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LAO BAO, VIET NAM. More than 50 foreign firms have set up in a special export zone established by the Government of Viet Nam at Lao Bao, near the Lao People’s Democratic Republic (Lao PDR) border at Lao Bao-Dansavanh.
Over the border, one of the Lao PDR’s biggest foreign investors, the Australian gold and copper producer, Oxiana, is extracting gold and expects next year to begin producing copper, which will be exported to major Asian markets. A Vietnamese telecoms company is already planning to set up a factory near Oxiana to access its copper cathodes.
Foreign investments in the Lao Bao commercial area have so far created more than 1,000 jobs in one of Viet Nam’s lessdeveloped regions, where 1 in 10 people is from an ethnic minority.
The increased presence of investors in the area owes much to progress on the East-West Economic Corridor, which the Lao PDR and Viet Nam are turning into an all-weather highway with assistance from funding agencies including the Asian Development Bank (ADB) and the Government of Japan.
The 1,500-kilometer road link between the Andaman Sea in the west and Viet Nam’s east coast via Thailand and the Lao PDR is the most advanced of several planned corridors crisscrossing the Greater Mekong Subregion (GMS).
This greater connectivity—along with planned electricity and telecoms networks —is transforming the GMS into a more integrated and competitive economic grouping as well as building a sense of community.
“The GMS is a community with shared interests and challenges, and is fast developing as a competitive place to do business as well as a regional tourist destination,” says Rajat Nag, Director General of ADB’s Mekong Department.
The GMS Economic Cooperation Program (GMS Program), which was launched with ADB assistance in 1992, can view the future with a confidence built on demonstrable progress as it holds its 13th Ministerial Conference in the Lao PDR capital, Vientiane, from 14 to 16 December 2004.
After a decade of discussions and planning, the implementation of the GMS Program is gathering momentum, especially with the private sector taking a more active role.
It is no coincidence that international business representatives are increasingly visiting the border area between Viet Nam and the Lao PDR now that this once isolated region is becoming more accessible to markets and ports.
An innovative one-stop customs procedure is expected to be operating for the first time at the Dansavanh-Lao Bao border atthe end of March 2005. This new streamlined procedure—designed to cut waiting time at border checkpoints from several hours to 30 minutes—will be gradually introduced at other GMS borders.
A new growth area for investment is expected to develop with the opening of a new bridge over the Mekong between Savannakhet in the Lao PDR and Mukdahan in Thailand in 2006.
As subregional links strengthen in agriculture, infrastructure, industry, tourism, trade and investment, and social development and the environment, the GMS initiative is enabling the pace of intraregional business to accelerate
As the Lao PDR widens the door for foreign investors, the Vice-Governor of Savannakhet believes the new bridge, the East-West Economic Corridor, and an upgraded airport, will pave the way for the industrialization of the province—and even the country.
As the corridor facilitates increased trade and investment, the door is opening too for an expansion of the tourism industry.
In Viet Nam, the East-West Economic Corridor is helping bring more local and international visitors to new ecotourism spots, historical sites along the Ho Chi Minh Trail, and cultural centers, such as Hue and Hoi An (see Ancient Allure). The pace of tourism growth in the central region already surpasses the national average.
The benefits notwithstanding, the GMS countries are also taking steps to counter the risks of greater connectivity, such as the spread of HIV/AIDS, which is becoming increasingly prevalent in border areas where there is increased movement of migrant laborers.
Among the countries worst affected by the upsurge in HIV/AIDS, Cambodia is conducting a preventive campaign that has already reined in HIV/AIDS infection rates among sex workers (see Killer at the Border).
Around the porous mountain borders between the People’s Republic of China and Myanmar, an innovative radio drama series in the Kachin language is warning ethnic minorities of the dangers of HIV/AIDS, drug abuse, and human trafficking.
Today, the GMS is markedly more “together” than it was in 1992. Within a decade, the intraregional share of total trade more than doubled: from 5.7% to 12.6%. More importantly, this has been accompanied by a significant drop in poverty.
As subregional links strengthen in agriculture, infrastructure, industry, tourism, trade and investment, and social development and the environment, the GMS initiative is enabling the pace of intraregional business to accelerate.
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