Economic corridor to boost regional trade, growth through Laos

The Ministry of Public Works and Transport on Wednesday launched a major initiative to improve transport, connectivity, climate resilience and regional trade across the northern part of Laos.
The “Southeast Asia Regional Economic Corridor and Connectivity Project” is backed by World Bank financing and is designed to help people in the northern provinces of Laos to benefit from expanded regional trade and transport connections.

The Minister of Public Works and Transport, Dr Viengsavath Siphandone (seated in the centre), while co-chairing the meeting in Vientiane on Wednesday.

The project was designed to complement the Association of Southeast Asian Nations (Asean) Master Plan on Connectivity. The new project will upgrade Lao National Road 2, which runs from east to west and connects Thailand, Laos and Vietnam, thus building a horizontal corridor that links with existing north-south routes in mainland Southeast Asia.
The upgraded road’s design will protect it from the storms, floods and landslides, which are becoming more frequent because of climate change.
Other activities include the development of dry ports, marketplaces, trucking terminals and locations where farmers can bring their produce for transport to national and foreign markets.
A major aim is to improve the ability of local smallholders to produce goods that can be traded via the new transport networks.
Addressing the launch ceremony for the project, the Minister of Public Works and Transport, Dr Viengsavath Siphandone, said “We are witnessing dramatic improvements in the transport infrastructure running from the north to the central part of the country.”
He added, “However, without local connections to these and other trade routes, most people in the provinces will not be able to take advantage of these new facilities. This is, therefore, an essential investment in our future.”
The Country Manager of the World Bank in Laos, Mr Alex Kremer, agreed with the minister and cited the new railway and the Vangvieng Expressway, which will be extended through the north, as examples of projects that can bring great benefits if smallholder farmers and traders are able to access them.
 “But while transport connectivity is important, it is not enough. To benefit more from its strategic location, Laos needs logistics services, a more competitive and efficient trucking industry, cross-border management, and better quality last-mile connectivity. This project will support government efforts in these areas,” he said.
National Road 2 is a section of the Asian Highway 13 and runs for almost 300 km from the Thai border at Huai Kone-Nam Ngeun to the Vietnamese border at Panghok-Tay Trang. It bisects the new Laos-China Railway in Oudomxay province, creating the potential for transport connectivity between China, Laos, Thailand, and Vietnam.
The new project will improve and widen sections of the road to meet Asian highway standards, making the route safer and climate resilient.
Upgrades will be made to connecting local roads in the provinces of Luang Namtha, Luang Prabang, Oudomxay, Phongsaly and Xayaboury.
At the same time, separate project components will focus on improving border crossing facilities, including digitisation of cross-border business processes for border clearance efficiency, and strengthening institutional capacity and regulatory frameworks for agricultural trade, transport and investment planning at the national and provincial levels.
Project teams will provide communities living along the roads with information on human trafficking, communicable diseases, road safety, and sexual exploitation, abuse and harassment.
The project will be implemented by the Lao Ministry of Public Works and Transport, with support from provincial administrations and the Ministries of Finance, Agriculture and Forestry, and Investment and Commerce.
Australia will provide 10 million Australian dollars of parallel financing for the project, which is expected to be completed in May 2028.

By Time Reporters
(Latest Update September 22, 2022)