Laos 20240911: Bold, Profound, Torpid
Laos 20240911: Bold, Profound, Torpid
Mekong Memo Laos Weekly: Business, politics, finance, trade & legal news.
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Headlines:
Vietnam-Laos Partnership Strengthens
Prabowo Pledges Support During Visit
Major Projects Under Scrutiny in South
Luxury Car Import Ban Targets Economic Woes
Low-Interest Fund to Boost Domestic Production
Inflation Crisis Erodes Purchasing Power
PM Rallies Support for ASEAN Summits
Tourism Rebounds, 2.3M Foreign Visitors So Far
Economic Challenges Persist Amid Slow Recovery
Push for Equal Access to Education
New Direct Flights to China and South Korea
National Assembly Targets Corruption
Vietnam-Laos Partnership Strengthens
Recent high-level meetings in Hanoi have reinforced commitments to cooperation across the board. Discussions covered economics, trade, defense, and regional integration. Vietnam pledged support for the ASEAN chairmanship and international missions. Both nations agreed to improve connectivity in finance, infrastructure, energy, and tourism.
Read more: VOV World (Cooperation), VietnamPlus (Talks), Vietnam Plus (Diplomatic Meeting), VOV World (Bilateral Relations), VOV (Diplomatic Ties)
Prabowo Pledges Support During Visit
President-elect Prabowo Subianto's meeting with President Thongloun Sisoulith signaled stronger bilateral ties and ASEAN collaboration. Prabowo backed Laos’ upcoming ASEAN leadership role, praising summit preparation efforts. Talks explored trade, investment, and educational partnerships, including scholarships for students. With bilateral trade moving above $188 million, both nations shared optimism about future cooperation.
Read more: The Star (Prabowo Visit), Laotian Times (ASEAN Cooperation)
Major Projects Under Scrutiny in South
Vietnamese Minister Nguyễn Chí Dũng inspected several important ventures in the south of Laos, including a $4.06 billion coal-fired power plant set to break ground in 2025. A bauxite mining and alumina processing complex was also reviewed. These projects, important fixtures in bilateral economic cooperation, are big projects facing investment and management hurdles that still need to be managed. Local authorities are being urged to streamline implementation, and leaders of both countries are keeping a close eye on progress.
Read more: Vietnam News
Luxury Car Import Ban Targets Economic Woes
The Lao government has imposed a temporary ban on importing luxury vehicles, like Toyota Land Cruisers, from August 20 to December 30, 2024. The ban is intended to reduce inflation and stabilize the national currency, the kip, which has been devalued along with a rising trade deficit. High-ranking officials and wealthy individuals commonly purchase these cars using U.S. dollars or Thai baht, contributing to the depletion of foreign reserves. The effectiveness of the ban remains to be seen thanks to enforcement challenges.
Read more: RFA
Low-Interest Fund to Boost Domestic Production
A new low-interest initiative is expected to provide affordable financing to support local manufacturing, particularly for micro, small, and medium enterprises. The plan is designed to increase business self-reliance, boost exports, and pull in more foreign investment. Several ministries and the central bank have been tasked with establishing the production promotion fund to drive economic growth.
Read more: Xinhua, Laotian Times
Inflation Crisis Erodes Purchasing Power
Soaring inflation, nearing 25%, and a weakening currency continue to strain household budgets. Experts are calling for more action on growing debt, especially with China, to reduce the pain. Rising prices for basic goods are making daily life increasingly difficult for regular people. Stabilizing the economy will require an aggressive curbing of debt and a strengthening of financial management.
Read more: Nikkei Asia
PM Rallies Support for ASEAN Summits
Prime Minister Sonexay Siphandone has called for nationwide backing as preparations ramp up for the 44th and 45th ASEAN Summits in October 2024. He emphasized the importance of showing off Laos' cultural heritage and ensuring a successful event, with heads of state and government from more than 20 countries expected to attend. The summits present an opportunity to showcase cultural heritage and boost regional cooperation in trade, investment, and tourism.
Read more: Asia News Network
Tourism Rebounds, 2.3M Foreign Visitors So Far
The tourism sector is doing well, attracting 2.3 million foreign visitors in the first seven months of 2024, a lift of 18% over last year’s tally. The industry has generated more than $700 million in revenue so far. Domestic tourism also flourished, with more than 2 million Lao tourists contributing $332 million. The government has introduced several new programs like tour guide training and visa-free entry for select countries, in order to further boost tourism through the end of this year.
Read more: Asia News Network
Economic Challenges Persist Amid Slow Recovery
Despite stable employment and rising female workforce participation, wage growth has severely lagged inflation. Currency depreciation is driving workers into agriculture and self-employment while boosting outmigration. Food insecurity remains a concern, with 63% of low-income households reducing intake. Education and healthcare spending cuts threaten long-term human capital development.
Read more: World Bank
Push for Equal Access to Education
Education Minister Phout Simmalavong called for increased investment to bridge the urban-rural divide in schooling. The government views education as a pillar to developing a competent workforce and efforts have been focused on creating opportunities for disadvantaged groups, including ethnic minorities and women, while addressing challenges like teacher shortages and high rural dropout rates.
Read more: China.org
New Direct Flights to China and South Korea
Air links with China and South Korea are expanding. 9 Air launched Guangzhou-Vientiane flights, while Luang Prabang prepares for direct routes to and from South Korea.
Read more: Travel and Tour World (China), The Star (South Korea)
National Assembly Targets Corruption
New draft resolutions from the National Assembly are expected to intensify anti-corruption efforts through increased inspections and improved public oversight mechanisms. Proposals include a citizen hotline for reporting concerns. The resolutions are reflective of a public-facing commitment to address persistent corruption issues and are hoped to boost public trust in governance through better enforcement.
Read more: The Star
That’s all for this week, thanks for reading.
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