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| November 30, 2000 | atimes.com | ||
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Special Reports
All roads lead to Vietnam's Danang By Fred Thurlow Introduction The East-West Economic Corridor will stretch from the northeast Thai town of Mukdahon, through southern Laos and central Vietnam, with Danang City as its easternmost point. The corridor is an innovative initiative of the Greater Mekong Subregion (GMS), which comprises Cambodia, Laos, Myanmar, Thailand, Vietnam and Yunnan Province in southern China. All of the members, except Yunnan, are also members of the 10-country Association of Asian Nations (Asean). The corridor was first mooted by Vietnam in 1998 as a means of focusing the interest of donors and investors to specific projects. The corridor aims to allow the participating countries to link major markets, and to introduce uniform policy and procedures. This will allow enterprises and trade to flourish and it will also allow country development programs to complement each other, and to focus regional initiatives involving energy, telecommunications, trade, investment, tourism, human resource development and environment concerns in a spatial manner. The corridor, which is being funded largely with Asian Development Bank (ADB) loans, involves three key construction phases - under the umbrella of the East-West Transport Corridor Project - all of which are due to be completed in the next few years: Danang City Danang City, which recently come under the direct management of the central government, is located on the central eastern coast of Vietnam. The city has an international airport, seaports, railway and developed roads. It is also the gateway to Pacific Ocean of the trans-Asian shipping route. These facilities promote trade within Vietnam with its neighboring countries and with the rest of the world. Danang is also a famous tourist destination - notably China Beach, a rest and recreation destination for American soldiers during the Vietnam War. Danang has been earmarked by the authorities to become the cultural, commercial and industrial focus of central Vietnam. Danang Port Danang Port actually consists of two major ports: Tien Sa and Song Han Port, built in 1966 and 1962 respectively. The two are situated in deep water in Danang Bay and provide relatively safe shelter for ships during the stormy season. Recently, the Ministry of Transport wrote a pre-feasibility study for the Tien Sa coastal dyke which will protect the port and enable it to operate continuously. Tien Sa, after the ports of Ho Chi Minh City and Haiphong, is the third largest commercial port in Vietnam. The navigation depth is 11 meters. There are two piers, each 182 meters long and 27 meters wide. The total area is 18.3 hectares of which the storage area occupies 90,000 square meters and the warehouses 15,945 square meters. The port has received 33,000 DWT ships and other kinds of ships, such as cruise ships. Han River Port connecting with Tien Sa Seaport Port has a navigation depth of seven meters. It consists of eight wharfs with a total length of 750 meters and occupies 3.4 hectares comprising 11,000 square meters of storage area and two warehouses totaling 2,450 square meters. The port has the capacity to receive 5000 DWT ships. Throughput up: In the first eight months of 2000 Danang Port received more than 35 cruise ships with more than 38,000 passengers, a fourfold increase compared to last year. The bulk of the passengers were carried on the Super Star Leo of Malaysia. The port also received more than 942,000 tons of cargo, up 15 percent compared with the same period last year. This included 281,000 tons of goods exported via the port, mostly eucalyptus wood chips and sand and 207,000 tons of imported goods. The port also received 140 container ships with 14,000 twenty-foot equivalent units (teu) of cargo handled, up 20 percent over a year ago. The port is expected to handle more than 1.3 million tons of cargo for the full year, up nearly 300,000 tons on last year. Plans for cargo hub: Danang Port authorities plan a seven-fold increase in cargo handling at the port to 8 million tons annually by 2010, with construction of new wharves and infrastructure capable of handling ships of up to 30,000 tons. The development will focus on the upgrade of piers, building new wharves, improving electricity networks, warehouses and goods handling equipment. The first phase of Tien Sa Port's redevelopment includes a 250 meter long coastal dyke against high waves, upgrading two piers, a container dock and a road linking the terminal with National Highway 1A. Incentives for investors: Investors receive benefits, including the speedy processing of investment licenses and exemption from profit tax for up to four years. The People's Committee of Danang City is allowed to grant investment licenses for projects with investment capital up to $5 million, within 30 days. Investment wanted: Danang City has 30 kilometers of coastline. Shipbuilding and repairing could become important industries while harvesting and processing aquatic products have significant potential. There is a plentiful supply of labor. Some of the areas where Danang City is actively seeking investors include: Main export items: The main export items are frozen, dried and fresh sea products and foodstuffs; coffee, eucalyptus chips, rattan furniture, wooden products, silk products, towels, leather and sport shoes, many kinds of garments, embroidered products, fine arts and lacquer products, electronic products assembly; plastic products and candles. Main import items: Fertilizer oil and gas construction materials (cement, iron, steel), motorbike spare parts, materials for tailoring, material for beer manufacturing, household electrical and mechanical appliances. Industrial zones: The city has three zones. Danang Industrial Zone west of the international airport is good for non-polluting and high-tech industries such as electronics assembly, garments and art handicrafts. Hoa Khanh Industrial Zone east of the international airport is good for light industries such as engineering, processing of agricultural forestry or aquatic products and petrochemicals. The Lien Chieu Industrial Zone is north of the international airport. It is good for heavy industries such as steel rolling, rubber, cement, chemicals, building materials production. The Greater Mekong Subregion (GMS) The GMS comprises Cambodia, the Lao People's Democratic Republic, Myanmar, Thailand, Vietnam and Yunnan province in southern China. In 1992, with the assistance of Asian Development Bank, the six countries entered into a program of subregional economic cooperation designed to enhance mutual economic relations. The GMS program has contributed to the development and sharing of resource bases, and in promoting the freer flow of goods and people in the subregion. It has also led to the international recognition of the subregion as a growth area. The program has proved a catalyst for drawing the members and their total population of 250 million people into closer economic ties. To date, at least 10 transport and energy projects - totaling some $1 billion - have either been implemented or are underway. One example is the completion of the Theun Hinboun hydropower project in Laos, from which Thailand will buy power. The ADB has provided $330 million in loan support to these transport and energy projects, and has arranged a further $230 million in co-financing. Also, 24 technical assistance projects have been implemented or are under way, representing a cost of $35 million and many person years of expertise. Protection of the environment, tourism promotion, telecommunications networking, human resource development and other benefits have been the result. Further, the GMS addresses "soft" infrastructure issues, such as non-physical impediments to the cross-border movement of goods and people. Landmark trade accord In November 1999 a landmark agreement to ease the flow of people and goods between Thailand, Laos and Vietnam was signed by the transport ministers of the three countries in Vientiane. Aimed at slashing the bureaucratic red tape that currently restricts cross-border traffic flows, the Trilateral Transport Agreement is expected to boost trade between the countries as well as between the region and the rest of the world. As such, it was a critical milestone in the plans to develop the Economic Corridor embracing the three countries. As recently as a few years back, the people and goods crossing between Thailand, Laos and Vietnam were mainly refugees and military hardware. The agreement simplifies and harmonizes legislation, regulations and procedures relating to cross-border transport. Simply put, the accord combines separate border controls so that inspections can be carried out jointly and speedily. The inspections relate to people (passports/visas, driving licenses, foreign exchange, customs, health matters), vehicles (registration, roadworthiness, insurance) and goods (customs, plant protection, veterinary concerns). A major aim of the agreement is to open up container traffic, which is minimal at present, traveling all the way from Bangkok to Danang and beyond. Commodities moving between the three countries since the early 1990s have mainly been construction materials, fuel, timber and wood products, machinery and equipment, foodstuff, textiles, marble and livestock. Growth in traffic of these goods is expected to double to 1.6 million metric tons by the end of 2000 and double again by 2010. Although fears have been raised that restored links will increase trafficking in drugs, prostitutes, wildlife and illegal logs, the ADB is working with the UN International Drug Control Program on drug trafficking and other agencies at national level on illegal logging and wildlife hunting. Greater Mekong Subregion's East-West Economic Corridor The corridor will pave the way for greater integration of economic sectors, such as light industries such as agroprocessing and manufacturing activities and other productions, trade and investment. Along the corridor the establishment of special border economic zones will provide opportunities for exporting to external markets. The corridor has its origins over a century ago when Vietnamese traders established markets in Thakhek and Savannakhet in what is today Laos. Conflicts have interrupted trade flows between countries straddling the Mekong River, but peace and strengthening economic ties are increasing the demand for trade. The corridor will open up new vistas for all three countries. Central Vietnam has several existing ports at Vinh and Qyu Nhon as well as Danang and planned deep-sea ports at Dung Quat, Chan May and Lien Chieu. When developed, these ports will be gateways to a huge hinterland. Northeast Thailand has the potential for agricultural development and the production of consumer goods. Central Laos is rich in agriculture, forestry, mineral and hydropower resources. Central Vietnam has land suitable for industrial crops and forest, marine and mineral resources. Projections for commodity flows along the East West Corridor see volumes roughly doubling between 2000 and 2010 and doubling again the following decade. Nearly half the 350,000 population living in the Highway 9 project area are very poor. The road will provide them with better access to markets, job opportunities, education and health care. Since the private sector is expected to serve as the engine of growth in the corridor, its legal framework is critical, together with the necessary customs and tariff structures. While ongoing efforts are focused on infrastructure development, the promotion of an enabling environment for private sector participation is being given attention. East-West Transport Corridor The $740 million Transport Corridor involves three construction phases: 1. The Second Mekong River Bridge This will connect Mukdahon Province in Thailand to Suwanakhet, with connecting roads at both ends. The first bridge across the Mekong was opened in 1994, linking Nong Khai with the Lao capital of Vientiane. In 1998 Laos, Thailand and the Japan International Cooperation Agency (Jica) signed a bilateral agreement for Jica to undertake a survey and provide a detailed design for the bridge. This phase is due to end early next year. Construction will then start, lasting for two years. The project is being funded by an Overseas Economic Cooperation Fund loan shared between the two countries 2. Construction and rehabilitation of Highway No 9 This covers 400 kilometers of road in Laos and Vietnam (Project R2). In December 1999 the ADB approved loans of $32 million and $25 million to Laos and Vietnam respectively for this phase. The two governments will provide $8 million and $11 million of their own respectively. The ADB loans are from its concessional Asian Development Fund. They are repayable over 32 years, including a grace period of eight years. Interest will be 1 percent per annum during the grace period and 1.5 percent per annum thereafter. The objectives of the loans were to promote economic activities and facilitate trade between and among Laos, Thailand and Vietnam and improve the prospects for poverty reduction along the East-West Corridor. The Lao component of the project comprises rehabilitation of Road No 9 between Muang Phin and Dene Savanh at the border with Vietnam (about 78 kilometers), and consulting services. The Vietnam component comprises upgrading and improvement of Road No 9 between Lao Bao at the border with Laos and Dong Ha on Highway 1 (about 83 kilometers), including the upgrading of the Dong Ha Bypass, and consulting services. Central Vietnam has the right geographical conditions to serve as a gateway for the East-West Corridor to several existing seaports such as Coua Loo Port (in Nghea An province), Tiean Sa Port (in Nao Naung) and Quy Nhon Port (in Binh Nonh province) and proposed deep-sea ports such as Dung Quaat, Chaan Maay and Liean Chieau which are near international sea lanes. The existing ports currently serve some of the landlocked Laos' international trade needs. With the planned ports and the upgrading of Danang Port, the corridor will have the capacity to serve as the gateway to a huge hinterland covering northeast Thailand, central Laos and central Vietnam. The establishment of free trade zones along this corridor at Cau Treo and Lao Bao border gates will pave the way for building an interstate road network. The corridor will run through 18 central Vietnamese provinces which have great development potential. At present they have an average per capita annual income of approximately $200, 60 percent lower than the country's average. The ADB loans cover two other areas: 3 Construction and extension of Danang Port See above. (Special to Asia Times Online) |
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