The island of Sumatra is the Indonesian part of the Malacca Straits region, and forms one of its edges. Its location on the route between the China Sea, the Indian Ocean and the Java Sea is exceptional, and has played a role in all the main periods of world history up to the time of Indonesian Independence. The building of this far-flung archipelago into a nation was marked by a fear of centrifugal forces; centralization of territorial management from the capital, Jakarta, and control by closing borders provided a solution to this problem. “Introverted” Indonesia developed over a fifty-five-year period, concentrating its investments on the central area, Java (Charras and Franck 2000, 2004), and turning Sumatra into an outlying area on the national scale. A major component of the Straits region due to its size (443,000 km2), its natural resources and the production of its plantations, but also on account of its demographic weight (50 million inhabitants, representing at present 21 per cent of the population and 21 per cent of the surface area of Indonesia, a unique balance in the archipelago), Sumatra today is a long way behind Singapore and the peninsular part of the Malaysian Federation in terms of economic performance.

This study presents the effects of the development policies since 1966, the beginning of the Soeharto regime, which led to this “sidelining”, then examines whether the ten years’ implementation of the regional autonomy law have finally enabled this large island to regain its place in the opening up and renewal of transnational relations on a regional scale. It deals with the central part of East Sumatra, which consists of three provinces — Riau, Jambi and South Sumatra (Sumsel) — facing the Malay peninsula, from Kuala Lumpur to Singapore, via Melaka and Johor Bahru. The coastline is bordered by a very wide swamp area and small islets encumbering the straits; it is the part closest to the opposite shore (see Map 9.1). It is also in this central part — rightly considered to be isolated and depressed in the regional study performed by the Japanese cooperation agency (JICA) in the 1980s — that recent development and spatial reshaping have been the greatest.

Specialists in transport geography define a corridor as an area of particular intensity in terms of flow and of spatial, economic, and demographic accumulation, generally supported by transportation infrastructures, on an axis between two poles (Debris and Comtois 2010; Rodrigue et al. 2006). According to this definition, Asia is structured by transnational continental and maritime corridors which are hierarchized according to the intensity of their traffic and trade patterns, be they local, regional, or international (Rimmer 1999). These corridors, whether planned or the result of existing flows, are structured by nodes whose ranks are linked to the ranks of the corridors and whose dynamics are closely tied to international exchanges along its length. These nodes function as logistic and communications hubs or gateways into territories and participate in articulating the space of flows (Castells 1996) and the space of places (Albrechts and Coppens 2003). The head nodes of the corridors are usually large first or second rank metropolises. Between these poles of command, the corridors are structured by a hierarchical series of hubs: by inland province capital cities and by smaller border towns along the continental corridors or, in maritime corridors, by smaller ports.

In the area studied, the strongest corridors, which are commanded by some of the most powerful global cities, are the maritime corridors (Malacca Straits and the corridor that runs along the Asia's Pacific coast). Asia also possesses continental corridors, especially the planned corridors of the GMS, a dense grid of transport corridors that connects southern China to Southeast Asia and the eastern and western coasts of the Indochinese peninsula (see Christian Taillard's article in this volume).

The dominant spatial organization is north-south both at the transnational level as it does in continental Southeast Asia at the national level in terms of spatial constructs. The dominant corridors, whether continental or maritime, are north-south oriented (or north-west-south-east in the case of the Malacca Straits) due to the intensity of the maritime traffic in one of globalization's dominant poles or, for continental corridors, due to the intensity of flows with China.

The term “straits” designates a narrow maritime passage between two land masses that links two seas. Like an isthmus or a canal, it represents not only a strategic axis but also a structural axis in global organization. This unique and complex zone of land-to-sea interface has become a major factor in the twentieth century, as coastal nations have exercised their political will by enlarging their sphere farther and farther out to sea and by nationalizing the seaways. Although the Conference of Montego Bay in 1982 put an end to decades of tensions and even conflicts by establishing rules to regulate this appropriation and to delimit the maritime borders, international straits remain insufficiently defined geographical areas. Often considered solely as a narrowing of the maritime region in which navigating conditions frequently become difficult, straits are rarely considered as separate territories structured by longitudinal as well as latitudinal flow (Picouet and Renard 2002).

The originality of the Straits of Malacca is precisely the fact that it is both a zone of major exchange and transit in international commerce, in which the nations situated along its coasts have always been deeply integrated, and a region in itself, shaped, despite the borders that separate the opposing coasts, by a tight web of commercial and cultural relations between the two coasts (Fau 2003a, p. 34). A multi-level approach is necessary in order to understand the functioning of these straits, which are given structure both by the latitudinal flow, for the most part transoceanic, and by the transversal flow linking the two coasts.

This multiple reality of the Straits of Malacca will be studied in this chapter under the angle of an analysis of the maritime shipping networks and of the different levels of organization in the port systems. In order to understand the articulation of the different maritime flows and their impact on the spatial organization of the coasts, the straits are considered successively as a corridor of intense global maritime circulation, as a natural border between Malaysia and Indonesia, and lastly as an inland sea in which the local shipping flow has been given a new dynamic by the opening of the borders.

There has been a dramatic rise in the number of natural disasters in the world in the past decade (CRED 2009). There has been a tenfold increase in the number of climate-related events such as droughts, storms, and floods since the data were first collected in 1950. In 2009, the Philippines occupied the topmost rank in terms of disaster occurrence with 25 events, followed by China with 24, and the United States with 16 (CRED 2009). Of the 25 events, 14 were classified as meteorological (typhoon), 9 were hydrological (flood and landslide), and 2 were geophysical (volcanic eruption and earthquake). The three strong typhoons in 2009 — Kiko (Morakot), Ondoy (Ketsana), and Pepeng (Parma) — were three of the most devastating in terms of number of victims and extent of damage to property. According to the Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA), there were, on average, 20 storms entering the Philippine Area of Responsibility every year from 1948 to 2004. Given that meteorological events occur frequently in this country, it is necessary to identify risk reduction strategies and coping mechanisms to alleviate the negative effects of a meteorological disaster.

In this chapter, I present a case study of disaster management strategies undertaken by households and local government in response to the storm Milenyo (international code name Xangsane) that hit the Philippines on 28 September 2006. According to CRED, Milenyo was the tenth most destructive disaster in the world in 2006. Evidence in this chapter comes from a dataset drawn from a household survey conducted in a village, East Laguna Village (Hayami and Kikuchi 2000), on February 2007, barely four months after the devastation by Milenyo. This study has four important findings from the experience of East Laguna Village. First, the damages caused by Milenyo varied widely from household to household even within the same village depending on the ownership of paddy fields and tree crops.

In Cambodia, the poor depend largely on natural resources for their livelihoods. This is particularly true for the rural poor. Hence, decline in the quality and accessibility of natural resources due to climate change is likely to affect them more seriously than the non-poor. Specifically, the poor become more vulnerable because they are less able to adapt to environmental change. Despite the fragility of Cambodian politics in the 1990s, the economy grew at a remarkable 7.2 per cent (average). After political stability returned in 1999, the rate rose even higher — to an average of 9.3 per cent for 2000–08. This resulted in an increase in per capita income and a decline in poverty. According to the latest World Bank Poverty Assessment report, the poverty headcount in Cambodia declined from 47 per cent in 1993/94 to 30 per cent in 2007. During the same period, school enrolment, housing, and access to safe drinking water, electricity, and sanitation also improved (MOP 2006; World Bank 2009).

Despite this impressive performance, poverty rate was not uniform across the country. Poverty rates are higher in rural areas than in urban areas in all geographical zones (MOP 2006). Of the country's five geographical zones, Plateau and Mountains is the poorest, with a poverty rate of 52 per cent in 2004, followed by Tonle Sap (42 per cent), Plains (32 per cent), Coastal regions (27 per cent), and Phnom Penh (4.6 per cent). Since the Tonle Sap zone, has so many poor, and contains 30 per cent of Cambodia's population (MOP 2009), it has become of special concern to policy makers and other national and international stakeholders. The Participatory Poverty Assessment of the Tonle Sap region conducted by the Cambodian Development Resource Institute (2007) reveals that the poor there have benefited less from Cambodia's rapid economic growth than the non-poor. The poor of this zone are still heavily dependent on land- and water-based natural resources for their livelihoods.

Planning the development of a city with rivers that flood requires an initial study on how the floods affect the residents. Among the city's residents, the poor are often the most affected. In 2008 the World Bank estimated that the Philippines loses 15 billion pesos (US$333 million) a year to floods, monsoons, and typhoons, which is about 0.7 per cent of the gross domestic product (GDP). In September and October 2009, typhoons Ondoy (Ketsana) and Pepeng (Parma) hit Manila and the northern Philippines in quick succession, causing 3.8 billion pesos in damages and 24.8 billion pesos in immediate losses to agriculture, fisheries, and forestry, or about 2.7 per cent of the GDP. They seriously affected 9.3 million people and resulted in a loss of almost 1,000 lives (World Bank 2009). Such figures are impressive, but the harm done to the poor is often underestimated.

Starting in the early morning of 26 September 2009, Ondoy brought 450 mm (18 inches) of rainfall in a span of twelve hours (almost equivalent to the average monthly rainfall of Manila). There was deep flooding and damage all over the metropolis. Many poor communities were under water for several days; some for two or three months. A few days later, Pepeng brought heavy winds and rains, with a cumulative rainfall exceeding 1,000 mm (39 inches) in some areas. The damages brought about by Ondoy and Pepeng needed about US$4.42 billion for rehabilitation and recovery in the ensuing three years. Ondoy and Pepeng made it clear that every household, community, city, and country must have a plan in place for coping with future disasters (World Bank 2009).

In this essay, I describe the socio­economic conditions of the people who live along the major rivers in the flood plains of Metro Manila. The description is based on a survey of 300 urban poor households I conducted between February 2008 and May 2009 in fourteen communities situated by the river side in the Metro Manila flood basin.

INTRODUCTION: MALAYSIA, A MARITIME NATION AT THE HEART OF A VIBRANT ECONOMIC REGION

Malaysia's economy, one of the brightest shining stars in the developing world, has undergone rapid transformation from being a commoditiesbased economy in the 1970s to a manufacturing-driven, export-oriented one today. A major producer of electronics and electrical goods, Malaysia was ranked the 8th largest trading nation in the world in 2009 by the World Trade Organization (WTO). It recorded a total trade value of RM1.169 trillion in 2010 and its external trade balance was at a surplus of RM110.1 billion.

As a nation surrounded by seas, it is not surprising that Malaysia depends heavily on seaborne transport to facilitate its trade. An estimated 95 per cent of the nation's trade is carried in whole or in part by maritime means. Hence, the importance of its seaports and other supporting maritime trade infrastructures to the nation's economic well-being cannot be overstated.

Given this reliance, it should not come as a surprise that Malaysia was ranked 23rd in the list of the world's top maritime nations based on its registered dead weight merchant shipping tonnage. The country contributed 10.25 million DWT or 0.8 per cent of the world total merchant shipping tonnage as of 1 January 2010 and 0.8 per cent to the world total merchandise trade in terms of value.

Underscoring Malaysia's clout as a maritime nation, it boasts two of the world's top twenty busiest container ports, namely Port of Tanjung Pelepas (PTP), the nation's transshipment hub, and Port Klang, the national load centre. Port Klang handled 8.87 million TEU while PTP handled 6.53 million TEU in 2010, and were ranked 14th and 18th, respectively, in the list of top twenty busiest container ports by throughput handled. Johor Port, located in the southern tip of Peninsular Malaysia, is the world's largest palm oil export terminal, while Bintulu Port in the state of Sarawak on Borneo Island is the world's largest LNG export terminal.

INTRODUCTION: COMPARISON OF TRANSNATIONAL STRUCTURES EMERGING IN THE GREATER MEKONG REGION AND THE MALACCA STRAITS

In conclusion to this work, before undertaking the comparison of transnational integrations in the Greater Mekong Subregion (GMS) and the Malacca Straits (triangular cooperation between Indonesia, Malaysia and Thailand and Singapore, Johor and Riau, respectively referred to as IMT-GT and SIJORI), it is worthwhile remembering the basic elements justifying the comparison of the regions chosen by the Transiter programme (Transnational Dynamics and Territorial Changes.

The first basic element in the comparison of these two emerging integrations in the context of regionalization as part of the process of globalization, concerns their location at the crossroads between major North-South and East-West international and subregional trade routes. Southeast Asia is at the junction not only between Northeast Asia and South Asia on the world container route, but also between its two components: continental for the Greater Mekong Subregion and maritime for the Malacca Straits.

These regions, located at the crossroads of world and subregional traffic, also share spatial profiles with a north-south structure resulting from the respective positions of sea coasts, rivers and highlands. The Himalayan river system, in the corner of the Asian continent, is framed by the North-South shorelines of the Indochinese peninsula. The Malacca Straits, situated between two oceans, are bordered by island and peninsular spaces structured by highlands with a north-south orientation. These two North-South profiles, combined with the abovementioned connections between world and subregional traffic, lead to a dynamic of spatial recompositions where emerging transnational North-South corridors play an essential role.

To these spatial considerations forming the basis for comparison we may also add the parallelism in the time-scale of the transnational dynamics implemented during the last two decades with the help of the Asian Development Bank (ADB). The approach by corridors in the Greater Mekong Region and growth triangles in the straits, adopted in the first decade (1992–2001) has been superseded by a regional network approach structured by a mesh of corridors during the second decade (2002–12).

Luang Namtha, Oudomxay and Bokeo provinces, located in the North- Western part of Lao PDR, have benefited long ago from a strategic position at the crossroads between Thailand, China, Myanmar and Vietnam. They were part of the caravan trade network that thrived between the thirteenth and nineteenth century, and then, of the Golden Triangle opium trade. Due to its geographical assets and its cross-border trade linkages, Northern Lao PDR is once again at the forefront of the regional stage through the implementation of the GMS North-South Economic Corridor (NSEC), which links Kunming to Bangkok by crossing the Northern provinces of Lao PDR. However, this regional integration process also means dramatic socio-economic changes in the remote and impoverished Upland Lao PDR. Will Northern Lao PDR be able to reap the benefits from the NSEC eventually? How is the NSEC impacting on local livelihoods, and who are the main drivers of change?

This research aims to examine the Asian Development Bank's argument that Lao PDR could become the crossroads of the trade routes in the GMS if this landlocked country manages to turn to its advantage the migration and transnational networks passing through its territory. I will explore the role of Chinese networks in regional trade, since the increasing flow of Chinese newcomers into Lao PDR is obviously metamorphosing the socio-economic landscape of the region. The present research is based on empirical data — interviews with Chinese migrants and Lao officials as well as analysis of socioeconomic statistics and reports — collected between 2007 and 2009 during several fieldwork studies carried out in the main cities of three Northern provinces of Lao PDR (Oudomxay, Luang Namtha, Bokeo) affected by the NSEC (see Map 18.1).

First, I will describe what is at stake since Lao PDR has been involved in the GMS programme, and specifically in the case of implementing the NSEC. Then, I will describe how Chinese newcomers are gradually weaving their transnational networks into Lao economy and how they are accelerating the pace of change in the region.

If environment affects poverty, it is primarily via economic growth. Therefore, it is necessary to investigate how environment affects economic growth. My interest is to find a way to have the environment, economic growth, and poverty reduction interact in a way that results in “pro-poor green growth”. In the first section, I briefly review the relationship between economic growth and poverty. Previous studies and experiences from Korea are introduced. In the second section, I investigate the relationship between the environment and economic growth using empirical findings and a theoretical model. The aim of that section is to find a way that the environment and economic growth can get along. I also deal with the relationship between economic growth and inequality. The poverty rate depends on the nature of economic growth. The third section is about government roles in making growth green and poverty-reducing. It reviews findings from the empirical literature and presents conclusions drawn from the experiences of the Organization for Economic Co-operation and Development. The fourth section concludes the essay.

ECONOMIC GROWTH AND POVERTY

At the Millennium Summit in 2000, world leaders adopted eight goals (the Millennium Development Goals, or MDGs). Reducing poverty and hunger and ensuring environmental sustainability were among them. Policy makers and scholars search for ways to achieve economic growth that is “sustainable” and “pro-poor”. What is pro- poor growth? To answer this question, let us look at Figure 6.1. The figure plots several cases of GDP growth rate and the growth rate of poor people's income. A possible definition of pro-poor growth is a rate of income growth for the poor that is higher than the rate of GDP growth (Kakwani and Pernia 2000). According to this definition, points A and E would be candidates for pro-poor growth. Another definition focuses on the status of the poor (Ravallion and Chen 2003). Specifically, as long as economic growth improves the income of the poor, it could be regarded as pro-poor. By this definition, points A, B, C, and D would be examples of pro-poor growth. It is difficult to decide which definition is superior because both have their pros and cons.

The main subject of this chapter is the what role, if any, development organizations should play in helping the poor in the developing countries of the Pacific Islands adapt to what is commonly called climate change. I first clarify what is meant by climate change. I then explain how in the absence of strong governments in these countries, development organizations do and can provide help to the poor in adapting to the changes taking place in their environments. I then explain how these organizations often appropriately use an area approach, one that means excluding some normally targeted people (the poor) and including some normally not-targeted people (the better off). And I try to give the reader a good brief understanding of what the Pacific Islands is, and how the area approach applies to it. I then present two ways the development organizations may succeed in getting better local support for environmental projects than governments have in the past. First, projects that seek to solve long-term problems that local people may not appreciate can be combined with elements that solve more obvious and immediate needs. It will be easier to come up with such projects if global warming is not considered separately from other environmental problems. I present a sketch of the sort of comprehensive classification scheme that would aid such a plan. Second, steps can be taken to make people more aware of the long-term problems, such as sea-level rise. But development organizations should first improve their own intellectual content and to coordinate their activities with each other.

GLOBAL WARMING AND ITS EFFECTS

Anything made of molecules, atoms, and particles emits self-propagating coupled electrical and magnetic waves that move at the speed of light (when in a vacuum). The higher the temperature of a thing, the higher the frequency of its waves and the greater the energy they carry. The spectrum ranges from radio waves, with the lowest frequency and energy, through microwaves, infrared, visible, ultraviolet, and X-rays, to gamma rays, with highest frequency and energy.

TRANSITER SOUTHEAST ASIA, A FRANCO-ASIAN SCIENTIFIC COOPERATION PROGRAMME

The main goal of the Transiter Programme “Transnational Dynamics and Territorial Redefinitions in Southeast Asia: The Greater Mekong Subregion and Malacca Straits economic corridors”, is to better understand the role played by the economic corridors in the ongoing transition between the development of cross-border trade, towards a broader transnational integration process. This objective will be reached basing the research work on concrete examples, studied according to a multi-disciplinary approach of monitoring evaluation during a three-year period, in order to value and estimate the potentialities of these new dynamics, as well as anticipate on their potential negative impacts on the local populations and natural environments to be transected by the corridors. Although the primary focus of research is on Southeast Asia, the programme also analyses the conditions when possible to compare the transnational dynamics taking place along the Straits of Malacca's maritime corridors with the Greater Mekong Subregion (GMS) continental corridors. It also details and reviews the multi-disciplinary research available on this region and, in particular, on Lao PDR, which is a “key country” within the subregion and the main counterpart within this scientific cooperation programme.

VIEWS OF LAO COUNTERPART

Following the policy of the government in transforming Lao PDR from land-locked to land-linked status, there have been substantial investments in transport infrastructure. Such initiative is driven by development partners, mainly the Asian Development Bank (ADB), through the Greater Mekong Subregion (GMS) framework and bilateral cooperation between Laos and its neighbours. This gives birth to the economic corridor development concept, focusing on developing the transport infrastructure to connect Lao PDR with her giant neighbours, including the construction of the East-West Economic Corridor (EWEC) and the North-South Economic Corridor (NSEC), and the promotion of economic opportunities along the corridors. Along with the improvement in the hardware, the government of Laos has gradually improved the trade and investment climate in the country with the objective of making it easier for the private sector to maximize the benefits from this increased connectivity and integration. Despite the massive investment in hardware, together with gradual reforms in trade and investment regulations, the expansion of trade and investment in the subregion and in Lao PDR in particular remains below expectations and the transport cost has not reflected this development.

In north and northwest China lie vast areas of grassland. Most of which are also dryland. In the past fifty years, there have been drastic changes to the ecology and environment of this area due to ongoing drought, rising temperature, and imprudent human activities, including unsustainable development. Of the 70 million people who live in the area, 7 or 8 million are nomadic or settled herders. Poverty is a serious problem for herders.

The vast grasslands of north and northwest China are in the semi- arid and arid belts of the east part of the Eurasian grassland. Drought is always a great threat to the environment and people there. In some areas (e.g., western Inner Mongolia and southern Xinjiang), the annual rainfall is below 200mm, having the largest area of arid pastures and poor vegetation in terms of height, coverage, and number of grass species.

In the past half century, there have been drastic changes to the area's ecology and environment due to persistent drought, rising temperatures, imprudent human activities. Degradation of the pastures in the north and northwest China is a common phenomenon. The grassland of north and northwest China has been in a condition of non-self-maintenance, non-sustainable in ecology and non-sustainable in environment (Wang 2010). And deterioration of the grassland eco-environment has been happening in most of the grassland areas. The following are the most serious issues:

• of the 2.87 billion hectares grassland, about 90 per cent of the pastures are deteriorated to certain degrees;

• the pastures that are deteriorated, desertified, and salinized constitute about 53 per cent in area of the total;

• the production capacity of the grassland has decreased by 17–40 per cent, of which the arid grassland pastures is the most serious, a 40 per cent reduction is very common;

• the area of soil erosion in the north and northwest China increased from 2,870,000 km 2 in 1989 to 2,940,000 km 2 in 2000, most of which occurred in the grassland areas;[…]

In Indonesia, there is widespread awareness of climate change and environmental problems, at least in academia, policy-making, civil society organizations, and NGOs. However, the ways climate change and the environment affect poverty are not so well understood. Indonesia, like many other countries, is preoccupied with achieving economic growth in a business-as-usual manner. The government emphasizes social protection rather than reducing vulnerabilities and improving livelihoods of the poor through a green economy. In this essay, we review the current discussion on the economics of environmental protection in Indonesia, especially with regards to climate change, and propose ways to fill in certain gaps between discourse and policy. We also discuss the poverty situation of Indonesia and highlight its relationship with the environment. Finally, we discuss the policy possibility of using the environment-climate connection as a way to accelerate poverty reduction. In particular, we argue that policies that take into account climate change and its effect on poverty should be applied at three different levels: micro, macro (national), and global (international).

THE ENVIRONMENT — POVERTY CONNECTION IN INDONESIA

Poverty in Indonesia has been decreasing (Figure 13.1), although there were a few spikes following the Asian Financial Crisis in 1997/98 and the rice and fuel price increases in 2005. As of February 2010, the poverty headcount index in Indonesia is around 13.3 per cent. 1 (Figure 13.1 depicts GDP growth rates and the open unemployment rates during 1998 to 2010.) The Asian Financial Crisis hit the country severely, resulting in a 13 per cent contraction. Slowly the country recovered, reaching its pre-crisis level in 2007, after ten years. The recent global financial crisis turned out to be far less damaging. In fact, Indonesia (along with China and India) was quite resilient, with a growth rate of 4.5 per cent in 2009, while most countries in the world experienced a contraction or near-zero growth.

Unemployment rate dynamics, on the other hand, reflect the four phases of the labour market in Indonesia, namely “growing rapidly” (1990–97, not shown on the figure), “crashing and coping” (1997–99), “jobless growth” (1999–2003), and “job recovery” (2003–08) (World Bank 2010).

Since the establishment of Lao People's Democratic Republic (Lao PDR) in 1975, the Lao economy has been through a series of transformations. With the introduction of the New Economic Mechanism in 1986, Lao PDR has gradually increased its integration with the subregional, regional and global economy. Some of the milestones include membership of the Greater Mekong Subregion cooperation (GMS) in 1992, the Association of Southeast Asian Nations (ASEAN) in 1997 and now WTO in 2013. The country has also been an active member of many regional and subregional cooperation initiatives, creating the opportunity for both investment and foreign trade. The economy has grown at a remarkable rate of 6.7 per cent a year over the past two decades. Despite the global financial crisis, the Lao economy managed to grow by 7.6 per cent in 2009 and 7.8 per cent in 2010. The GDP per capita rose from US$329 in 2001 to US$1,069 in 2010. In the social field, progress has also been observed. The literacy rate for both males and females, the primary completion rate as well as the total enrolment rate show a gradual improvement in education. Health indicators, such as infant mortality rate and life expectancy, show some improvements. There has been a significant progress in poverty eradication. The poverty headcount ratio at national poverty line fell from 46 per cent in 1992/93 to 27.6 per cent in 2007/08 and is estimated at 20.4 per cent for 2010.

This chapter aims to review the integration of Lao PDR into the regional and subregional economy. It will first summarize the evolution of Lao economic integration. The chapter will then outline how and why Laos needs to integrate with the region. In the last part, it will discuss the need for a better integration at different levels, including a discussion of the opportunities and challenges arising from the integration. In the conclusion the concept of connectivity is introduced.