Thailand’s Highway 12 fuels the East-West Economic Corridor

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Thailand’s Highway 12, a 793-kilometer route which links Thailand with Myanmar and Laos in Tak and Mukdahan, was completed in early June this year. As part of the East-West Economic Corridor (EWEC), the route aims to fortify the logistics and trade activities between four countries, with Thailand as the hub.

EWEC launched in 1998 as one of the initiatives of Greater Mekong Sub-region (GMS), but it never truly lived up to its dream and potential until 2023. Once completed, the full EWEC will consist of a total 1,450 kilometers, as part of GMS Economic Initiative between Myanmar, Laos, Cambodia, Thailand, and China. The longest portion of the route is in Thailand. The corridor was envisaged as a land bridge connecting the Indian and Pacific Oceans, avoiding the sea route via the Malacca Strait. By linking two ports between Danang (Vietnam) and Thilawa (Myanmar) via inland transportation, the cargo transit time may be reduced from 8 days to 27 hours.

End points

• Mawlamyine, Myanmar to Da Nang, Vietnam

Border crossings

• Myawaddy/Mae Sot (Myanmar/Thailand)
• Mukdahan/Savannakhet (Thailand/Lao PDR)
• Dansavanh/Lao Bao (Lao PDR/Vietnam)

Since 2019, Thailand’s inland transportation has grown an average of 1-2% annually and accounted for 88% of the country’s total domestic transports by volume. The primary driving factors behind this growth have been the expansion in manufacturing, cross-border trade, e-commerce and agricultural sectors. When connected by both the East-West Economic Corridor and the North-South Economic Corridor together, land transportation time from Yangon to Bangkok will be reduced to 9 hours.

While the EWEC promises improved logistics and trade across the region, various challenges must be addressed to maximize efficiency. “The trade volume of the route from Tilawah to Danang and Danang to Tilawah should not be significantly different for trucks to avoid empty trucks running along the way […]. It also needs networks for the first mile and last mile, together with warehouses at Tilawah and Danang, and other stops along the way,” advises Interim Mekong Cluster Head for Land Transport Saran Limvorasak, DB Schenker Thailand.

Along with the completion of the EWEC or Highway 12, all four countries need to agree and apply synchronized systems such as Custom’s Single Stop Inspection and Single Window, permission of government officers to work overseas, transit and transshipment cargoes, insurance, and others. These would promote the free movement of goods, vehicles, and people within the GMS so that

1. Trucks, drivers, and goods can go to any GMS country;
2. Trucks with goods can transit any GMS country without reloading or transloading;
3. Clearance times at border crossings are reduced; and
4. Institutional coordination is improved among agencies at the borders.

Meanwhile, the opening of the route would bring about other trading activities along the four countries’ borders, which could include the development of dry ports, marketplaces, trucking terminals, and cross-border trading of local agriculture to foreign markets.  According to Thailand’s Finance Ministry, EWEC will boost transborder trade by at least 50%.

Trade networks:

• Myanmar: Mawlamyine – Myawaddy
• Thailand: Mae Sot – Tak – Phitsanulok – Khon Kaen – Kalasin – Kuchinarai – Mukdahan 
• Lao PDR: Savannakhet – Dansavanh 
• Vietnam: Quang Tri – Thua Thien Hue – Dong Ha – Da Nang 

As a result, Thailand would strengthen efforts to attract more investment into the highway area.  

“Thailand is already a gateway to the region, and the road network is the foundation of development. Highway 12 will offer business opportunities for hoteliers, food shops and fuel stations. It will inject vitality into the economy along the entire route, not to mention huge increase in revenue from import-export tariff,” said Chanin Songmek, President of Tak’s Chamber of Commerce.

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Authored by

Yada Saraneeyatham, Tractus’s Senior Research Analyst based in Bangkok