Laos 20231213

Mekong Memo Laos Weekly: Business, politics, finance, trade & legal news.

Dec 13, 2023

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Headlines:

World Bank Reports on Fiscal Challenges and Opportunities

UNODC Opium Survey Sees Stable Output

China Co-op in News, Culture, and Tourism

Laos Revives Soviet-Era Ties with Russia

Sanctions Target Scam Operations in SEA

ADB Earmarks Cash for Climate and Urban Development

Vietnam and Laos Collaborate on Digital Economy

New Economic Measures Met with Skepticism

Direct Vientiane / HCMC Flights

Vietnam and Laos Deepen Energy Links

Challenges for 2024 ASEAN Chair

UNESCO Recognizes Naga Weaving

World Bank Reports on Fiscal Challenges and Opportunities

The World Bank's two new reports on Lao PDR's public finances outline specific challenges facing the nation, including a high debt burden, poor revenue collection, and limited financing options. The analysis suggests that Laos' economic instability stems from low revenue and accumulated debt, compounded by inefficient public expenditure. The reports recommend improving tax collection, reforming state-owned enterprises and public-private partnerships, and targeting public spending more efficiently in order to create a more equitable and sustainable fiscal system for long-term prosperity.

Read more: World Bank (Overview), World Bank (Public Finance), World Bank (Fiscal Incidence)

UNODC Opium Survey Sees Stable Output

The United Nations Office on Drugs and Crime (UNODC) released the Southeast Asia Opium Survey 2023 with a summary of cultivation, production and implications in the region. The survey reveals that Laotian opium poppy cultivation has remained relatively stable over the past decade with a slight decline from 5,700 hectares to about 5,000 hectares. The majority of cultivation was observed in Phongsaly province, which has traditionally been a center for opium production in Laos. For comparison, the area under cultivation represents about one-tenth of the area under cultivation in Myanmar. Yield estimates also remained relatively stable in 2023 compared to 2014, but due to the lack of recent data, it is difficult to see the impact that the COVID pandemic and the country's economic situation is having on production.

China Co-op in News, Culture, and Tourism

In an announcement made during a meeting with Xinhua News Agency's president, Prime Minister Sonexay Siphandone redoubled his commitment to cooperation with China in areas of news, culture, and tourism. This announcement during the second Belt and Road Forum for Laos-China Cooperation came as participants celebrated (again) the Laos-China Railway, which has been instrumental in boosting local trade and economies. Laos continues to leverage this partnership to showcase its tourism potential and attract more Chinese visitors.

Laos Revives Soviet-Era Ties with Russia

Laos is revitalizing its long-standing Soviet-era relationship with Russia. This renewed alliance, with particular cooperation in the digital economy, education, and tourism sectors, comes as Russia seeks to counter global isolation following its Ukraine invasion. Historical ties, forged through ideological links and the legacies of war, are being leveraged, with Laos exploring Russian oil imports and healthcare system support. Laos' diplomatic stance remains neutral, consistently abstaining from U.N. votes against Russia, perhaps pragmatically as a strategic balance in its international relations amidst rising debts and reliance on China.

Sanctions Target Scam Operations in SEA

Western nations, including the UK, US, and Canada, have imposed sanctions on nine individuals and five entities involved in human trafficking and operating 'scam farms' in Laos, Myanmar, and Cambodia. Victims lured with job promises face torture and inhumane conditions. Figures like Zhao Wei, founder of Kings Romans Group, and Saw Chit Thu of Myanmar's Karen Border Guard Force, are among those sanctioned.

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