Laos Update: November 15, 2018

Laos Update | November 15, 2018
Authors: Riley Smith, Ella Duangkaew and Monica Chritton
 
LOOKING AHEAD
 
 

December 4-6, 2018: 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 Tuesday 4 December to Thursday, 6 December, 2018 in Ubud, Indonesia. To register, please click here.

 
THE COUNCIL'S TAKE
 
 

Planned China-Laos-Thailand Free Trade Zone Another Example of Deepening Sino-Lao Economic Ties

A trilateral free trade zone linking China, Laos and Thailand will be developed and set up in the next few years, according to reports by the Nikkei Asian Review. In the planned free trade zone, tariffs and value-added tax will be waived on imports from countries not bordering China, such as other ASEAN nations, with the aim of strengthening trade between China and the Mekong region. The Minister of Commerce of Thailand, Sontirat Sontijirawong, will lead in facilitating talks between China and Laos.

The free trade zone will cover a portion of Laos’ Northwest region, linking China to Laos at Mohan and Boten and Laos to Thailand at Huay Sai and Chiang Khong. These cities are already connected by the R3A highway, which opened in 2008. The highway starts in China’s Kunming province, passes through Laos, and ends in Thailand’s Chiang Rai province at Chiang Khong. Laos and China have signed an MOU to look into reducing transit times across the R3A highway.

The free trade zone builds upon growing Laos-China ties. These ties were recently re-affirmed at a November 4 meeting between Lao Prime Minister Thongloun Sisoulith and Chinese President Xi Jinping in Shanghai ahead of the first China International Import Export Expo, which was seen as a bid by China to build allies amid the U.S.-China trade war. Xinhua News reports that at the November 4 meeting, President Xi called for closer strategic cooperation between Laos and China, and for advancement of the China-Laos economic corridor. The need for collaboration was echoed by Prime Minister Thongloun, who said that the China-Laos railway, the biggest infrastructure project in Laos to date, was making steady progress and that Laos has benefitted from joint efforts in China’s Belt and Road Initiative.

These developments are further evidence of strengthening relations between China and Laos, which is likely to have an impact Laos-U.S. relations in light of the U.S.-China tariff conflict. To date, China is the largest foreign investor in Laos, and the free trade zone is well positioned to strengthen the economic relationship between the two countries. Even though the United States’ engagement with Laos has been on the upswing since the historic visits of U.S President Barack Obama and U.S. Commerce Secretary Wilbur Ross in 2016 and 2017, respectively, Laos’ economic and trade relations with China still outpace those with the United States. As with other developing countries in the region, especially those that may be able to leapfrog neighbors with the adoption and utilization of new technologies, Laos’ deepening relations with China and the United States can influence the commercial regulatory frameworks the government chooses to implement. Often times, the frameworks are devised so as to bolster already strong economic and trade relations. This means that the United States and Laos should seek ways to deepen relations to ensure that the latter has a more balanced perspective when devising these regulatory frameworks.

 
IN THIS UPDATE
 
 
Regional Affairs
Moon says Laos key partner in 'New Southern Policy'
China to create trade zone with Thailand and Laos as tariffs bite
Turkey inaugurates embassy in Laos
What’s in the First Vietnam-Laos-Cambodia Trilateral Border Exchange?
Xi meets Lao prime minister
Vietcombank opens first overseas subsidiary in Laos

National Affairs
Laos' Political Reforms To Remain Slow Despite Increased International Scrutiny
Dozens Of Officials Trained On English, Communication Skills
New Laos land law could block customary rights, women's titles: analysts
Water Experts Question World Bank's Role in Laos Dam

Banking
Laos plans return to baht bonds

Defense & Security
Laos, Russia cooperate in clearing unexploded ordnance in central Laos
Japan provides 5 billion kip for law enforcement, border security
INTERPOL Launches A Project Designed To Strengthen Capacity Of Law Enforcement Agencies
Growing solidarity, friendship on borders of Vietnam, Laos, Cambodia

Economics
‘Review compensation policy’, research institute suggests
Govt, UN partners assess development priorities
Inequality, Disasters Risks to Development as Progress Pushed in Laos: UNDP

Energy
More Southeast Asian Dam Disasters Likely Unless Funders Ensure Higher Standards
Chinese dams ramp up Lao external debt
China starts exporting petroleum to Laos
Hydroelectric Power in Laos: Economic Security in Energy-Hungry South-East Asia
In Laos, a World Bank 'model' dam and the myth of sustainable hydropower
New questions asked about Laos dam toll, builder’s role

Food & Agriculture
Lao onion, garlic smuggled across Mekong River, seized at Thai border market
Wet season rice production down in Laos due to flood
Managing El Niño And La Niña In Lao Agriculture

Health & Life Sciences
Authorities reissue dengue warning despite end to rainy season
Senior U.S. Health Official Advances Cooperation With Laos
Preventing malnutrition in Laos

Infrastructure
Leveraging Competitiveness Of Transport SMEs
Lao think tank suggests to maximize Laos-China railway
"Space data offers instant clues to cause of deadly Laos dam disaster": Stanford Professor
Lao Governor Walks Back Projected Costs For Housing in Flood-Hit Attapeu

Travel & Tourism
Tour operators call for chronic problems to be addressed
Runoff From Railway Project Pollutes River in Lao Tourist Destination
 
ARTICLE CLIPS
 
 
Regional Affairs

Moon says Laos key partner in 'New Southern Policy' Yonhap News Agency 14th Nov 2018
President Moon Jae-in said Wednesday that Laos is a key partner in his policy to strengthen relations with Southeast Asian nations as he held summit talks with Lao Prime Minister Thongloun Sisoulith. During the meeting on the sidelines of the annual ASEAN summits in Singapore, Sisoulith expressed thanks for South Korea's support for the country in the wake of a dam collapse in July that killed 40 people, injured 66 and left about 6,000 homeless.

China to create trade zone with Thailand and Laos as tariffs bite Nikkei Asian Review 12th Nov 2018
As the trade war with the U.S. intensifies, China is looking to strengthen commercial ties with countries in the Mekong region of Southeast Asia by setting up a free-trade zone on the border between Thailand and Laos. In the planned zone, Beijing will waive tariffs and value-added tax on imports from countries that do not share a border with China.

Turkey inaugurates embassy in Laos Yeni Safek News 7th Nov 2018
Turkey on Wednesday inaugurated its embassy in the capital of Lao People’s Democratic Republic. "Through this embassy, this mission, we serve for the interest of both countries Laos and Turkey," Turkish Foreign Minister Mevlut Cavusoglu said at the opening ceremony in the southeast Asian country. Çavuşoğlu, who is currently in a two-day visit to capital Vientiane, is the first foreign minister who pays a visit to Laos from Turkey.

What’s in the First Vietnam-Laos-Cambodia Trilateral Border Exchange? The Diplomat 5th Nov 2018
Later this week, Vietnam, Laos, and Cambodia will hold the first iteration of a new trilateral border exchange between them in Vietnam. Though the event was just one among many developments within the management of border relations between these countries, its significance nonetheless bears noting within the context of both regional developments on that front as well as Vietnam’s own priorities in this respect.

Xi meets Lao prime minister Xinhua 4th Nov 2018
Chinese President Xi Jinping on Sunday met with Lao Prime Minister Thongloun Sisoulith, who will attend the first China International Import Expo opening Monday in Shanghai. Xi expressed welcome to Thongloun and said that the China-Laos relationship is at its best in history.

Vietcombank opens first overseas subsidiary in Laos vietnamplus.vn 19th Oct 2018
The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) opened its first overseas subsidiary in Vientiane, Laos, on October 19. Located on Lane Xang Avenue, a finance-banking hub in downtown Vientiane, the Vietcombank Laos chapter has a charter capital of 80 million USD, the highest among Vietnamese credit institutions in the country.

National Affairs

Laos' Political Reforms To Remain Slow Despite Increased International Scrutiny Fitch Solutions 12th Nov 2018
Laos will likely face increased scrutiny over the coming quarters by the pro-democratic Western community after a review by the UNHCR highlighted the country’s dismal human rights record. However, we believe that this will have limited impact on political liberalisation and legal reforms in the country given that Laos remain dependent on its immediate neighbours for economic and political support.

Dozens Of Officials Trained On English, Communication Skills Lao News Agency 7th Nov 2018
The Singapore Ministry of Foreign Affairs has funded a three-week training course on “Intermediate English Language and Communication Skills” for 39 Lao government officials. Conducted between Oct 15 and Nov 2, the course, which was held at the Lao-Singapore Training Centre, was conducted by Ms Sheila David from Green Olive Tree, Singapore.

New Laos land law could block customary rights, women's titles: analysts Reuters 23rd Oct 2018
A new land law may bring greater transparency in land management and modernization of records in Laos, but it could also curb ownership by women, as well as the customary rights of rural and indigenous people, analysts said. The long-delayed legislation is scheduled to be tabled before the country’s National Assembly next month, according to campaigners and analysts who have given feedback on the draft.

Water Experts Question World Bank's Role in Laos Dam VOA 19th Oct 2018
A panel of water experts have warned that the World Bank's promotion of a major dam in Laos, which they say failed to deliver on basic promises, has fueled the country's development of shoddy hydropower projects with catastrophic consequences.

Banking

Laos plans return to baht bonds NASDAQ 6th Nov 2018
The Lao People's Democratic Republic, rated BBB+ by Tris, is returning to the baht bond market with plans to raise up to Bt7bn (US$215.3m) this month. Bangkok Bank and Thanachart Bank are joint lead managers for the deal. The Indochinese sovereign obtained approval from Thailand'sMinistry of Finance in September to issue bonds from September 1 2018 to May 31 2019. No other details were released.

Defense & Security

Laos, Russia cooperate in clearing unexploded ordnance in central Laos Xinhua 13th Nov 2018
Joint cooperation between Laos and Russia to combat the unexploded ordnance (UXO) threat in central Laos' Borikhamxay province has seen progress after the project began a month ago, local daily Vientiane Times reported on Tuesday. An official in charge of the Ministry of National Defence's Humanitarian UXO Demining Army Unit 58 (U58) gave an update on the progress made so far on Monday.

Japan provides 5 billion kip for law enforcement, border security Vientiane Times 12th Nov 2018
The Japanese government has provided over 5 billion kip (US$700,000) for the iTWIN-Japan/Laos Project, which aims to strengthen the capacity of law enforcement and border security agencies, launched by Interpol. The project opening took place in Vientiane last week and was attended by the Deputy Minister of Public Security, Major General Dr Somvang Thammasith, Director of the Global Outreach and Regional Support Directorate at Interpol, Ms Roraima Andriani, and the Ambassador of Japan to Laos, Mr Takeshi Hikihara, as well as officials from Lao ministries and Interpol.

INTERPOL Launches A Project Designed To Strengthen Capacity Of Law Enforcement Agencies Lao News Agency 12th Nov 2018
The iTWIN-JAPAN/LAOS Project, which aims to strengthen the capacity of law enforcement and border security agencies, was launched by INTERPOL on Thursday. The project opening recently took place in Vientiane in the attendance of Maj. Gen. Somvang Thammasith, Vice Minister of Public Security,Ms. Roraima Andriani, Director, Global Outreach and Regional Support Directorate of INTERPOL, and Mr. Takeshi Hikihara, Ambassador of Japan to the Lao PDR, as well as officers from related ministries of the Lao PDR and INTERPOL.

Growing solidarity, friendship on borders of Vietnam, Laos, Cambodia vietnamplus.vn 12th Nov 2018
The Central Highlands province of Kon Tum and three provinces of Laos and Cambodia do not only share boundaries with each other along edges of the Annamese Mountains but also boast growing bonds in recent years. Life of locals in Kon Tum, Attapeu and Sekong of Laos and Ratanakiri of Cambodia are becoming better and better thanks to their greater solidarity, friendship and a variety of joint activities. Over the last five years, Kon Tum has helped its neighbour provinces build schools, hospitals and other social projects.

Economics

‘Review compensation policy’, research institute suggests Vientiane Times 12th Nov 2018
A top economic research institute has suggested the government reconsider its compensation policy, as many people who were compensated for the loss of their land to special and specific economic zones (SEZs) have been unhappy with the amount they received. The National Economic Research Institute (NERI) said the authorities in charge should study ways to provide compensation in various forms, so as to give displaced villagers more options.

Govt, UN partners assess development priorities Vientiane Times 12th Nov 2018
The enhancement of private sector participation in the development process will be critical when the government draws up the next five-year development plan, which will also address the livelihoods of the most vulnerable people. These issues were discussed at a meeting on Friday between representatives from the government, the United Nations and the media, in preparation for the upcoming Round Table Meeting 2018.

Inequality, Disasters Risks to Development as Progress Pushed in Laos: UNDP Laotian Times 30th Oct 2018
In light of UNDP’s latest statistical update on human development indices and indicators, launched recently, Lao PDR appears to be continuing on its path towards graduation from Least Developed Country status in 2024. According to the update, Lao PDR’s Human Development Index (HDI) value which is calculated based on the life expectancy, level of education and income per capita of a country’s people, has increased by over 50 per cent since 1990.

Energy

More Southeast Asian Dam Disasters Likely Unless Funders Ensure Higher Standards Radio Free Asia 13th Nov 2018
The Lao dam disaster in July that resulted in heavy flooding in two provinces that left at least 40 people dead and displaced 7,000 others has drawn both regional and international attention to the potential dangers of Southeast Asia’s current dam-building spree.

Chinese dams ramp up Lao external debt Nikkei Asian Review 2nd Nov 2018
In its rush to become the "battery" of Southeast Asia, Laos is accepting more Chinese loans to build dams, ensuring the already debt-strapped country falls ever deeper into China's pocket.  The landlocked country's latest dam project is the groundwork for the $2.1 billion Pak Lay hydropower scheme on the Mekong. It is being built by  state-owned Power China Resources, a leader in dam construction, and financed with a $1.7 billion loan from China's Export-Import Bank.

China starts exporting petroleum to Laos Xinhua 31st Oct 2018
With over 64 ton diesel, handed over from PetroChina to a Lao company at Laos-China border, the first export of Chinese refined oil to Lao market was made on Wednesday.

Hydroelectric Power in Laos: Economic Security in Energy-Hungry South-East Asia Future Directions 24th Oct 2018
Hydroelectricity is at the core of Laos’ strategy to become the “Battery of Asia”. The export of electricity to neighbouring high-growth states, such as Thailand, is predicted to stimulate economic development.

In Laos, a World Bank 'model' dam and the myth of sustainable hydropower Devex 24th Oct 2018
It wasn’t a flood. It was a tsunami, Premrudee Daorung said of the wall of water that tore through the forests of Laos’ Attapeu province, snapping timber like matchsticks and flattening entire villages.

New questions asked about Laos dam toll, builder’s role Asia Times 19th Oct 2018
Civil society groups say govt toll of about 40 is not credible, that 800 or more people could have died in July; while Korean lawmaker claims the firm building the dam altered the design and lowered the height to boost profit

Food & Agriculture

Lao onion, garlic smuggled across Mekong River, seized at Thai border market Xinhua 12th Nov 2018
Red onion and garlic allegedly smuggled across Mekong River from Laos were seized at a Thai border market on Monday, police said. A haul of 1.7 tons of red onion and 1.4 tons of garlic were seized from a couple of pickup trucks at the border market in That Phanom district of Nakhon Phanom province, about 737 km northeast of Bangkok, said police superintendent Pol. Col. Chularit Chulaka.

Wet season rice production down in Laos due to flood Xinhua 9th Nov 2018
Wet season rice production in Laos is expected to be reduced by about 300,000 tons after widespread flooding this year that affected many parts of the country. The Lao government, especially the Ministry of Agriculture and Forestry, has encouraged farmers around the country to produce 3.5 million tons of rainy season rice, but authorities expected the harvest to achieve about 3.2 million tons, local daily Vientiane Times on Friday quoted the ministry officials as saying.

Managing El Niño And La Niña In Lao Agriculture Lao News Agency 23rd Oct 2018
Since 1966, over 70 percent of drought or flood disasters in Lao PDR have occurred during El Niño and La Niña years, with major impacts on the Lao agricultural sector and the overall economy, according to World Bank reported in Vientiane Capital on Oct 19, 2018. These findings – as well as recommendations for strengthening resilience to ENSO– were discussed today in Vientiane during the presentation of the World Bank Report Striking a Balance: Managing El Niño and La Niña in Lao Agriculture.

Health & Life Sciences

Authorities reissue dengue warning despite end to rainy season Lao News Agency 13th Nov 2018
Everyone needs to remain vigilant in preventing possible outbreaks of dengue fever even though the rainy season is over, a leading health official has cautioned. Director General of the National Centre for Laboratory and Epidemiology under the Ministry of Health, Dr Onechanh Keosavanh, reiterated to media on Friday the need for preventive measures against dengue during a visit to the centre by Deputy Secretary of the Department of Health and Human Services, USA, Mr Eric D. Hargan.

Senior U.S. Health Official Advances Cooperation With Laos Lao News Agency 12th Nov 2018
On November 9, 2018, U.S. Deputy Secretary of Health and Human Services Eric Hargan met with Minister of Health Assoc. Prof. Dr. Bounkong Syhavong to discuss health cooperation between the United States and the Lao PDR. Laos is an important partner in our global efforts to combat emerging and re-emerging disease threats, especially Avian Influenza and novel influenza viruses, artemisinin-resistant malaria, dengue, HIV/AIDS, and tuberculosis.

Preventing malnutrition in Laos UNICEF 12th Nov 2018
Investing in health centres, especially in remote areas, and increasing the number of skilled health workers is essential. But equally important is to keep mothers informed of the services that are available to them, and changing the attitudes that prevent them from providing proper nutrition to their newborns.

Infrastructure

Leveraging Competitiveness Of Transport SMEs Lao News Agency 8th Nov 2018
Operational competitiveness of SME transport companies in the Lao PDR needs improvement when compared to other ASEAN Member States. The cross-border freight market is dominated by Thai, Vietnamese and Chinese operators. As Laos is exposed to increased competition from established ASEAN operators, Lao SME transport companies find it difficult to compete unless they streamline their operations, reduce time and increase vehicle utilization.

Lao think tank suggests to maximize Laos-China railway Xinhua 6th Nov 2018
The Lao government's top economic research agency has suggested that investment focus in areas that would make use of and maximize the benefits of the Laos-China railway. There is the possibility of building Special Economic Zones (SEZs) along the 411-km route of the high-speed railway, with a focus on developing industrial zones, the National Economic Research Institute (NERI) recommended in its latest survey, local daily Vientiane Times reported Tuesday.

"Space data offers instant clues to cause of deadly Laos dam disaster": Stanford Professor Laotian Times 5th Nov 2018
Space data gleaned from satellites has been used to create a hypothesis on the cause of the collapse of the saddle dam D at the Xe Pian Xe Namnoy project in Attepeu province. Bangkok-based professor Richard Meehan from Stanford University in the United States’ has been investigating the dam’s failure from Bangkok using new space technologies, according to a report published via the Blume Earthquake Engineering Center website on October 26.

Lao Governor Walks Back Projected Costs For Housing in Flood-Hit Attapeu Radio Free Asia 23rd Oct 2018
The governor of a province in Laos hit by flooding from a dam breach earlier this year has issued conflicting estimates of the projected cost to house displaced persons, giving figures deemed unnecessarily high by another official source and contradicting statements he himself had made earlier in an interview. On July 23, water poured over a saddle dam at the Xe Pian Xe Namnoy hydropower project in Champassak in southern Laos, sweeping away homes and causing severe flooding in up to 12 villages downstream in Champassak and neighboring Attapeu province.

Travel & Tourism

Tour operators call for chronic problems to be addressed Vientiane Times 14th Nov 2018
Authorities should address issues that are a source of annoyance for tour operators and tourists, to ensure better conditions for visitors during Visit Laos-China Year 2019 and beyond, tour operators say. Lao and Chinese authorities have agreed to launch the Visit Laos-China Year 2019 programme following the Visit Laos Year 2018 campaign in an attempt to lure more foreign visitors to Laos.

Runoff From Railway Project Pollutes River in Lao Tourist Destination Radio Free Asia 12th Nov 2018
The Lao-Chinese railway project has released polluted water from construction work into the Xong River in Vientiane province’s Vang Vieng district, one of the most popular destinations in the country for tourists, an local resident and an environmental official told RFA’s Lao Service.