Roadblocks on the Great Asian
Highway By Brian McCartan
LUANG NAM THA, Laos - The North-South
Corridor of the Asian Development Bank-funded
(ADB) Great Asian Highway is nearly fully paved.
But as the last kilometers are completed,
questions are arising about the future social,
economic and even geopolitical costs of the new
roadway, and with them new hitches are emerging.
The North-South Corridor Project has been
a part of the ADB's development agenda since 1993
and aims at better linking the economies of China,
Myanmar, Laos, Vietnam, Thailand and Cambodia. The
portion of the road known as Highway 3, which runs
through northwestern Laos and connects China and
Thailand, is expected to cost
US$95.8 million and is being financed with a loan
from the ADB, along with funds from the Chinese,
Thai and Lao governments.
The completed
sections of the road have gone from being little
more than a dirt track a few years ago to a
two-lane road complete with concrete shoulders,
drainage and concrete bridges. The journey from
the Lao border town of Huai Xai to the
southwestern Chinese border village of Boten
situated in southwestern Yunnan province took as
long as two days on the old mostly dirt road
depending on weather conditions. The new roadway
has shortened that trip to a trade-promoting five
to six hours.
The route was expected to be
completed in 2007, but damage to the road from
floods during the 2006 rainy season pushed the
completion date into 2008. While the road is now
passable all year, there are still sections, some
of several kilometers in length, which remain
unfinished and largely dirt, although graded in
anticipation of surfacing.
Missing link
Construction of the Thai-built portion of
the road has lagged behind that of the Chinese
section, but some well-placed observers contend
this is because the Thai section is "much better
constructed". They indicated that the Chinese side
was built faster because of engineering shortcuts
which in future could make that section of the
road less durable.
The bigger and more
significant hitch is the lack of progress on a
bridge scheduled to be built across the Mekong
River connecting the Thai town of Chiang Khong
with its cross-border neighbor of Huay Xai in
Laos. The Chinese and Thai governments earlier
agreed to build the bridge and share the estimated
US$33 million dollar cost of the project, but
little, if any, work has yet been done.
The Thai cabinet approved the project in
February 2007 with an expected completion date in
2011, but many Chiang Khong residents remain
skeptical that that timeline will be kept because
successive Thai governments since the late 1980s
have similarly promised to undertake the project.
The only thing that has occurred since the most
recent announcement has been steep hikes in land
prices, they say.
Thai border disputes
with Laos, the 1997-98 Asian financial crisis,
political indifference in Bangkok and a general
reluctance on the part of Thai investors has kept
the project on a slow simmer. China meanwhile is
keen to develop land-locked Yunnan province
through the creation of trade links with Southeast
Asia, including access to Thailand's sea ports.
While Thailand may benefit broadly from a new link
with China, there are some that fear a flood of
cheap Chinese products will bankrupt northern Thai
farmers.
Those fears came to life with the
implementation of the so-called "early harvest"
provision of the recently agreed Thailand-China
free trade agreement, which resulted in a flood of
cheap Chinese agriculture goods. The last,
incomplete link to Laos represents a significant
barrier to efficient trade between the two
countries and some venture that is the reason for
Thai foot-dragging on the bridge. Bangkok may also
be using the bridge as a bargaining chip for trade
negotiations with Beijing, since the Chinese
appear considerably more eager to complete the
route.
Until the bridge is constructed,
Highway 3 will remain a road less traveled.
Currently Chinese goods destined for Thailand must
be ferried across the Mekong River between Chiang
Khong and Huay Xai and many shippers have
expressed their concerns that the ferry costs and
Lao customs duties are too expensive. Chinese
traders also complain about the long time required
for Lao customs procedures and inspections.
Although Laos is under pressure to
eliminate its transit taxes, the cash-strapped
communist government is loath to do so. In part,
that's because China and Thailand seem set to
benefit disproportionately from the completed
roadway. Currently, 95% of China-Thailand trade is
conducted through shipping up and down the Mekong,
with goods taking anywhere from 10 to 15 days to
travel.
The water route currently suffers
from frequent problems of inadequate levels to
keep large cargo barges afloat, a sticky situation
which is expected to increase when more of China's
planned dams on the river's upper reaches go
online in the coming years. The economic benefits
of the roadway to Laos, meanwhile, are less clear.
Road wary While the roadway is
expected to bring in more business opportunities
through increased market access to both China and
Thailand, including for the country's growing
agribusiness and tourism sectors, the Lao
government appears more geared to increase state
revenues through the collection of transit fees
and taxes on goods that arrive at its borders -
although it is under growing pressure from the
Association of Southeast Asian Nations to embed
new costs on already stunted intra-regional trade.
According to people involved in the
tourism industry in northwestern Laos, while
Western tourists are arriving in Luang Nam Tha in
increasing numbers, tourists from neighboring
Thailand and China often only pass through Laos on
their way to Boten on the Chinese border where
there is a large casino and market. Chinese
tourists who do travel south of the casino often
see Luang Nam Tha as only a convenient place to
have lunch on the way to Luang Prabang or
Vientiane, the industry sources say. In
addition to reaping less economic benefits, Laos
will also likely have to deal with
disproportionate social and environmental costs,
people monitoring the project say. Without proper
control mechanisms in place, the region's opening
will disproportionately benefit
government-connected business groups while
displacing a large number of the non-ethnic Lao
groups who currently inhabit the area.
A
2002 ADB report estimated that 2,502 people or 502
households might have to be relocated due to the
road project - though some monitoring groups put
that figure much higher. Although resettlement
plans were drafted by the ADB to compensate for
the loss of houses, land, rice granaries and
shops, it is not clear that the funds are truly
reaching the people who have been most affected.
In one major resettlement, the original
Lao inhabitants of Boten village at the border
with China have been moved a kilometer or more
down the road to make way for the construction of
a Chinese-owned casino, hotel and rows of shop
houses. Resettled villagers have complained that
the new relocation site lacks services and the
land set aside is smaller and less fertile than
their repossessed original land.
Others
gripe about rampant land grabbing of plots
adjacent to the new road by government-connected
traders and businessmen who have established shops
and other businesses on the newly prime real
estate. Lack of proper land deeds and a court
system that is inadequately equipped to handle
land disputes means there is little or no recourse
for displaced locals.
That legal vacuum
has also paved the way for a growing influx of
Chinese migrants, many of whom first arrived to
work on the road and who have since settled to set
up shops and other businesses along the road.
Along certain stretches of the roadway, Chinese
migrants have established whole new villages, a
development that is stirring local resentment
among those who have been resettled to less
fertile and less lucrative land plots.
At
the same time, various rights groups worry the
once remote area's rapid opening will increase the
local and largely impoverished population's
exposure to the dangers of HIV/AIDS, human
traffickers and the possibility of
overexploitation by Thai and Chinese business
interests of the surrounding forests and wildlife
resources.
While the ADB's original hopes
that the route would reduce transport costs for
the movement of vehicles, goods and people and
promote faster economic growth, as the road nears
completion, the cost-benefit breakdown of the
project for the local population is still very
much in doubt.
Brian McCartan is
a Thailand-based freelance journalist. He may be
contacted through brianpm@comcast.net.
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