implementation of interventions aimed at mitigating the negative consequences of climate change:

• How seriously do rural households take climate-related risks compared to other shocks endured in the recent past?

• How much of an effort do poor and vulnerable rural households make to reduce the impact of climate-related risks?

• Do poor people experience or perceive climate-related risk dif- ferently than the non-poor and do they act differently in coping with it?

In the context of the regionalization process of globalization in Asia, the Asian Development Bank (ADB) has skilfully seized opportunities arising from a reversal in post-Cold War national territorial strategies. Between 1992 and 1994, it promoted the Greater Mekong Subregion (GMS) and has accompanied its development ever since, through the implementation of a regional integration initiative at the scale of continental Southeast Asia. It is the most dynamic ADB-assisted transnational integration programme in East Asia. Far from succumbing to the Asian crisis in 1997, regional integration has actually found its second wind.

The term “transnational”, as used to describe this form of integration, does not correspond to the first acceptation of the prefix trans: beyond (ie. trans-Alpine), nor to supranational configurations such as the Mekong Commission, for instance. The term is used in its second acceptation: across (ie. trans-Siberian), and refers to emerging recompositions within the Greater Mekong Subregion which integrate national constructions by blending two scales of the term “region”: infra-national in French speaking terminology and supranational for the Anglo-Saxons. These recompositions involve entire or partial networking of national territories entailing the emergence of new regional architectures, founded on converging interests between partner-nations. These configurations enable them to recover, on this new scale, a part of national power lost in the whirlwind of globalization.

This process was related to a redefinition of State and regional territorial strategies: regional integration through the expansion of trade in the peninsula severely disrupted, first by colonization, then by decades of war. Five of the six partner-nations of the Greater Mekong Subregion have undertaken a redefinition of their territorial policies. China, Lao PDR and Vietnam have operated a strategic reversal towards transnational integration, while Myanmar and Cambodia have reappeared on the regional stage. Only Thailand has maintained its position: peninsular centre at the main sea entrance portal of the Greater Mekong Subregion.

The end of the Cold War marks far-reaching regional and economic geopolitical transformations: Communist nations shifted from a centralized economy to a market economy. Thailand readapted its model of integration in the world economy in the aftermath of the 1997 Asian economic crisis.

Cross-border twin cities have a particular spatial organization in the sense that geographic proximity is an intermingling factor of urban areas and economic interdependence allowing a transnational development. Their transnational setting, i.e. through a border, covers a multiscalar approach on a provincial scale (within a State) on the one hand, and a regional scale on the other, combining at least two States. This kind of urban layout therefore leads to a spatial reorganization networking a new regional territory which responds to the economic guidelines of partner States (Raffestin 1974; Taillard 2010). Infrastructure networking, administrative harmonization, respective comparative advantages and complementarities have made these urban areas a layout that may support an economic dynamism specific to transnational regions (Maneepong et al. 2004; Taillard 2010; Goldblum et al. 2007). The border is thus no longer exclusively a component of separation, but may also turn into a spatial bridge between two bordered provinces (Arnold 2010).

Among the twin towns bordering Thailand and Malaysia, the Danok- Bukit Kayu Hitam pair may have the greatest potential to be developed into a major growth area. Although the urban and economic layouts fall into the category of a twin city, it has not however been officially stated by the Malaysian and Thai governments so far. It is thus by no means as institutionalized as those at the southern boundary of China, which are discussed in more detail by Sébastien Colin in this book. This study aims to investigate how the twin cities of Danok and Bukit Kayu Hitam may become a peripheral growth centre for both Thailand and Malaysia, thus promoting sustainable development in the region.

This study is organized according to approaches on different scales (see Map 13.1) The following section will provide a local scale by studying the district location and socio-economic backgrounds of Sadao and Kubang Pasu and the twin cities in question. The second part will cover a comparative analysis of the twin cities to determine whether their status may imply identical dynamics; we shall also touch on the institutional framework of the aforementioned cities.

The implementation of transportation infrastructures has played a key role in the economic development of Malaysia by supporting the rise of urban and industrial centres. The extraction of natural resources, notably tin and rubber, has encouraged the establishment of roads and railways from the nineteenth century. Production areas, while witnessing an increase of their transport network, are linked to the major international gateways such as Klang, Penang and Singapore (Fau 2003). The States on the west coast of Malaysia — Penang, Perak, Selangor, Negeri Sembilan, Melaka and Johor — have thus seen an early development rarely known across Southeast Asia (World Bank 1955). Consecutive governments of Malaysia have conducted a development policy focused on the implementation of clusters along a corridor from North, Bukit Kayu Hitam and Padang Besar, to South, Johor Bahru, which is neighbouring Singapore (Fau 2003). The nodes of the corridor, by having a range of multimodal transports based on rail, highways, airports and ports, concentrate flows of investments, goods and labour. The connectivity based on a modern transportation network, does indeed allow the emergence of nodal cities, but also an integration of margins (see Map 12.1).

The first-rank cities of Malaysia, Kuala Lumpur and Penang, cover an international scope but are also facing congestion issues which can to a certain extent slow down their growth. To tackle the congestion matter, the use of storage areas and better interconnection with the hinterland has been implemented. The result of this spatial development is an increased complexity of the national and regional urban network and hierarchy (Goldblum and Franck 2007). This spatial reorganization leads to a redistribution of growth through the region and stimulates a great nodal region. The logistic model of a dry port is therefore used as a main tool which by its hinterland location and its land transportation infrastructures allows a terminal to act as supporting port (Walter and Poist 2003). Although it is not a landlocked country, Malaysia benefits from a dry port to relay its congested coastline (i.e. Naziri Khalid's contribution).

Myanmar's (formerly Burma) strategic geographic location at the tri-junction of South Asia, Southeast Asia and China has been attracting foreign countries as it is a dynamic crossroads linking Southeast Asia, Western China and the Indian subcontinent and serves as an economic gateway to a colossal potential market of more than two billion consumers as well as a primary gateway to energy supplies and trans-shipment. In the context of energy security, Myanmar's emergence as a significant regional exporter of natural gas including its immense hydropower potential has become a pivotal stake to energy-hungry superpowers such as India and particularly the economic powerhouse, China.

Indeed, Myanmar's geostrategic location is of critical significance for China as it is a “land bridge” for the economic development of its south western provinces, a strategic corridor allowing China to secure access to the Indian Ocean, trans-shipment of oil and source of natural gas. Currently, China is building oil and gas pipelines linking Kunming, the capital of Yunnan Province, to the deep-water port of Kyaukphyu on the Bengal coastline to tap Myanmar's huge gas reserves and to provide an alternative route for its crude oil imports from the Middle East and Africa, reducing shipping time and its dependence on traffic through the Straits of Malacca.

However, Beijing's influence in Myanmar has been challenged since the November 2010 national elections in Myanmar. Following the elections, the junta, the State Peace and Development Council (SPDC) was dissolved by the parliament and a new civil government — mainly composed of newly retired generals and military officers — was formed. The elections aimed to institutionalize the junta's political role and gain domestic and international legitimacy, and respectability with its new civil government. The end of the military rule was perceived as a move to attract foreign investment. At first, the handover of power by the junta was greeted with scepticism, since then, the international community has been seeking engagement and adopting a more flexible approach with the new government after the April 2012 by-elections that marked the return of the main opposition National League for Democracy (NLD) party into the Myanmar political system.

The temperature in Asia increased at a rate of 0.1–0.3 degrees Celsius per decade from 1951 to 2000, while sea level rose and rainfall increased but with greater variation. Changes in weather resulting from climate change come in various forms: heat waves, droughts, floods and cyclones. These become more often and more intense, and interfere with human activities, including economic activities. Over the period 1990–2100, there could be a decline of up to 50 per cent in rice yield in Indonesia, Vietnam, the Philippines, and Thailand. Agriculture is therefore among the most affected sectors. Agriculture is also a major cause of climate change. For example, the emission of methane (CH4) from rice fields contributes to greenhouse gas. Agriculture therefore should be managed in a way that both mitigates and adapts to climate change. Adaptation is especially important for poor farmers who lack the resources needed to properly deal with the problems of climate change.

CLIMATE CHANGE AND AGRICULTURE

Changes in temperature, rainfall, and CO2 release are all critical to agricultural activities. Pests and diseases are also likely to change and therefore alter food productivity. Geographic changes to land affect their suitability for cultivating staple crops. Other negative effects include the reduction in the quantity of water and the loss of land due to rise in sea level. Climate change will most likely be experienced differently from one area to another. Some areas may benefit from increased temperature, especially those areas that currently have limited potential due to cold weather. Atmospheric CO2 may also speed up growth process of some plants. Rain-fed crops declined in South and Southeast Asia. Crop yields might increase by 20 per cent in East Asia and Southeast Asia. In Thailand, the effects on yields can be either positive or negative, depending on the CO 2 regime. Given the mixed findings, even if global effects were small or moderate, regional effects could be large and devastating — at least for some parts, such as Southeast Asia, which is among the most vulnerable places due to its high forestation and strong dependence on agriculture.

The aim of this chapter is to understand and analyse the effects of the opening of frontiers, the increase in cross-border exchanges and subsequently, the creation of economic corridors among local societies in Northern Laos. Until the last decade, a picture of Northern Laos would have been approximately the following: on the one hand, Tai populations (including the Lao majority) settling in the lowlands, growing rice, and on the other, highlanders practising shifting cultivation, husbandry and poppy growing. Roughly 75 per cent of the Laotian population of 5.5 million practised shifting cultivation. During the last ten years, some significant changes have raised questions concerning this situation. These changes are the result of the combination of several policies:

A first set of changes concerns the border areas and has its origins in regional political and economic transformations induced by the opening of borders. In the northern part of Laos, most border regions have been isolated for a long time since they are located in the outer regions of the country. Since the policy of Economic Corridor Development, these previously isolated regions are now mostly included in the new trade routes and there has been a particular increase in pressure on these peripheral areas. Due to the regional context mentioned elsewhere, the government considers border area trade as an important component of its foreign trade policy. Facing external demands for developing market-based agriculture, the Lao State has promulgated various laws (e.g. land-forest allocations), following the injunctions of the World Bank and the UNDP. These two organizations strongly encourage land allocation in order to develop a land market attractive to investors and to ensure a better use of agricultural land and environmental protection. At the same time, and as the contribution of Danielle Tan will show, the opening of borders has made possible the establishment of several foreign companies (mainly Chinese) which are, for the most part, dedicated to the agricultural sector (growing rubber trees, corn, tea, or buying NTFP). As a result, each province and district is witness to the burgeoning growth of foreign concessions owned by these companies. This rapid growth is also having a snowball effect and is leading to the appearance of Lao citizen-owned concessions — generally smaller in size.