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Headlines:
Constitutional Reforms Debated
Government Restructures Ministries
China-Laos Foreign Ministers Meet
Water Crisis Hits Vientiane
China Keeps Position as Top Trading Partner
Labor Market Crisis Exposes Skills Gap
Food Safety Fear After Chemical Contamination
Cloud Database Protects Forests
Huaxi Cattle Breeding Deal with China
Taxi Safety Concerns After Harassment
Local Currency Payments Boost Bilateral Trade
Digital Census Launched for 2025
Vocational Training Expansion
AUS Funded Disease Prevention Project Expands
Hydropower Potential Requires Careful Approach
Vietnamese Rubber Expansion Welcomed
Constitutional Reforms Debated
The National Assembly is considering sweeping constitutional reforms that would reshape the country's governance structure in an effort to decentralize decision-making processes. The 2025 Draft Constitution proposes getting rid of individual executive roles like Governors and Village Chiefs in favor of collective Governing Committees across all administrative levels, while introducing a new "Tasaeng" administrative tier. Economic reforms would be rolled out to develop an "independent economy" focused on sustainable growth and innovation. The judicial system would see increased prosecution powers and more National Assembly oversight.
Read more: Laotian Times
Government Restructures Ministries
The government is consolidating its ministries from 17 to 13. The reorganization includes merging Planning and Investment with Finance, combining Energy and Mines with Industry and Commerce, and integrating Natural Resources with Agriculture and Forestry. The Ministry of Interior's functions will transfer to the party's central organization, while media affairs move to the party's propaganda department. With 168,572 state employees, uncertainty hangs over the civil service over job impacts. The restructuring is being pitched as a cost reduction and efficiency improvement exercise as the current leadership approaches the end of their five-year term, with elections scheduled for next year.
Read more: RFA (Ministry Mergers), Pattaya Mail (Restructuring Details), Asian News Network (Government Changes)
China-Laos Foreign Ministers Meet
Chinese Foreign Minister Wang Yi and Lao Foreign Minister Thongsavanh Phomvihane recently held talks centered on celebrating 64 years of diplomatic relations and improving bilateral cooperation. The ministers talked about expanding the China-Laos Economic Corridor and railway development, while agreeing to work more closely in the spheres of AI, digital economy, energy, and cross-border security. They signed a Memorandum of Understanding on the Global Security Initiative and Laos reaffirmed its support for the Belt and Road Initiative.
Read more: FMPRC (Diplomatic Talks), People's Daily (Strategic Partnership)
Water Crisis Hits Vientiane
Vientiane is facing a serious water crisis with daily demand of 520,000 cubic meters far exceeding production capacity of 348,000 cubic meters. The Water Supply State Enterprise Vientiane has introduced remedial measures, including contracts for three new water supply factories in the villages of Tha Dok Kham (100,000m³), Houay Hom (20,000m³), and Chi Nai Mo (40,000m³). Residents in elevated and suburban areas are experiencing supply disruptions and low pressure, worsened by a prolonged heatwave and power outages. The government is looking for private sector investment while asking residents to store water, with growing public concern about supply during the upcoming Lao New Year festival.
Read more: Laotian Times (Water Crisis)
China Keeps Position as Top Trading Partner
Trade between Laos and China reached $8.23 billion in 2024, a 15.91% year-on-year increase. Lao exports to China grew 21.4% to $4.56 billion, while imports from China rose 9.8% to $3.68 billion. The China-Laos Railway has allowed more than 50 million tons of freight movement since its 2021 opening. China is keeping its position as Laos' largest foreign investor since 1989, with 927 projects valued at more than $18 billion, mostly in the energy, mining, services, and agriculture sectors. The recent Laos-China Cooperation Commission meeting approved new plans including a third five-year Economic-Technical Cooperation Plan for 2025-2029.
Read more: The Star
Labor Market Crisis Exposes Skills Gap
Laos created a meager 26,000 jobs created in 2024 for its 3.5 million-strong workforce. Chinese and Vietnamese companies dominate foreign investment in Laos but consistently bypass local workers due to claimed skill deficiencies. Labor ministry officials are blaming the problem on inadequate worker training, while evidence suggests issues including potential corruption that allows foreign companies to import workers without proper permits. The government's limited budget for worker training programs and poor oversight of foreign investment makes the whole thing worse.
Read more: RFA
Food Safety Fear After Chemical Contamination
Provincial authorities in Houaphanh Province discovered formaldehyde and borax contamination in fruit and food products in a local market. Oranges and apples showed the highest contamination levels. These chemicals, used to prevent discoloration and preserve freshness, can cause severe damage to stomach, liver, kidneys, and brain. The incident echoes similar cases in Champasack and Khammouane provinces in 2024. Under Article 183 of Lao Penal Code, violators can be imprisoned for 3 months to 10 years and face fines ranging from LAK 1-50 million. The recurring incidents show that unfortunately there are still food safety challenges in the region.
Read more: Laotian Times
Cloud Database Protects Forests
A Green Climate Fund-supported REDD+ emission reduction programme in Laos has been running a cloud database that has successfully integrated 900,000 hectares of village land into formal land-use plans since 2020. The system has allowed for the development of 240 Village Forest Management Plans covering 474,400 hectares across three northern provinces. The technology has supported a 40% reduction in fire outbreaks in targeted areas while supporting community-led forest protection initiatives. The database provides real-time monitoring of forest conservation activities, allows precise tracking of forest boundaries, and helps resolve encroachment issues.
Read more: WebWire
Huaxi Cattle Breeding Deal with China
China is proudly celebrating a win in cattle breeding with its Huaxi breed, developed over 43 years, reporting on its first international export through a partnership with Laos. The breed features bulls growing to 900kg and cows reaching 550kg, with a meat yield of 53.95%. The deal with Laos includes providing 100,000 doses of frozen Huaxi semen and 10 breeding bulls for crossbreeding with local cattle. The program, perhaps surprisingly run under the umbrella of Belt and Road efforts, is intended to support development of Laos' cattle industry while internationalizing China's beef cattle seed industry.
Read more: SCMP
Taxi Safety Concerns After Harassment
A sexual harassment incident involving a Vientiane taxi driver has caused widespread debate about passenger safety and legal protections. The incident, documented by the female victim, showed the driver engaging in inappropriate touching and displaying explicit content during the ride. While the driver later issued a public apology, the case has exposed issues including prevalent victim-blaming attitudes and inadequate legal frameworks for harassment victims.
Read more: Laotian Times
Local Currency Payments Boost Bilateral Trade
Vietnam and Laos continue to promote regional trade using local currency payments. At a conference in Vientiane, the Bank of the Lao PDR and State Bank of Vietnam, along with the Lao-Viet Joint Venture Bank and Vietcombank Laos, outlined plans to facilitate transactions in Lao kip and Vietnamese dong. The plans follow on a 2023 Memorandum of Understanding that was inked in an effort to grow the value of local currency payments between the two nations.
Read more: The Star
Digital Census Launched for 2025
The Lao Statistics Bureau will launch its first-ever fully digital Population and Housing Census in October 2025. The census will employ handheld devices and Geographic Information Systems for data collection, supported by satellite imagery. The project requires the training of 13,000 enumerators and is getting technical and financial backing from UNFPA along with development partners including Australia, USA, Luxembourg, and Switzerland. The census timeline includes GIS mapping operations in March 2025, enumerator training in September, main data collection in October, and a Post-Enumeration Survey in early December. This census is expected to provide data for the 2026-2030 National Socio-Economic Development Plan.
Read more: Laotian Times
Vocational Training Expansion
Phase two of the Lao Vocational Training and Employment Support Services project is running from October 2024 through 2027. Run by the Ministry of Education and Sports, the project targets youth dropouts and economic challenges by delivering vocational training, employment counseling, and self-employment support. The project has already helped more than a thousand young people, mostly in rural and disadvantaged communities.
Read more: The Star
AUS Funded Disease Prevention Project Expands
The World Mosquito Programme, in partnership with the Ministry of Health and Save the Children International, is launching phase two of a Wolbachia mosquito release project targeting dengue and other mosquito-borne diseases. The AU$8.2 million (~US$5.2M) project, funded by the Australian Government and Gillespie Foundation, will expand to cover 84 km² across Vientiane and four provinces, protecting more than 1.2 million people. The project uses Wolbachia bacteria technology, developed by Australian scientists, which already been shown to be successful in 14 other countries. A previous trial in two Vientiane districts saw 99% public acceptance. Dengue caused more than 20,000 cases and 11 deaths last year.
Read more: The Star
Hydropower Potential Requires Careful Approach
While Laos generates ab out 40,000 gigawatts and exports 80% of its electricity to Thailand, it faces debt challenges with a government debt-to-GDP ratio of 130% as of 2022, with 42% of that debt concentrated in the power sector. Despite expected graduation from LDC status in 2026, Laos needs to fix a lack of regulatory oversight and risks of hydropower overinvestment. The path forward requires developing transmission infrastructure, diversifying energy investments, and independent regulatory mechanisms to avoid debt traps.
Read more: Nikkei Asia
Vietnamese Rubber Expansion Welcomed
Vietnam Rubber Group has received support from Laos Prime Minister Sonexay Siphandone for more investment in the country. VRG currently maintains a sizeable operation with $164 million invested out of $255 million registered capital. The group manages 26,644 hectares of rubber plantations and operates three rubber latex processing factories with 34,000 tons annual capacity. The projects have generated $555 million in revenue and $75 million in pre-tax profit, while employing 5,500 workers, including 4,800 Lao nationals earning an average of $350 monthly. Despite current government restrictions on rubber planting investments, VRG wants to expand its plantation area and develop new industrial rubber products like tires.
Read more: European Rubber Journal
That’s all for this week, thanks for reading.
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