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The success of the 10th ASEAN Summit held in Vientiane in November 2004 showed Laos' commitment to regional affairs. It was the first ASEAN summit and the largest regional event ever hosted by the country. Over 3,000 delegates, including 800 foreign journalists, were invited. It was no small achievement for a country that joined the organization less than 10 years ago after decades of war followed by several years of diplomatic and economic ostracism from the international community.
Besides the symbolic importance of such an event, the country's progress towards sub-regional integration is arguably best demonstrated by a more mundane yet highly visible instrument: roads. The path to development for Laos has to some extent become embodied in one expression, i.e. 'land-linked', in the hope that the realization of this goal will conjure away the nation-state's fate as the only land-locked country in Southeast Asia. The integration of Laos into a sub-regional transport network is a collaborative regional project, supported (financially and politically) by multiple national and international actors: the Asian Development Bank, the World Bank, Laos' Southeast Asian neighbours (Thailand, Vietnam, Cambodia, Myanmar) and China. The Greater Mekong Sub-region (GMS) Program, in particular, plays an essential role in the process of regional integration. Launched in 1992, this initiative involves the participation of six countries - Cambodia, China (Yunnan Province), Laos, Myanmar, Thailand and Viet Nam - as well as the strategic support of the ADB.
The GMS transport program primarily consists of the building and development of three 'Economic Corridors', namely the North-South, the East-West and the Southern corridors. The first two of these 'corridors' will cross Laos. The North-South Economic Corridor (NSEC) will link Northern Thailand, Northwestern Laos and Southwestern China; and the East-West Economic Corridor will connect Central Viet Nam in the east with Myanmar in the west, cutting across Southern Laos and North and Northeastern Thailand. These roads, composed of highways and feeder roads (the latter serving to link rural communities with the highways), are presented by the ADB and its partner countries as having the goal of developing an efficient transport system, which will allow goods and people to move around the sub-region without excessive cost or delay.
At the country level, three highways (two of which are sections of Economic Corridors) form the backbone of Laos' national road network. The longest and most important of these all-weather highways is Road No. 13, which runs from northern Laos all the way south to the Lao-Cambodian border. It is approximately 1,500km long. A second national highway is Road No. 9 (209km) that crosses the southern province of Savannakhet from the provincial capital in the west to the Lao-Vietnamese border, thus constituting a portion of the East-West Economic Corridor. A third national road, which is also a component of the North-South Economic Corridor, is Road No. 3. It is 228km long and crosses Northwestern Laos; most importantly, it will link Thailand to China. This road is expected to be completed by 2007.
Prospects for the East-West Economic Corridor's contributions to economic development in Laos still appear tentative at the present time. Due to the lack of short and medium-term alternatives, investment opportunities are frequently narrowed down to the development of services - such as small restaurants, hotels or guest houses, and petrol stations - along the road. As far as Laos is concerned, the East-West Economic Corridor is still closer to a transportation than an economic axis. There are also concerns regarding the potential negative impacts of the Corridors, notably with regard to the accelerated spread of HIV/AIDS. Although the level of HIV prevalence in Laos is officially still low (0.1 per cent) compared to that of neighbouring countries, the limited testing facilities and the high variation between different provinces in the country should warn against any complacency.
A key issue is the need for more studies to improve our understanding of the complex relationship between mobility and HIV risk. Some specialists have argued that more than movement of people, it is new forms of social practices and behaviours between mobile and non-mobile groups that contribute to increases in HIV transmission. In other words, movement itself does not mean vulnerability to HIV: a correlation between better transport networks and higher HIV risk does not necessarily imply causality. Nonetheless, the rationale behind the construction of those roads, i.e. to develop the market-based economy in Laos through the expansion of regional trade, private foreign investment and labour mobility, will accelerate social and economic changes within the society.
WATCHPOINT: The issue, therefore, is not so much whether Laos will become 'land-linked' but, rather, how the country will negotiate the new socio-economic opportunities and risks that a greater opening of her borders will inevitably create.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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