Laos Update: January 9, 2020

Laos Update | January 9, 2020
Authors: Riley Smith and Jacob Corfman
 
LOOKING AHEAD
 
 

January 15: Roundtable with the Hon. Peter Haymond, U.S. Ambassador-Designate to Laos

February 4 & 6-7:  U.S. Embassies in Vientiane and Phnom Penh Trade Events in Laos (February 4) and Cambodia (February 6-7). Please view the attached information packet for more information or contact David Sequeira at sequeiraDR@state.gov 

 
THE COUNCIL'S TAKE
 
 

Laos and the USAID launch new program to improve business environment

On December 12, the Laos Ministry of Industry and Commerce and the U.S. Agency for International Development (USAID) unveiled the “Laos Business Environment Project.” Those who attended the unveiling included Laos’ Minister of Industry and Commerce, H.E. Khemmani Pholsena, U.S. Ambassador to Laos, the Hon. Rena Bitter, representatives of USAID and officials from related private sectors. The five-year project, funded by USAID, will provide capacity building and advisory services aimed at strengthening the competitiveness of Laos’ small-and-medium-sized enterprises (SMEs) while improving the implementation of trade-related laws, policies and regulations. SMEs make up the majority of firms in Laos and account for most of the country’s private sector employment. Consequently, the country’s economic development relies heavily upon support for Laos’ SMEs. In addition to SME support, the project’s other goals include improving the competitiveness of agricultural microenterprises, strengthening the rule of law, promoting health and nutrition, supporting people with disabilities and improving education. This is the third USAID project focusing on Laos, the first two being the Lao PDR-U.S. International and ASEAN Integration Project (LUNA-Lao) and its successor, USAID LUNA II. 

Initiatives such as the Laos Business Environment Project can help the United States deepen economic relations with Laos, which aims to play an increasingly important role in mainland Southeast Asia’s logistics sector, especially with respect to trade with China. Laos’ close relations with China are evident in the amount of infrastructure investment Beijing continues to pour into the country. This is in large part due to China’s geographical proximity to Laos, but also China’s interest in using Laos as a gateway by which to access countries in Southeast Asia that it does not directly border. The China-Laos railway, which planners envision with connect to rail lines extending through Thailand, Malaysia, and down to Singapore, is the clearest example of this goal. While the cost of the railway, especially for a developing country like Laos, has been a source of concern among observers, the Lao government insists that it is part of a larger, long-term project to turn landlocked Laos into a “land-linked” country that has strong logistical links with China and its ASEAN neighbors.

Laos and Thailand cooperate to expand QR code digital payment system

The Bank of Thailand (BOT) and the Bank of Lao PDR signed an MoU agreeing to cooperate in developing QR code and international payment standards for a bilateral payment system policy. Currently, PromptPay, a real-time payments system, has 49.5 million registered users in Thailand with an average of 8.1 million daily transactions. More than 5 million shops nationwide allow customers to make payments through the Thai QR Payment System. The MOU’s goal is to build off the growing use of QR codes for payment in Thailand to develop and promote bilateral money transfers and payment innovations between Thailand and Laos. The countries already have in place a payment service that uses interoperable QR payments for transfers between Thanachart Bank (TBANK) and Banque Pour Le Commerce Exterieur Lao Public (BCEL), the first such service in ASEAN. Between February and September of last year, Lao citizens used the application to make 32,000 transactions, resulting in around THB 157 million (US$5.17 million)-worth of spending.

 
 
IN THIS UPDATE
 
 
Regional Affairs
Singapore furthers IP cooperation with Laos to accelerate ASEAN’s innovation growth
Japan grants support for school, water supply projects in Laos’ poor communities
Lao minister visits Xinhua for 2nd Laos-China Belt and Road Cooperation Forum

Defense & Security
Laos, US Conduct 14th Annual Defense Dialogue
Japan’s Ground Self-Defense Force helped train Lao People’s Army personnel on search and rescue
Russia quietly expands military ties with Laos
First Russian-Lao joint drills start in Laos

Economics
Laos, US cooperate on biz environment improvement
Laos Eyes Law Change to Attract More Investments in Stock Market

Energy
Laos links 195MW power to Cambodia
Vietnam to Import More Energy from Laos

Financial Services
Thai banking trio set to recapitalise Lao branches

Food & Agriculture
Rice farming improvements sow seeds of success in Laos
Laos gets US$22mil soft loan to tackle rural poverty

Health & Life Sciences
Laos steps up fight against antimicrobial resistance

Infrastructure
China, Laos to enhance cooperation, boost ties
China-Laos railway power supply project launched in Lao capital
China digs Laos in deeper with flurry of SEZs
Chinese engineering firm drills 3 China-Laos railway tunnels in December
With US$1.5 billion debt load, can Laos reap profits from China rail link?
Laos continues path of relentless development

Travel & Tourism
Laos claws back tourist arrivals
Laos, Vietnam enhance cooperation on culture and tourism

Vietnam
Vietnamese, Lao PMs: inter-gov’t committee meeting a success
 
ARTICLE CLIPS
 
 
Regional Affairs

Singapore furthers IP cooperation with Laos to accelerate ASEAN’s innovation growth :: KPL :: Lao News Agency 19th Dec 2019
Enterprises in ASEAN will soon benefit from a new intellectual property (IP) cooperation signed between Singapore and the Lao PDR. This will allow innovative enterprises swifter access to a combined market of some 12.5 million people across both countries.

Japan grants support for school, water supply projects in Laos’ poor communities :: KPL :: Lao News Agency 19th Dec 2019
The government of Japan is providing grant assistance worth over US$159,000 for two education related projects in Bokeo and Xekong Provinces and one water supply system project in Xayabouly Province through its Grant Assistance for Grassroots Human Security Projects (GGP). Grant contracts were signed at the Japanese Embassy in Vientiane Capital on Dec 18 between Mr. Takewala Keizo, Ambassador of Japan to the Lao PDR, and representatives of the respective district and provincial authorities where the projects are to be implemented.

Lao minister visits Xinhua for 2nd Laos-China Belt and Road Cooperation Forum Xinhua 15th Dec 2019
Kikeo Khaykhamphithoune, Lao Minister of Information, Culture and Tourism visited the headquarters of Xinhua News Agency here on Sunday for the forthcoming Second Laos-China Belt and Road Cooperation Forum. During their talks, Xinhua President Cai Mingzhao hailed the China-Laos relationship as example of China's friendship and cooperation with its neighbor countries. Noting media groups' role in enhancing mutual understanding and friendship, Cai said the Laos-China Belt and Road Cooperation Forum has become a new important platform to boost the bilateral ties.

Defense & Security

Laos, US Conduct 14th Annual Defense Dialogue :: KPL :: Lao News Agency 19th Dec 2019
On December 5, senior officials of the Ministry of National Defense (MND) met with U.S. Ambassador to Laos Rena Bitter and senior officials from the U.S. Indo-Pacific Command (USINDOPACOM) for the 14th Lao-United States Bilateral Defense Dialogue (BDD).

Japan’s Ground Self-Defense Force helped train Lao People’s Army personnel on search and rescue :: KPL :: Lao News Agency 19th Dec 2019
A reception for the 2019 Programme on ‘’ Search and Rescue and Medic Seminar of Humanitarian Assistance and Disaster Relief’’ was organized on Nov 14 by the Embassy of Japan to the Lao PDR. The 2019 Programme on ‘’Search and Rescue and Medic Seminar of Humanitarian Assistance and Disaster Relief’’ under the Capacity-Building Cooperation between the Japan’s Ministry of Defense (JMOD), with experts from the Japan Ground Self-Defense Force, and the Lao People’s Army was organized between November 11 and 15 at LPA’s 58th Humanitarian UXO clearance unit base in Tha Ngon.

Russia quietly expands military ties with Laos Nikkei Asian Review 14th Dec 2019
On Dec. 10, Russia and Laos launched their first-ever joint military exercise. More than 500 soldiers from both countries and numerous tanks are participaing in the nine-day Laros 2019 exercise at the Ban Peng training ground in Laos. "Although the contingent of troops from Russia is not very big, this exercise is nevertheless the first attempt [by Moscow] to establish a military presence in Southeast Asia," said Alexey Maslov, a professor at the National Research University Higher School of Economics. "I suspect that Russia views Laos as one of the first stops for offering its military services to Asia."

First Russian-Lao joint drills start in Laos Xinhua 10th Dec 2019
The first Russian-Lao joint military exercises Laros 2019 kicked off on Tuesday at the Ban Peng training ground in Laos, the Russian Defense Ministry said. The drills to last through Dec. 19 will involve over 500 troops from both sides, the ministry said.

Economics

Laos, US cooperate on biz environment improvement Phnom Penh Post 19th Dec 2019
Private sector conditions in Laos are likely to improve following the launch of the New Laos Business Environment Project by the Ministry of Industry and Commerce and the US. The project will provide capacity building and advisory services aimed at strengthening the competitiveness of Laos’ small- and medium-sized enterprises (SMEs) while improving the implementation of trade-related laws, policies and regulations.

Laos Eyes Law Change to Attract More Investments in Stock Market The Laotian Times 5th Dec 2019
Laos is poised to amend the law on securities in a bid to create more favorable conditions for state and private business units to mobilize funds from the securities market. It is not 100 percent clear which kind of changes would be made, but the proposal of amendment is subject for the National Assembly’s consideration and approval.

Energy

Laos links 195MW power to Cambodia Bangkok Post 9th Jan 2020
Nearly 200 megawatts of electricity from Don Sahong Dam in Laos has been linked to Cambodia’s national grid after the dam finished tests on four electricity generators. The power linking was made between interim transmitters in Laos and transmitters in Cambodia’s Stung Treng province on Tuesday, the Khmer Times reported on Wednesday.

Vietnam to Import More Energy from Laos The Laotian Times 13th Dec 2019
Vietnam has decided to import an additional 200 MW of electricity from Laos next year amid possible power shortages. The country’s decision comes amid concerns that it may suffer energy shortages from 2020.

Financial Services

Thai banking trio set to recapitalise Lao branches Bangkok Post 5th Dec 2019
Three large Thai banks are recapitalising their branches in Laos to comply with the Bank of the Lao PDR's amended capital regulations for both local and foreign commercial banks to meet minimum requirements over the course of five years. Kasikornbank (KBank) is in the process of injecting fresh funds into its Lao branches, with the recapitalisation set for next month, said Barvorn Srisangatrakul, first vice-president of world business group. Under the amended regulations, the Lao central bank requires foreign commercial banks to raise their minimum registered capital from 50 billion kip (US$5.8 million) to 30 billion kip. For local banks, the regulator requires their minimum registered capital to be increased from 100 billion kip to 500 billion kip.

Food & Agriculture

Rice farming improvements sow seeds of success in Laos Phnom Penh Post 19th Dec 2019
Farmers in Laos’ two northern provinces of Xieng Khuang and Huaphan have witnessed increased yields and quality from seven seed varieties of local khao kainoi rice. The Agro-Biodiversity Initiative (Tabi) is continuing its programme to assist farmers in the provinces of Xieng Khuang and Huaphan to improve the quality of khao kainoi seeds, thereby ensuring food security in the communities and better returns for farmers.

Laos gets US$22mil soft loan to tackle rural poverty New Straits Times 7th Dec 2019
The World Bank has approved an additional funding of US$22.5 million for Laos to address rural poverty. The sum will be channeled to the Poverty Reduction Fund, which is one of the Lao government’s main vehicles to handle poverty in the nation. The World Bank said it would continue its support of agriculture-related activities under the government’s National Nutrition Strategy. The World Bank’s financing comes from the International Development Association, meant for the poorest countries. The focus of the Nutrition Strategy will be on upgrading agricultural infrastructure for improving livelihoods and nutritional intake, and broadening the access for seed grants to self-help groups. The additional funding will also contribute to a government multi-sectoral nutrition initiative to reduce child growth stunting in some of the poorest districts of the country.

Health & Life Sciences

Laos steps up fight against antimicrobial resistance Xinhua 1st Jan 2020
The Lao government is stepping up its fight against the emergence of so-called "super-bugs": infections that do not respond to commonly used antibiotics. Backed by international partners, the Lao Ministry of Health and Lao Ministry of Agriculture and Forestry launched on Tuesday the National Strategic Plan against Antimicrobial Resistance 2019-2023, Lao News Agency (KPL) reported on Thursday.

Infrastructure

China, Laos to enhance cooperation, boost ties Xinhua 6th Jan 2020
Chinese Premier Li Keqiang held talks with visiting Lao Prime Minister Thongloun Sisoulith here on Monday, calling for further development of bilateral relations. Hailing the friendly relations between China and Laos, Li said China attaches great importance to relations with Laos and is ready to work with Laos to carry forward their traditional friendship, deepen mutual political trust, implement the action plan on the building of a community with a shared future for China and Laos, and promote cooperation featuring win-win results.

China-Laos railway power supply project launched in Lao capital Xinhua 30th Dec 2019
The power supply project for the China-Laos railway was kicked off in the Lao capital on Monday. The power supply project for the China-Laos railway is the first BOT (build-operate-transfer) power grid project in Laos, a key project to guarantee the scheduled operation of the China-Laos railway and of building the China-Laos community with a shared future. It is also a symbolic project of the Belt and Road Initiative to advance infrastructure connectivity.

China digs Laos in deeper with flurry of SEZs Nikkei Asian Review 23rd Dec 2019
After opening its borders to China's dam builders and railway engineers, Laos is looking for Chinese companies to invest in the special economic zones (SEZs) mushrooming up all over the country. But observers question these projects, and worry about the small communist nation's mounting debt. With Beijing promoting SEZs as part of its Belt and Road Initiative (BRI), the Boten Special Economic Zone on the border in northern Laos exemplifies the "quest for capital in exchange for land." Boten abuts the border with China's southern province of Yunnan, and Chinese developers are being given leases there of 90 years.

Chinese engineering firm drills 3 China-Laos railway tunnels in December Xinhua 19th Dec 2019
The Chinese railway engineering company has drilled through three China-Laos railway tunnels in northern Laos in this December. The railway engineering company -- China Railway Guangzhou Engineering Group (CREC-GZ) completed the China-Laos Railway Muangxay No. 1 Tunnel on Wednesday, 74 days ahead of schedule, along with Nam Nouan No.2 Tunnel and Ban Thin No. 1 Tunnel in this December.

With US$1.5 billion debt load, can Laos reap profits from China rail link? South China Morning Post 10th Dec 2019
An ambitious high speed electified railway track running through Laos and connecting Kunming in China with northeastern Thailand is now 78 per cent complete, according to reports. All the bridges, tunnels and other structures have been built; what remains is to lay the track and install signalling and other mechanics necessary for operations. The first trains are expected to be running around two years from now.

Laos continues path of relentless development Phnom Penh Post 16th Dec 2019
Under the guidance of the party and state over the past 44 years, the people are happy and proud to see that Laos is continuously developing. In many ways, the country’s development is making good progress and is strong. The economy is recording continuous growth and today’s society is developing every day.

Travel & Tourism

Laos claws back tourist arrivals TTR Weekly 9th Jan 2020
Laos got its tourist arrivals back on track in 2019 reporting a headcount of 4.58 million, up 9% after a below target showing in 2018. Reported initially by the Vientiane Times, the data was released earlier this week by the Ministry of Information, Culture and Tourism’s director-general of the tourism marketing department, Sounh Manivong.

Laos, Vietnam enhance cooperation on culture and tourism :: KPL :: Lao News Agency 19th Dec 2019
Minister of Information, Culture and Tourism Kikeo Khaykhamphithoune on Dec 5 met with the Minister of Culture, Sports and Tourism of Vietnam Nguyen Ngoc Tien as the latter was on a working visit to Laos. At amicable talks, both ministers highly noted that the growing relations and deepened cooperation between the Ministry of Information, Culture and Tourism of Laos and the Ministry of Culture, Sports and Tourism of Vietnam have contributed to enhancing the traditional relations, special solidarity and comprehensive cooperation between the two Parties, governments and peoples of the Lao PDR and Vietnam.

Vietnam

Vietnamese, Lao PMs: inter-gov’t committee meeting a success vietnamnews.vn 5th Jan 2020
The 42nd meeting of the Việt Nam-Laos Inter-Governmental Committee was a success, Prime Minister Nguyễn Xuân Phúc and his Lao counterpart Thongloun Sisoulith said. During a press conference held in Hà Nội on Saturday following the meeting, the two PMs expressed delight at the effective and comprehensive development of bilateral ties. Both sides agreed to realise set agreements and deepen bilateral political, external, national defence – security ties, towards achieving growth of 10-15 per cent in two-way trade next year.