Copyright 2002 Singapore Press Holdings Limited
The Straits Times (Singapore)

October 18, 2002 Friday

HEADLINE: Laos pact paves way for road to China;
New 230-km highway linking Thailand with Laos will open up a new trade
route to the huge southern Chinese market
BYLINE: Edward Tang

BANGKOK - A long stretch of mud track in Laos, until now the missing
link in the direct land route between South-east Asia and southern
China, will in five years become a modern highway and trade route to
an emerging Chinese market.
The highway will link Thailand's northernmost Chiang Rai province to
Kunming in southern China through Bokeo and Luang Namtha provinces in
Laos.
Where the road from Thailand once ended in a cold trail in Houei Sai
at the Thai-Laos border, trucks and tourist buses will in future be
able to drive through to Boten and across the Laos-China border into
Yunnan province. A three-party consortium - Thailand, China and the
Asian Development Bank (ADB) - will each loan US$30 million (S$54
million) to finance the US $90-million project. Last week, Thailand
signed the first agreement with Laos. China and the ADB are expected
to follow suit.
'This new highway will open a new trade route into southern China
which will boost Thai exports to China as well as assist the economic
development of Laos,' said Thai Finance Minister Somkid Jatusripitak.
Getting Laos on board was in itself a major coup as the communist
state had long been shy of opening itself to foreigners, say analysts.
Thailand and Laos may see themselves as the main beneficiaries, but
the potential benefits of the proposed highway extend beyond national
boundaries, they say.
'The highway will become an economic gateway for South-east Asian
countries to a rapidly growing Chinese market in Yunnan province,'
said Ms Sumitra Pooltong, assistant director of the National Economic
and Social Development Board, a Thai think-tank.
That market of 150 million people was quickly expanding to include
other southern Chinese cities, she said.
'Trade will increase, tourism too. It will open up opportunities for
everyone, not just Thailand.'
Currently, Asean's trade with southern China is restricted largely to
river traffic via the Mekong River.
An existing road from Thailand to China that meanders through Myanmar
is unpopular because of the long distance and poor road quality.
It is also unsafe because it passes through rebel territories.
Moreover, the road is not always accessible due to prickly
Thai-Myanmar relations.
Cutting a new highway through Laos, which which is expected to pit
construction companies against each other for the contract once the
blueprint is ready next year, is the better alternative.
ADB's principal economist based in Manila, Ms Rita Nangia, told The
Straits Times: 'The new route will result in significant transport
cost savings.'
The highway, which is officially called the Northern Corridor Project
by ADB, would complement other ongoing major road projects in the
region, including the east-west corridor highway that will link
Vietnam with Thailand.
The new route would give a boost to the ambitious United
Nations-funded Asian Highway project, which aims to hook up the
continent from Singapore to Azerbaijan in Central Asia.
The recently-revived Asian Railway network, which aims to connect
Singapore to Kunming through Malaysia, Thailand and Laos, is another
project that could benefit from the highway.