LAOS-THAILAND: Deeper, Better Links

Laos and Thailand have agreed on the construction of a third and fourth Friendship Bridge over the Mekong River. Thailand remains Laos’ largest trading partner, and the two countries benefit from tourists and visitors who go their border areas, especially where travel is easy. Already linked by land, air and water, a new bus route was added in early 2008 between the Lao capital Vientiane and the north-eastern city of Khon Kaen in Thailand.

All of these provide a glimpse of continued close ties between the two neighbours, which share land and river borders. Indeed, sitting in many of the eating places in Vientiane by the Mekong River, one views Nongkhai, Thailand just across the water.

TRADE AND ECONOMIC LINKS
Over the last nine months until January 2008, Thai exports to Laos stood at 524.2 million dollars, consisting of fuel, automobiles and auto parts, construction and agricultural materials, as Thailand remains Laos’ biggest economic partner. But while bilateral trade is big, exports by Laos to Thailand amounted to only 493.5 million.

But the future might bring new trends and Laos’ balance of trade with Thailand may well “be in surplus” one day, says Saleumphoun Phongsabubnapa, head of the Thai trade (check) in Laos.

Among others, this is because Thailand plans to buy more electricity from Laos in the coming years. Likewise, Laos expects to become more active in trade with other Mekong countries. For instance, it expects to gain from export and other opportunities to be opened by the development of the Mekong transboundary road corridors that pass through it. New investors should also appear, including Chinese ones, as in the case in the province of Bokeo, where a project by the company Dok Ngiouakham to construct a 827-hectare special economic zone is underway that would place Laos at the centre of a trade market of more than 200 million people.

Laos is located in a strategic area between China, with over one billion people, Thailand with over 60 million, Myanmar with more than 50 million, Vietnam with more than 80 million, and Cambodia, which has 13 million people.

After Thailand, Laos’ second largest trading partner is neighbouring Vietnam to the east, followed by China, its neighbour to the north.

Bridges of friendship, bridges of trade.

FRIENDSHIP BRIDGES
Economic ties are also being facilitated by other kinds of linkages that continue to be forged in the Mekong region as part of a process of economic integration.

In Laos’ case, recent examples of such linkages are the signing of a memorandum of agreement on December 2007 between Minister of Public Works and Transport of the Lao People's Democratic Republic Sommat Pholsena and his Thai counterpart Admiral Thira Haocharoen, on the construction of the third and fourth Friendship Bridges over the Mekong River. The third bridge would link Thakhek, Laos to Nakhon Phanom in Thailand, and the fourth would connect Houay Sai in Bokeo province to Chiang Khong district of Chiang Rai province, Thailand. These two bridges are supposed to be integrated with railway connections between the two countries.

"The Thai government should pay close attention to exploiting the potential logistics in the province of Chiang Rai to prepare for global competition, as well as pushing the private sector to join the government's effort," said Pattana Sitthisombat, president of the Chiang Rai Chamber of Commerce. "The province of Chiang Rai is now in a strategic position for logistics development. It should be carried out in parallel to the promotion of tourism. “

Some of the construction cost of the third bridge, which will be 630 metres long and 16.7 metres wide connecting Chiang Khong to Houay Sai, will be shouldered by Thailand and China, both of which stand to benefit from this link.

The first Thai-Lao Friendship Bridge, opened in 1994, links Vientiane to Nong Khai. The second one, opened in January 2007, links Mukdahan in Thailand with Savannakhet in Laos.

“The second bridge linking Savannakhet to Mukdahan is part of what we call the East-West Corridor, which goes from Myanmar to Vietnam through Thailand and Laos,” Thai Deputy Transport Minister Sansern Wongchaum said during the December 2007 signing ceremony for the third bridge in Bangkok. “Our two countries will become an unavoidable passage point of that corridor, which stretches for 1,500 kilometres and is the only ground route through South-east Asia for that matter.”

Moreover, officials say, drivers who use these routes will have driving licences common to the connected countries in order to ensure smoother traffic flow, without having produce numerous special documents at border points.

ROADS

The Vientiane-Khon Kaen bus route that was opened in February 2008 is the fourth cross-border bus route between Laos and Thailand, according to the deputy chief of staff of the urban development and transport, Bounyou Thammasath. The other three are Vientiane-Nong Khai, Vientiane-Udon Thani, and Vientiane-Bangkok, which opened in 2004 following a bilateral agreement dating back to 2002.

A survey jointly conducted by the Lao and Thai authorities showed that the number of people travelling to Khon Kaen was increasing daily, thus necessitating the new bus route. "So far, passengers first had to go to Nong Khai in Thailand, and then change buses headed for Khon Kaen. Now, things will become much simpler, " said Khamphoune Temerath, director general of the state bus company of Lao PDR.

Two buses run the 150-kilometre route between Vientiane and Khon Kaen everyday, at a cost of 50,000 kip or 180 baht (5.2 dollars). One trip departs at 8:15 a.m. and the other at 2:15 p.m.
Since Laos and Thailand first opened a regular bus service between Nong Khai and Vientiane in 2004, the number of passengers taking the bus route between the two neighbours has increased annually. Since these bus lines came into operation, the annual number of passengers has grown from three million in 2004 to nearly four million in 2005, and to just over five million in 2006 – at a growth rate of 30 percent of more each year.

This augurs well for passenger traffic, which is expected to further pick up in the wake of the opening of the Second Friendship Bridge linking Savannakhet to Mukdahan and after the third and fourth bridges across the Mekong are completed in the coming years.

(*This is a combination of several stories, produced under the Imaging Our Mekong media programme 2007-08, that were published in ‘Le Renovateur’ in Vientiane, Lao PDR.)