Impact of the EWEC on Development in Border Provinces: Case Study of Savannakhet Province in Lao PDR

The study bring together in a systematic manner the available information from recent expenditure and consumption surveys for Laos as they relate to the impact of the East West Economic Corridor (EWEC) on different social and economic aspects of households in the Lao province of Savannakhet. The results of the study sustain a number of conclusions in terms of the transformation of the EWEC from a transport to an economic corridor. In the first place, the central districts of Savannakhet have benefited more from the transport infrastructure of the EWEC that the surrounding districts. Nevertheless, the peripheral areas surrounding the Corridor have benefited in a substantial way from improvements in the feeder road system. The second important finding of the study is that infrastructure development has been an effective way of directly impacting on household well-being and indirectly contributing to human endowments of those households by enhancing their consumption of education and health services. However, the results also indicate that infrastructural developments have not been allocated among districts in the province in a way that could have produced a more equitable distribution of their effects on living standards. The implication of this third finding is that infrastructural investment needs to better target low-income rural areas in the peripheral districts. In that way, public investments could help to reduce the growing inequality among districts in Savannakhet, especially if it were to target low-income groups in remote villages.