Conference on “Lao Bao-Densavan Crossborder Economic Zone: From Idea to Practice” opens

The transnational economic zone which connects Quang Tri Province and Savannakhet Province, Laos is in line with the Quang Tri Province’s socio-economic development and Politburo’s Resolution No.26-NQ/TW dated November 3, 2022 on socio-economic development and defense and security in the northern and central coastal areas by 2030 and vision to 2045.

On the occasion of the conference, the Quang Tri Newspaper talked with Ha Sy Dong, Deputy Permanent Chairman of the Quang Tri People’s Committee, on how to turn the economic zone’s idea into reality.

Ha Sy Dong, Deputy Permanent Chairman of the Quang Tri People’s Committee

Why did Quang Tri choose to implement the pilot model?

In 1997, the Politburos of Vietnam and Laos reached a consensus on developing a transborder economic and commercial zone, which was then stipulated in Resolution No.26-NQ/TW dated November 3, 2022, in the national master plan. It highlighted boosting economic cooperation through border gates associated with the East-West Economic Corridor (EWEC). Therefore, a pilot model on the border economic zone on the EWEC should be carried out.

Quang Tri holds favorable conditions for piloting the model as its location is at the first pole on the EWEC – the 1450-km road spanning 13 provinces and cities of four countries: Myanmar, Thailand, Laos, and Vietnam. With the Lao Bao International Border Gate, Quang Tri becomes one of the hubs for decentralized cooperation among localities in the Mekong Subregion, one of the gateways leading to the East Sea through the My Thuy deepwater port.

Quang Tri boasts a well-coordinated transportation network comprising deepwater seaports, North-South railways, roads, waterways, and airports under construction, promoting the flow of products and people while establishing the framework for the growth of trade, business, investment, services, and tourism at the local, national, and international levels.

Both the Lao Bao Special Economic Zone in Vietnam and the Densavan Border Trade Zone in Laos were established based on the region’s advantages, the two nations’ special friendship, the policies of their respective government ministries, and their resolve to select and develop a common area that would permit the pilot application of particular policies.

Following over 25 years of growth, the two economic zones have played a significant role in the development of the Quang Tri and Savannakhet provinces by altering the landscape on both sides of the border. Beyond the accomplished outcomes, some drawbacks and benefits still need to be fully realized to provide the Lao Bao - Densavan area with the incentive to develop in line with the trend of global economic integration and policy mechanisms.

To maximize the potential of the Densavan Border Commercial Area and the Lao Bao Special Economic Zone in supporting local and regional economic development, Quang Tri since 2015 has proactively suggested to the government a course of action for studying and developing the Lao Bao- Densavan Crossborder Economic Zone. This is part of the friendship and cooperation between Vietnam and Laos.

In the Party’s Central Committee, in its document 35-TB/VPTW dated on April 21, 2017 which was released after the working visit paid to Quang Tri by General Secretary of the Communist Party of Vietnam Nguyen Phu Trong, Quang Tri was chosen to conduct a pilot project on developing the Lao Bao Special Economic Zone and the Densavan Border Commercial Area to submit to the Politburo and government of Vietnam and Laos.

Based on this, the province of Quang Tri set up Working Group 626 to compile a draft bilateral agreement and a draft project to construct a crossborder economic zone. The province has continued to gather input from businesses and experts, and the conference on March 15, 2024 will have a foundation upon which to report and finish the draft that we will present to the governments of the two nations.

Lao Bao International Border Gate has a new look. Photo: T.T

How does the crossborder economic zone work?

With common mechanisms, policies, and operational management, the proposed crossborder economic zone project is expected to function by the “Two countries, one economic zone” model. It will have special preferential policies based on equality and mutual benefit, respecting each other’s independence, sovereignty, and territorial integrity.

The Lao Bao-Densavan Crossborder Economic Zone will be combined into a single regional planning, operation, and construction project based on adherence to international norms and both sides’ legal requirements. It enables crossborder transportation and logistics linkages, provides the general infrastructure in the central region, and connects infrastructure inside and outside the region.

It will execute a “three in one” mechanism (three coins: same policies, rules, and standards; one common area) while applying the most favored mechanisms and policies that the governments of Laos and Vietnam are implementing in their respective economic and trade zones.

The two governments will remove obstacles and streamline labor, investment procedures, and loan requirements for investment projects with new and alluring special policy mechanisms on investment and “non-tariff” solutions. This will draw domestic and foreign companies to invest in the shared cross-border economic zone.

What are the main issues to be discussed at the conference?

The contents will be shared between the two countries, highlighting and introducing the potential of resources, workable legal foundations, and practical mechanisms. Other issues will be preferential policies on creating a conducive business environment and operation within the crossborder economic zone.

The conference’s opinions will provide information for finalizing the Project and Draft Agreement on establishing a shared crossborder economic zone between the Laotian and Vietnamese governments.

The event is anticipated to inform domestic and foreign investors about Quang Tri’s development orientations, potentials, strengths, preferential policies, industrial parks, and projects.

Thanh Truc – Linh Pham