The Phnom Penh- Ho Chi Minh City Road is the first project to be implemented under the ADB’s Greater Mekong Subregion (GMS) Initiative, which is intended to improve cooperation for economic development amongst the GMS countries (Cambodia, Lao People’s Democratic Republic, Burma (Myanmar), Thailand, Vietnam, and Yunnan Province in the People’s Republic of China). The purpose of this project is to assist the Cambodian and Vietnamese Governments in improving the cross-border section of Highway 1 linking Phnom Penh in Cambodia to Ho Chi Minh City in Vietnam, thereby increasing the potential for cross-border trade. The section being improved is 265 km long in Vietnam and 105 km in Cambodia.

Project construction involves road widening, which has had a number of adverse social and economic effects on communities situated on Highway 1, mainly associated with forced relocation. While the Bank’s Initial Environmental Examination indicated the potential for only minor impacts on the people living along the highway, the residents living on the Cambodian part of the road have been impacted or resettled without proper compensation. Case studies conducted by Cambodian civil society groups showed that the compensation allocated by the Government to project-affected families was substantially lower than the actual price for relocation and reconstruction of most dwellings. Communities interviewed said that the Government of Cambodia used intimidation tactics to coerce people into accepting an inadequate resettlement plan.