Laos Clippings: Donors inject millions to perk up investment climate

Top Story of The Week: Donors inject millions to perk up investment climate

LOOKING AHEAD:
For more information regarding the Council's Laos program, Please contact Carr Slayton at cslayton@usasean.org with any inquiries.

IN THIS UPDATE:

Energy
+    Theun Hinboune plant's extension projected to turn turbine mid 2012 
+  Thai firm to study 600MW wind power project in Laos

Flood Crisis
+ Russia donates US$ 100,000 for flood victims in Laos
+ Charity fair for flood victims assistance reaches millions kip

Manufacturing
+ Complex automobile assembly plant to operate by 2013 
+ Hyundai heavy industries expands to Laos 
+ Lao garment training centre opened 

Food & Agriculture
+ VN group starts huge sugar project in Laos
+ BeerLaos invests 4 bln kip in new headquarter construction

Health & Life Sciences
+ Vaccination drive on track to eliminate measles 
+ Germany backs new blood donation centres
+ Bridging culture to promote maternal health
+ Children's hospital opens in Vientiane

Infrastructure
+ First ever Lao Airlines flight to Singapore takes off today  
+ Laos to Wait for ‘Positive Signals' Before Building Mekong Dam
+ New Airbus of Lao Airlines arrives in Vientiane
+ Laos-China railway not losing speed

Financial Services
+ Govt, development partners urge sustainable growth
+ Govt seeks US$700m in aid to ensure economic growth of 8 percent 
+ Donors inject millions to perk up investment climate 
+ Phongsavanh Bank and Agribank extend frontier cooperation
+ Trade integration study is 80 per cent complete
+ Central bank vows to support Asean banking integration
+ Laos has to strike resource-non-resource balance
+ Lao, Thai, Israeli companies launch recycling venture
+ ADB provides additional loans, grants
+ UN report shows rise in Lao development ranking
+ New minimum wage delayed
+ Cigarette tax to be proposed to Government

Politics
+ Laos, VN lift their special relationship
+ PM Lee meets Japan, Laos PMs at ASEAN summit

Defense & Security
+ China, Laos, Thailand and Myanmar to launch joint Mekong River patrols


Defense & Security

China, Laos, Thailand and Myanmar to launch joint Mekong River patrols, Lao Voices, Nov. 27 

China, Laos, Thailand and Myanmar will hold a ceremony to inaugurate the joint patrol's maiden voyage before December 15 in the Chinese port of Guanlei. A headquarters for the initiative will be established in China, with coordination offices in each of the other three countries.

China will provide assistance to Laos and Myanmar in terms of police training and equipment. Police departments from the four countries will also set up a coordination teams to work out further security measures along the Mekong River.

Energy

Theun Hinboune plant's extension projected to turn turbine mid 2012, Lao Voices, Nov. 23 The extension to a 1450 gwh Theun Hinboune Hydropower Plant is projected to turn its turbine in the beginning of July next year.

According to a report by the company, the construction of the extension project began in 2008 and is anticipated to be 100 per cent complete early next year before it turbine is turned in July. The extension is aimed at increasing the electricity current production of the power plant as market demand is seeing an increasing trend, said the report.

Thai firm to study 600MW wind power project in Laos, Penn Energy, Nov. 18

The Impact Energy Asia Limited of Thailand, on Tuesday signed a Memorandum of Understanding with the Lao government to conduct a feasibility study on development on the Monsoon Wind Farm Power Project in Laos.

The MoU on the study of a proposed 600 megawatt phased wind power project will develop in Khammouane, Savannakhet and Sekong provinces. A signing ceremony of MoU was held in Vientiane between Deputy Minister of Planning and Investment, Mr. Thongmy Phomvisay, and director of Impact Energy Asia Limited, Mr. Mark Christopher Jobling. The proposal would see the first phase of commercial operation in 2015.

"Laos is not just a beautiful country but blessed by nature to have world class hydro power developments. We believe that the monsoon winds which move across Laos will allow for the undertaking of a commercial wind power development," said Mr. Jobling.

Financial Services

Govt, development partners urge sustainable growth, Vientiane Times, Nov. 23

The Lao government and its development partners are in favour of development that strikes a balance between economic growth, and social and environmental aspects.

This was the overriding message conveyed by high-ranking Lao government and overseas officials yesterday at the Round Table Implementation Meeting 2011 in Vientiane, attended by representatives from government agencies, line ministries, provincial authorities, and development partners.

The annual meeting was held to discuss perspectives and pathways for development to achieve the 7th National Socio-Economic Development Plan (NSEDP) and Millennium Development Goals (MDGs), which will prepare Laos for graduation from least developed country status by 2020.

Dr Thongloun said that in order to achieve these goals it is necessary that the capacity of all units involved be enhanced, including family-owned businesses and small and medium size enterprises, and a supporting mechanism be established to build a multi-sectoral economy.

Govt seeks US$700m in aid to ensure economic growth of 8 percent, Vientiane Times, Nov. 22

The Lao government needs between US$700 and US$800 million in Official Development Assistance (ODA) per year on average over the next five years (2011-15) to reach its target of annual economic growth of 8 percent.

To achieve the goal, government sectors need to display a firm commitment and real intention to utilise ODA provided by development partners in an effective manner, according to a senior government official.

Deputy Minister of Planning and Investment Dr Bounthavy Sisouphanthong told Vientiane Times yesterday that government sectors need to strictly follow the requirements of development partners regarding aid effectiveness, transparency and good governance.

Donors inject millions to perk up investment climate, Vientiane Times, Nov. 21

Laos has received foreign aid totalling US$144 million to bolster the government's capacity to regulate fiscal and monetary policy and improve the investment climate.

Deputy Minister of Finance Ms Viengthong Siphandone unveiled the details of the aid received from development partners through the Poverty Reduction Support Operation (PRSO) at a meeting held in Vientiane on Friday.

The meeting aimed to review the implementation of foreign aid programmes established since 2004 as part of the funding agreement with the World Bank for the Nam Theun 2 hydropower plant development project in Khammuan province.

Ms Viengthong, who is PRSO Secretariat Office Head, said that during the first two phases of foreign aid programme implementation, the government was able to mobilise US$144 million in grants and loans from the World Bank, Japan, European Union and AusAid.

Phongsavanh Bank and Agribank extend frontier cooperation, Lao Voices, Nov. 21

The Vietnam Bank for Agriculture and Rural Development (Agribank) signed a Memorandum of Understanding (MoU) on extended banking business cooperation with Phongsavanh Bank on Wednesday in Vientiane.

The objective of the agreement is to provide banking services to promote trade payments, investments and financial transactions in the Dan Savanh-Lao Bao shared border area between Laos and Vietnam. "This cooperation will mean additional services in the future such as ATMs and credit cards facilities for customers in both Laos and Vietnam," Phongsavanh Bank Deputy Managing Director Mr Bounthanh Vongsoury said at the signing ceremony.

The banks will work together to offer financial services to facilitate Vietnamese companies engaged in investment projects or operating businesses in Laos.The banks will also provide money transfer for Lao students and people living in Vietnam. "In the near future, money transaction fees will be cheaper for students," Mr Bounthanh said.

Trade integration study is 80 per cent complete, Lao Voices, Nov. 20

The draft of the Diagnostic Trade Integration Study update is now approximately 80 per cent complete and the final draft is expected to be complete in time in December, said a senior official.

"The study and the resultant action matrix is the key document for Lao PDR in documenting and identifying trade and private sector related constrains and opportunities," said Vice-Minister of Industry and Commerce Khemmani Pholsena.

It has also been a very useful tool in guiding assistance from development partners within the integrated framework resulting in progress towards a programme-based approach.

The study will provide the Action Plan for Trade and Private Sector Development in Lao PDR for implementation of her 7th Social Economic Development Plan. Central bank vows to support Asean banking integration, Lao Voices, Nov. 19

The Bank of the Lao PDR has vowed to support Asean banking integration as a measure to drive the development of a regional economic community by 2015. The free flow of investment funds will be impossible if Asean financial institutions are not integrated and do not have adequate communication channels.

Speaking at the official opening ceremony of the 41st Asean Banking Council Meeting in Vientiane yesterday, central bank Governor Mr Somphao Phaysith urged Asean bankers to pay closer attention to the details of regional banking integration before adopting and enforcing any measures.

He said commercial banks need common standards in capital adequacy, management and supervision, and accounting and transparency to ensure the effective integration of regional financial institutions in the economic bloc of 500 million consumers.

Laos has to strike resource-non-resource balance, Lao Voices, Nov. 18

World Bank's Senior Country Economist for Lao PDR Genevieve Boyreau has said that if Lao PDR wants to sustain its growth, it is important to strike a balance between resource and non-resource sectors, pointing recent economic development is commonly linked to the natural resource sector.

"If managed well, the non-resource sector is expected to contribute more than half of Lao PDR's real GDP growth and 75 percent of the GDP in the medium. To achieve these results, policies in Lao PDR should be creating an enabling business environment that supports the development of the non-resource sector," said the economist.

Investment Climate Assessment, recently released by the World Bank, states that the non-resource sector provides more inclusive growth options than the resources sector, such as long-term employment opportunities.

The report shows how the current investment climate could improve in order to enable an inclusive and sustainable economic growth path.

Lao, Thai, Israeli companies launch recycling venture, Vientiane Times, Nov. 18

Laos, Thailand and Israel have agreed to establish a recycling factory in Vientiane to improve refuse collection and reuse, keep Vientiane clean, and protect the environment.

The agreement was signed in Vientiane on Wednesday between Khouane Meung Group Company (Laos) President Mr Khamla Nackhavong, Freshco Intertrade Com-pany (Thailand) Managing Director Mr Yanapon Chaichanawongsarot, and Greencycles and Energy and Recycling Company (Israel) President Mr Adam Artwinski.

"We will invest US$30 million in total on this project, but in the first three years we will invest US$9 million, of which 30 percent will come from Laos and 70 percent from the Thais and Israelis," Mr Khamla said.

ADB provides additional loans, grants, Vientiane Times, Nov. 16 

The Asian Development Bank (ADB) has agreed to provide loans and grants worth 480 billion kip (US$60 million) for three development projects in Laos.

The funding agreements were signed between the ADB and the Ministry of Finance yesterday in Vientiane. The funding will support the secondary education development programme, the second private sector and small and medium size enterprise development programme cluster (sub-programme 1) and the Nam Ngum river basin development sector project.

ADB Country Director Mr Chong Chi Nai said that US$40 million will go to the education project, US$15 million to the business-related project and US$5 million is for additional financing of the Nam Ngum river project.

UN report shows rise in Lao development ranking, Vientiane Times, Nov. 16

Development progress in Laos has been recognised by a rise in the country's Human Development Index (HDI) value from 0.520 in 2010 to 0.524 in 2011.

The United Nations Development Programme (UNDP) Global Human Development Report (HDR) 2011 was unveiled in Vientiane on Tuesday.

Laos has seen a 39 percent rise in its HDI ranking since the first HDR was published in 1990.  Critically there has also been an improvement in the inequality-adjusted HDI, with Laos moving up six places to 107 out of 134 countries covered in the report, which is titled ‘Sustainability and Equity: A Better Future for All'.

New minimum wage delayed, Lao Voices, Nov. 14

Private sector workers will have to wait a while longer to receive the revised minimum wage as the government wants the Ministry of Labour and Social Welfare to decide on a round figure for practical purposes.

An official involved in the process said last week that government leaders have agreed in principle to the proposed increase of the minimum wage from 348,000 kip to 626,400 kip a month, but want the Ministry of Labour and Social Welfare to adjust it to a round figure for easier calculation.

"According to a notice from the Government Office, the government agrees in principle with the proposal but they want the new amount to be a round figure. However, the notice does not specify whether this should involve an increase or decrease to the proposed figure," said the official. The official said the ministry would host another meeting of government, employer and employee representatives to discuss the change to the minimum wage in line with the advice from the Government Office.

Cigarette tax to be proposed to Government, Lao Voices, Nov. 14 Ministries of Health and Finance are preparing proposals of establishing cigarette control fund and tax upwards adjustment for the cigarette to the government for consideration of approval.

The Ministry of Health is preparing the proposal on the establishment of the fund and will submit it to the Government Office by this year's end, according to Deputy Director of Hygiene and Prevention Department Dr. Khatsanaphone Phandouangsy.

"The tobacco control fund is aimed at promoting cigarette control activities and reducing the number of smokers," said Dr. Khatsanaphone.

"The current tax imposed on cigarette is relatively low as compared to those in neighboring countries, for instance, in Thailand, the price of cigarrette is, due to higher tax, THB 60 (approx.15,600 kip) but the cigarette in Laos sells for only 6,000 kip per box," said Dr. Khatsanaphone.

Flood Crisis

Russia donates US$ 100,000 for flood victims in Laos, Lao Voices, Nov. 20

The Russian government has donated US$ 100,000 as relief aid for flood victims in Laos.

The presentation ceremony for the relief package took place at the Ministry of Foreign Affairs in Vientiane between Russian Ambassador to Lao PDR, Oleg Kabanov and Deputy Minister of Foreign Affairs, Mrs. Sounthone Sayachack in the witness of relevant officials of both sides.

On this occasion, Mrs. Sounthone expressed heartfelt thanks to the Russian government for is generous assistance for the victims of natural disasters in Laos.

Charity fair for flood victims assistance reaches millions kip, Lao Voices, Nov. 13

A charity fair for helping the flood victims hit by tropical storms of Haima and Nokten was held at the Lao-ITECC, last Saturday enabled to raise fund in society amounting to more than 200 million kip.

More than 40 local booths displayed at the fair to sell and promote their products ranging from handicraft products, food, soft-drink, domestic and foreign souvenirs. "The fair is aimed at raising fund for helping flood victims countrywide who have suffered from Haima and Nokten tropical storms, last late June and August," said President of Lao Women's Federation of the Ministry of Foreign Affairs, Mrs. Khamphao Ernthavin at the opening ceremony.

The storms have claimed 30 lives and more than 82,000 households in 96 districts in 12 provinces have reportedly been affected.

Food & Agriculture

VN group starts huge sugar project in Laos, Tuoitre News, Nov. 22

Vietnam's Hoang Anh Gia Lai Group started work on the construction of a US$100 million sugar and sugarcane industrial cluster in Attapeu province, southern Laos on November 22.

The cluster includes a sugar mill with a capacity of 7,000 tons per day, a 30MW thermal power plant, an ethanol plant with a capacity of 30,000 tons per year and a fertiliser plant with a capacity of 50,000 tons a year. These facilities are expected to create 20,000 jobs for local people when they are put into operation.

Addressing the ceremony, Vietnamese Deputy Prime Minister Nguyen Xuan Phuc thanked the Lao government for their facilitation to Vietnamese businesses and expressed his belief that Lao leaders will continue creating favourable conditions for Hoang Anh Gia Lai and other Vietnamese investors in Laos.

BeerLaos invests 4 bln kip in new headquarter construction, Lao Voices, Nov. 13 Lao Brewery Company has decided to invest 40 billion kip in the construction of its new headquarters building. A contract of the construction was signed in Vientiane Capital, yesterday, between General Director of Lao Brewery Company, Mr. Kitsana Vongsay and General Director of Guapa Lao Housing Construction Company Limited, Mr Phatthana Simmalavong.

The construction work will take 13 months to complete. Mr. Kitsana said the construction of new office is to improve the standard of infrastructure and service internationally in comply with current work of the company, which is on upward.

Health & Life Sciences

Vaccination drive on track to eliminate measles, rubella, Vientiane Times, Nov. 21 

A nationwide measles and rubella vaccination programme is now in its final phase, in the hope of eliminating the diseases in Laos next year.

A ceremony to launch the programme in Vientiane took place at the National Culture Hall on Saturday, attended by President Choummaly Sayasone, Minister of Health Professor Dr Eksavang Vongvichit, National Commission for Mother and Child Chairperson Ms Khempheng Pholsena, and United Nations Children Fund (UNICEF) Deputy Representative Ms Julia Rees.

Vaccinations are being given in four main locations - Luang Prabang province in the north, Champassak province in the south, Khammuan province in the central region, and in Vientiane.

Laos is one of 36 West Pacific countries targeting the elimination of measles and rubella in 2012, and achieving the United Nations Millennium Development Goals on reducing child mortality rates and improving maternal health.

Germany backs new blood donation centres, Vientiane Times, Nov. 17

The German Red Cross (GRC) yesterday provided 5.5 billion kip to build five new blood donation centres in Laos to promote the importance of blood donations and strengthen cooperation between Red Cross organisations in the two nations.

The funds will be spent on blood donation facilities in five provinces between now and 2014 after the GRC obtained support from the German government to finance the project.

The German Ministry for Economic Cooperation and Development and the GRC provided the funds with the aim of improving health care in Champassak district of Champassak province, Dakcheung district in Xekong province, Taoy district in Saravan province, Khua district in Phongsaly province, and Hongsa district in Xayaboury province.

Bridging culture to promote maternal health, IRIN News, Nov. 16

In 2010, for the first time in more than 20 years, 140 midwives graduated in Laos but specialists say their skills may go untapped because the country's women are not used to visiting health workers.

Only 34 percent of women in Laos seek the advice of medical professionals; even fewer see one when they are pregnant, according to government data from 2009-2010. At Luang Prabang's regional hospital, some 200km north of the capital Vientiane, Magdalen Muraa, a UN Volunteer with UN Population Fund (UNFPA) is training 20 midwives for graduation in February 2012.

Children's hospital opens in Vientiane, Lao Voices, Nov. 13

The Lao-Korea National Children's Friendship Hospital opened in Vientiane yesterday, targeting a sharp reduction in infant and maternal mortality rates as dictated by the 2015 Millennium Development Goals (MDGs).

The US$3.5 million hospital, the first children's hospital in Laos, was funded by the government of the Republic of Korea, and is located in Phonsavang village, Chanthabouly district, close to Mittaphab Hospital. The facility will also act as a research and training centre for paediatric medicine. Construction took just over two years following the groundbreaking ceremony in October 2009.

Speaking at the opening ceremony, Minister of Health Prof. Dr Eksavang Vongvichit said the hospital was part of the government's wider programme of modernisation and expansion of health services in Laos.

Infrastructure

First ever Lao Airlines flight to Singapore takes off today, Lao Voices, Nov. 25

Lao Airlines' first ever direct flight to Singapore is scheduled for take-off this afternoon with 135 lucky passengers on board the 142-seat Airbus 320. The airline is optimistic the new Vientiane-Singapore sector will meet with the same success as its other international and domestic routes.

The official opening of the Vientiane-Singapore-Vientiane flight will take place in Singapore on Friday, attended by Lao government officials and representatives from Lao Airlines and Singapore's Changi Airport. Regular flights are scheduled for Tuesdays, Thursdays and Sundays.

Laos to Wait for ‘Positive Signals' Before Building Mekong Dam, Bloomberg, Nov. 20

Laos will wait for "positive signals" from its neighbors before it builds the $3.7 billion Thai-financed Xayaburi hydropower plant on the Mekong River, Deputy Prime Minister Thongloun Sisolit said.

"Laos, Vietnam and Cambodia share the common position that any construction activity will take place only if positive signals are given by the experts," he said in an interview two days ago in Bali, Indonesia, where 18 Asia-Pacific leaders met for a summit. "We will be pleased to listen to the concerns and opinions of all parties."

Mekong River nations are set to meet on Dec. 7 to decide whether to endorse the project after Laos agreed in April to postpone construction because of environmental concerns. Vietnam earlier recommended a 10-year delay for all hydropower projects on the river, which winds through Myanmar, Thailand and Cambodia from its source in China's Tibetan plateau.

New Airbus of Lao Airlines arrives in Vientiane, Lao Voices, Nov. 16

Lao Airlines, the national carrier of Laos, has taken delivery of the first of two A320 aircraft ordered from Airbus. The welcoming ceremony of aircraft held on 8 November in the presence of Standing Deputy Prime Minister, Mr Somsavat Lengsavad and Thierry Mariani, French Minister of Transport.

The second A320 ordered by Lao Airlines is scheduled to arrive in Vientiane next month, with the aircraft entering service on routes to key destinations in South East Asia, including Bangkok and Singapore. The A320s are the first jet aircraft to be purchased by Lao Airlines and feature a high comfort two class layout seating 126 passengers in the main cabin and 16 in Business Class. The aircraft are powered by CFM56 engines from CFM International.

"The A320 will see Lao Airlines introduce a new level of premium service as we expand our international route network," said Somphone Douangdara, President of Lao Airlines. "In addition to the highest standards of in-flight comfort, Lao Airlines will also benefit from the extremely low operating costs offered by these modern, fuel-efficient aircraft."

Laos-China railway not losing speed, Lao Voices, Nov. 14

The Laos-China high speed railway has been delayed but its construction won't take any longer than other large-scale investment projects, a high-ranking official has said.

Speaking at a meeting of Chinese expatriates in Vientiane on Thursday, Deputy Minister of Planning and Investment Dr Khamlien Pholsena said it took 10 years to build the US$1 billion Nam Theun 2 hydropower plant, so it is not surprising that the US$7 billion railway project has been delayed.

"The Nam Theun 2 dam cost about US$1 billion and took 10 years to build. The proposed high speed rail link will cost US$7 billion. However, this does not mean it will take 70 years to build," Dr Khamlien said in response to questions from meeting participants. Last year the government announced in the National Assembly that construction of the railway would begin in April, but the project was postponed. Government leaders are currently unable to confirm when construction will begin.

Manufacturing

Complex automobile assembly plant to operate by 2013, Lao Voices, Nov. 20

A complex automobile assembly plant in central province of Khammouane, with the employment capacity of over 2,000 workers is expected to assemble motorbike and automobile by next three years.

A groundbreaking ceremony of a complex automobile assembly plant was held in Khammouane province, which was in coincide with the officially opening ceremony of the 3rd Lao-Thai Friendship Bridge, on 11 November. The company will pour more than US$1.5 billion in the construction of industrial processing area.

Hyundai heavy industries expands to Laos, Lao Voices, Nov. 17 The Lao Hyundai Heavy Industries Company (HHI) expanded its market to Laos by opening a showroom in Vientiane Capital last Friday.

The expansion is thanks to a high market demand and a lot construction project, said President of HHI, Mr. Souksamone Sihathep. The HHI of heavy industrial products will make available for sale through its agent-Maniyom Group which is located at the ASEAN Road (T2) in Khounta Thong village, Sikhottabong district, Vientiane Capital.

Lao garment training centre opened, Lao Voices, Nov. 14

The first ever garment training centre at Sawang village, Chanthabouly district, Vientiane Capital, was open on November 7.

The opening ceremony for the centre saw the presence of Acting Minister of Industry and Commerce, Ms. Khemmany Pholsena.

"The centre is designed for developing local skilled and trained foremen and workers who can be in charge of important responsibilities in production process in garment factories as most of such positions is now held by foreigners," said President of the Lao Garment Industry Association, Ms. Onesy Boutsivongsak.

"However, in order to meet the production demand in the industry, it is needed that the industry has adequate number of skilled and experienced workers who is in charge of and watches over a group of workers, and able to check the quality of the finished products and is in charge of marketing," said the official.

Politics

Laos, VN lift their special relationship, Viet Nam News, Nov. 22

Viet Nam would do its utmost to work with Laos to develop the two countries' special relationship to a higher level, affirmed Party General Secretary Nguyen Phu Trong.

Trong made the statement yesterday while receiving a delegation from the Propaganda and Training Board of the Lao People's Revolutionary Party Central Committee, led by Cheuang Sombounkhan, who is also the Lao Party Secretary.

Sombounkhan spoke highly of the results of the delegation's working visit to Viet Nam and co-operation results between the board and the Communist Party Central Committee's Commission for Publicity and Information of Viet Nam over the past years. He affirmed the two sides would continue working closely with each other, increasing experience sharing and mutual assistance.

PM Lee meets Japan, Laos PMs at ASEAN summit, Channel News Asia, Nov. 18

Singapore Prime Minister Lee Hsien Loong held bilateral meetings on the sidelines of the ASEAN Summit on Friday.

In his meeting with new Japanese Prime Minister Yoshihiko Noda, both sides reaffirmed the strong bilateral relations. Mr Lee expressed support for Japan's intention to participate in the Trans-Pacific Partnership, and acknowledged Japan's contributions to the region. They also discussed the issue of maritime security and agreed on the need for international law and UNCLOS (United Nations Convention on the Law of the Sea) to be adhered to.

PM Lee also met with the Prime Minister of Laos, Thongsing Thammavong. The leaders reaffirmed the warm ties, and expressed confidence in further strengthening bilateral cooperation.