The cross border trade and its impact on the growth of Lao Bao border town, Quang Tri Province, Vietnam

Abstract

The thesis aims to study the current trend of cross border trade between Vietnam and Laos though the Lao Bao international checkpoint over the recent years (1998-2010) and the impacts of cross border trade (CBT) on the socio-economic development of Lao Bao border town which was previously an isolated and the poorest border area of Quang Tri province, Vietnam. Moreover, the study also shows the main factors affecting the border trading transactions of the two countries through Lao Bao-Dansavanh border gates. The study finds out that the cross border trade of Vietnam with Laos through Lao Bao border gate has increased with an impressive growth rate over the ten years. And the most important factor fostering the rise of border trade is the establishment of the Lao Bao Special Economic and Commercial Area initially in 1998. Other important factors contributing to the boost of CBT including: the completion of East West Economic Corridor in 2006, the initial implementation of Cross Border Transport Agreement (CBTA) and a single stop customs inspection applied at the Lao Bao-Dansavanh border checkpoints. In addition, the research also discover that the increased cross border trade at Lao Bao checkpoint has brought about many positive effects to the growth of Lao bao border area. Of which, the direct impacts which are easily noticed include economic restructure and high economic growth rate in Lao Bao, the income improvement and poverty reduction for local residents. Other impacts such as infrastructural improvements, easy access to basic service are all found out. The Lao Bao economy has been changed from pure agriculture to an active centre of trading, services and industrial development, that contributes significantly to improvement of living standard of local people as well as social economic development of Quang Tri province. However, there still exist many obstacles that hinder Lao Bao from expanding CBT with Laos as well as further developing the area include: gaps in special preferential policies, smuggling, shortcomings in CBTA implementations and customs procedures. These require more effective policy intervention from central government and management skill and operation of the local government of Lao Bao.