Expectations from the “two countries, one economic zone” model

The establishment of the Lao Bao - Densavan Special Economic Zone promises to be a “new wind”, a new destination for investors; creating new opportunities for residents on both sides of the border in economic and social development; making Lao Bao - Densavan a “golden address”, bustling on the East-West Economic Corridor (EWEC).

Early bloom, late fade

In 1998, the Lao Bao Special Economic and Trade Zone, originally named Lao Bao Economic and Trade Development Promotion Zone, applied special preferential policies and mechanisms to promote socio-economic development in the Vietnam-Laos border area, specifically in the two localities of Quang Tri (Vietnam) and Savannakhet (Laos).

Lao Bao Special Economic Zone is conveniently located on the main traffic route of the East-West Economic Corridor, conveniently connected to economic centers and important traffic infrastructure of the region, convenient for developing service industries such as transportation and logistics, trade, tourism , etc. Up to now, this special economic zone has undergone dramatic changes, the infrastructure and service system has been invested in and built, meeting the production and business needs of enterprises, investors and people's lives in the region. Vietnam and Laos have also built relatively comprehensive mechanisms and policies on the management and operation of border trade activities, including regulations on entry and exit of people and vehicles; regulations on goods bought, sold and exchanged across the border, etc.

However, in reality, due to many objective and subjective reasons, Lao Bao Special Economic Zone has not yet developed as expected; there are limitations and inadequacies in policy mechanisms that need to be resolved. Although this special economic zone has its own special policies, like many other economic and commercial zones in the country, this place also falls into the situation of "blooming early and fading early", when preferential policies... expire.

Lao Bao International Border Gate (Quang Tri).

Therefore, although it was once expected to be one of the top in the Central region, in reality, many businesses in this economic zone have closed down and projects are operating at a standstill. The chain of supermarkets and duty-free stores that once sprung up side by side has now quietly closed its doors; changed owners, changed business purposes or stopped operating. For example, the Millennium Supermarket with an investment capital of hundreds of billions of VND, opened in 2009. After more than 5 years of operation, the supermarket closed down and converted its function into a joint inspection house of the Lao Bao International Border Gate.

The Lao Bao Special Economic Zone is “slow to grow”, making the establishment of the Lao Bao - Densavan Cross-Border Economic Zone more urgent and of mutual interest to Quang Tri and Savannakhet provinces, with the expectation of creating momentum for socio-economic development of the two localities, connecting border economic zones, promoting trade and investment.

Hope for a "new wind"

In fact, in the trend of globalization, the pilot application of models of cross-border economic and trade zones or free trade zones is not uncommon. Therefore, the research on the construction of the Lao Bao - Densavan Special Cross-Border Economic and Trade Zone is an issue of interest to many people.

The establishment of the Lao Bao - Densavan Special Economic Zone across the common border promises to be a "new wind", with attractive and unified policies in the whole region, becoming a new destination for investors; creating new opportunities for residents on both sides of the border in economic and social development. Lao Bao - Densavan will become a "golden address", bustling on the East - West Economic Corridor (EWEC); promoting trade activities on the EWEC through the Lao Bao international border gate, increasing budget revenue, creating jobs, contributing to the socio-economic development of the locality.

Lao Bao Special Economic Zone has not developed as expected.

According to the project "Building a joint Lao Bao - Densavan cross-border economic and trade zone", the total proposed area is 3,224 hectares; of which, the area on the Vietnamese side is 1,724 hectares; the area on the Lao side is 1,500 hectares. This cross-border economic and trade zone is expected to operate under the model of "two countries, one economic zone" with the same mechanism, policies and operational management; with special preferential policies with the principles of equality and mutual benefit, respecting each other's independence, sovereignty and territorial integrity. On the basis of complying with the legal requirements of both sides and international practices, the Lao Bao - Densavan cross-border economic and trade zone is unified in a common regional planning, common organization and operation, common infrastructure construction in the central area and connecting infrastructure.

Mr. Vo Van Hung, Chairman of Quang Tri Provincial People's Committee, said, "In order for the Lao Bao - Densavan Cross-Border Economic and Trade Zone to soon come into operation and operate effectively, Quang Tri province has determined that in addition to coordinating research to develop policy mechanisms and legal corridors, it is necessary to simultaneously adjust the planning of the Lao Bao Special Economic and Trade Zone and coordinate with Savannakhet province to adjust the planning of the Densavan Border Trade Zone in accordance with the new development orientation and actively promote and attract businesses to invest, especially in transport infrastructure and technical infrastructure in the two economic zones. All three of the above contents are being jointly implemented by Quang Tri province and Savannakhet province...

According to Dr. Nguyen Quoc Truong, Deputy Director of the Institute for Development Strategy (Ministry of Planning and Investment), the construction and development of the Lao Bao - Densavan cross-border economic and trade zone has strategic significance in promoting economic connectivity between Vietnam and Laos. From there, it will contribute significantly to promoting the friendly cooperation between Vietnam and Laos and ensuring national defense and security for both countries. The construction and development of this economic and trade zone has become a necessary and urgent task in the context of cooperation, regional connectivity and regional connectivity.

The Lao Bao Special Economic Zone is "slow to grow", making the establishment of the Lao Bao - Densavan cross-border economic zone urgent.

According to Associate Professor Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, in order to build the Lao Bao - Densavan cross-border economic zone as a new model of fundamental and substantial development, it is necessary to aim for a system of institutional standards for high-class free trade zones in the world. Currently, a number of other localities in Vietnam are also making efforts to build "pilot" models of this development institution. Hai Phong and Da Nang are actively seeking institutional models for their future free trade zones. In this case, Quang Tri's latecomer advantage is prominent, which needs to be fully utilized and promoted, minimizing the risk of acting alone...

It is known that up to now, the leaders of Quang Tri and Savannakhet provinces have agreed to propose relevant ministries and branches of the two countries to advise the Vietnamese and Lao governments to sign an agreement on piloting the construction of the Lao Bao - Densavan cross-border economic and trade zone. From there, there will be a legal basis for Quang Tri and Savannakhet provinces to base on building coordination regulations in the management and operation of the first common cross-border economic and trade zone between the two countries, which have a special friendly relationship.

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