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Linking Two Worlds
ADB Review [ December 2004 ]

Special economic zones are bringing foreignbacked factories that provide jobs for the poor, including ethnic minorities, in remote areas

By Ian Gill, (igill@adb.org)
Principal External Relations Specialist



OPENING UP A woman in a traditional Bru village - the world is coming to her door.

QUANG TRI PROVINCE, VIET NAM. The Bru villagers gather around the clearing in Sand village to watch a traditional sacrifice ritual. A man kneels and chants, calling upon the spirits to smile upon the visitors, the harvest, and the children.

Behind him, another man beats a gong in rhythm to the invocation. In front is a tray bearing the offering—a chicken, usually slaughtered during the ritual, but on this occasion mercifully killed beforehand. After the ceremony, village elders offer lao lao (rice wine) to the visitors.


GREETING VISITORS Performing a ritual sacrifice in a Bru village.

Some 27 kilometers away, up a winding mountain road, a more modern ritual is taking place in a large, newly built factory at the Lao Bao Commercial Area. Amid the whirr and hum of machines, white-masked workers, many from nearby villages, form a production line turning out tires and tubes for motorbikes. The Thai managing director offers visitors tea.

The two worlds—the ethnic minority village and the industrial plant—are being brought closer together by the East-West Economic Corridor, an ambitious upgrading project that is nearing completion.

The East-West Economic Corridor stretches coast to coast from Mawlamyine to Da Nang, linking Myanmar, Thailand, the Lao People’s Democratic Republic (Lao PDR), and Viet Nam. It is a flagship project of the Greater Mekong Subregion (GMS) Economic Cooperation Program being promoted by the Asian Development Bank (ADB) in partnership with governments and other international development agencies.

With streamlined border procedures to ease the flow of people and goods, the Corridor is bringing trade, investment, and tourism to some very poor regions.

At the Lao PDR-Viet Nam border checkpoint between Dansavanh and Lao Bao, officials processing a line of trucks say they are preparing to implement a one-stop customs procedure that will reduce waiting time from several hours to 30 minutes.


JOBS FOR LOCALS Foreign investors are bringing work opportunities to remote areas

The expected influx of entrepreneurs and tourists should translate into more jobs and other opportunities for the Bru and the 200 other ethnic minorities of the GMS, who mainly live in mountain areas, including the ranges that straddle the Lao PDR and Viet Nam and extend into the People’s Republic of China.

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Sorely Needed Opportunities

Such opportunities are sorely needed in the remoter areas of Viet Nam’s Central Region, which lack basic amenities, like safe water and electricity, as well as access to social services, including education and health care. Most children under 5 years old are underweight.


HANDLING RUBBER A tire factory brings new hope to a poor region

In Sand village, children and their parents come out of their wooden stilt-houses to gaze in curiosity at the foreign visitor, who is still an unusual sight in these parts. In one corner, women are pounding grain with wooden clubs. An elderly woman sits smoking a pipe beside the rattan basket she uses to carry firewood on her back. A teenage girl climbs some steps while carrying an infant wrapped in a shawl behind her. In the river below the village, men fish while children play naked in the cool waters.

“People here like the tourists very much. The tourists not only bring joy and excitement in the village, but also more understanding of the outside world,” comments Ho Van Choang, a community leader and a member of the ethnic minorities committee for Quang Tri Province.

Mr. Choang says the Bru, like other ethnic minorities, welcome the greater access to social services and job opportunities that the road is bringing, but are also anxious to preserve their unique culture and traditions. The Bru are known for their folk singing and their music with drums, castanets, and gongs as well as wind and stringed instruments.

He believes that tourist interest in Bru culture would help revive some traditional arts.

Up the road, the tire and tube plant is one of several foreign investment projects filling up the Lao Bao Commercial Area, which was set up near the Lao PDR border by the Government of Viet Nam in late 1998.


GOOD CATCH These youngsters may have choices when they grow up

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Free Trade Push

“We have more than 50 small- and mediumsized enterprises operating now—20 manufacturers and 30 in trade and services—and we want to attract more,” says Nguyen Huy, Deputy Chief of the commercial area. “With work nearing completion on the East-West Economic Corridor and the new bridge over the Mekong at Savannakhet, fish boys we want to draw investors and tourists. It is a high priority to develop our free trade area.”

An important goal is to improve the socioeconomic conditions for the local people, including the Bru and other ethnic minorities who make up 10% of the population of 33,000, says Mr. Huy.

"People here like the tourists very much. The tourists not only bring joy and excitement in the village, but also more understanding of the outside world"

- Ho Van Choang, ethnic minority community leader

The commercial area has brought water, electricity, and transport services for the first time. During the past 3 years, it has also created more than 1,000 jobs for local people.

Foreign investors are using local raw materials, says Mr. Huy, citing one enterprise that is producing cassava flour and another that is processing coffee.

The foreign companies are also providing training, and some have sent staff to Thailand’s and Viet Nam’s big cities to improve their skills.

The upgraded Corridor will provide foreign companies more markets in the Lao PDR and Viet Nam as well as an export seaport in Da Nang, says Phornchai Chiravinijnandh, managing director of Camel Rubber (Vietnam) Co. Ltd. The tire plant is the Thai company’s first overseas manufacturing venture.

The Lao Bao venture, however, is not without its teething problems, Mr. Chiravinijnandh disclosed. He is still trying to source rubber from the local market.

“There are still many regulations and procedures that have to be made easier and faster for investors,” he commented.

Nonetheless, the company plans to expand production from motorbike tires to truck tires. This would mean increasing a workforce that includes 130 Vietnamese and 15 Thais.

Despite its drawbacks, the Lao Bao Commercial Area is developing according to expectations. The Government is taking steps to attract foreign investors in other parts of the country and form partnerships with local businesses.

Clearly, improved physical infrastructure and easier cross-border procedures are already providing incentives for businesspeople—and jobs for the poor.


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