Laos Update: May 31, 2018

Laos Update | May 31, 2018
Authors: Matt Solomon, Ella Duangkaew, Piranat Viriyaprapaikit
 
LOOKING AHEAD
 
 

June 29, 2018Second Lao Digital ForumThe Bank of Lao PDR is partnering with the U.S. Embassy in Vientiane to hold the second Lao Digital Forum on June 29, following the first Forum held on January 26. The purpose of this forum will be to raise awareness of financial technologies among key policymakers in Laos, and discuss the optimal policy environment needed to help Laos increase prosperity and financial inclusion, promote microenterprises and SMEs, deepen its economic integration into the ASEAN Economic Community, and create a level playing field that allows open competition and innovation in fintech. Representatives from the Ministry of Posts and Telecommunications, the Ministry of Industry and Commerce, and the Ministry of Finance, as well as leading representatives of the Lao business community are expected to attend the forum. The Embassy is seeking participation and sponsorship from the U.S. private sector. Sponsorship of the forum would include participation in either Davos-style panel discussions or breakout sessions with policymakers, and an opportunity to engage with Laos’ top leadership on issues related to fintech. If you are interested in sponsoring and/or participating in the forum, please contact Ella Duangkaew at eduangkaew@usasean.org.

August 23-24, 2018Laos Business Mission: Please save the date for the Council's annual Business Mission to Laos, taking place in Vientiane. Please contact Ella Duangkaew at eduangkaew@usasean.org with any questions.

 
THE COUNCIL'S TAKE
 
 

Laos Hosts ASEAN Power Grid Summit

From May 21 to May 23, the ASEAN Power Grid Summit 2018 took place in Vientiane, Laos under the theme of "Enhancing ASEAN Power Grid Investment towards Regional Energy Optimization."  Participating officials included the Minister of Energy and Mines Khammany Inthirath, Confexhub Chairman Abdual Kadir, Executive Director of the ASEAN Centre for Energy Sanjayan Velautham, Chairman of the ASEAN Power Grid Consultative Committee Twarath Sutabutr, and representatives from more than 20 countries, including ASEAN member states. The three-day summit included comprehensive tours of Laos’ hydropower plants, a series of keynote speakers on collaboration between the public and private sector in the energy sector, and discussions of investment opportunities and prospects in the ASEAN energy sector. The ASEAN Power Grid (APG) was also discussed, which has the aim of establishing regional interconnectivity for electricity within ASEAN, with the aim to ensure regional energy security, efficient energy utilization, and sub-regional energy sharing. Laos’ power sharing agreement is a critical part of the APG, and helps establish Laos’ important role in building out the APG. More information on the APG can be found in our Energy updates here and here.

Laos serving as the host of the ASEAN Power Grid Summit aligns well with their continued prioritization of increasing energy production and capacity in the country as a driver of economic growth. With 46 operational hydropower plants and 54 hydropower projects under development, Laos has been significantly increasing electricity production to supply the country’s ever-growing domestic demand, as well as the demand for electricity exports to neighboring countries like Thailand, Cambodia, and Vietnam. With a strong interest in becoming the “Battery of ASEAN” by 2020, the Ministry of Energy and Mines of Laos is looking to operate 100 hydropower plants by 2020 with a combined install generation capacity of 28,000 MW and annual power output of about 77,000 million KWh. Additional cooperative plans for infrastructure improvement, railway connectivity, and commercial development at Khonphapheng, as well as increased foreign direct investment throughout the country may help Laos in building out its energy infrastructure and production capacity.

Cooperation Efforts on Laos-Cambodian Border Dispute

On May 16, delegates from the Lao and Cambodian Ministries of Foreign Affairs met to discuss progress made in resolving border demarcation issues. Historically, 535 kilometers, or 14 percent, of the total length of the common border continues to not be demarcated, which has created longstanding military tensions in the area. The meetings on May 16 were initiated after a border dispute in August 2017, when both Lao and Cambodian militaries undertook multiple construction projects in the “white zone” both nations had previously agreed to keep clear of any military installations. Cambodian Prime Minister Hun Sen warned the Lao government to move out of an area that he claimed should be rightfully part of Cambodia.

This year, Lao Minister of Foreign Affairs Saleumxay Kommasith met with Cambodian Minister of Foreign Affairs and International Cooperation Prak Sokhonn and agreed to establish department-level collaboration mechanisms at both countries’ foreign ministries. Both sides expressed their desire to ensure peace and security along the Lao-Cambodian common border by working under various bilateral cooperation frameworks.

 
IN THIS UPDATE
 
 
Regional Affairs
Lao And Chinese Ministries Pledge Strengthened Cooperation
Laos seeks coal development cooperation with ASEAN partners
National Steering Committee Discusses Progress In SDG Implementation
Laos, Singapore Enhance Ties, Cooperation

National Affairs
Philippines President Duterte Confers Order Of Sikatuna To Lao Ambassador
Laos Will Rollout New and Improved Primary School Curriculum in 2019
Kaysone Phomvihane Announced As A City
Preparations Being Made For Celebration Of Announced City Status Of Pakse

Defense & Security
U.S. Pacific Command Deputy Commander Visits Lao P.D.R.

Economics
Gov’t Raises Minimum Wage To 1.1 Million Kip
Laos Making Efforts to Improve Ease of Doing Business

Energy
Don Sahong Project Expected To Begin Power Generation In Late 2019
Fuel Prices Rise Again and May Rise Further
Rising Fuel Prices Cause Inflation
NERI: Lao Economy Needs Diversification
Leaked report warns Cambodia's biggest dam could 'literally kill' Mekong river
Mining sector to contribute less to Lao economy: report - Xinhua | English.news.cn
Laos: New Hydropower Dams, Old Mekong Worries

Financial Services
Central Bank Approves Only 3 QR Payment Services in Laos

Food & Agriculture
Lao Prime Minister Tightens Regulations Against Wildlife Trafficking
Government Declares One-Dish Menu Items to Be Priced No More Than 15,000 Kip
Chemical Runoff Suspected in Cow Deaths
World Bank Supports Laos' Agricultural Sector

Health & Life Sciences
UK lends support to malaria control
Thai Hospital To Build Branch In Vientiane

Infrastructure
Fifth Lao-Thai Friendship Bridge Approved

Myanmar
Laos, Myanmar move forward in energy cooperation | Eleven Myanmar
 
ARTICLE CLIPS
 
 
Regional Affairs

Lao And Chinese Ministries Pledge Strengthened Cooperation KPL Laos News Agency 30th May 2018
(KPL) The Ministry of Industry and Commerce of the Lao PDR and China’s Ministry of Commerce have agreed to strengthen cooperation. The statement was made at the 9th Laos-China Economic and Trade Cooperation Commission meeting held in Vientiane on May 11. The Lao side was led by Minister of Industry and Commerce Khemmany Pholsena, and Deputy Minister of Commerce of China Gao Yan.

Laos seeks coal development cooperation with ASEAN partners Xinhua 30th May 2018
VIENTIANE, May 18 (Xinhua) -- Laos is looking forward to greater cooperation with its Association of Southeast Asian Nations (ASEAN) partners to solve the challenging issues on coal development as part of support for the region's economic growth, government officials said. The remarks were made by Head of Office of the Ministry of Energy and Mines Daovong Phonekeo, at the 16th ASEAN Forum on Coal Council Meeting in Lao capital Vientiane, Local daily Vientiane Times reported Friday. The Council is actively promoting the development and utilization of cleaner coal technologies in the ASEAN member states. Council members expressed their commitment to supporting and implementing the ASEAN Plan of Action for Energy Cooperation program on Clean Coal Technology.

National Steering Committee Discusses Progress In SDG Implementation KPL Laos News Agency 30th May 2018
(KPL) The 2nd meeting of the National Steering Committee on the Implementation of Sustainable Development Goals (SDGs) was held in Vientiane where progress in implementing the Sustainable Development Goals in the Lao PDR was reported. The meeting was held in Vientiane on May 24 in the presence of Minister of Foreign Affairs Saleumxay Kommasith. The Lao government has attached importance to the implementation of the 2030 Agenda for Sustainable Development Goals by mainstreaming SDGs into the 8th Five-year Socio-economic Development plan (2016-2020) and annual national socio-economic development plans.

Laos, Singapore Enhance Ties, Cooperation KPL Laos News Agency 30th May 2018
(KPL) President Bounnhang Vorachit arrived in Singapore on Wednesday for a two-day state visit to the city country in response to the invitation of his Singaporean counterpart Halimah Yacob to enhance the longstanding relations and cooperation between the two ASEAN neighbours. This is President Bounnhang’s first visit to Singapore since he took office in April 2016. He is accompanied by his wife Khammeung Vorachit, ministers and business people.

National Affairs

Philippines President Duterte Confers Order Of Sikatuna To Lao Ambassador KPL Laos News Agency 30th May 2018
(KPL) Philippine President Rodrigo Roa Duterte conferred on May 28 the Order of Sikatuna to outgoing Lao Ambassador to the Philippines Phoxay Khaykhamphithoune in Malacañan Palace. The citation recognizes ‘his meritorious contributions in further strengthening the relations between the Republic of the Philippines and the Lao People’s Democratic Republic, and his commitment efforts in further intensifying cooperation between the two countries to advance peace, progress and prosperity in the two countries and in the region.

Laos Will Rollout New and Improved Primary School Curriculum in 2019 The Laotian Times 30th May 2018
Since 2015, the Ministry of Education and Sports (MOES) has been in the process of revising the country’s national curriculum and developing new textbooks, teacher guides and other resources for primary schools. On Wednesday, Associate Professor Khamphay Sisavanh, Vice-Minister for Education and Sports and Mr Andreas Zurbrugg, Deputy Head of Mission of the Australian Embassy co-chaired the Primary Curriculum Steering Committee’s inaugural meeting to familiarize MoES Departments with the new primary curriculum, including key changes, teacher guides and teaching materials.

Kaysone Phomvihane Announced As A City KPL Laos News Agency 30th May 2018
(KPL) Authorities and people of Savannakhet held a ceremony on May 25 to announce the city status of Kaysone Phomvihane and celebrated the 1,000,000th child of the province at the Kaysone Phomvihane Memorial. Translate into reality the resolution of 10th National Congress of Lao People’s Revolutionary Party Prime Minister Thongloun Sisoulith issued last month three decrees approving the upgrading of three districts to cities including Luang Prabang of Luang Prabang Province, Kaysone Phomvihane of Savannakhet Province and Pakse of Champassak Province.

Preparations Being Made For Celebration Of Announced City Status Of Pakse KPL Laos News Agency 30th May 2018
(KPL) Pakse authorities in southernmost province Champassak are expected to celebrate the announcement of Pakse district as a city on May 31. Prime Minister Thongloun Sisoulith issued last month three decrees approving the upgrading of three districts to cities including Luang Prabang of Luang Prabang Province, Kaysone Phomvihane of Savannakhet Province and Pakse of Champassak Province. To be classified as a city, a municipality must have a population of at least 60,000 and be financially self sufficient with regard to administration costs.

Defense & Security

U.S. Pacific Command Deputy Commander Visits Lao P.D.R. KPL Laos News Agency 30th May 2018
(KPL) A bilateral meeting between the delegation of the Ministry of Foreign Affairs of Laos and that of the Ministry of Foreign Affairs and International Cooperation of Cambodia was held on May 16 in Vientiane. The Lao side was led by Minister of Foreign Affairs Saleumxay Kommasith, and the Cambodian delegation was headed by Minister of Foreign Affairs and International Cooperation Prak Sokhonn.

Economics

Gov’t Raises Minimum Wage To 1.1 Million Kip KPL Laos News Agency 30th May 2018
(KPL) The government has approved workers’ monthly minimum wage of 1.1 million kip, an increase of 11 per cent from 900,000 kip, according to the announcement of Prime Minister’s Office No. 560, dated April 20, 2018. “The minimum wage increase will take effect from May 1, 2018,” Minister of Labour and Social Welfare Sompheng Xaysompheng told a press conference in Vientiane on Apr 30, 2018. Minister Sompheng justified the raise of the minimum wage by claiming the fact that the country and the region have recorded an increase economic growth and, consequently, higher cost of living over the past couple of years.

Laos Making Efforts to Improve Ease of Doing Business The Laotian Times 14th May 2018
The government of Laos is making efforts to improve the ease of doing business in the country by streamlining the process for business registrations. According to the World Bank Ease of Doing Business ranking system, Laos took 141st place in 2017, dropping steadily from 134th place in 2014, and 139th in 2016.

Energy

Don Sahong Project Expected To Begin Power Generation In Late 2019 Laos News Agency 30th May 2018
(KPL) The 260-mw Don Sahong hydropower dam, which is a roller-compact dam – RCC – with a designed annual power output of 2,000 Gwh, is expected to begin generating electricity by the end of 2019. Once fully completed and put into operation, the dam will ease power shortage in southern provinces including Champassak, a fast growing province of Laos. A huge amount of generated power will be exported to neighbouring Thailand and Cambodia.

Fuel Prices Rise Again and May Rise Further The Laotian Times 26th May 2018
The retail price of fuel has just risen again as of Saturday (May 26). According to a statement signed by the Minister of Industry and Commerce, petrol companies and gas stations across the country must now increase the retail price by 200 kip/liter for premium grade, 100 kip/liter for regular petrol, and 100 kip/liter for diesel. In the capital city for example, petrol now costs 10,510 kip/liter for premium grade, up from 10,310 kip. One liter of regular petrol sells now for 9,370 kip, up from 9,270 kip and diesel will cost 8,400 kip/liter, up from 8,300 kip.

Rising Fuel Prices Cause Inflation The Laotian Times 18th May 2018
The rising price of fuel has been identified as the culprit behind inflation in Laos, causing the government to take steps to address this economic risk. According to the latest report from the Lao National Statistics Bureau, inflation has risen by 1.88%, due to the rising price of fuel, which apparently is the main force behind the rise in the general prices of other consumer goods. The price of fuel in Laos has increased by 17.15% compared to last year. The increase drove up the consumer price index of the transport sector by 3.61% compared to the previous year, stated the report.

NERI: Lao Economy Needs Diversification The Laotian Times 3rd May 2018
An economic update released last month by the National Economic Research Institute (NERI), a government body led by former Prime Minister Bouasone Bouphavanh, stated that the mining sector’s contribution to the country’s economy will continue to drop over the coming years as a lower output is predicted for this natural resource-based sector. NERI did not identify the factors contributing to the lower productivity of the mining sector. However, it is widely recognized that the mining sector, particularly two major mining operations, has seen a fall in the production of raw materials. One of these is the Sepon mine, the operations of which are expected to close in 2020 due to the exhaustion of resources.

Leaked report warns Cambodia's biggest dam could 'literally kill' Mekong river the Guardian 16th May 2018
A Chinese-backed plan to build Cambodia’s biggest dam could “literally kill” the Mekong river, according to a confidential assessment seen by the Guardian which says that the proposed site at Sambor is the “worst possible place” for hydropower. The report, which was commissioned by the government in Phnom Penh, has been kept secret since it was submitted last year, prompting concerns that ministers are inclined to push ahead regardless of the dire impact it predicts on river dolphins and one of the world’s largest migrations of freshwater fish.The proposed hydropower plant would require a 33km-wide concrete barrier across the river at Sambor, Kratie province. This quiet rural district is best known as a place for watching Irrawaddy dolphins, whose critically low numbers have just shown their first increase in 20 years.

Mining sector to contribute less to Lao economy: report - Xinhua | English.news.cn Xinhua 16th May 2018
The mining sector's contribution to the Lao economy will continue to drop over the coming years as a lower output is forecast for this natural resource-based business, according to an update from the Lao National Economic Research Institute. The institute released its domestic economic update last month, which highlighted projections for 2018 and beyond, local daily Vientiane Times reported Thursday. According to the report, the output of the mining sector, one of the main contributing sectors to the economy, has witnessed continued decline. This has deflated the sector's contribution to the economy.

Laos: New Hydropower Dams, Old Mekong Worries The Diplomat 14th May 2018
Laos has not been reluctant to let the world know about its ambition to become the largest energy exporter in the region, or the “Battery of Asia.” As of part of efforts to realize its goal, the landlocked communist country has pushing for building more hydropower plants over the years, in spite of the current and projected impacts on the future of the Mekong River, one of the world’s longest, largest, and resource-rich rivers. With a current installed capacity of approximately 6,000 MW, the Lao government aims to achieve 14,000 MW of energy production by 2020. Its primary export targets are neighboring countries where there are growing demands for more energy. With Thailand as its current main customer, the country is poised to export more to others, including potentially other countries in mainland Southeast Asia as well.

Financial Services

Central Bank Approves Only 3 QR Payment Services in Laos The Laotian Times 17th May 2018
The Bank of Laos (BOL) has issued a statement to the general public regarding the use of QR code payment services being offered by financial institutions that have not been given authorization by the BOL. The public statement stated that the only financial organizations that have been approved to offer QR code payment services to the public are BCEL (Banque Pour Le Commerce Extérieur Lao), Lao-Viet Bank (Lao-Vietnam Joint Venture Bank) and the New Concept Microfinance Institution. BCEL has One Pay, Lao-Viet Bank has QR Pay and New Concept has been given the green light to run a pilot service called Kapao E-wallet.

Food & Agriculture

Lao Prime Minister Tightens Regulations Against Wildlife Trafficking The Laotian Times 31st May 2018
Prime Minister Thongloun Sisoulith has issued an order to tighten regulations against hunting and trade of protected wildlife. Individuals or groups that breach the order are to be arrested and prosecuted. The PM issued the Order for Increased Stringency in Management and Inspection of Protected Wild Fauna and Flora, No. 05/PM, on 08 May this year. The order was issued to tighten implementation of forest plant and wildlife protection, especially those species which are classified as endangered. The order is intended to ensure measures are compliant with the Convention on International Trade in Endangered Species of Wild Fauna and Fora (CTIES) to which the Lao PDR is a party.

Government Declares One-Dish Menu Items to Be Priced No More Than 15,000 Kip The Laotian Times 25th May 2018
The Ministry of Industry and Commerce has just announced that it will be implementing a new price control policy, in Vientiane Capital, on the following popular menu items in restaurants: pho, kao piek, kao pat, and kao latna. The notice, dated 25 May, and signed by the DG of the Office of the Industry and Commerce Ministry Bansathi Thepavong, stated that the aforementioned one-dish menus (aharn jarn diew) should not exceed 15,000 kip. In the event that the customer would like a customized dish with extra serving sizes or special items, he/she may negotiate the price directly with the vendor.

Chemical Runoff Suspected in Cow Deaths The Laotian Times 22nd May 2018
Chemical runoff from factories is suspected to be the cause of the recent deaths of over 40 cows in a village in Xaysettha District, Vientiane Capital. Authorities are investigating the livestock deaths, and all nearby factories will be inspected for release of chemicals into water sources. Factories found to have released contaminants will be made to pay compensation to farmers who lost their livestock.

World Bank Supports Laos' Agricultural Sector The Laotian Times 17th May 2018
The US$25 million Lao PDR Agriculture Competitiveness Project aims to help over 140,000 people by making the planting of rice, maize, and vegetables more productive and profitable. The agreement was signed on Thursday by the World Bank Country Manager Inguna Dobraja and Finance Vice Minister Thipphakone Chanthavongsa. The project is intended to support 28,000 farming households in 224 villages to improve yields and product quality, increase labor productivity and crop sales, and link farmers with agribusinesses. The project will also increase access to high quality seeds, irrigation, advisory services and markets, further reducing transaction costs and enable higher returns for farmers.

Health & Life Sciences

UK lends support to malaria control Vientiane Times 30th May 2018
The United Kingdom’s Comic Relief charity is providing over US$700,000 from 2018 to 2020 to help prevent and control malaria in three provinces of Laos. An agreement for the project was signed yesterday by the Director General of the Department of Communicable Diseases Control, Ministry of Health, Dr Rattanaxay Phetsouvanh, and Comic Relief, United Kingdom and Health Poverty Action (HPA) Country Director, Mr Ronaldo Estera.

Thai Hospital To Build Branch In Vientiane KPL Laos News Agency 30th May 2018
(KPL) Kasemrad International Hospital, affiliated to Bangkok Chain Hospital Public, held a groundbreaking ceremony for its first Vientiane-based branch last Friday. The ceremony took place in the presence of Deputy Prime Minister Sonexay Siphandone and Director General of Bangkok Chain Hospital Public Chalerm Harnphanich. The new hospital will be built in Sisattanak district at a cost of more than US$70 million over the next eight years.

Infrastructure

Fifth Lao-Thai Friendship Bridge Approved The Laotian Times 26th May 2018
The Lao and Thai governments have officially given the green light to the construction of the 5th Lao-Thai Friendship Bridge that will soon link Beung Kan Province in northeastern Thailand to Paksan, Bolikhamxay Province in Laos. An anonymous source from the Ministry of Public Works and Transport (MPWT)) told local newspaper The Vientiane Times on Tuesday that Lao and Thai officials approved the plans when they met in Paksé earlier this year. Furthermore, a 6th Lao-Thai Friendship Bridge linking Salavan (Laos) to Ubon Ratchathani (Thailand) is also currently in the proposal stage. “The two bridges may be built at the same time, but the date of construction will need further consideration,” the MPWT source said. The 1.6km-long bridge is likely to cost over USD$110 million (3.6 billion baht). Land clearing for the construction of a road heading to the site in Beung Kan province has already started with land along the road being expropriated and landowners compensated. Rubber trees along the route have also been felled for the road construction. Thai PBS reports that it is likely that construction will begin towards the end of this year. Once complete, the bridge will serve as a major transport route that will link Thailand with several cities in Vietnam. Departing from Beung Kan Province, it would only take vehicles 150km of travel to reach Nge An Province in Vietnam via Lao National Highway No. 8 through Bolikhamxay. In Nge An, the route then links up with roads to Hanoi, Danang and other cities in Vietnam. In addition, the new bridge will further permit accessibility to the northern Lao provinces of Xieng Khuang and Huaphan to tourists from Thailand. The bridge will likely provide a further boost to Bolikhamxay’s already fast-growing economy which boats an economic growth rate of 8% last year with a GDP of about 5 trillion kip and average annual per capita income of 17.9 million kip (USD $2,151). Beung Kan province depends mainly on ferries and boats for goods transport to neighboring countries through the Beung Kan – Paksan border checkpoint. Cross-border trade through this checkpoint came to approximately USD $160 million, according to statistics in 2011. The amount rose to USD $168 million in 2012 and is likely to continue to increase. Around 128,000 people cross the border by boat each year. About the Lao-Thai Friendship Bridges There are currently four Thai-Lao Friendship Bridges. Both countries officially opened the first Lao-Thai Friendship Bridge, linking Nong Khai in northeastern Thailand with the Lao capital of Vientiane, on the 8th of April, 1994 (Australian Government aid, USD$30 million construction cost). The second Lao-Thai Friendship Bridge, linking Mukdahan, also in northeastern Thailand, with the central Lao province of Savannakhet, was opened on the 20th of December, 2006 (low-interest loan from the Japanese Government, construction cost of USD$70 million). The third Lao-Thai Friendship Bridge, linking the northeastern province of Nakhon Phanom in Thailand with Khammouan province in central Laos, was opened on the 11th of November, 2011 (Thai Government grant, construction cost of approximately USD$60 million). The fourth Lao-Thai Friendship Bridge links Chiang Khong District of Chiang Rai Province in northern Thailand with Houayxay of Bokeo Province in Laos and was opened at the end of 2013, made possible due to a joint investment by the Thai and Chinese Governments. Source: Vientiane Times, Public Relations Department Thailand, Thai PBS, Lao Economic Daily

Myanmar

Laos, Myanmar move forward in energy cooperation | Eleven Myanmar Eleven Myanmar 31st May 2018
VIENTIANE (Vientiane Times/ANN) - Laos and Myanmar have taken another step towards implementing a Memorandum of Understanding (MOU) on power cooperation that was signed in January this year.