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Laos Sells Power Direct
Lao solar generators can now sell power directly into China's Southern Regional Power Market, bypassing the intergovernmental price negotiations that previously governed the cost of every kilowatt-hour. One the first day’s operation of the new 500-kV line that strings together Yunnan, Oudomxay, and Luang Namtha, 4.81 million kWh from a northern solar project were sent over the border by way of a market transaction. China is expected to sell power back during the dry season, when Lao hydropower output is reduced. Running the project is EDL-T, a joint venture between Electricité du Laos and China Southern Power Grid that has a 25-year concession on the country's transmission assets. The deal was formalized in 2021.
Read more: Dialogue Earth
Inflation's Encore in Vientiane
Laos brought inflation down from a vertiginous 30 percent in 2023 to about 7.7 percent in 2025, a remarkable achievement. But the climb seems to have started again, as prices in February and March started edging up before getting to 10.2 percent in April, whipsawed by energy costs the economy hasn’t yet found a way to insulate itself from. The harder numbers are on the fiscal side. Social protection spending is roughly 1.6 percent of GDP, public health now is about 2 percent, and interest payments and capital outlays keep eating the rest before education or healthcare get their turn at the trough. The Ministry of Finance is desperate to increase revenue to 20ish percent of GDP by improving collection and trimming the discretionary exemptions that have been eroding the tax base.
Read more: The Star (AMRO regional outlook), East Asia Forum (labor migration)
Jakarta Wants In on the Potash
PT Pupuk Indonesia gets almost all of its potassium from Laos, and Jakarta has decided that it’s time to stop being a passive customer. At a Tuesday meeting between Deputy PM Phomvihane and VP Gibran at the Jakarta Vice Presidential Palace, Indonesia said it wanted Pupuk Indonesia and its sovereign wealth fund Danantara to make a fertilizer investment in order to change a supply relationship into an equity play. Indonesia-Lao trade is $83.3 million yearly, with Jakarta having a $57 million deficit, almost entirely from potash. It was Phomvihane's first trip to a Southeast Asian capital since the new Lao government formed in March.
Read more: Antara News (delegation members), Antara News (trade deficit), Antara News (JCBC reactivation)
Comrades Mark 65 Years, Renew their Vows
Wang Yi met Thongsavanh Phomvihane in Beijing on Thursday, and China's foreign minister again sang refrains about Beijing’s readiness to “deepen cooperation”. The usual topics of late were high on the agenda: the railway, minerals, trade, and human resources. The visit comes during the 65th anniversary of diplomatic ties. Vientiane also re-affirmed the one-China principle and committed to putting the 2024-2028 action plan to work in order to support a shared-future community. Tens of thousands of Lao students currently study in China.
Read more: MITV (Wang-Thongsavanh meeting), Xinhua (Li Hongzhong reception), Socialist China (Xi-Thongloun exchange)
Too Big to Solo
The Bank of the Lao PDR's Decision No. 310, issued April 9, 2026, puts a lid on how much a single commercial bank is allowed to carry alone. Any loan request that pushes past the Tier 1 Capital levels that were set in November 2025 (that’s 25% for a single borrower, 50% for related parties, 500% for major borrowers in aggregate) now requires a formal syndicate, with a lead bank, an agent bank, and a security agent, all bound under one loan agreement. Banks are still allowed to syndicate voluntarily below those limits, so the structure isn't punitive, but it is now mandatory at scale.
Read more: VDB Loi
Two Capitals Under a Cloud of Smoke
PM2.5 concentrations topped 100 micrograms per cubic meter across Laos earlier this month (double the commonly accepted safe level), and Thailand also reported unsafe air in its north, northeast, east and center. The shared misery brought Lao Agriculture and Environment Minister Linkham Douangsavanh and Thai Natural Resources and Environment Minister Suchart Chomklin together this week to review the Clear Sky Strategy, a five-point plan that includes fire suppression, air monitoring, long-term farming practices, law enforcement, and (most importantly?) implementation. Laos, Thailand and Myanmar formally agreed to the strategy in 2024, with a 2030 target. Nobody is holding their breath, but everyone’s kind of holding their breath on this one.
Read more: VnExpress
Vientiane Counts the Cost of Child Brides
Lao set up a National Advisory Group on child, early and forced marriage in Vientiane this week as part of an Australian-funded push that doesn't officially start until June 2026 and which runs through June 2028. UNICEF and the Lao Academy of Social and Economic Sciences says the yearly economic hit from early marriage is about US$40 million, much of it the result of lost productivity due to young girls dropping out of school. The new group, chaired by the National Commission for the Advancement of Women, Mothers and Children, is expected to coordinate government, UN agencies and partners working under Canberra's TUSIP program.
Read more: UNICEF
Tidying the Books Before the World Bank Arrives
The Ministry of Education and Sports is hustling to tidy up its books before a World Bank Implementation Support Mission arrives in early June. Last week's progress review for the GPE III: LEAP project, co-chaired by World Bank Senior Economist Michael Drabble, came with instructions for project units to clear outstanding budget items from both 2025 and 2026 in advance of the visit. On the assessment side, a Grade 3 literacy and numeracy test is rolling out across 40 districts and is going to serve as the headline scorecard for the program.
Read more: The Star
Another Road From Yunnan
A cross-border bus service connecting Yunnan to Luang Namtha began this week, adding road-level traffic to a corridor that already carries the railway and the power grid (and most of the debt). Luang Namtha, tucked against the Chinese border in the far north, now has a direct link for traders and tourists who previously had to patch together their own arrangements.
Read more: Travel and Tour World
That's all for this week, thanks for reading. Your voice matters to us. Feel we're missing something? Have additional sources to suggest? Don't hold back- hit reply and tell us what you think.
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