BANGKOK - The last remaining physical gaps on the north-south roadway set to
connect China to Thailand and further afield through Southeast Asia will soon
be bridged, opening a new land route that promises to expand intra-regional
trade. China has recently agreed to finance the construction of two bridges
across the Mekong River inside Laos, which until now have represented the
regional project's missing links.
Both bridges are key components of a grand infrastructure plan known as the
Greater Mekong Subregion's (GMS) North-South Corridor, which aims to create
more efficient and rapid transport between China and Southeast Asia's Cambodia,
Laos, Myanmar, Thailand and Vietnam. The infrastructure is also key to the
design of the Asian Development Bank (ADB)-funded Great Asian
Highway, which has been a priority of the ADB's regional development agenda
since 1993.
Lao state media reported on May 25 that China would provide a US$50 million
loan for the construction of a bridge near the Lao town of Pakbeng, in the
Southeast Asian country's northern Oudomxay province and across from northern
Thailand. The new bridge will link the two lane Route 2W with a new road
extending from the Thai border to the river.
The long-term soft loan agreement was signed the previous week between Lao and
Chinese officials. Math Sounmala, director of the Lao Ministry of Public Works'
planning and cooperation department, told the Vientiane Times that the bridge's
construction would commence soon and likely be completed before 2015. The
approximately 600-meter long bridge is expected to replace the current ferry
service across the river, which is now viewed as a bottleneck to fast and
efficient trade.
Since undergoing improvements in 2004, the 2W is reportedly now in excellent
paved condition. The two-lane road runs north to Oudomxay town in Laos where it
connects to other throughfares leading north to the border crossing with China
at Boten and east to the Vietnamese border and onto Hanoi.
Thailand has given Laos $25.9 million in grants and loans to build a
49-kilometer road linking the bridge with a border crossing at the Lao village
of Mong Ngeun in Xayaboury province. From there, an existing two lane road
continues from the Thai village of Huay Kon to the provincial capital of Nan
and onward to Thailand's extensive domestic road network leading to modern
ports and other trade facilities.
A long-delayed fourth bridge across the Mekong connecting northern Thailand and
Laos is also planned. The 480-meter long bridge represents the last link in a
route known in Laos as National Route 3 or regionally as Asia Highway 3 that
will connect Thailand with southwestern China running through northwestern
Laos. The bridge will be built near the Thai town of Chiang Khong in northern
Chiang Rai province and the Lao town of Huay Xai in Bokeo province.
China's minister of commerce and the Thai minister of finance signed an
agreement for the construction of the bridge during the 15th Association of
Southeast Asian Nations Summit held at the Thai resort town of Hua Hin in 2009.
Chinese Prime Minister Wen Jiabao, Lao Prime Minister Bouasone Bouphavanh and
Thai Prime Minister Abhisit Vejjajeva oversaw the signing.
A further agreement on the operators of the construction project was signed by
representatives of the Lao and Thai governments in Thailand's Chiang Rai
province on May 14. China's Railway No 5 Engineering Group and the Thai Krung
Thon Engineers' Company will jointly build the bridge as the CR5-KT Joint
Venture Group. The cost of the $43 million project will be split evenly by the
Thai and Lao governments.
China provided a $20 million grant to Vientiane in 2008 to cover its share of
the costs of the Chiang Khong-Huay Xai bridge. That project is slated for
completion by late 2012, though construction has been delayed several times in
the past and many observers doubt the deadline will be met. Disagreements among
the three countries over the project's budget, the global financial crisis and
political instability in Thailand have all contributed to delays.
As of late May, little had been done apart from leveling dirt roads running to
the site on both sides of the border. Although the project had been proposed
repeatedly by successive Thai governments since the 1980's, this is the closest
the three countries have come to actually building the bridge. Cold War-era
tensions between Thailand and Laos, as well as long-standing border disputes,
have frequently put the project on hold. While bilateral relations have
improved greatly since a short 1988 border war, a general reluctance among Thai
investors has since stalled progress.
For Vientiane, the roads promise to change Laos from being "land-locked to
land-linked", strategically positioning the country as a regional trade
crossroads. China and Thailand believe the routes will open up new trade and
business opportunities in some of their poorer remote regions. China in
particular sees the north-south roads as an opportunity to open up its
landlocked southwestern Yunnan region to Southeast Asian markets and ports.
Asia Highway 3 was officially inaugurated in March 2008 at the GMS's 3rd
Meeting in Vientiane. The $97 million project was financed with a loan from the
ADB and funds from China, Thailand and Laos. Thai and Chinese construction
companies built the road that has shortened travel times between the Chinese
border town of Boten and Huay Xai on the Lao border with Thailand from two days
to five to six hours.
A third route off the North-South Corridor is scheduled to be built through
Myanmar, but has been hampered because it would pass through territory where
armed insurgents are active. The northernmost portion of the proposed road and
the border crossing with China at Mong La are controlled by an ethnic armed
militia that currently has a very tenuous ceasefire agreement with Myanmar's
military government.
Over the river, into the woods
Both Asian Highway 3 and Route 2W are expected to replace much of the current
riverine shipping down the Mekong, including from ports near Jinghong in China
to the Thai river port of Chiang Saen. Dominated by Chinese river vessels,
goods can take three days or more to transit, depending on water levels.
The route is also sometimes closed when the river's depth drops below levels
considered safe for navigation. This occurred earlier this year after a severe
drought in southwestern China caused record low water levels on the Mekong.
There is further concern in Thailand and Laos that Chinese dams built on the
upper reaches of the Mekong may restrict water flows and contribute to low
levels. China has denied that the dams are adversely affecting the river's
depth.
For the moment, some freight shippers still prefer the river route because it
skirts Laos' notoriously complicated and corrupt customs procedures. These and
other restrictive regulations, including multiple tariffs applied on goods
transported along the various roads connecting China and Southeast Asia across
Laos, will need to be resolved before road routes are seen by traders as more
cost competitive. Some Thai business leaders and development officials have
suggested this could be remedied by a single stop inspection system for goods
transported through Laos.
The Lao government, however, may be wary of waving transit fees and customs
duties, which it sees as a key economic benefit of the new roads. This will
change, however, as the Association of Southeast Asian Nations (ASEAN)
increases pressure on its member states to reduce tariffs in line with both the
ASEAN Free Trade Agreement (AFTA) and the ASEAN-China Free Trade Area, which
will come into force for Laos in 2015. Laos is expected to have reduced tariffs
to AFTA acceptable levels of between 0-5% by 2015.
Accurate trade statistics for Laos are scarce. Informal trades and an
inefficient customs and statistics-keeping administration skews the figures
that are available. Regardless, the Lao government seems to expect that new,
more efficient trade links will lead to expanded trade and investment which
together with an economic development plan focused on natural resource
exploitation will offset loses from reduced tariffs.
Still, some fear that without effective regulation the new routes will also
result in an unsustainable influx of cheaply produced Chinese goods, low-priced
agricultural products and big waves of economic migrants. Rights advocates and
development workers already say greater efforts are required to ensure people
living in northwestern Laos also benefit from the roads and to mitigate the
potential negative social impacts of accelerated travel and trade.
There are already reports about land grabbing along the main new route, as
influential business people obtain territory near the Asia Highway 3 or launch
new businesses alongside it. The road will also open previously closed areas to
human trafficking syndicates, communicable diseases such as HIV/AIDS and
possible over-exploitation of the surrounding forests and wildlife resources
from Thai and Chinese business interests, activist groups warn.
A related concern is a possible surge of inward Chinese migration. Some have
already arrived in Laos as workers on the new roads and many have stayed on to
open shops and guesthouses catering mainly to other Chinese. Certain Lao towns,
especially Oudomxay and Laung Nam Tha, have recently developed a distinct
Chinese character, stoking resentment among some local residents.
While China and Thailand will definitely benefit from the expanded trade, Laos
may ultimately lose out because many of the goods transported along the route
will be destined for wealthier destinations in Thailand, China and Vietnam.
Truck drivers may only stop in Laos for food, gas and rest.
For Thailand, the risks are a rapid increase in economic migrants from China
and even greater competition from cheaper Chinese-made goods and agricultural
products. Thai politicians have complained that a free trade agreement with
China has put pressure on Thai garlic farmers who can't compete on price. Some
observers have therefore speculated that Thai foot-dragging on the construction
of the Chiang Khong-Huay Xai bridge has had more to do with putting the brakes
on Chinese economic inroads than official indifference.
Others in Thailand believe that increased trade and investment with China will
bring net-net economic benefits. Either way, it seems certain that when the new
Mekong bridges in Laos and other road links are finally completed, China's
influence in Southeast Asia, through trade, investment and migration, is only
set to grow.
Brian McCartan is a Bangkok-based freelance journalist. He may be reached
at brianpm@comcast.net.
(Copyright 2010 Asia Times Online (Holdings) Ltd. All rights reserved. Please
contact us about
sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
