Savannakhet Province as trade and services center

Savannakhet Province in Lao PDR is a thriving hub of trade and services in the Greater Mekong Sub-region (GMS). The province is located along the East-West Corridor (EWC) linking Thailand , Lao PDR, and Vietnam (Road No.9). It is also along the North-South axis (Road No.13) that runs through Lao PDR, leading north into China and South into Cambodia .

Road and bridge construction will further develop Savannakhet as a trade and services zone. Road No.9 is being improved thank to international assistance from Japan . Once the improvement work is completed by 2004, this road will shorten the transport time between Savannakhet and central Vietnam .

Savannakhet itself will also develop multiple routes from Thailand to north/central Vietnam . This will bring about an expansion of markets. Direct access to Thailand across the new Mekong River Bridge , which is currently under construction, will create further business opportunities for all the economic sectors in Savannakhet.

The total value of export in Savannakhet was US$238 million in 1998-1999, of which nearly 92% (US$218 million) was transit goods.

Savan-Seno Special Economic Zone 

Savan-Seno Special Economic Zone (SSEZ) is geographically composed of two separate sites both located in Savannakhet Province :

• Site A (305 ha), located immediately upstream of Savannakhet capital city (Khanthabouly) and next to the new Mekong River Bridge , the construction of which will start in 2003;
  
  
• Site B (20 ha) at Seno town located 28 km East from Khanthabouly city, at the junction between the National Road No. 13 and National Road No. 9.
  
  

• The East-West Corridor, linking Myanmar, Thailand and Vietnam, is located mid-way between the nearest Vietnamese sea port of Danang (about 500 km from the Zone) and the Thailand port of Bangkok (about 600 km from the Zone). Thanks to its strategic location, the development of the SSEZ is to become a center for service and trade of the East-West Corridor.

  Furthermore, the SSEZ is located around the mid-way point along Road No.13 from China to Cambodia . That means it is at the junction between the East-West axis and the North-South axis linking the most populous countries in the Asian region, and thus is a prime center for trade and services for the neighboring countries, which include China (Yunnan Province), Myanmar, Thailand, Cambodia and Vietnam, with a total population of more than 500 million people.

  The Lao Government is planning to upgrade the existing domestic airport in Khanthabouly city of Savannakhet province into an international airport in the near future, in order to meet transportation requirements of passengers and goods.

  The categories of business activities planned to be develop in the SSEZ include the following:

  1)      Export Processing Zone;

  2)      Free Trade Zone;

  3)      Free Service and Logistic Center (which should include tourism, banking and other activities).

One of the major policies of the government is to attract labor-intensive agro-industries and activities. Toward this purpose, the Lao Government is approaching bilateral assistance agencies and foreign government grants to assist in building vocational schools and agricultural schools in Savannakhet Province .

Regulations on the SSEZ, which are under preparation to be adopted by the Government and National Assembly by early 2003, will be designed to successful attract local and foreign investment to the Zone. For instance, Lao and foreign direct investments in this Zone will be granted special privileges including duty-free privileges for import and export items and products. Fiscal incentives will be more favorable than incentives under the existing Prime Minister's decrees.

The SSEZ governance is the responsibility of the SSEZ Authority (SEZA). The primary function of the Authority will be to ensure prompt and transparent authorization of licensing of investment in the Zone and to provide investors and developers with all necessary facilities and assistance, including processing of their investment requests through a One-stop Station Service. The SSEZ has an autonomous budget and full responsibility in the management, design and construction of the Zone.

The SSEZ is in its initial stage of development. SEZA is looking for foreign aid and proposals from private investors and co-developers to jointly invest in the construction and development of infrastructures and facilities in the SSEZ. SEZA is also seeking contact with potential investors concerning preliminary planning of near-future investments in promoted sectors and projects that have competitive advantages in the Zone.

Contact address:

Savan-Seno Special Economic Zone Authority
Phetsalad Road , Khanthabouli District Savannakhet Province , Lao PDR
Tel./Fax.: (856 41) 251487
Mobile phone: (856 20) 513811
(856 20) 541178
(856 20) 541003
email: sonphet@laotel.com