Building a Cross-Border Trade Economic Zone Connecting Lao Bao and Densavan

This afternoon (15/3), in Lao Bao town, Huong Hoa district, Quang Tri province, a seminar on “Lao Bao Cross-border Economic and Commercial Zone (Quang Tri province, Vietnam) – Densavan (Savannakhet province, Laos): From Idea to Reality” took place. The seminar was organized by Quang Tri province and Savannakhet province of Laos, attracting more than 200 delegates representing central government agencies, departments, and localities of the two countries Vietnam – Laos, experts, researchers, and domestic and foreign enterprises.

The Lao Bao Special Economic and Commercial Zone in Quang Tri province was established in 1998. Initially named the Lao Bao Economic and Commercial Development Encouragement Zone, it applied special preferential policies to promote the socio-economic development of the Vietnam – Laos border area. Over the past 26 years, Quang Tri province has focused on investment and development, gradually forming the appearance of a border urban area in the East-West Economic Corridor towards Vietnam. However, the Lao Bao Special Economic and Commercial Zone has not developed as expected, and there are still shortcomings and limitations in the policy mechanism that need to be resolved, creating new impetus for the border area.

The Lao Bao Special Economic and Commercial Zone (Vietnam) and the Densavan Border Trade Zone (Laos) are formed based on the advantages of the region and the direction of the two Party Central Committees of the Communist Party of Vietnam and the Lao People’s Revolutionary Party since 1997 in building the “Lao Bao – Densavan Free Trade Zone”. Resolution No. 26 of 2022 by the Communist Party Central Committee on socio-economic development and ensuring defense and security in the North Central and Central Coastal regions until 2030 with a vision to 2045 sets the direction: “Study the pilot model of border economic gateway economic zone in the East-West Economic Corridor”.

In the “Cooperation Plan between the Government of Vietnam and Laos in 2023”, signed on January 12, 2023, the content of the pilot model of border economic gateway zone in the East-West Economic Corridor is included in the document signed between the two Prime Ministers. Implementing the direction of the senior leaders of the two countries, Quang Tri province has coordinated with Savannakhet province (Laos) to develop the pilot project “Building the Lao Bao – Densavan Cross-border Economic and Commercial Zone” to be the basis for advising central government agencies and governments of the two countries to implement this important direction. Mr. Sen xac Su ly xac, Deputy Chairman of Savannakhet province, Laos, affirmed: “The establishment of the common cross-border economic and commercial zone between Den savan and Lao Bao, the Savannakhet provincial government realizes the importance of high unity in the process of formation and is ready to cooperate to officially establish this economic zone, which will become a symbol of cooperation between Laos and Vietnam”.

The seminar aims to introduce the content of the pilot project, especially the specific and outstanding policy mechanisms expected to be applied in the common cross-border economic and commercial zone to gather opinions from experts, scientists, relevant agencies, and the contributions of the Vietnamese and Laos business communities. This is the basis for Quang Tri province and Savannakhet province to continue perfecting the project and drafting the content of the Agreement between the two Governments to submit to the Ministry of Planning and Investment – the Permanent Secretariat of the Vietnam-Laos Cooperation Committee and the ministries and departments of the two countries.

Mr. Vo Van Hung, Chairman of the Quang Tri Provincial People’s Committee, hopes that when the common cross-border economic and commercial zone is put into operation, it will be highly feasible, suitable to the practical situation and the Vietnam – Laos relationship in the new context and truly attractive to enterprises to invest and do business in this potential area: “Quang Tri province has identified that besides coordinating research and building mechanism policies, legal corridors must simultaneously adjust the planning of the Lao Bao Special Economic and Commercial Zone and coordinate with Savannakhet province to adjust the planning of the Densavan Border Trade Zone to be suitable with the new development orientation and actively promote attracting investment enterprises, especially investment in transport infrastructure and technical infrastructure in the two economic zones”.

At the seminar, experts, researchers, and managers from both sides focused on clarifying the feasibility and proposing mechanisms, policies, and advantages to create favorable conditions for enterprises to invest and do business in the common cross-border economic and commercial zone. Opinions at the seminar focused on proposing solutions to mobilize capital, invest in the infrastructure of the two countries’ border gates to develop logistics services and industrial zones, free trade zones, tax-free zones, attracting investment projects for production and business activities, and implementing pilot mechanisms and policies in the Lao Bao – Densavan common cross-border economic and commercial zone. Building the Lao Bao – Densavan Common Cross-border Economic and Commercial Zone is highly consistent with the current requirements of economic, commercial, and tourism services development in both Vietnam and Laos; it is an inevitable trend when the region and the world are undergoing many changes and developments.

Associate Professor – Dr. Tran Dinh Thien, Former Director of the Vietnam Institute of Economics, believes that after a process of development lacking substance, going through ups and downs of the officially determined “national special, with the highest level of incentives and support that the country has”, the direction of building the Lao Bao – Densavan Common Cross-border Economic and Commercial Zone as a fundamentally new development model is necessary and essential: “After a long process of development lacking substance, the direction of building the Lao Bao – Densavan Common Cross-border Economic and Commercial Zone must be considered as a fundamentally new and substantial model. It is a pilot model. If not, there will be policy risks”.