The Indonesia-Malaysia-Thailand Growth Triangle – deepening subregional integration

by Natasha FERNANDO

The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) was launched in 1993 between these three countries of Southeast Asia to work on six main areas of cooperation which include: trade and investment, agriculture, tourism, infrastructure, human resource development and halal products and services. The geographical scope covers 32 provinces and states in these countries which include 10 provinces of Sumatra Island in Indonesia, 8 northern states of Malaysia and 14 provinces of Southern Thailand. This explainer covers a brief history of the triangular cooperation, the importance of the economic zones of the IMT-GT and its main attractive feature which is tourism.

What is the IMT-GT?

The Indonesia–Malaysia–Thailand Growth Triangle launched in 1993 was inaugurated by Prime Ministers Mahathir Mohammad (Malaysia), Chuan Leekpai (Thailand) and President Suharto of Indonesia. The Asian Development Bank (ADB) was entrusted along with other experts to conduct a feasibility study for cooperation which identified the above mentioned six areas. However, the Asian Financial Crisis of 1997 constrained the progress of the project until the economies picked up. In 2001 the ADB began to review the areas of cooperation which they undertook as an official task to formulate a roadmap. This was when ADB was invited to serve as the project’s official development partner in 2006 at a Senior Officials’ Meeting in Indonesia. The road map was presented at the IMT-GT Leaders’ Summit in Cebu in 2007. Under the reviewed road map, supporting infrastructure and connectivity development, institutional strengthening, enhanced economic connectivity, trade, investment, and sustainable environmental management were focused on.

Source : Asian Development Bank

Strategic significance of the subregional economic zones

Special Economic Zones (SEZs) are designated areas with distinct management and administration, typically enclosed by physical boundaries. These zones offer various incentives to companies operating within them, such as duty-free trade, streamlined regulatory procedures, reduced taxes, and access to infrastructure support. By providing these benefits, SEZs aim to attract investment, lower production costs, and enhance the competitiveness of goods manufactured within the zone. The aims are to promote growth, employment, and economic prosperity within the region. The five priority economic corridors of the IMT-GT include:

• Extended Songkhla–Penang–Medan Corridor (EC1)
• Straits of Malacca Corridor (EC2)
• Banda Aceh– Medan–Pekanbaru–Palembang Economic Corridor (EC3)
• Melaka– Dumai Economic Corridor (EC4)
• Ranong–Phuket–Aceh Economic Corridor (EC5)

The IMT-GT is not only a platform for economic integration and cooperation, its unfolding results in economic growth, job creation and poverty alleviation. Such cooperation also ushers in peace and stability due to stronger ties between nations. The EC1 is a maritime route that links Malaysia and Indonesia across the strait of Malacca with the Belawan Port in Medan, Indonesia, as the main international port for maritime connectivity. The EC2 is also a multimodal connectivity project with both land and coastal linkages. The EC4 links the Dumai port of Indonesia with the Tanjung Brias Port of Malysia fostering maritime connectivity across the Strait of Malacca. These maritime linkages promote maritime commercial trade especially import and exports of products between these regions.

Tourism in the IMT-GT

On May 11, 2023, at the ASEAN Summit in Labuan Bajo, Indonesian President Joko Widodo launched the Indonesia-Malaysia-Thailand Growth Triangle Visit Years 2023-2025 pillar to promote tourism growth among the three countries. According to the Indonesian minister of Tourism and Creative Economy, the plan is to attract 60 million tourists to boost foreign exchange earnings up to USD 75 billion during these years. Ten exotic destinations are focused to attract tourism which includes Aceh, North Sumatra, West Sumatra, South Sumatra, Riau, Jambi, Bengkulu, Bangka Belitung Islands, Riau Islands and Lampung. Each of these provinces have their own diversity in terms of natural, historical, and cultural attractions.

The Tourism, Arts and Culture Ministry (Motac) of Malaysia announced plans in 2023 to organize the IMT-GT Familiarisation Trip to enhance Malaysia’s tourism sector which involve social media influencers and media representatives from Indonesia and Thailand. The Motac also announced that discussions were underway to transfer the Malaysia My Second Home (MM2H) visa program under its jurisdiction which allows non-citizens to retire and settle in Malaysia in preparation for the Visit Malaysia Year 2025 tourism booster program. The Tourism Authority of Thailand (TAT) projects the arrival of 40 million tourists by the end of 2024, and aims for full recovery from the COVID-19 pandemic which took a hit on the industry. The TAT marketing strategy is to promote high-value tourism, sustainability, and meaningful travel experiences to promote the tourism industry. The Thailand Travel Mart Plus is a platform that could showcase Thai tourism products to international buyers alongside other initiatives such as domestic travel and gastronomy tourism.

The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) represents a significant platform for deepening subregional integration and fostering economic growth across the three countries. Initiatives like the IMT-GT Visit Years 2023-2025 pillar and tourism-focused events demonstrate a commitment to leveraging the region’s diverse attractions to boost tourism and economic prosperity.