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Province hopes to make hay from corridor

Update: August, 06/2012 - 10:26

by Le Hung Vong

An international conference on economic and tourism development along the Trans-Asia Highway held in the city of Dong Ha in Quang Tri was indicative of the central province's efforts to exploit the highway.

The chairman of the Quang Tri People's Committee, Nguyen Duc Cuong, underlined this effort, saying the conference was aimed at assessing the advantages conferred by the province's beach-head position on the highway, also known as the East-West Economic Corridor (EWEC), and attracting investment.

The 1,450-km highway, which runs through 19 cities and provinces in Myanmar, Thailand, Laos, and Viet Nam, opened in late 2006 following the completion of the second Thai-Lao Friendship Bridge linking Thailand's Mukdahan and Laos' Savannakhet provinces.

The Asian Development Bank estimates the total cost of all the projects and initiatives related to the EWEC at US$2.5 billion. Some $1.2 billion worth of financing has already been identified, mostly related to the ADB's tentative investment pipeline and funds committed by governments.

But the EWEC has not yet been optimally used – while the volume of cargo transported on it has been rising in the last couple of years, the growth rate is lower than expected.

Trade through the Lao Bao (Viet Nam) – Densavan (Laos) border gates rose from nearly $140 million in 2006 to $391.2 million last year, according to Quang Tri trade authorities.

The number of vehicles crossing the border went up from 51,530 in 2010 to 55,000 in 2011, while the number of travellers has been rising sharply every year, going up from 135,000 in 2004 to nearly 596,400 last year.

Le Quang Vinh, director of the Quang Tri Department of Industry and Trade, said commercial and services networks have been developed along the corridor, but mainly in cities and towns in some north-western provinces of Thailand, Savan Town in Laos, and Quang Tri, Thua Thien-Hue, and Da Nang in Viet Nam. But no changes are visible in Laos along the more than 200km from the Densavan Border Gate on the Vietnamese border.

Trade with Myanmar is now in an "exploration" stage due to difficulties in transportation, knowledge of habits and customs, demand for goods, and payment, he said.

"Transport on the EWEC has not been smooth," he admitted.

Since the opening of the Friendship Bridge No 2, the transportation time from Savannakhet to Den Savan has reduced from 10-12 hours to 2.5-3 hours, and from Dong Ha to the Lao Bao border, from four hours to less than two hours.

"Although the Greater Mekong Sub-region's Cross-Border Transport Agreement (CBTA) was signed in 2009, it has not been implemented, affecting the exploitation of the route and transport infrastructure and trade and services infrastructure which has been created, especially transport services, ports and warehouses," Vinh said.

Japanese retailer expands

Japanese supermarket operator Aeon Co Ltd has received a licence for its second shopping centre in Viet Nam in the southern province of Binh Duong.

To be built at a cost of $95 million, the Aeon Shopping Centre – Binh Duong Canary will open in Thuan An town in 2014.

The licence comes four months after Aeon Viet Nam announced it would open its first outlet in HCM City's Tan Phu District.

The $109 million Aeon-Tan Phu Celadon Shopping Centre, construction of which will begin in September, will be completed in mid-2014.

Aeon plans to invest $1.5 billion to open 20 outlets across Viet Nam in the next decade, Motoya Okada, its President and CEO, said at the opening of the company's representative office in HCM City last March.

The 20 outlets, to each employ 2,000-3,000 people, would also help boost exports of Vietnamese goods to Japan, he said.

They "are expected to help attract many other Japanese companies to Viet Nam."

Several Japanese self-service chains such as Family Mart and MiniStop have also come to Viet Nam. Another leading retail group, Takashimaya, is looking at the market and will be accompanied by world-famous fashion brands.

These shopping centres are testimony to a new wave of Japanese investment in Viet Nam since mid-2012.

Real estate has been another option for Japanese investors. In March the Tokyu Corporation broke ground for a $1.2 billion property project covering 71ha in Binh Duong.

Many other Japanese projects were announced in HCM City and other southern provinces in the first half of 2012.

According to the Ministry of Planning and Investment, Japanese investment in Viet Nam rose from $17 billion at the end of 2008 to nearly $24 billion three years later.

In the first six months of this year Japan topped the list of foreign investors with investments of $4.15 billion, or 65 per cent of all foreign investment in the period. — VNS

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