ASEAN: Vietnam to “Jump-Start” slow-going Mainland SE-Asia “East-West Corridor”

By Pooky, Thai Intel’s economics journalist

Once, a few years back, the East West Corridor-is like a very big thing. A boon for main land SE Asia trade-is what most head-lines in Bangkok says.

The Democrat Party of Thailand, for all its fault-has got something right-in that it is a freak on trade. You name it, triangles zones, bi-angle zones, border trade zones and like about a billion more zones this and zone that. Well, the problem is off course, the Commerce Minister of Thailand is from another political party-and so the trade zones have gotten very little attention from the Democrat Party. “Yes” that is the nature of the Democrat Party, not to let anyone get ahead of it on anything.

Well, the Vietnamese, are taking up the slack-with a US$1.5 billion development project to revive the East West Corridor.

 The Following is from Vietnam News:

Project to exploit East-West economic corridor

by Le Hung Vong 

HCM CITY — The central province of Quang Tri has officially unveiled a project to develop a marine economic zone and a deep water seaport that are expected to help it better exploit the Trans-Asia Highway, now called the East-west Economic Corridor (EWEC).

The province is located on the eastern entrance of the 1,450km trans-Asia highway that links central Viet Nam with Laos, Thailand and Myanmar.

“Development of a marine economic zone and a seaport on the easternmost point of the Road No. 9 or the Trans-Asia Highway is now a big expectation of most Quang Tri residents,” Tran Phuong Nam, head of the province’s Department of Information and Communications, said at a seminar on the development of EWEC held in Quang Tri in late December, 2010.

Dr. Bui Quoc Nghia, head of the project to map out the Southeastern Quang Tri Economic Zone and My Thuy Deep-water Sea-port, said the strip of land stretching from Cua Viet Estuary and the southeast section of Quang Tri was prime location for building an artificial seaport which can accommodate vessels of up to 50,000 DWT each.

“The marine economic zone will revolve around the deep-water seaport,” said Nghia.

The projects to develop the My Thuy Seaport and Southeastern Quang Tri Economic Zone have been supported and approved by the Government.

According to figures from the provincial authorities, My Thuy Seaport will be located on 913ha in Hai Lang District’s Hai An and Hai Khe communes, nearly 30km from Highway No. 9 (now part of the EWEC) and 60km to the north of Phu Bai Airport in Thua Thien-Hue Province.

The seaport project, which requires an investment of US$1.15 billion, will enjoy several investment incentive policies from the Government.

The province is also calling for an investment of $1.4 to $1.7 billion into the first phase of the project for infrastructure development and operation of 15,000 hectares of the Southeastern QuangzTri Economic Zone.

Main works of the first phase, that is set last from 2010 to 2020, includes digging of habour passages to the My Thuy Seaport and a harbour for the bonded warehouse in the economic zone and other infrastructure facilities for the industrial park.

The second phase of the project to develop the EZ, which covers 23,792ha of land covering several communes and townships in the province’s Gio Linh, Hai Lang and Trieu Phong districts, will begin in 2020.

As an economic development programme initiated by the ministerial conference among GMS countries in Manila in 1998, the EWEC was brought into operation in December 2006, but exploitation of the highway has been limited to date.

Addressing the EWEC Cooperation Forum in Quang Tri in mid-2010, the Asian Development Bank‘s country director for Viet Nam, Ayumi Konishi, had said, “Although there have been good achievements in improving the ‘connectivity’ in this part of the Greater Mekong Sub-region (GMS), we are yet to transform the East West Corridor from a ‘transportation corridor’ to an economic corridor.

However, Konishi also said the immediate impact of the EWEC has been “dramatic”. He said average vehicle speeds have increased and the average travel time from Savanakhet to Dansavan (in Laos) along the Road No. 9 has dropped from 10 to 12 hours to less than three hours, and that from Dong Ha to Lao Bao cut from four to two hours.

Declarations and inspection time by border agencies at the Lao Bao border gate has reduced from 125 minutes to 29 minutes for outbound goods and from 20 to 12 minutes for inbound goods. Faster trans-national commutes and cross-border clearance has sparked an increase in cross-border trade.

Average trade value through Lao Bao has risen with crossing trade value peaking at US$148.5 million in 2007. Industrial properties are being developed and more “boom towns” are being planned.

Increased connectivity has also led to an expansion of tourism and services sector, which account for a major part of increased traffic between Thailand and Laos, the ADB reported. The movement of people increased from some 95,000 in 2000-2001 to 184,000 in 2006 and 247,000 in 2007.

Although there had been an improvement in traffic, trade, tourism and investments, the really substantial and dramatic increases expected to arise from the development of the EWEC had not yet been materialised, said Konishi.

“Cross-border freight traffic, in particular, has shown slow growth,” he said.He said the pilot implementation of the Customs Transit System utilising the advantages of the GMS Cross Border Transportation Agreement started in June 2009, but the private sector had not sought to take full advantage of this facility.

He said the corridor was not connected to key economic areas in the GMS and that was a key factor behind the low demand for utilisation of the EWEC.

“There is so far little interest for transit traffic to start in Lao Bao, or in Mawlamymine in Myanmar, or along the EWEC itself where there is little economic activity that would benefit from transit traffic either way,” Konishi said.

He said the current agreement on the exchange of traffic rights along EWEC had so far not led to greater access to major commercial centres in the sub-region.

“A road does not only connect the origins and destinations, but any two points along it. Further efforts to develop economic linkages among the areas along EWEC are essential for EWEC to be used more effectively,” he said.

Quang Tri provincial authorities are hoping these two major projects will enable the province to exploit EWEC’s economic potential in a big way. — VNS

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