Roads can convert Myanmar from economic void to hub

Cars wait at the border area of Myawaddy for entry into Thailand

YANGON -- Once regarded as "Asia's missing link," Myanmar is undergoing a road construction boom. Seen as vital for economic development, arterial roads are being planned and built with greater urgency, and advances in democratization as well as cease-fires with ethnic minority rebels have sped projects along.

     The construction of roads connecting Myanmar with Thailand, which started ahead of other projects, has not only increased trade in miscellaneous daily goods and other items, but also encouraged corporations to make advances into the country.

     Myanmar, with its important geopolitical location, is about to bloom along with a road construction boom.

A new path

A two-lane paved road threads through steep cliffs in the eastern Myanmar district of Kawkareik, and big trucks move along at breakneck speed. The road is the last section of the East-West Economic Corridor, an international road from Danang, a Pacific port city in Vietnam, to Myanmar via Laos and Thailand.

     A rugged path stretching about 50km between Kawkareik and Myawaddy, which borders Thailand, was so bad that it was called the worst bottleneck of the corridor. With public and private support from Thailand, roadwork started in 2012 and finished last summer. Within less than a year of its completion, the new section has cleared a path to make this road into a main economic artery.

     A mountain road was built in Kawkareik while the country was under military rule, but the road is so narrow that it only functions as a one-way street whose direction of travel is changed every other day. Vehicles cannot travel faster than 30kph.

     The new road enables drivers to cruise at more than 80kph, shortening the travel time to the Thai border to less than one hour, or one-fifth the time needed in the past. A 30-year-old merchant who uses the road to transport fruits and vegetables said, "The new road ensures a comfortable, though bumpy, ride and is a boost to my business because I can return from Myawaddy on the same day."

     Indeed, the road has been a boon for trade. While imports from Thailand to Myanmar in April-September, the first half of fiscal 2015, grew 17% from a year earlier to about $900 million, the rate of growth topped 40% in September, immediately after the road opened.

     Although trade between Thailand and Myanmar has gradually expanded after democratic reforms were instituted in the latter country, it is expected to log the biggest gain in fiscal 2015 since the opening of the road, in part because the transfer of goods via Myawaddy accounts for 30% of cross-border trade.


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INDOCHINA MARKET INSIGHTS provide effective services and solutions to companies wishing to invest or who are already operating in Myanmar, Vietnam, Cambodia and Laos. We work on behalf of your company, providing vital guidance so you can enter the market with confidence and prosper in this region - the Indochina markets.

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The principal, Mikael Knudsen, has 35 years of International business experience working in developing countries, including 20 years in Indochina markets with International companies.

He has lived and worked in Vietnam and Myanmar since 1994. He graduated with a Masters Degree from CBS and a MBA from SFSU.

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