Catalog

SAVANNAKHET, LAO PDR

To put food on the table each day, residents of Ban Nam Kheeb village in the Lao People’s Democratic Republic (Lao PDR) province of Savannakhet used to rely on the forests around them.

Inhabited by some 700,000 people, Savannakhet, sharing the border with Viet Nam in the east and Thailand in the west, is the largest province in the Lao PDR and is endowed with fertile land and abundant mineral deposits.

But as one villager, Ms. Cheam, says, “We only practiced slash-and-burn cultivation and hardly had enough food to eat for the whole year.”

Now Ms. Cheam earns 200,000 kip a month (about $20) from silk weaving that complements her husband’s pay from a newly opened mining company. This is enough not only to buy them food, but also to send their children to school, complete with uniforms and books.

Ms. Cheam, with thousands of others, is reaping the early benefits of the East-West Economic Corridor being developed in the Greater Mekong Subregion (GMS). The only land route that traverses mainland Southeast Asia on an east-west axis, the project, supported by ADB and the Government of Japan, is expected to be completed in 2006. The 1,500 kilometer (km) road directly connects the port of Mawlamyine, Myanmar, to the Da Nang deep-sea port in Viet Nam, passing through Thailand and the Lao PDR. But the corridor is more than just a transport network.

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Major Benefits

A key means of promoting regional cooperation in the region, the corridor will play a major role in integrating the GMS countries both physically and economically. Poverty reduction, development of rural and border areas, increased trade and investments, and employment opportunities are just some of the major benefits expected.

The corridor development includes improvements to National Road 9, which runs from Savannakhet to Da Nang. The road used to be so bad that, according to Sethamouak residents, many sick people died on their way to the provincial hospital in Khanthaboury, the capital of Savannakhet Province, some 100 km away.

FORWARD The corridor is bringing more opportunities and access to markets

In 1999, ADB approved a $32 million loan to the Government of the Lao PDR, which contributed $8 million to upgrade a 78-km stretch of Road 9. The road improvement for this stretch is expected to be completed by the end of 2004.

“Now, it just takes a couple of hours to reach the provincial hospital,” says Ms. Phai, a resident of Sethamouak town.

“Without an improved road, it would be very difficult for the company to operate successfully. Road 9 is vital to the successful operations of gold/copper mining operations,” says Mick Wilkes, Field Manager of the Oxiana/LXM.

Oxiana/LXM, which employs Ms. Cheam’s husband, has provided short training courses on cotton and silk production to women in the six villages directly affected by the mining operations. After the training, Oxiana/LXM provided the women with cotton and silk fabric. The company also installed electric transmission lines, provided safe drinking water, and is refurbishing the district hospital.

Aside from improved living conditions in the villages, the province will benefit from the taxes that the company will pay. The central Government is expected to earn about $5.3 million annually from 2005 to 2006, and about $10 million each year after that from Oxiana/LXM’s tax payments alone.

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Easier Access to Education

Besides economic and health benefits, the improved road is helping Savannakhet residents gain access to education facilities, with students able to ride their bicycles to secondary schools. Before this, parents rarely sent their children to school beyond the primary level.

In towns along Road 9, new concrete houses, markets, guesthouses, restaurants, gasoline stations, repair shops, and other microenterprises are emerging.