Laos 20240117

Mekong Memo Laos Weekly: Business, politics, finance, trade & legal news.

Jan 17, 2024

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Headlines:

Twin Tests in Debt and Diplomacy

Laos Faces Challenges as ASEAN Chair

South Korea Raises Travel Alert to Highest Level for Golden Triangle

Swiss Reinforce Commitment to Job Training

New Banking Regulation for Foreign Investors

World Bank Urges Sin Tax, VAT Increases

Lao Telecom Expands 5G Services

Laos Teams with China on Satellite Monitoring

Digital Transformation for Growth

Sustainable Agroforestry Coffee Production

Preservation and Progress in Luang Prabang

Illinois Academic Boosts Lao Pig Farming

Twin Tests in Debt and Diplomacy

Laos is reining in its soaring public debt, which reached 112% of GDP, by implementing tighter borrowing oversight and making improvements to revenue collection. These efforts will be important to mitigate the risks associated with rapid economic growth and heavy (over?)investment in industries like mining and hydropower. Meanwhile, as 2024 ASEAN chair, Laos faces delicate diplomacy, particularly balancing its heavy debt reliance on China with its regional role. (Also see next article)

Read more: Nikkei Asia (Debt Management), Nikkei Asia (ASEAN Chairmanship)

Laos Faces Challenges as ASEAN Chair

Laos, as the 2024 ASEAN will likely struggle with major challenges like Myanmar's civil war and South China Sea disputes. Despite institutional weaknesses, Laos is expected to contribute to the bloc's economic connectivity and digital initiatives. The country's approach, influenced by its economic ties and indebtedness to China, will likely stress neutrality on contentious issues, while pushing forward on issues of economic interconnectivity and ASEAN's digital economy framework.

South Korea Raises Travel Alert to Highest Level for Golden Triangle

Citing increased criminal activity, South Korea has set a Level 4 “no-go” travel alert, barring citizens from the notorious Golden Triangle region in Laos starting February 1. This area, known for trafficking, scams and other illicit activity, has particularly affected South Korean nationals. Six-month travel bans were also extended to eight other countries and six regions with security and terrorism risks, including Somalia, Afghanistan, and parts of the Philippines.

Swiss Reinforce Commitment to Job Training

Switzerland has successfully wrapped up the first phase of their Vocational Training and Employment Support Services project in Laos, to the benefit of more than 3,500 youth. The project, funded by the Swiss government, included vocational training, employment support, and business start-up support. Phase 2 now expects to build on this impact, addressing local labor needs and expanding to include Vientiane district.

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