Mekong Memo Laos Weekly: Business, politics, finance, trade & legal news.
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This week's Mekong Memo Laos features key themes focusing on regional partnerships, expanding tourism, development projects, trade growth, social issues, and environmental topics. The stories emphasize Laos' relative political stability and policy efforts to spur continued economic expansion in areas like services and exports. Challenges highlighted include dependence on hydropower, illegal drugs, and malnutrition.
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Here is your Mekong Memo Laos for the week of November 8, 2023. If you like it, please share. If you love it, please subscribe. If you’re not sure, hit reply and let us know what’s on your mind. Of course, if it turns out that it’s not for you, tap that unsubscribe button down at the bottom. Thanks!
Economic Resilience: Stability in Tough Times
Laos has demonstrated a steady economic growth rate of just over 4% over recent years, regularly beating its stated national targets. Despite a depreciating currency and the challenges of inflation and exchange rate fluctuations, the government's fiscal strategies have led revenue collection goals exceeding budget. The service sector, particularly wholesale, retail, and tourism, has been pivotal in this growth, contributing to 37.2% of GDP. With political stability and social order as priorities, Laos is shooting for a GDP per capita of $2,880 by 2025, while hoping to curb inflation to single digits next year.
Read more: Xinhua (Economic Overview), The Star (PM's Insights), VietnamPlus (2024 Targets), Xinhua (Policy), Xinhua (Currency and Inflation), The Star (Growth Consistency), The Star (Service Sector Growth),
Midlife Crisis to Cheese Paradise: Buffalo Farming
In Luang Prabang, Laos, an Australian couple turned a midlife crisis into a pioneering dairy venture, establishing the first buffalo cheese farm in the country. Laos Buffalo Dairy, born from a quest for buffalo milk, now offers a unique range of cheeses and dairy products, supporting local buffalo care, improving animal health, protecting the gene pool, and boosting farmers' incomes. The farm's sustainable model rents local buffaloes, supports child nutrition programs, and plans to reintroduce educational initiatives post-pandemic, embodying a mission with a purpose beyond profit.
Read more: CNN
Laos and Mongolia Ink Multiple Cooperation Agreements
On the occasion of the state visit of the Mongolian President, the two countries have signed seven agreements to further economic, trade, investment, and tourism ties. The signings are intended to deepen relations established since 1962. Areas of focus include agriculture, logistics, and transportation, as well as leveraging the China-Laos Railway for development. The leaders also discussed reciprocal high-level visits and mutual support in regional and international forums.
The High Costs of Hydropower
Laos faces a pivotal moment in its development trajectory, battling the economic and environmental repercussions of its hydropower ambitions. While working to become a major energy provider in Southeast Asia, the country has incurred significant debt, with hydropower projects contributing to over 100% of its GDP. The World Bank notes that power sector revenue is less than 10% of fiscal revenue, highlighting the need for the nation to diversify its economy. The Mekong River, a vital resource, is under threat from these projects, affecting biodiversity and local livelihoods. The article urges and exploration of sustainable alternatives in agriculture, tourism, and renewable energy to ensure economic stability and environmental conservation.
Read more: Asia Times
Tourism Boom and Expanding Air Connectivity
Laos is set to enhance its regional connectivity and boost tourism with the upcoming launch of the Bokeo International Airport, expected to operate by year's end. This development comes as the nation witnessed a record-breaking 285% surge in tourism for 2023, signaling a robust recovery and promising future for the sector. The new airport, alongside resumed direct flights from Changzhou to Vientiane and expanded Southeast Asian routes, positions Laos as an increasingly accessible and attractive destination.
Agriculture and Wood Exports
One of the government’s new projects is focusing on agriculture and wood product exports. A recent meeting in Vientiane emphasized the importance of inclusive agricultural development to the national economy, expressly the need for initiatives that promote job creation, poverty reduction, and food security, while also protecting the environment. Efforts are being made to stimulate the wood processing sector in order to capitalize on the rising demand in European markets, especially for high value-added wood products.
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