Greater Mekong SubGreater Mekong Sub--region Outlook region Outlook through Route 9 and the Mekong through Route 9 and the Mekong Second International Bridge: Second International Bridge: Implications for Participating Implications for Participating Countries and OutsidersCountries and Outsiders

BuddhagarnBuddhagarn RutchatornRutchatornChulalongkorn UniversityChulalongkorn University

As ADB is the main sponsor, GMS has 2.3 million As ADB is the main sponsor, GMS has 2.3 million sq.kmsq.km. in land and 250million . in land and 250million inpopulationinpopulation. The area . The area is plentiful in natural resource and be the centre of is plentiful in natural resource and be the centre of South Asia, East Asia and Southeast Asia. The goal of South Asia, East Asia and Southeast Asia. The goal of GMS Project is to support trade, industrial investment, GMS Project is to support trade, industrial investment, agriculture and service expansion, improve agriculture and service expansion, improve employment, local life standard, and education, and employment, local life standard, and education, and also the improvement in global economic competition.also the improvement in global economic competition.

IntroductionIntroductionGreater Mekong SubGreater Mekong Sub--region region

East-West Corridor

อ.แมสอด

Legend: ถนนอาเซียนภายในประเทศ ถนนอาเซียนสายหลัก ถนนอาเซียนระหวางประเทศ ถนนอาเซียนระหวางประเทศ ถนนอาเซียนเสนทางตะวนัออก- Not to scale

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The Transportation Development Project The Transportation Development Project was Determined Support Trade, was Determined Support Trade, Investment and Population in GMSInvestment and Population in GMS

The Priority of spatial Development are The Priority of spatial Development are 4 routes (From 11 recommendation 4 routes (From 11 recommendation Projects)Projects)

1. North1. North--South Economic Corridor South Economic Corridor (NSEC) are construct the road link (NSEC) are construct the road link from from JinhongJinhong in China via in China via MynmarMynmar and and connect with the route Asia no.2 from connect with the route Asia no.2 from ChiangraiChiangrai to to PitsanulokPitsanulok in Thailandin Thailand

2.2. KunmingKunming--HanoiHanoi--HaiphongHaiphong seaport which seaport which develop the railroad link develop the railroad link YunnanYunnan to to sealandsealand

3.3. EastEast--West Economic Corridor which connect West Economic Corridor which connect between Andaman sea and South China sea, between Andaman sea and South China sea, from from DanangDanang, Hue in Vietnam, via Lao, and , Hue in Vietnam, via Lao, and the Second Mekong International Bridge in the Second Mekong International Bridge in MukdahanMukdahan through Mae Sod, through Mae Sod, TakTak Province Province Thailand and Thailand and MynmarMynmar

4.4. Southern Corridor which link from Southern Corridor which link from PaksePakse in in LaoLao--through Phnom Penh and through Phnom Penh and HochiminhHochiminh CityCity

The study will focus onThe study will focus onEast West Economic CorridorEast West Economic Corridor

New frontier of economic potential on mainland New frontier of economic potential on mainland SEASEALongLong--term vision and strong political will (GMS term vision and strong political will (GMS Summit, Phnom Penh, 3 November 2002)Summit, Phnom Penh, 3 November 2002)Arising opportunities with real first time ever crossArising opportunities with real first time ever cross--border infrastructural developmentborder infrastructural developmentRoute 9 and the Mekong Second International Route 9 and the Mekong Second International Bridge after the Mekong First International Bridge Bridge after the Mekong First International Bridge built earlierbuilt earlier

The Progress of EastThe Progress of East--West Corridor connecting West Corridor connecting MyanmarMyanmar--ThailandThailand--LaosLaos--Vietnam is in detail as Vietnam is in detail as below:below:

Eastern Part (Route No. 9): Eastern Part (Route No. 9): MukdahanMukdahan--SawannaketSawannaket--DonghaDongha--HueHue--DanungDanung

Mekong River bridge no.2, Thailand and Mekong River bridge no.2, Thailand and Laos made a loan from JBIC 4,700million Yen Laos made a loan from JBIC 4,700million Yen (2,300million Yen from Thailand). The (2,300million Yen from Thailand). The contract signed on 3 Dec. 2003, and the contract signed on 3 Dec. 2003, and the construction completed and open for public on construction completed and open for public on December 20, 2006 (One year delayed from December 20, 2006 (One year delayed from the Schedule )the Schedule )

Route no.9(Laos),reconstructing of 210 km. Route no.9(Laos),reconstructing of 210 km. SawannaketSawannaket--PinPin--DansawanDansawan route. Monetary route. Monetary supported by JBIC and ADB. The route was supported by JBIC and ADB. The route was officially opened on 23 Apr. 2004.officially opened on 23 Apr. 2004.

Western Part (From Western Part (From PitsanulokPitsanulok -- Rangoon):Rangoon):Because of the Physical and Political Problems in Because of the Physical and Political Problems in neighborhood country, the project is sluggishly neighborhood country, the project is sluggishly operating.operating.

The route connected The route connected MaesodMaesod--MyoudeeMyoudee--KokarekKokarek, 60 km. The construction will be , 60 km. The construction will be completed in 2007 by schedule and will be completed in 2007 by schedule and will be connected with Rangoon (198 km.)connected with Rangoon (198 km.)

The transportation development in eastern is The transportation development in eastern is from from MukdahanMukdahan province, Thailand, province, Thailand, viaInternationalviaInternationalMekong Bridge no.2 to Mekong Bridge no.2 to SawannaketSawannaket, Laos, and , Laos, and Vietnam. Vietnam has developed rapidly including Vietnam. Vietnam has developed rapidly including DaDa--nungnung Seaport developing of Seaport developing of DhanangDhanang pier, the pier, the EastEast--West Corridor was changed to WestWest Corridor was changed to West--East East Corridor to place importance on the improving of Corridor to place importance on the improving of route connecting route connecting MyoudeeMyoudee and and MalamangMalamang, , Myanmar. And also develop marine transportation Myanmar. And also develop marine transportation network at network at MolamyaiMolamyai city, the third biggest pier in city, the third biggest pier in Myanmar.Myanmar.

Current Status of Eastern Current Status of Eastern Part of EWECPart of EWECRoute 9 extends from Route 9 extends from SavannakhetSavannakhet to to DansavanhDansavanh on the Laoon the Lao--Vietnam border, Vietnam border, combining 245 km, is almost rebuilt under combining 245 km, is almost rebuilt under various projects funded by the ADB, JICA and various projects funded by the ADB, JICA and IBRD.IBRD.Mekong Second International Bridge Open on Mekong Second International Bridge Open on December 19, 2006, with 2December 19, 2006, with 2--lane road (2.05 lane road (2.05 Km) and broader facilities and access roads Km) and broader facilities and access roads with joint Thaiwith joint Thai--Lao funding through 8.09 Lao funding through 8.09 billionbillion--yen loan from JBIC.yen loan from JBIC.

There are also infrastructural improvements in There are also infrastructural improvements in Thailand and Vietnam. Thailand spends its energy Thailand and Vietnam. Thailand spends its energy to improve to improve MukdahanMukdahan and its transport networks in and its transport networks in the Northeast. Vietnam looks to develop its poor the Northeast. Vietnam looks to develop its poor central region with central region with infrastucturalinfrastuctural improvement of improvement of Route 9 for 84 km from Lao Route 9 for 84 km from Lao BaoBao to Dong Ha and to Dong Ha and then the Highway 1 to then the Highway 1 to DaDa NangNang (172 Km), including (172 Km), including the construction of the construction of HaiHai Van Tunnel and upgrading Van Tunnel and upgrading of of DaDa NangNang Port.Port.

3. Significance and Impacts3. Significance and Impactsof Route No. 9of Route No. 9

Development of landDevelopment of land--locked regions of locked regions of mainland SEA (South East Asia)mainland SEA (South East Asia)Thailand NortheastThailand Northeast’’s access to the outside world. s access to the outside world. Distance from Distance from MukdahanMukdahan to to DaDa NangNang is 509 Km, is 509 Km, and also to neighboring countriesand also to neighboring countriesLao PDR and its lower parts could access easier Lao PDR and its lower parts could access easier also to the sea and trade within the region and also also to the sea and trade within the region and also with the rest of the worldwith the rest of the worldVietnam, central region, expects to develop more Vietnam, central region, expects to develop more with the opening up to the outside worldwith the opening up to the outside worldIntegral part to the longIntegral part to the long--term development vision term development vision for the EWEC to stimulate growth of participating for the EWEC to stimulate growth of participating areas and raise the incomes of their residentsareas and raise the incomes of their residents

Route 9 and the Mekong Second Route 9 and the Mekong Second International Bridge and its linkages to International Bridge and its linkages to the Economic corridor Conceptthe Economic corridor Concept

Efficient resource allocation of underlying subEfficient resource allocation of underlying sub--regional regional complimentaritiescomplimentaritiesDevelopment of competitive advantages that will Development of competitive advantages that will enhance the overall competitiveness of the EWECenhance the overall competitiveness of the EWECCore vision is a single, unified geographical and Core vision is a single, unified geographical and economic unit economic unit Development must be a longDevelopment must be a long--term one, given the term one, given the farfar--reaching poverty and underreaching poverty and under--development development characterizing many sections of the Corridorcharacterizing many sections of the Corridor

EWEC is figured as one of transport development EWEC is figured as one of transport development projects, one of the 11 priority programs of the GMS, projects, one of the 11 priority programs of the GMS, designed by the ADB for 2003designed by the ADB for 2003--2012 (102012 (10--12 billions US$)12 billions US$)EWEC strategy includes spatial planning with initiatives EWEC strategy includes spatial planning with initiatives ranked by priority, physical infrastructure development, ranked by priority, physical infrastructure development, policy and procedural reform, support programs, skills policy and procedural reform, support programs, skills development, capital and financing and institutional development, capital and financing and institutional developmentdevelopmentEWEC also encompasses a defined geographic space, EWEC also encompasses a defined geographic space, with greater emphasis on bilateral, rather than with greater emphasis on bilateral, rather than multilateral initiatives, particularly border crossing multilateral initiatives, particularly border crossing between two countries. It also places a greater emphasis between two countries. It also places a greater emphasis on the careful spatial and physical planning of the on the careful spatial and physical planning of the corridor and its surrounding areacorridor and its surrounding area

Route 9 and the Mekong Second International Route 9 and the Mekong Second International Bridge and its linkages to the Economic corridor Bridge and its linkages to the Economic corridor Concept (continued)Concept (continued)

Lao PDR expects major changes from Route 9 Lao PDR expects major changes from Route 9 and SMIBand SMIBCrossing from Crossing from MukdahanMukdahan to to SavannakhetSavannakhet is currently is currently by ferry and is relatively slow, requiring up to 2 hours by ferry and is relatively slow, requiring up to 2 hours to traverse the 8 Km route between the two towns. to traverse the 8 Km route between the two towns. Car transport in around 50 vehicles per day and total Car transport in around 50 vehicles per day and total number of 115,272 passengers in 2003.number of 115,272 passengers in 2003.It is expected that car transport could increase to It is expected that car transport could increase to almost one thousand within the first two years as the almost one thousand within the first two years as the total number of passengers would follow the suite.total number of passengers would follow the suite.Lao Lao PDRPDR’’ss agricultural and manufacturing scene is agricultural and manufacturing scene is also expected to be more efficiently allocated as a also expected to be more efficiently allocated as a result of the improvement of land transport.result of the improvement of land transport.By observing after open the SMIB, the Average Truck By observing after open the SMIB, the Average Truck still very low as 68 vehicles per day during the first still very low as 68 vehicles per day during the first month.month.

Significant improvement of border controls in Lao PDR Significant improvement of border controls in Lao PDR and its neighbors like Thailand and Vietnam will and its neighbors like Thailand and Vietnam will enhance trade and investment quite tremendously.enhance trade and investment quite tremendously.Institutional development both in the public and Institutional development both in the public and private sector is also expected to follow.private sector is also expected to follow.Should the project like Nam Should the project like Nam TheunTheun Dam2 beDam2 becompleted, Lao PDR would have excessive power completed, Lao PDR would have excessive power capacity, thuscapacity, thus helped to increase trade with neighbors helped to increase trade with neighbors like Thailand and Vietnam.like Thailand and Vietnam.

4. Implications for Participating 4. Implications for Participating CountriesCountries

Lao PDRLao PDRMajor changes for its subsistence economyMajor changes for its subsistence economyInfrastructural builtInfrastructural built--up and its readiness up and its readiness From landFrom land--locked to landlocked to land--linked, its needs to linked, its needs to change law, regulations and institutional change law, regulations and institutional developmentdevelopmentRole of the private sector development and its Role of the private sector development and its

interactions with the public sectorinteractions with the public sector

VietnamVietnamExpectations from these projects to improve Expectations from these projects to improve regional growth and income of the Central region regional growth and income of the Central region as compared to the North and the Southas compared to the North and the SouthNeeds of consistent strategies to link with Needs of consistent strategies to link with neighboring countries and the outside worldneighboring countries and the outside worldEfficiency improvement in both public and private Efficiency improvement in both public and private sector to respond to major changes, in particular, sector to respond to major changes, in particular, with regard to trade and investmentwith regard to trade and investment

ThailandThailandEast Economic Corridor is developed faster than the East Economic Corridor is developed faster than the West Economic CorridorWest Economic CorridorNeeds for institutional development and Needs for institutional development and coordination to support such projectscoordination to support such projectsIncrease economic potential and business Increase economic potential and business opportunities for several Northeastern and Northern opportunities for several Northeastern and Northern provincesprovincesConsistent policy to assist Lao PDR in their regional Consistent policy to assist Lao PDR in their regional development development ThailandThailand’’s provinces could link increasingly in terms s provinces could link increasingly in terms of trade and production to neighboring countries of trade and production to neighboring countries and the outside worldand the outside world

Other organizations and outsidersOther organizations and outsidersRole of ADB through GMS programs is also, at Role of ADB through GMS programs is also, at present, the key to the kinds of the future outlookpresent, the key to the kinds of the future outlookThere is also the Mekong River Commission dealing There is also the Mekong River Commission dealing with resources and its use, although China is not yet with resources and its use, although China is not yet in in ASEANASEAN--China should take these initiatives more fully China should take these initiatives more fully and discuss the role of China in the mainland SEA and discuss the role of China in the mainland SEA developmentdevelopmentJapanese strategy towards GMS and EWEC explains Japanese strategy towards GMS and EWEC explains much why Japan strongly involves with different much why Japan strongly involves with different initiatives and crossinitiatives and cross--border regional developmentborder regional development

These recommendations summarize propositionsfrom this study. It has detailed issues and areas forimprovement as a result of construction of SMIB, Routeno.9 and possibly the completion of EWEC in the nearfuture such as.

Recommendations

MonitoringMonitoring closelyclosely changechange of of transporttransport activityactivity inin thisthis borderborderregionregion onceonce thethe SMIBSMIB isis setset toto operateoperate..

SetSet properproper useuse feesfees andand interestinginteresting schemesschemes forfor frequentfrequentusersusers of of thethe SMIBSMIB such as such as forfor peoplepeople,, goodsgoods andand transporttransportvehiclesvehicles inin orderorder toto attractattract moremore economiceconomic transactionstransactions intointothethe regionregion

PriorityPriority shouldshould bebe givengiven toto thethe efficientefficient timetime,, useuse costcost savingsavingtoto crosscross thethe SMIBSMIB andand managementmanagement wheneverwhenever thethe flows flows taketakeplaceplace onon weekweek daysdays oror weekweek endend..

DevelopmentDevelopment of of SMIBSMIB shouldshould accompanyaccompany withwith majormajorimprovementimprovement of of transportationtransportation andand communicationcommunication alongalong thetheborderborder andand thethe movementmovement of of goodsgoods andand servicesservices..

A) Transportation and CommunicationA) Transportation and Communication

B) Border Trade and Border B) Border Trade and Border Controls Controls OverallOverall FrameworkFramework

SetSet upup singlesingle--windowwindow inspectioninspection forfor allall differentdifferent kindskinds of of inspectioninspection andand controlcontrol of of peoplepeople,, goodsgoods,, vehiclesvehicles.. ThisThis shouldshouldbebe carriedcarried outout jointlyjointly andand simultaneouslysimultaneously byby thethe respectiverespectiveinvolvedinvolved authoritiesauthorities,, thusthus includingincluding customscustoms,, policepolice,,immigrationimmigration,, tradetrade,, agricultureagriculture andand healthhealth departmentsdepartments.. ItIt alsoalsoneedsneeds toto complyingcomplying withwith thethe GMSGMS AgreementAgreement forfor FacilitationFacilitationof of CrossCross –– BorderBorder TransportTransport of of GoodsGoods andand PeoplePeopleSetSet upup alsoalso singlesingle--stopstop inspectioninspection,, withwith MukdahanMukdahan andandSavannakhetSavannakhet competentcompetent authoritiesauthorities carryingcarrying outout theirtheirinspectionsinspections jointlyjointly andand simultaneouslysimultaneously byby complyingcomplying withwith thetheGMSGMS AgreementAgreement forfor FacilitationFacilitation of of CrossCross –– BorderBorder TransportTransport of of GoodsGoods andand PeoplePeople..

C) Movements of PeopleC) Movements of People

PrioritizePrioritize harmonizationharmonization of of documentsdocuments andand proceduresprocedures forforimmigrationimmigration andand relatedrelated inspectioninspection byby complyingcomplying withwith thethe aboveabove--mentionedmentioned GMSGMS AgreementAgreementFacilitateFacilitate temporarytemporary borderborder passpass permitpermit availableavailable atat borderbordercheckpointscheckpointsAllowAllow moremore facilitationfacilitation atat immigrationimmigration checkpointscheckpoints toto bebe carryingcarryingoutout fairlyfairly throughoutthroughout thethe weekweek,, withwith nono overtimeovertime feefee chargescharges ononweekendweekendAcceptAccept mutualmutual recognitionrecognition forfor nationalnational drivingdriving permitpermit acrossacross thetheborderborder regionregionAllowAllow freefree movementmovement forfor ThaiThai passengerspassengers usingusing SavannakhetSavannakhetairportairport toto MukdahanMukdahanNeedsNeeds of of furtherfurther negotiationsnegotiations andand actualactual implementationimplementation of of thetheGMSGMS AgreementAgreement forfor FacilitationFacilitation of of CrossCross –– BorderBorder TransportTransport of of GoodsGoods andand PeoplePeople

D) Movements of GoodsD) Movements of Goods

FreeFree borderborder zonezone withwith singlesingle--windowwindow andand singlesingle--stopstop inspectioninspection forfor goodsgoods atat MukdahanMukdahanSavannakhetSavannakhet oror SenoSenoHarmonizationHarmonization of of documentsdocuments andand proceduresprocedures forforcustomscustoms andand relatedrelated inspectioninspectionMutualMutual recognitionrecognition forfor qualityquality andand standardstandard controlscontrolsNeedsNeeds of of furtherfurther negotiationsnegotiations andand actualactualimplementationimplementation of of thethe aboveabove--mentionedmentioned GMSGMSAgreementAgreement

E) Movements of VehiclesE) Movements of Vehicles

SingleSingle--windowwindow andand singlesingle--stopstop inspectioninspectionSettingSetting upup timeframetimeframe forfor progressiveprogressive liberalizationliberalizationtargettarget forfor roadroad circulationcirculation inin LaosLaos andand VietnamVietnam likelikenumbernumber of of truckstrucks andand kindskinds of of transporttransport vehiclesvehiclesNeedsNeeds of of furtherfurther negotiationsnegotiations andand actualactualimplementationimplementation of of thethe aboveabove--mentionedmentioned GMSGMSAgreementAgreement

F) Trends and Development of F) Trends and Development of Transaction CostsTransaction Costs

MonitoringMonitoring trendstrends andand developmentdevelopment of of transactiontransactioncostscosts onceonce thethe SMIBSMIB isis setset toto operateoperate inin thethe nearnearfuturefutureDeviseDevise waysways andand meansmeans toto continuingcontinuing improvementimprovementof of transactiontransaction costscosts acrossacross thisthis borderborder regionregionContinuousContinuous surveysurvey of of firmsfirms doingdoing businessbusiness fromfromwithinwithin andand outsideoutside thethe regionregion forfor thethe improvementimprovementof of transactiontransaction costscostsCooperationCooperation amongamong authoritiesauthorities involvedinvolved toto improveimproveinstitutionalinstitutional impedimentsimpediments toto tradetrade andand investmentinvestmentinin thethe mediummedium andand longlong runrun

SMIB and its Influence on EWECSMIB and its Influence on EWECPPotentialotential forfor EconomicEconomic DevelopmentDevelopment

Development of local firms to work in a competitive Development of local firms to work in a competitive environment with the firms from outside this border environment with the firms from outside this border regionregionDevelopmentDevelopment of of supportingsupporting industriesindustries likelike rubberrubberandand coppercopper andand agroagro industryindustry likelike glucoseglucose fromfromcassavacassavaNeedsNeeds of of attractingattracting moremore foreignforeign directdirect investmentinvestmenttoto setset operationsoperations inin interestinginteresting agglomeratedagglomeratedeconomiceconomic areasareas

Furthermore Study:Furthermore Study:The Southern Economic Corridor (SEC) will be more The Southern Economic Corridor (SEC) will be more

important and benefit for GMS, such asimportant and benefit for GMS, such asIt consists of one major corridor and two sub It consists of one major corridor and two sub corridor. The major and central of the three is the corridor. The major and central of the three is the 1,005 km. route, road and rail connecting the sub1,005 km. route, road and rail connecting the sub--regionregion’’s two s two targesttargest concentration of populations concentration of populations and Economic Activities, the Metropolitan area of and Economic Activities, the Metropolitan area of Bangkok and Bangkok and HochiminhHochiminh. Link with three major . Link with three major seaport of seaport of VungVung taotao (Vietnam) (Vietnam) KomponKompon Some Some (Cambodia) and (Cambodia) and LeamLeam ChabangChabang Thailand.Thailand.