GSM East west economic corridor
Il documento illustra le strategie progettuali del GMS strategic Framework e il coinvolgimento della giunta birmana



The flagship initiative for the East-West Economic Corridor (EWEC) directly

supports three of the five strategic thrusts of the Greater Mekong subregion (GMS)

Strategic Framework: (i) strengthening connectivity through a multisectoral approach, (ii)

facilitating cross-border trade and investment, and (iii) enhancing private sector

participation in development and improving its competitiveness. The goal is to develop a

highly efficient transport system, which will allow goods and people to move around the

Greater Mekong subregion without significant impediment or excessive cost or delay.

Improvement in the transportation network plays a key role in promoting economic

growth and regional development, thereby reducing poverty.

In an effort to improve intraregional transport and maximize benefits derived,

GMS countries have begun to adopt a holistic approach to development, in the form of

economic corridors . In developing these growth corridors, investments in priority

infrastructure sectors such as transport, energy, telecommunications, and tourism will

focus on the same geographic space to maximize development impact while minimizing

development costs. The initiative will also involve carefully planning and managing

policy, regulatory, and infrastructure initiatives in support of selected business


The central component of the EWEC flagship is the 1,450-km long road

connecting Da Nang in Viet Nam on the eastern-end, with Mawlamyine in Myanmar on

the western-end, cutting across central Lao PDR and north and northeastern Thailand.

When completed, this transport corridor would be the only link that will traverse mainland

Southeast Asia on an east-west axis. It would also connect the Pacific Ocean and the

Indian Ocean.

Flagship Objectives

The objectives of the East-West Economic Corridor flagship initiative are: (i) to

further strengthen economic cooperation and facilitate trade, investment, and

development between and among Lao PDR, Myanmar, Thailand and Viet Nam; (ii) to

reduce transport costs in the project influence area, and make the movement of goods

and passengers more efficient; and (iii) to reduce poverty, support development of rural

and border areas, increase the earnings of low-income groups, provide employment

opportunities for women, and promote tourism. The EWEC is also expected to provide

focused support for development opportunities, including in agro-industry and tourism.


Major infrastructure components of EWEC have been completed, or are nearing

completion. The 1,450-km road corridor is expected to be completed in 2006/07,

including the eastern terminus sea port in Da Nang. The establishment of the

Mawlamyine port, which has generated some interest from foreign private sector

organizations, or the Yangon port could act as the western terminus of the EWEC.

Adequate provisions for power along the EWEC have been made in Thailand and Viet

GMS Flagship Initiative



Nam, and new rural electrification initiatives are required for Lao PDR and possibly

Myanmar. The proposed Nam Theun 2 Hydropower Project and associated transmission

lines to Thailand will also provide needed power for Lao PDR, along the EWEC, which is

currently being imported from Viet Nam and Thailand. The GMS Phase I

Telecommunications Backbone Optical Fiber Network connecting, among others, the

EWEC areas has been completed, and now Myanmar needs integration by the

establishment of the Phase II Western Loop.

The mitigation of nonphysical barriers to the cross-border movement of goods

and people is a key initiative in transforming the East - West transport corridor into an

economic corridor. The GMS Cross-Border Transport Agreement as well as bilateral

land transport agreements between Lao PDR and Thailand, and between Lao PDR and

Viet Nam are now in force, but have yet to be fully implemented. Preparations are being

made for the implementation of single-stop customs inspection (SSCI), initially at the

Dansavanh (Lao PDR) – Lao Bao (Viet Nam) border, and then at Savannakhet (Lao

PDR) – Mukdahan (Thailand) border. Plans are being formulated to establish selected

industrial estates and special economic zones at border and gateway locations, which

would promote private sector investment in the EWEC in manufacturing, trade and

agriculture. The diverse tourism resources in the EWEC, particularly in Viet Nam and

Myanmar, are being promoted, and could utilize the increased connectivity that the

corridor would provide to facilitate the development of multi-country and circuit tours.

The sustained competitiveness and efficiency of the GMS countries would depend on

the development of the corridor’s human resources and skills competencies, which is

being addressed on a GMS-wide basis under a separate flagship program.

Key Components

As a result of consultations with EWEC Governments and Provincial Authorities

held in February-March 2004, a total of 77 projects/subprojects were identified to

comprise the updated EWEC development matrix (DM). These projects fall under the

following sectors: (i) Transportation; (ii) Energy; (iii) Telecommunications; (iv) Tourism;

(v) Trade Facilitation; (vi) Agriculture; and (vii) Private Investment and Industrial


In transportation, financing has been secured for the entire road corridor, except

for a section in Myanmar. A 140-km expressway from the new Hai Van Tunnel in Da

Nang Province to Cam Lo in Quang Tri Province, which would run in parallel with the

existing Highway 1, has been proposed to accommodate the expected increase in traffic

to the Viet Nam ports. Projects that would rehabilitate Route 9 from Savannakhet to

Seno, and construct feeder roads, which would ensure improved access to markets and

social services for affected rural communities, have also been included in the DM. The

development of the Savannakhet airport for joint use with Thailand, and upgrading of

Phu Bai airport in Hue, Viet Nam have been proposed by the respective Governments.

In addition to the Da Nang and Mawlamyine ports, two additional sea ports in Viet Nam

are being considered to accommodate national and subregional demand.

1 Six volume of Preinvestment Study for the Mekong Subregion East West Economic Corridor

covering agro-industry, industry and industry zones, infrastructure, tourism, and trade and

investment with possible projects are also available.

GMS Flagship Initiative



In energy, Phase I of the GMS Regional Power Interconnection Project (Nam

Theun 2-Savannakhet-Roi Et) is expected to provide electricity to the EWEC areas. The

extension of rural electrification along Route 9 and distribution to 71 villages in six

districts has been recommended. Viet Nam recommended the inclusion in the EWEC

DM of oil and gas pipeline projects from the Chan May Port-Highway 1-Route 9 to Lao

PDR and Thailand for possible public-private sector financing, which would need prefeasibility

studies to determine their viability. While the status of provision of reliable

energy supply in the Myanmar section of the EWEC needs to be determined, a feasibility

study for a transmission line linking the Thai border town of Mae Sot to Thaton in

Myanmar has been included in the DM. In telecommunications, a project to improve

telecommunications services in the Myanmar section of the EWEC has been included in

the DM.

In tourism, a comprehensive tourism study has been recommended for the

EWEC that will cover areas to promote tourism in the EWEC as a single tourist

destination. The study will look into potential tourism infrastructure projects in the Lao

and Vietnamese sections of the EWEC, which have been identified by the respective

Governments and provisionally included in the DM.

In trade facilitation, seven projects have been included in the DM to support the

planned implementation of single-stop customs inspection at the EWEC border

crossings, which include electronic data interchange and standardization of trade

documents. The implementation of SSCI remains as a high priority initiative for the

EWEC. Viet Nam recommended the inclusion of road station in Dong Ha, the concept of

which is being promoted by the Japan Bank for International Cooperation.

In agriculture, projects on regularizing raw material supplies in from Lao PDR and

Myanmar for processing in Thailand have been recommended for inclusion in the EWEC

DM2. A project on fish processing in Mawlamyine, Myanmar has likewise been included.

The establishment of industrial estates and special economic zones has been

proposed to promote private investment in the EWEC, specifically, in Myawaddy in

Myanmar, Mae Sot and Mukdahan in Thailand, Savan-Seno and Dansavanh in Lao

PDR, Lao Bao, Lien Chieu and Hoa Khanh, and Phu Bai. A study on harmonizing

industrial zone management policies and rationalizing industrial zones has been

recommended to be undertaken, and will be complemented by Thailand’s offer of

sharing best practices for industrial estate development.

Sequencing Priorities

A specific sequencing and prioritization strategy for all the project components

needs to be formulated and agreed upon by the four participating governments. The

eastern section of the East-West Corridor transport infrastructure is scheduled to be

completed by 2006/07. The implementation period for other infrastructure components,

notably, the Mawlamyine Port and the industrial estates development, is not yet firm.

The cross-border land transport facilitation agreement, including its annexes and

protocols, is expected to be final and complete by 2005, and implemented by 2007/08.

Project Financing

2 Myanmar has expressed reservations about the inclusion of the project in the DM.

GMS Flagship Initiative



Estimated total cost of all the projects and initiatives under the EWEC is US$2.5

billion. Of this amount, an estimated US$1.2 billion worth of financing has been

identified, mostly related to the ADB tentative investment pipeline, and some committed

funds from the governments concerned. There appears to be a financing gap of US$1.4

billion, for which financing may be sought.

Several major potential sources of funding have been identified for the various

proposals: (i) government, (ii) multilateral development agencies and international

lending agencies, (iii) foreign and local direct private investment, (iv) international private

equity funds, and (v) international and domestic capital markets. Public sector funds will

play a key role in project financing, given the nature of the project components for the

East-West Economic Corridor, particularly in the early stages of project development.

The four participating governments will have to shoulder a significant share of

project development costs. This is especially the case with policy and program

formulation and implementation, and institutional development. In several cases,

implementation of various programs and institutions will require multicountry support,

and cost-sharing will have to be established on a case-by-case basis, in line with

anticipated benefits.