East-West Economic Corridor offers trade openings for Thailand
Thai and foreign investors have been encouraged to look at putting funds into special economic zones in Laos and Vietnam and take advantage of the seven-year-old East-West Economic Corridor that traverses Myanmar, Thailand, Laos and Vietnam.
The encouragement to invest came following a survey undertaken earlier this year by the Asian Development Bank (ADB), Japan International Cooperation Agency, Japan External Trade Organisation, Overseas Human Resources and Industry Development Association, and the National Economic and Social Development Board (NESDB).
The East-West Economic Corridor was initiated in 1998 as an economic development programme by the Ministerial Conference of the Greater Mekong Subregion. The aim is to promote development and integration between Myanmar, Thailand, Laos, and Vietnam.
The corridor officially came into operation on 12 December 2006 and is centred on a highway that stretches 1,450 kilometres from the west of Myanmar, through the Thai provinces of Tak, Sukhothai, Phitsanulok, Phetchabun, Khon Kaen, Kalasin, and Mukdahan, before crossing into the Lao province of Savannakhet and entering Vietnam, finshing at the port of Danang.
Thailand is being urged to conclude a pact on cross-border transport in order to help encourage further development of the corridor.
The survey showed strong potential for investment in special economic zones in Laos and Vietnam, primarily because of cheaper labour costs, attractive privileges for investors, and availability of long-term land rentals.
The secretary-general of the NESDB is quoted as saying Thai businesses should seriously consider the long-term advantages of investing in these zones. Given the advent of the Asean Economic Community (AEC) in less than two years time, this East-West Corridor is likely to gain in popularity.
Equally, with the incentives currently on offer, as well as tax privileges and a one-stop service setup, the corridor is one of the more attractive business opportunities in the region.
Laos currently operates three economic zones along the corridor, two of which are run by the government, the other is in private hands. Potential investment includes services, hotels, trading, warehouses, education, public health, and logistics.
Vietnam has one economic zone, at Lao Bao, and its potential industries include agricultural services, auto parts, and tourism.
The survey suggested the Thai government should develop more facilities in the border provinces of Mukdahan and Nakhon Pathom since these are well positioned to link into Laos and Vietnam. As well, they would have easier access to southern China.
One of the drags on current development, as it relates to Thailand, is the ongoing political crisis which has led to so many delays to important economic considerations. While decisions are eventually forthcoming, political crises are always going to lead to delays and, sometimes, reduced investor confidence.