Special Economic Zone – Savannakhet Province as trade and services center

Date: 26, Oct, 2010   Time: 1:48 pm

Savannakhet Province in Lao PDR is a thriving hub of trade and services in the Greater Mekong Sub-region (GMS). The province is located along the East-West Corridor (EWC) linking Thailand, Lao PDR, and Vietnam (Road No. 9. It is also along the North – South axis (Road No.13) that runs through Lao PDR, leading north into China and South into Cambodia.

Road and bridge construction will further develop Savannakhet as a trade and services zone. Road No.9 is being improved thank to the international assistance from Japan. Once the improvement work is complete by 2004, this road will shorten the  transport time between Savannakhet and central Vietnam.

Savannakhet itself will also develop multiples routes from Thailand to north/central Vietnam. This will bring about an expansions of markets,. Direct access to Thailand across the new Mekong River Bridge, which is already constructed, will create further business opportunities for all the economic sectors in Savannakhet.

The total value of export in Savannakhet was US$238 million in 1998 – 1999, of which nearly 92% (US$218 million) was transit goods.

Lao PDR on the EWC

The Asian Development Bank (ADB) and six Mekong riparian countries mapped out the socio – economic development framework of the Greater Mekong Sub – region (GMS). Located in the center of the GMS, Lao PDR will play a critical role in various development programs porposed to the GMS.

One of the spearheaded program is the East – West Corridor (EWC), which is expected to commence in 2003 upon the opening of the Mekong River Bridge in Savannakhet Province. The bridge will link major cities and towns located between Mawlamyine (Myanmar) and Danang (Vietnam) via Khon Kaen, Mukdahan (Thailand) and Savannakhet Lao PDR.

The EWC crosses the Indo – China peninsula and forms a land bridge between the South China Sea and Andaman Sea. It runs through the middle of Lao PDR, approximately 500km  south of the capital city of Vientiane. Cooperation among the GMS countries has been accelerated, particularly since year 1997 when the Lao PDR became a full member of the Association of Southeast Asian Nations.

(ASEAN) . In order to gain maximum benefit of the implementation of the EWC, the Lao Government has decided to establish the first Special Economic Zone in Lao PDR

Savan – Seno Special Economic Zone

The East – West Corridor, linking Myanmar, Thailand and Vietnam, is located mid – way between the nearest Vietnamese sea port of Danang (about 500km from the zone) and the Thailand port of Bangkok ( about 600km from the zone). Thanks to its strategic location, the development of the SSEZ is to become a center for service and trade of the East – West Corridor.

Furthermore, the  SSEZ is located around the mid – way point along Road No. 13 from China to Cambodia. That mean it is at the junction between the East – West axis and the North – South axis linking the most populous countries in the Asian region, and thus is a prime center for trade and services for the neighboring countries, which include China (Yunnan Province), Myanmar, Thailand, Cambodia and Vietnam, with a total population of more than 5 million people.

The categories of business activities planned to be develop in the SSEZ include the following:

1. Export Processing Zone;

2. Free Trade Zone;

3. Free Service and Logistic Center ( which should include tourism, banking and other activities).

One of the major policies of the government is to attract labor – intensive agro – industries and activities. Toward this purpose, the Lao Government is approaching bilateral assistance agencies and foreign government grants to assist in building vocational schools and agricultural schools in Savannakhet Province.

The SSEZ governance is the responsibility of the SSEZ Authority (SEZA). The primary function of the authority will be to ensure prompt and transparent authorization of licensing investment in the zone and to provide investors and developers with all necessary facilities and assistance, including processing of their investment requests through a One – Stop Station Service. The SSEZ has an autonomous budget and full responsibility in the management, design and construction of the Zone.