The concept was first introduced at the eighth ministerial conference of the Greater Mekong River Subregion in Manila in October 1998. Five corridors were discussed. Of these, the East-West Economic Corridor (EWEC) was given major priority.
To thoroughly understand the economic corridor, it is necessary to have a basic knowledge of regional cooperative structures. There is official and unofficial economic cooperation. The official includes the Free Trade Area (FTA), Tax Alliance (similar to Russia-Belarus Coalition) and Common Market (EU).
Unofficial structures are the Development Triangle, Trans-national Free Area and Economic Corridor, which are only between regions or localities of various countries, not for the whole country. Members maintain commercial and investment relations with external markets. They have no common policies but have tariff and non-tariff measures to facilitate free trade, investment, transport and people movement and to speed up the development of border areas.
Besides having common characteristics of unofficial economic cooperation structures, the economic corridor has three distinctive features. Firstly, it is considered a defined geographical region. Secondly, the corridor mainly focuses on bilateral initiatives, not multi-lateral ones. Thirdly, the economic corridor requires detailed physical and space planning for infrastructure development for the most effective results.
The 1,450km long East-West Economic Corridor passes through four countries. It starts at Myanmar’s Mawlamyine seaport of Mon State and goes to the Myawaddy border gate of Kayin State on the Myanmar - Thailand border. In Thailand, the corridor starts in Mae Sot and passes through the seven provinces of Tak, Sukhothai, Kalasin, Phitsanulok, Khon Kaen, Yasothon and Mukdahan. In Laos, it goes from Savannakhet Province to Dansavanh border gate. In Vietnam, the route is from the Lao Bao border gate in Quang Tri Province, through Thua Thien Hue Province and to Danang City.
The East-West Economic Corridor has diverse topography and climate. It has coastal plains of Myanmar, low areas and mountains in southern Thailand, wet delta, forest and plants in Savannakhet, and mountainous and midland areas in central Vietnam. The corridor's commercial activities focus on six major localities, including Mawlamyine, Phitsanulok, Khon Kaen, Savannakhet, Hue, Danang and some other small-scale towns.
The East-West Economic Corridor also connects with main north-south roads, including Yangon – Dawei and Chiang Mai – Bangkok of Thailand, Road 13 of Laos, and National Highway No.1A of Vietnam.
This will help develop trade toward the north and the south to major commercial centers of Bangkok and Ho Chi Minh. However, most of member localities are underdeveloped, highly populated and geographically remote. Agriculture plays an important role and industry has not strongly developed.
The establishment of the corridor will bring practical and long-term benefits to member countries. Better access to natural resources, sea products and energy will be provided for manufacturing and processing sectors. The corridor will also facilitate cities and small towns along it to strengthen trans-border trade and investment attraction, and develop new economic activities by effectively using economic space and establishing trans-national economic areas. Goods from Laos, Thailand and China will be able to enter potential markets in Southern and Eastern Asia, Europe and America. The corridor will be a good environment to test new economic policies, especially for Myanmar, Vietnam and Laos, and open up multi-faceted cooperation among member nations.
Corridor localities have agricultural sectors accounting for 20% to 50% of the economic growth rate. Industrial outputs are mainly from farming-based manufacture including foodstuff processing, beverages, and sea and forestry products, depending on the specific characteristics of each locality.
Industrial production is not the main economic activity of the corridor. Most of it is farming-related or light industry based on natural resources. Industrial zones are located near residential areas. Thailand has the most developed industry with strengths in timber processing, garments and metallurgy. Thanks to the Generalised System of Preferential (GSP), Laos' garments-textiles and electricity equipment manufacture had strongly developed. Laos' exporters of garments did not have quotas when trading with the EU market. The country also has the most abundant natural resources. Some localities in Vietnam are very undeveloped compared with others in the country. Main sectors are garments, sea products processing and cement, in which Danang has a well-developed industry, making up 5% GDP of national industry.
Trade exchange among nations in the Southeast Asia over the past years has increased steadily. Total export turnover between Laos, Thailand and Myanmar has experienced an annual average increase of 33%. Commercial activities at border gates mainly reflect the comparative advantages of each country. Goods are also transited to other markets. Main items are vegetables, fruit, timber, cattle and garments. Foreign investment attraction is not as remarkable as other localities in the countries.
The East-West Economic Corridor has many potentials for tourism development thanks to its unification and diversification. However, at present, only air tours have been well implemented. The Thailand-Laos caravan is relatively developed. There are many tourist destinations, including historical and cultural sites and eco-tourism zones.
The localities along the corridor, except for main cities and towns, are sparsely populated. Their human resources are mostly lack professional skills, science-technology and labor discipline. The rate of poor households are rather high. There are some ethnic minorities, especially on the Thailand - Myanmar border.
The corridor is a road from Mawlamyine to Danang that is to be completed in 2005. It goes through the north-south transport hub to Yangon - Mandalay, Chiang Mai - Bangkok, Vientiane - Savannakhet and Hanoi - Ho Chi Minh City. However, in general, the infrastructure has not been completely built. Sea and air ways, water and power supply and telecommunication services have not developed strongly.
All localities have industrial establishments and free commercial areas. But they have operated ineffectively due to unfavourable positions and insufficient planning.
The East-West Economic Corridor will be an impetus for boosting economic development and cultural and social exchange between Southeast Asian countries in general and member localities in particular.