Published on August 6, 2007

The immediate task before him is to convince the 200,000 visitors that passed through Savannakhet in the past eight months to stay longer. For vice governor Dr Souphanh Keomixay wants to cash in on their presence. It is a mammoth assignment for the Soviet-trained economist but he has plans to transform his province into a tourist and investment hub. Sandwiched between the more developed Mukdahan on the Thai side and Quang Tri on the Vietnamese side, he realises it is a tall order.

"We must make Savannakhet into the supply chain for the East and West and go for eco-tourism," he said, referring to neighbouring Thailand and Vietnam. With 850,000 people, Savannakhet is the most populated province in Laos. It has great potential. With good alluvial soils, the province can attract foreign investors who are interested in rubber, peanuts and corn, among other products. Thai agro-industry companies such as Charoen Phokphand and Mitr Phol have already invested there. Recently, the latter opened a sugar refinery there.

Meanwhile, Lao authorities have been making pitches for the Savan-Seno Special Economic Zone, established in 2004. The first zone is located just opposite Mukdahan across the Mekong, and consists of an export processing zone, hotels, golf course, residential units for retirees and other facilities. The second zone is in Dansavanh at the other end of the Lao-Vietnam border, which will serve as a distribution hub. Potential investors are from China, Japan, Korea and Taiwan. A five-star hotel will open soon.

Savannakhet is also blessed with rich minerals and other resources. Oxiania, an Australian mining company, is bringing in more than $400 million a year in foreign exchange through exports of gold and copper. "We still have lots more resources including silver, gas and oil," the vice governor said. With these natural assets and its role as a transit route, it will be interesting to watch how the Lao economic planners map out their strategies.

One attribute that could turn Souphanh's dream into reality is the East West Economic Corridor (EWEC) - the US$200 million project by the Manila-based Asian Development Bank (ADB). The EWEC refers to the 1,450-kilometre road network linking Burma's Gulf of Martaban on the Indian Ocean to Vietnam's Danang on the Pacific Ocean. The road network also cuts across central Thailand through Tak, Sukhothai, Kalasin, Phitsanulok, Khon Kaen, Yasothon and Mukdahan. Since its inception in 1992 as part of the Greater Mekong Sub-region, it has in effect helped these four countries to synergise their economic development and resources. The completion of the second Thai-Lao bridge links all existing transport networks. The 100-kilometre portion linking Burma and Thailand has been delayed due to the former's political uncertainty.

Travelling overland from Mukdahan to Danang last week, one could feel the excitement brought about by the EWEC. Customs and immigration officials in Thailand, Laos and Vietnam all shared the same optimism that the EWEC would bring investment, tourists and a better standard of living. But they have to work closely together to facilitate border-crossing formalities and procedures for movement of people and goods. Most important will be the harmonisation of import-export procedures. At the Lao-Vietnam border at Dansavanh-Lao Bao, a unique single-stop customs inspection has reduced the processing time by half, to less than an hour.

The strategic No 9 route linking Savannakhet and Quang Tri has now become indispensable for the whole Mekong region. It has turned land-locked Laos into a land-linked country. But Laos is aiming beyond the status of transitory territory, hoping to reduce poverty and pull itself off the list of the world's poorest countries. Therefore, its economic progress depends on how efficiently it uses the EWEC network and the opportunities that come with the Mukdahan-Savannakhet bridge.

One future project that will test Laos' resilience is the proposed , joint-use with Thailand, Savannakhet International Airport in Kaysorn Phoumvihane, opposite Mukdahan. Built in 1998, the airport was abandoned in 2004 after Lao Airways halted daily operations due to insufficient passengers. For Laos to attract investors and tourists, direct flights to Savannakhet are indispensable. To strengthen infrastructure links between the neighbours, the National Economic and Social Development Board has already pledged not to construct a new airport in Mukdahan. Instead, the council wants to incorporate the Lao airport as part of its domestic air network. In the next few months, Thai and Lao authorities must decide on the fate of this airport. In doing so, they have to settle one remaining contentious point. The Thai side prefers immigration checks in Mukdahan while the Lao side insists on similar procedures at its airport before passengers embark. As such, outbound passengers from Thailand would go through immigration and customs checks twice. Discussions with authorities across the Mekong revealed a fear that red tape could impede the plan. Further delay could hurt the plan to transform Savannakhet into a regional hub serving Indochina and beyond.

Apichart Petcharat, the Thai consul in Savannakhet, said Thai-Lao friendship is now booming. "Our relations have gone beyond the nitty-gritty and tit-for-tat of the past. We are looking at the big picture together," he said.

He is confident the two sides will overcome their differences and that the airport will be in service in time for the Greater Mekong Sub-region summit that Laos will host at the end of March 2008.

Kavi Chongkittavorn