Laos Update: October 18, 2018

Laos Update | October 18, 2018
Authors: Riley Smith, Ella Duangkaew, Monica Chritton
 
LOOKING AHEAD
 
 

October 30-31: Mission to the 36th ASEAN Ministers of Energy Meeting (AMEM)
Register here for the US-ASEAN Business Council’s Business Mission to the 36th ASEAN Ministers on Energy Meeting (AMEM) in Singapore. The mission will take place on Tuesday, October 30 - Wednesday, October 31, and will consist of bilateral meetings with ASEAN Energy Ministers and relevant AMEM Dialogue Partners. Though the early bird deadline for registration passed on October 16, the Council is still accepting registrations. For more information, please contact Riley Smith (rsmith@usasean.org).

November 1, 2018: Farewell Luncheon for H.E. Mai Sayavongs, Ambassador of Lao PDR to the United States
Ambassador Mai Sayavongs is leaving his post as the Lao Ambassador to the United States, a position he has held since August 2015. The Council is now accepting sponsorship for a farewell luncheon to honor Ambassador Mai as he leaves Washington to return to Laos. The sponsorship deadline is October 24, click here to sponsor. For more information, please contact Ella Duangkaew at eduangkaew@usasean.org.

December 4-6: 2018 Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting
We are now registering senior level executives for our Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN) taking place on Tuesday, December 4 - Thursday, December 6 in Ubud, Indonesia. For more information, please contact Mario Masaya (mmasaya@usasean.org).

November 13, 2018: WCO workshop for Lao Customs on Combating Counterfeiting
The World Customs Organization is inviting private sector representatives to present on intellectual property protection and product identification at an upcoming training session for the Lao Department of Customs. The Joint Session with Rights Holders is currently scheduled for the afternoon of November 13. Please contact Ian Saccomanno if you are interested in supporting the program.

 
THE COUNCIL'S TAKE
 
 

Construction of China-Laos Railway Makes Progress, Though Economic Benefits Uncertain

Construction on the China-Laos Railway has seen major developments, including key progress toward the critical Luang Prabang cross-Mekong River bridge. The Railway broke ground in December 2016, and is over 20% complete, as of August 2018. It is projected to be operational by 2021. Managed by the Laos China Railway Company and designed, constructed and operated in accordance with Chinese railway standards, the US$6 billion China-Laos Railway is the largest investment in Laos to date, being roughly equivalent to 35% of Laos’ annual GDP. The high-speed rail project is set to create a key link between southern China and ASEAN with a goal of up opening up land-locked Laos to increased economic activity and investment.

However, some economists argue that, just as the Railway will allow Chinese goods and tourists to pass through Laos to other Southeast Asian countries, so too will the economic benefits pass through the country. The project has thus far created few new local jobs – the Railway’s workforce of over 30,000 is predominantly Chinese – and Chinese contractors supply many of the work camps, which tend to be situated far from city centers. There is also the concern that the Railway will put even greater economic pressure on local industries by further opening up domestic Lao markets to Chinese imports, and that it will attract business away from local bus and plane services running between Luang Prabang and Vientiane.  

Analysts have also raised concerns about how having to finance the China-Laos Railway could negatively affect Laos’ economy. Under the current financial terms, Laos must commit US$720 million in cash to help cover construction costs. While Laos will only be drawing about a third of this from its national budget over the course of five years (the remaining amount will be borrowed from the Export Import Bank of China), declining mining revenues and a low tax base mean that even the roughly US$50 million per year could be difficult to service. This year alone, Laos’ public debt is expected to reach 65% of GDP, up four percentage points from last year, and trend that the IMF has singled out as a downside risk. Increased borrowing from Chinese banks and sovereign bond issuances are the primary drivers of this increase. The combination of the project financing requirements and the compensation that is to be dispensed to those displaced  by the railway project – compensation which could amount to as much as US$250 million – is likely to put further pressure on other outlays in Laos’ national budget, such as those for health and education.   

Laos Government Ends Search for Missing Attapeu Dam Collapse Flood Victims, Resumes Hydropower Projects

On October 4, Deputy Prime Minister Sonexay Siphandone announced in a meeting that the search for victims of the July collapse of the Xe-Pian Dam in the Sanamxay District of the southern province of Attapeu has ceased. The search is set to immediately resume upon receipt of any new information about a missing person. The dam collapse resulted in the release of over five million tons of water that flooded into the local areas and caused widespread damage to 13 villages (For more information, see our previous Update here). Officials report 34 deceased from the flooding, a death toll revised down from 131, according to the Laotian Times. The revision followed the discovery of 66 people found to be alive, according to state news media. The 66 people include individuals who had escaped the flooding and had returned to register their whereabouts or individuals who were registered as residents, but who were not in the area at the time of the flooding. Thirty-one individuals have yet to be accounted for.

In response to the Attapeu dam collapse, the Lao Government created a special National Disaster Preparedness Committee to oversee national level crises. The special committee was tasked with coordinating the disaster management, analyzing the damages done, and investigating the causes of the disaster to improve future readiness. At the October 4 meeting, officials discussed the possibility of creating a special task force to assist affected populations in the Attapeu province for further recovery.

The announcement that the search for flood victims was ending was preceded by a resumption of all hydropower projects, as announced by Prime Minister Thongloun Sisolith at the WEF-ASEAN (see our previous Update for more information). This follows the Government’s earlier decision to suspend all new projects and re-evaluate all existing projects (see our previous Update for more information). This may indicate that the Lao government still sees energy as a key sector for growth, despite environmental implications, and will continue to pursue greater investment in the area, particularly from external investors.

 
IN THIS UPDATE
 
 

Regional Affairs
A New Cambodia-Laos Border Deal?
Mekong cross-border planning, management boosted as Commission secures German funding
Remarkable period achieved in Laos-China relations, departing Ambassador says
Germany provides 1 million euros for new technical college
China, Laos vow to deepen bilateral ties between parties, countries
Capital of Laos Seeks Stronger Ties to China

National Affairs
Fortunate Escape For 66 Folk? Search for Missing Flood Victims in Attapeu Officially Ends

Customs
Cross-border zone in North could boost trade links

Defense & Security
UN Migration Agency, Lao Immigration Department, Cooperate to Tackle Human Trafficking and Smuggling
US. Supports Lao Government To Strengthen Law Enforcement, Border Security

Economics
Measures imposed to control public debt
Connectivity, Transport Keys to Unlocking Laos' Growth Potential While "Navigating Uncertainty": WB
Lao economic growth remains resilient despite heightened global uncertainty:WB
GDP growth target lowering mulled: DPM
Lao PDR Set for Moderate Growth in 2018 and 2019

Energy
Dam Collapse May Slow, but Not Stop, Laotian Hydropower Projects
Stakeholder Forum Debates Proposed Pak Lay Project, Recommends Steps To Strengthen Basin Planning In The Mekong
Activists push for Pak Lay Dam studies

Food & Agriculture
Poverty, hunger worsened by challenges at home, worldwide
Climate change threatens nation’s food security
Laos not to face serious food shortages but temporary difficulties: minister

Health & Life Sciences
Illicit stash torched to mark National Day Against Drugs
Laos, EU, UNICEF to bolster information on nutrition
Lao-Thai cooperation targeting better treatment for gastrointestinal patients

ICT
Science, technology development as govt, private sector discuss
Overcoming a government crackdown on social media in Laos
3 nation to join global trademark databases


Infrastructure
Air safety committee meets to strengthen civil aviation
Japan, Mekong Leaders To Adopt New Strategy Centering On Connectivity
The train of opportunities as Laos builds rail link with China
Chinese railway engineering firms hand over 4 bridges to Laos
Construction of National Road 11 to begin this year
China-Laos railway completes first continuous beam block construction on Mekong River

Manufacturing
Construction materials inspection centre first approved via Chinese cooperation

Travel & Tourism
Laos’ Nam Ha named among Asia’s top 10 eco-tourism destinations
River tourism takes off
Champassak cleans up to advance Asean tourist city aspirations
One dollar charge awaits travelers, foreign residents returning to Laos
Investing In Ecotourism To Promote Sustainable Development And Reduce Poverty

 
ARTICLE CLIPS
 
 
Regional Affairs

A New Cambodia-Laos Border Deal? The Diplomat 11th Oct 2018
Last week, reports surfaced that Cambodia and Laos had forged some sort of consensus to manage longstanding border issues. While both sides have long sought such mechanisms following previous rounds of tensions, the so-called consensus deserves close scrutiny given the opportunities and challenges it presents for the two countries.

Mekong cross-border planning, management boosted as Commission secures German funding Vientiane Times 3rd Oct 2018
The government of Germany has committed EUR4 million (approximately US$4.6 million) to the Mekong River Commission (MRC) to strengthen Mekong cross-border water cooperation, according to the MRC. The inter-governmental organisation of Cambodia, Laos, Thailand and Vietnam announced yesterday it had received an official letter from the Embassy of Germany to Laos in Vientiane that was said to confirm the continued German funding to the MRC overt next few years.

Remarkable period achieved in Laos-China relations, departing Ambassador says Vientiane Times 3rd Oct 2018
Relations between China and Laos have entered the most remarkable period in history with the powerful Asian country becoming the largest investor in and second biggest trade partner to Laos.

Germany provides 1 million euros for new technical college Vientiane Times 27th Sep 2018
The German government will support Laos by providing half the cost to construct the second 2-million euro Lao-German Technical College in Vientiane. Work on the facility is set to start at the end of this year, and the Ministry of Education and Sports has selected a site within the compound of the Primary School in Xiengda village of Xaysettha district, located on the new concrete road to Lao-Thai Train Station.

China, Laos vow to deepen bilateral ties between parties, countries Xinhua 26th Sep 2018
Senior official of the Communist Party of China (CPC) Zhao Leji on Wednesday concluded his official good-will visit to Laos, where he and Laotian officials agreed to deepen bilateral ties and cooperations between the two countries as well as ruling parties. Zhao, also a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and secretary of the Central Commission for Discipline Inspection of the CPC, started visiting Laos on Sunday.

Capital of Laos Seeks Stronger Ties to China New York Times 25th Sep 2018
Two decades ago, this sleepy city on the Mekong River was just starting to pave its streets. Today, Vientiane, the Laotian capital, is abuzz with change. Cars choke the paved city streets, and the downtown area is brimming with cafes, restaurants and bars catering to the small but growing middle class. In recent years, Chinese investment in resource-rich Laos has strengthened the country’s economy, which is projected to grow by 7 percent this year. Vientiane’s hot property market reflects this trend. Hoping that China’s Belt and Road Initiative will improve connectivity with its neighbor, Laos is preparing for a new wave of Chinese investment in its property sector.

National Affairs

Fortunate Escape For 66 Folk? Search for Missing Flood Victims in Attapeu Officially Ends Laotian Times 4th Oct 2018
Sixty-six fortunate folk have been located alive as the Lao government taskforce headed by the Deputy PM reported 34 confirmed dead, 31 missing and another six post-flood disaster-related fatalities in Attapeu in final figures cited by to the nation’s news media Thursday.

Customs

Cross-border zone in North could boost trade links Bangkok Post 24th Sep 2018
The government is studying the feasibility of establishing a cross-border economic zone in the Golden Triangle under the Lancang-Mekong Cooperation scheme to expand economic links for Thailand, Myanmar, Laos and China.

Defense & Security

UN Migration Agency, Lao Immigration Department, Cooperate to Tackle Human Trafficking and Smuggling ReliefWeb 17th Oct 2018
The UN Migration Agency (IOM) and the Department of Immigration (DoI) of the Lao People’s Democratic Republic have launched a first training by DoI Master Trainers for police and frontline border guards to increase the country’s capacity to tackle human trafficking and people smuggling nationwide.

US. Supports Lao Government To Strengthen Law Enforcement, Border Security Lao News Agency 17th Oct 2018
The United States and the Lao PDR signed an Amended Letter of Agreement between the U.S. Embassy in Vientiane and the Department of Customs in the Ministry of Finance of the Lao PDR to strengthen bilateral cooperation in the areas of Law Enforcement and Border Security. The signing ceremony took place at the Customs Department on October 11, 2018. Vice Minister Thipphakone Chanthavongsa attended the ceremony, and Mr. Bounpaseuth Sikounlabout, Acting Director of the Customs Department, signed on behalf of the Lao government. U.S. Ambassador Rena Bitter signed on behalf of the United States.

Economics

Measures imposed to control public debt Vientiane Times 15th Oct 2018
President Bounnhang Vorachit has signed a Presidential Ordinance to promulgate a law to manage and control public debt while maximising state investment. The Law on State Debt Management, which will come into effect on October 29, prohibits state departments and any party from carrying out unapproved projects or unlawfully creating public debt in the name of the government. State expenditure must not exceed the budget approved by the National Assembly (NA). Any unlawful public debt-related activities are not allowed, according to the 26-page law passed by the National Assembly (NA) in June this year.

Connectivity, Transport Keys to Unlocking Laos' Growth Potential While "Navigating Uncertainty": WB Laotian Times 5th Oct 2018
According to the World Bank, Laos’ economic growth is projected to ease to 6.7 per cent in 2018, down from 6.9 per cent in 2017, remaining robust compared to regional peers.

Improved Business Environment To Support Sustainable Growth In Lao PDR Lao News Agency 3rd Oct 2018
Lao firms and households are expected to benefit from a new US$13-million project, approved on Sep 27, 2018 by the World Bank’s Board of Executive Directors, which will promote reforms to the business environment, for instance reducing the number of days needed to start a business. The Lao PDR Competitiveness and Trade Project will support the government’s efforts to simplify business regulations, facilitate trade, and improve competitiveness.

GDP growth target lowering mulled: DPM Vientiane Times 27th Sep 2018
Discussions are taking place to whether the government should propose that the National Assembly (NA) consider adjusting the economic growth target, Deputy Prime Minister Somdy Duangdy has said. The consideration to lower the gross domestic product (GDP) growth target came amid global challenges which make it unlikely for the government to attain the 7 percent growth target. GDP grew by 6.9 percent last year with this year’s growth was estimated to decline further to 6.5 percent. Growth fell short of the 7 percent target set in the five-year socio-economic development plan approved by the National Assembly (NA).

Lao PDR Set for Moderate Growth in 2018 and 2019 The Financial 26th Sep 2018
Economic growth for the Lao People’s Democratic Republic (Lao PDR) is expected to moderate in 2018, as agriculture and mining outputs are forecast to underperform, although an expansion in electricity generation, construction, and services will partially offset these adverse effects, according to a new Asian Development Bank (ADB) report. In an update of its flagship annual economic publication, Asian Development Outlook (ADO) 2018, ADB projects Lao PDR’s gross domestic product (GDP) to grow by 6.6% in 2018 and 6.9% in 2019, slightly lower than its April estimates of 6.8% for this year and 7.0% for next year.

Energy

Dam Collapse May Slow, but Not Stop, Laotian Hydropower Projects POWER Magazine 1st Oct 2018
The Laotian government in August said the approval process for new hydroelectric dams in the country should be suspended as it continued to review construction practices. The move came after more than three dozen people were killed, and thousands of residents were displaced, by the July 23 collapse of an auxiliary dam that was part of the 1,880-MW Xe-Pian Xe-Namnoy power project in the southern province of Attapeu.

Stakeholder Forum Debates Proposed Pak Lay Project, Recommends Steps To Strengthen Basin Planning In The Mekong Lao News Agency 24th Sep 2018
A two-day regional stakeholder forum on the proposed Pak Lay hydropower project and other ongoing initiatives came to a close on Sep 21. The forum, convened by the Mekong River Commission (MRC), gathered about 160 participants from various stakeholder groups, including civil society, governmental and non-governmental organisations, academia, the private sector, and development partners.

Activists push for Pak Lay Dam studies Khmer Times 23rd Sep 2018
Environmental activists are urging Laos and the Mekong River Commission to halt the Pak Lay Hydropower project until all stakeholders can rigorously assess the project’s environmental and social impacts.

Food & Agriculture

Poverty, hunger worsened by challenges at home, worldwide Vientiane Times 17th Oct 2018
A number of persistent problems have worsened poverty and hunger in countries across the globe including Laos, a minister told an event yesterday that marked World Food Day, and International Day and National Week for Poverty Eradication. Speaking at the event in Vientiane, Minister of Agriculture and Forestry, Dr Lien Thikeo said natural disasters, the impact of climate change, disease outbreaks, social conflicts, wars and crises have inhibited efforts in achieving an end to poverty and hunger worldwide.

Climate change threatens nation’s food security Vientiane Times 10th Oct 2018
Minister of Agriculture and Forestry, Dr Lien Thikeo made the remark yesterday during a press conference in Vientiane to publicise World Food Day which is officially recognised annually on October 16.

Laos not to face serious food shortages but temporary difficulties: minister Global Times 26th Sep 2018
The Laos will not face serious rice shortages but will encounter temporary difficulties in supplying the staple grain, according to the country's National Ad Hoc Committee in charge of the post-disaster response. This will occur in some provinces which usually require rice supplies from others. Lao Minister of Agriculture and Forestry, Lien Thikeo representing the committee made the comment at their first press conference last week to report on initial assessments of the impact of floods around the country. "We will not face serious shortages of food but will face temporary difficulty only," local daily Vientiane Times on Wednesday quoted Lien as saying.

Health & Life Sciences

Illicit stash torched to mark National Day Against Drugs Vientiane Times 10th Oct 2018
A massive quantity of drugs was burnt in Xaythany district, Vientiane yesterday to mark the 17th Anniversary of National Day Against Drugs. Illicit drugs going up in smoke on the day included 50kg of amphetamines, 308 kg of dried cannabis, 5.9 kg of crystal methamphetamine (ya ice), 23 kg of caffeine, and 1.5 kg of precursor material to mix and produce drugs.

Laos, EU, UNICEF to bolster information on nutrition Vientiane Times 8th Oct 2018
The European Union (EU) has forecast a budget of around US$3 million to strengthen information systems for nutrition in Laos from 2018-2021 with the project to be implemented by UNICEF. The new project, known as the National Information Platforms for Nutrition (NIPN), is part of ongoing development assistance to improve nutrition in the country and in support of the National Nutrition Strategy 2016-2025.

Lao-Thai cooperation targeting better treatment for gastrointestinal patients The Nation 8th Oct 2018
Mahosot Hospital is cooperating with experts from Asean countries including Thailand aiming to improve treatment for patients with gastrointestinal problems. The cooperation aims to improve treatment by developing local doctors’ skills in the use of new endoscopy equipment to respond to the increasing number of gastrointestinal problems being identified across the country.

ICT

Science, technology development as govt, private sector discuss Vientiane Times 16th Oct 2018
Government officials, representatives of the private sector, research institutes and universities and entrepreneurs from Laos and abroad met in the capital yesterday to exchange experiences for the development of science, technology and innovation in the country.

Overcoming a government crackdown on social media in Laos Al Jazeera News 3rd Oct 2018
Inside a packed lecture hall at the American Centre in the capital Vientiane, 60 National University of Laos students sit surrounded by framed posters featuring inspirational quotes by American icons Martin Luther King Jr, Maya Angelou and Steve Jobs. On the screen at the front of the room, Vientiane Times journalist Keoxomphou Sakdavong begins her US embassy-sponsored event, How to Spot Fake News, by broadcasting on Facebook Live from the manicured lawn outside the hall.

3 nation to join global trademark databases The Nation 28th Sep 2018
The intellectual property (IP) offices of Indonesia, Brunei Darussalam and Laos are to integrate their trade mark and design data into the global trade mark and design search databases, TMview and Designview.

Infrastructure

Air safety committee meets to strengthen civil aviation Vientiane Times 10th Oct 2018
The National Committee for Civil Aviation Safety met in Vientiane yesterday to discuss ways of strengthening safety for the nation’s domestic and international air travellers. In his opening remarks at the meeting, Minister of National Defence and Chairman of the committee, Lt Gen Chansamone Chanyalath noted air transportation’s importance to socio-economic development by creating connectivity between the nation and other countries in the region and around the world.

Japan, Mekong Leaders To Adopt New Strategy Centering On Connectivity Lao News Agency 9th Oct 2018
The leaders of Japan and five Southeast Asian nations along the Mekong River held a summit Tuesday in Tokyo with the aim of adopting a new three-year strategy to improve connectivity in the region through quality infrastructure building. During the 10th Mekong-Japan Summit Meeting, Japanese Prime Minister Shinzo Abe and the leaders from Cambodia, Laos, Myanmar, Thailand and Vietnam are expected to exchange their views on the three main areas -- connectivity, people and the environment, according to the Foreign Ministry.

The train of opportunities as Laos builds rail link with China The Straits Times 8th Oct 2018
Laos is speeding up construction of the high speed railway link with China hoping this historic and major investment project will be completed and operational over the next two years. The railway line, from the Chinese border in the northern province of Luang Namtha to the capital Vientiane, will serve as a key link in the land transportation system between southern China and Asean.

Chinese railway engineering firms hand over 4 bridges to Laos Xinhua 27th Sep 2018
Chinese engineering companies, which are building China-Laos railway in northern Laos, have handed over four bridges to the Lao government. A handing-over ceremony was held on Wednesday in Lao Ministry of Public Works and Transport in capital Vientiane. Li Bingxuan, director general of the Laos-China Railway Company, the China-Laos joint venture in charge of the construction and operation of China-Laos railway, briefed the construction and completion of the four bridges in Attapeu Province in southern Laos, and handed over them to the Laos side.

Construction of National Road 11 to begin this year Vientiane Times 27th Sep 2018
Work on a section of the National Road 11 section from Khok Khaodor-Nonsavanh villages to Xanakham district to Vang and Namsang villages is set to begin at the end of this year, with the construction to be completed in three years. The construction of the 124-km stretch is part of the project launched in 2010 to build a road from Tad Thong village to Sangthong district with financial support from the Neighbouring Countries Economic Development Cooperation Agency (NEDA) of Thailand.

China-Laos railway completes first continuous beam block construction on Mekong River Xinhua 21st Sep 2018
The concrete casting for the first block of the Luang Prabang cross-Mekong River super major bridge' continuous beam along the China-Laos Railway was completed on Sept. 17, the Chinese contractor told Xinhua on Saturday. Yan Haiyong, CPC party secretary of the China Railway No.8 Engineering Group (CREC-8)'s railway project department, who is in charge of the construction of the two bridges across the Mekong along the China-Laos Railway, said that the Luang Prabang railway bridge with a total length of 1458.9 meters, is a key project of the China-Laos Railway.

Manufacturing

Construction materials inspection centre first approved via Chinese cooperation Lao News Agency 3rd Oct 2018
Laos and China have agreed to build the first-ever construction materials quality inspection and testing centre in Vientiane as part of ongoing cooperation in the sciences and technology sector. The project to build the new facility, official known as the “Quality Inspection and Testing of Construction Engineering Centre” is valued at approximately US$8 million.

Travel & Tourism

Laos’ Nam Ha named among Asia’s top 10 eco-tourism destinations Borneo Bulletin Online 8th Oct 2018
Nam Ha National Protected Area of Luang Namtha province has recently been named as one of the top 10 ecotourism destinations in Asia, according to the website tripstodiscover.com.

River tourism takes off TTR Weekly 2nd Oct 2018
Mekong River tourism is turning its spotlight on “Destination Pak Beng” as the Lao port transforms from a remote overnight stop on the Thailand-Luang Prabang cruise route into a multi-day stay-over town.

Champassak cleans up to advance Asean tourist city aspirations Vientiane Times 2nd Oct 2018
Champassak district in Champassak province is aiming to achieve Asean Clean Tourist City certification by 2020. The UNESCO World Heritage Listed Old Town of Luang Prabang became the first conurbation in Laos to be awarded the standard earlier this year. The latest news was revealed at a workshop on Dissemination of Information on the Asean Clean Tourist City standard held in Champassak province from September 27-28.

One dollar charge awaits travelers, foreign residents returning to Laos Laotian Times 29th Sep 2018
All travelers entering Laos on foreign passports, including residents, will have to reach into their pockets for an extra US$1 bill in the form of a tourism development levy when entering via international border immigration checkpoints from October 1.

Investing In Ecotourism To Promote Sustainable Development And Reduce Poverty Lao News Agency 24th Sep 2018
The Lao PDR’s development has been rapid during the last decade, largely funded by income from natural resources driving the bulk of economic growth. The government is promoting responsible investment across the country to ensure that quality investments benefit all of Lao society, fostering green development and sustainable use of natural resources, in accordance with the 8th National Socio-Economic Development Plan.