Laos 20240501: Rejuvenation, Nexus, Digitization

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

May 01, 2024

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Headlines:

Tourism Rebounds in SEA, Including Laos

Economy Still Below Pre-Pandemic Levels Despite Growth

Rural Communities See Water Shortages

Laos and Thailand to Open 5th Friendship Bridge

Laos Hosts ASEAN Summit, Seeks Vietnamese Tech Solutions

Inflation Eases Slightly to 24.92% in April

New VAT Rate Coming Soon: Are You Ready?

Measles-Rubella Vaccination for Children

Thai Minister to Inspect Laos-China Checkpoints

Central Bank Issues Warning on Counterfeit Currency

Centara Opens COSI Vientiane Nam Phu

Tourism Rebounds in SEA, Including Laos

Tourism in Southeast Asia is steadily recovering from pandemic lows, with Laos among the countries seeing an uptick in visitors. In 2023, the six major ASEAN economies recorded 91 million tourist arrivals, up from just 39 million in 2022. Thailand is leading the recovery, with around 28 million arrivals last year - 71% of pre-pandemic levels. Vietnam also saw strong growth, with 12.6 million visitors in 2023, 70% of 2019 figures. The return of Chinese tourists, traditionally a major source of visitors for the region, has been slower than hoped. As currencies remain weak in 2024, Southeast Asia could be primed for a full return to pre-pandemic tourism.

Economy Still Below Pre-Pandemic Levels

The World Bank reports that Laos' economic growth remains below 2019 levels, despite some positive signs. Factors contributing to the sluggish recovery include economic instability, low worker skills, labor out-migration, and a challenging business environment. On the upside, sectors like tourism, transport, logistics, and mining are helping to drive growth. The country is hoping to transition to a "land-linked" economy through large railway and electrical infrastructure projects. Hydropower is also a big part of the national development strategy, despite ecological concerns.

Rural Communities See Water Shortages

Rural communities in Laos are struggling with dwindling water resources as climate change takes its toll. Longer dry seasons and less predictable rainfall are making it harder to access clean water for drinking, agriculture, and livestock. Government projects are underway to provide clean water to 85% of urban residents by 2025 and 90% by 2030. These projects are expected to increase water and sanitation capacity at central and local levels, but more support is needed for rural areas facing the brunt of climate impacts on their water supplies.

Laos and Thailand to Open 5th Friendship Bridge

A new Mekong River crossing linking Bolikhamxay, Laos and Bueng Kan, Thailand is set to open this November. The 5th Thai-Lao Friendship Bridge will feature 1,350m of bridge structure plus upgraded road links on both sides, costing 3.9 billion baht. The project will go a long way to improving transportation, trade and tourism connections between the neighbors. Four provinces in this border region - Bueng Kan, Nakhon Phanom, Mukdahan and Sakon Nakhon - are seen as high-potential economic zones that will benefit from the new connectivity.

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