The investment in the third Thai-Lao Friendship Bridge is proving worthwhile one year after it opened. Economic indicators in Nakhon Phanom province have improved significantly, but concerns are growing that the project is not benefiting many people.
The third Thai-Lao Friendship Bridge is meant to improve Nakhon Phanom’s economy in terms of gross provincial product, which is expected to reach 35 billion baht this year, up by 7.69% from 32.5 billion baht last year.
Nakhon Phanom Governor Anukul Tangkananukulchai says the completion of the 2-billion-baht cross-border bridge has brought more income to the province, but it has mainly gone to a limited number of border traders.
Poor farmers and other sectors are expected to see only a negative impact, with rising living costs and land prices.
The bridge linking Nakhon Phanom with Khammouane province in central Laos is part of the Asian Development Bank's East-West Economic Corridor project.
It is aimed at improving the economy of one of Thailand's poorest provinces in terms of gross provincial product (GPP), which is expected to reach 35 billion baht this year, up by 7.69% from 32.5 billion last year.
Border trade has enjoyed handsome double-digit growth. From 2009-11, its value rose from 5.15 billion baht to 6.79 billion baht, but in the first nine months of this year it leaped 12.5% to 7.64 billion baht.
The number of tourists crossing the border has also risen by 50% from last year to average 1,280 daily.
Smarn: Competition from big players
About 300 million baht of the investment on the bridge went on support facilities such as warehouses and a one-stop trading service and immigration office to cope with the increase in business and manufacturing in the area.
Smarn Srisuk, the owner of a construction materials shop along the border, said the improvement in trade has come with intense competition, as big players such as Big C and Makro have moved into the area.
But the bridge has increased demand for his products across the border, he said.
Surat Kongkiatkamon, vice-president of the provincial chamber of commerce, said he expected property investment to jump by 50-60%. But the project's benefits have so far been limited to sectors involved in border trading.
"These sectors know better than farmers and labourers how to make money," he said.
Mr Surat said even though there has been an increase in tourists, only 10-15% come to Nakhon Phanom while the rest pass by to Sakon Nakhon, where there are more shopping places and resorts.
Land prices in specific areas are skyrocketing as wages rise in response to the developing economy.
The downside of development has been reaffirmed by research from Shinawatra University student Pornsakol na Srito and lecturer John Walsh. They found concerns among people that benefits will be enjoyed only by investors while the local community will hardly be touched.
Residents are worried about unaffordable land prices, while landowners are already tempted to make handsome profits via the appreciation of land values.
Anukul: Border traders doing well
"Hence, in the long term the local community will not be involved with the increased economic activities, but the investors that become the new landlords will receive the benefit," said their report.
Farmers living in rural areas away from the bridge or the downtown area said the opening of the bridge and upcoming Asean integration have had little visible effect on their income and daily lives.
Mr Anukul has adopted His Majesty the King's self-sufficiency economy initiative by encouraging farmers to do mixed plantations rather than risky traditional plantations.
He also wants farmers to train in other skills after the harvesting season so they can increase their incomes by making products to offer to wealthy city people.
He said 65-72% of Nakhon Phanom's GPP growth is generated by the farm sector. Adopting the One Tambon One Product approach would help the province improve its advantage in border trading.
Another problem is the outflow of young people to work in Bangkok or other industrialised regions. A shortage of educated and skilled labour has also limited the benefit of the bridge project.
"We have tried hard to attract industrial investment and promote the agro-processing industry while establishing an education centre to train teachers or researchers," Mr Anukul said.
"We have also reformed the welfare system including hospitals and schools in order to attract and retain potential talent."
Mr Walsh said bridges enable technologies that make it easier for people to do cross-border business, but he suggests the government could do more to deal with the downside of such projects.
"Many people benefit, many people suffer," he said. "Local state agencies should focus on helping those who have suffered and cannot help themselves, mostly the elderly, less well educated and so forth."