Every Friday and Saturday, a patch of no man's land on a mountain slope on the border of Thailand and Laos heats up with an amazing outbreak of activity when thousands of people from both countries scramble up the slopes at Ban Phudu mountain to trade in a vast range of goods under the casual watch of Thai and Laotian police.

By the end of the year, this informal market, about 500km north of Bangkok, will become an official trading post under an agreement only reached last month between the governments of Thailand and Laos.

Thailand plans to build concrete roads and cement platforms for market stalls, and at the same time collect taxes on the nearly 20 million baht (US$ 512,820) trade that is being done on the mountain slope.

The scheme of this Thailand-Laos bazaar on Ban Phudu mountain is vigorously pushed forward by Khun Precha Budsri, the current governor of Uttaradit province in Thailand.

Under Prime Minister Thaksin Shinawatra's new style of CEO Governor concept, provincial governors are expected to act like corporate chief executives working with clearly defined targets and strategies. Khun Budsri and his advisers believe that Uttaradit province is a natural crossroads for trade and possibly tourism between the countries of China, Laos and Thailand.

The area already has 4 border checkpoints on the route from Thailand to Sayaboury in Laos, but Ban Phudu, where most of the trading takes place, has so far been only been an unofficial border checkpoint. This is a potentially better and shorter route into southern China, said Professor Panu Sittiwong from the Rajabhat Institute, who is adviser to governor Budsri.

The route over Ban Phudu mountain is one of the shortest routes to link east and west Asia. We give it around 2 to 3 years, by then Laos government will have improved the roads to Ban Phudu which will cut traveling time down while at the same time open up a better route for trade and tourism into Laos.

The distance between the Sukhothai in Thailand and Luang Prabang in Laos through Ban Phudu is more than 50km shorter than any other current route. But the approach road to Ban Phudu from Laos is a winding and curling dirt track up mountain slopes that currently only can be done by tractor or Camel Trophy alike 4x4 off-road vehicles.

It takes 3 hours for 31-year-old Hoon from Laos to make the trip every Friday and Saturday from his Laotian town of Pak Lai, only 33km away from Ban Phudu. Laotians buy brand-goods and packaged-goods from Thai merchants, who flock up the mountain from Thailand's site with their pickup trucks crammed with all kind of products.

Merchandise is simply laid on display on ground of the mountain slope: Clothes, hats, shoes, plastic household goods, tools, boxes and boxes of canned sardines, Thai energy drinks, detergent, soap, shampoo, mattresses, towels and anything else that is on offer in Thailand. Old Thai farming equipment and scrap metal, which are sold by kilo, are much in demand.

Hoon from Laos buys detergent and sacks full of corn animal feed. She can get all this at Pak Lai, she says, but it is much more expensive there and shopping on the mountain is much more fun.

Laotians traders sell Vietnamese cigarettes at rock-bottom price of 65 baht (US$ 1,65) per carton of 200 cigarettes and with a small profit margin of just 5 baht (US$ 0,13), Laotian merchants sell cases and cases of wine and alcohol made in China, cartons and cartons of the famous Beer Lao plus farm implements.

An army of heavy armed Thai and Lao policemen keep a watchful but friendly eye on the market. Their border posts are 10km apart and here border police from both countries can mingle, share Vietnamese cigarettes, a bottle of Beer Lao, hot Thai sausages and other luxuries from Thailand.

Manus Sokantika, a Thai district officer, said: Borders are the problem with governments, not people. The Thai and Laos people here have always been living as neighbors. If Thailand in the future will become as rich as the United States or Singapore, then border trade with Laos must be opened up more.

After the first joint Cabinet meeting with Laos last month, Thailand pledged about 50 million US-dollar in development aid to Laos, it's poorer neighbor and inaugurated a "New Era of Cooperation" with the start of a second "Friendship Bridge" across the Mekong, to be finished by the year 2007.