New Economic Corridor designed to boost regional trade

The World Bank’s Board of Executive Directors has approved the US$132 million Southeast Asia Regional Economic Corridor and Connectivity Project, intending to improve transport connectivity and regional trade along an east-west corridor through northern Laos.
Designed to complement the Asean Master Plan on Connectivity, the new project will upgrade Lao National Road 2, connecting Laos with Thailand and Vietnam, thus creating a corridor that links with existing north-south routes in mainland Southeast Asia, according to the World Bank.
It bisects the Laos-China railway in Oudomxay province, creating the potential for transport connectivity between China, Laos, Thailand and Vietnam.
National Road 2 is a section of Asian Highway 13 and runs for almost 300 kilometres from the Thai border to the Vietnamese border. The project will improve and widen sections of the road to meet Asian highway standards, making the road safer and climate resilient, according to the Bank.
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.
The upgraded road’s design will protect it from the storms, floods and landslides that are becoming more frequent because of climate change.
“It is vital that local people and communities have the chance to access large-scale transport investments and use them for their own economic benefit,” said World Bank Lao PDR Country Manager Alex Kremer.
“The Regional Economic Corridor will not only upgrade a key regional road, but will also help people produce goods and access markets,” he added.
A similar approach will be used to upgrade 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. These include 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 national and provincial levels.
A major aim of the project is improving the ability of local smallholders to produce goods that can be traded via the new transport networks and so take advantage of regional connections.
At the same time, project teams will tour communities living along project roads to inform people about the risk of human trafficking, communicable diseases, and sexual exploitation, abuse and harassment, as well as raise awareness of road safety.
The project will be implemented by Laos’ Ministry of Public Works and Transport, with support from provincial authorities and the ministries of Finance, Agriculture and Forestry, and other sectors.
 Australia is to provide 10 million Australian dollars of parallel financing. The project is expected to be completed in May 2028.

By Times Reporters
 (Latest Update May 23, 2022)