Regional Local Economic Development in the East-West Economic Corridor (RLED-EWEC)

Project completed
Farmers preparing produce for the market. © The Mekong Institute.

SDC has entered into a partnership with the Mekong Institute – an intergovernmental institution owned by the GMS countries’ governments – to foster an enabling environment for economic growth in rural areas. The goal is to contribute to the alleviation of poverty in the region.

Country/region Topic Period Budget
Mekong
Employment & economic development
SME development
01.08.2012 - 30.06.2017
CHF 3'780'000
Background

The countries in the Greater Mekong Sub-region(GMS) are culturally, politically, and economically very different. Still, in the early 1990s, it became broadly recognized that Southeast Asia mainland was an area with common economic interests, and that the GMS countries could benefit from closer economic collaboration.

In 1992, the Asian Development Bank (ADB)launched an ambitious project to foster economic growth by strengthening regional integration. ADB supported the development of “economic corridors”– essentially infrastructure, such as roads and border crossings, which linked areas of production with areas of consumption. For example, rice or vegetables grown in Savannakhet, Lao PDR could be transported, exported, and sold to markets in Danang, Vietnam.

The three economic corridors increased trade volume in the region by a factor of more than ten over a decade and spurred rapid economic growth in the newly connected cities. They also facilitated the development of mines, hydropower, and agroindustrial concessions. However, the effect on the rural poor that live in the areas the corridors run through was and is marginal.

SDC seeks to alleviate poverty in the Greater Mekong Sub-region by helping the population in rural areas fully capitalize on the advantages of being connected to an economic corridor. In partnership with the Mekong Institute, SDC supports to the capacity building of value chains actors and focuses on improving the environment for economic growth along the “East West Economic Corridor” (EWEC), which runs from Danang Port in Vietnam, through Lao PDR, Thailand, and to the Mawlamyine Port in Myanmar.

Objectives

SDC wants to strengthen the capacity of farmers, small and medium enterprises, government agencies who regulate the sector, and business development service providers, such as chambers of commerce. By improving capacities of development actors in rural areas along the East West Economic Corridor, SDC aims to foster an enabling environment for inclusive, equitable economic growth and to contribute to the alleviation of poverty.

Results

Expected results:  

The two main mechanisms that will lead to poverty reduction are improved agriculture-based value chains, and more enabling environments for local economic development. Commodities grown by poor farmers in six provinces along the East West Economic Corridor have been chosen by the project, and bottlenecks along the chains have been identified and will be removed. Improved functioning of value chains are governed by contracts along the chain – contract farming. Poor farmers will profit from improved value chains through better services to support production, increased volume of products sold, and guaranteed sale prices.

Both farmers and transporting and processing businesses will benefit from improved frame conditions for local economic development: extentionists coaching farmers on good agricultural production and harvesting practices, roads that allow farmers to reach markets or distributors, market intelligence that guide crop planting decisions, credits that can be used by small enterprises as operating funds, certificates of origin needed for export, business-to-business links for penetrating new markets, one-stop shops at border crossings that reduce transaction costs etc. The project will improve the capacity of Government regulators and business service providers to facilitate local economic development.

Specifically, SDC is supporting the Mekong Institute to set up a results oriented monitoring and evaluation system, train its staff for working with local partners, and redesign its organizational structure to be able to implement large development projects, becoming a stronger and more effective organization.


Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
Foreign academic and research organisation
  • Research Organisation of South East


Other partners

The Mekong Institute

Budget Current phase Swiss budget CHF   3'780'000 Swiss disbursement to date CHF   3'637'568
Project phases Phase 2 01.08.2017 - 31.10.2019   (Completed)

Phase 1 01.08.2012 - 30.06.2017   (Completed)