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Headlines:
Government Shrinks from 17 to 13 Ministries
Big Changes to Local Government
Finance Ministry Grabs Corruption Cash
US Funding Cuts Hit Bomb Clearance Work
US Puts Laos on Draft Travel Restriction List
China-Laos Projects Continue with Big Projects
New Investment Zone Gets Massive Tax Breaks
$1.45 Billion Chinese Deal Supports Hub Plans
Net Zero Roadmap Launched for Energy Sector
Major Gaps Found in Social Protection System
Health Security Review Identifies Needs
AI Pushes Digital Transformation Forward
Luang Prabang Economy Booming
Rail Links Support Thai Ag Exports
Cambodia-Laos Border Marking Moves Forward
Cambodia-Laos Security Cooperation
Chinese Rubber Company Expands Operations
Government Shrinks from 17 to 13 Ministries
The National Assembly just approved a government shake-up that cuts the number of ministries from 17 to 13. They're combining several departments - Planning and Investment now joins with Finance; Energy and Mines merges with Industry and Commerce; and Natural Resources and Environment teams up with Agriculture and Forestry. The Ministry of Home Affairs will now report straight to the Party Central Committee, while media groups move to the Party's Propaganda Board. The changes also give local administrations more power, beef up anti-corruption rules, push the retirement age to 65, and let people up to age 40 apply for government jobs.
Read more: The Star (Ministry Mergers), The Star (Session Conclusion)
Big Changes to Local Government
Local governance is also getting a makeover. The National Assembly's new plan creates sub-districts (taseng) as the lowest administrative level, replacing the current village-based approach. They're setting up administrative committees at provincial, district, and sub-district levels, while transforming villages into community units focused mainly on social and cultural activities. The goal is to improve public services, increase self-reliance at the local level, and promote stronger grassroots institutions. Limited budgets and staffing at the sub-district level could make implementation tricky.
Read more: The Star
Finance Ministry Grabs Corruption Cash
The Finance Ministry seized more than 12.3 billion kip, $265,919, and 24.8 million baht from 50 accounts during its 2024 inspection. Finance Minister Santiphab Phomvihane led the operation targeting misused government money. The investigation focused on customs checkpoints and found problems in import guarantee systems. Civil servants caught in the mess faced demotions or job changes. The ministry wants to tighten supervision and is pushing Party leaders to enforce rules and stop officials from using their positions to line their own pockets.
Read more: The Star
US Funding Cuts Hit Bomb Clearance Work
Laos faces a tough situation as it prepares to graduate from Least Developed Country status in November 2026 while US funding for important de-mining work dries up. The funding cuts - from what was once $400 million for clearing unexploded ordnance - have forced NGOs to lay off workers and bring a stop to clearing operations. The changes are creating big problems in a country still dealing with bombs from the Vietnam War era, when the United States dropped two million tons of explosives across almost the entire country. These leftover bombs still threaten development and safety, especially for children.
Read more: Pass Blue
US Puts Laos on Draft Travel Restriction List
The Trump administration has added Laos to its draft travel restriction list in the "orange" tier. This could mean mandatory in-person visa interviews and tighter approval processes for Lao citizens trying to enter the United States. Laos has 60 days to respond to government concerns, with lack of cooperation on deportee returns mentioned as a likely reason for being added to the list. The restrictions would affect multiple visa types including green cards, work visas, student visas, and tourist visas, creating problems for travelers, students, business people, and family visitors.
Read more: Laotian Times
China-Laos Projects Continue with Big Projects
China and Laos continue to build their partnership through big initiatives like the China-Laos Economic Corridor and the $6 billion China-Laos Railway. Trade between the countries hit $7.1 billion in 2023 - up nearly 27% from the year prior - while Chinese investments in Laos reached almost a billion dollars. Their partnership focuses on building infrastructure through railways, energy projects, and cross-border logistics. Economic cooperation covers mining, construction, hydropower, agriculture, and Special Economic Zones. But challenges exist, including Laos' growing debt to China, unbalanced trade, and limited industrial capacity.
Read more: China Briefing
New Investment Zone Gets Massive Tax Breaks
The National Assembly has approved huge tax incentives for the Amata Special Economic Zone, which covers 3,150 hectares in Namor district, Oudomxay Province and 410 hectares in Nateuy district, Luang Namtha Province. The package gives investors a 30-year profit tax exemption in sectors including agricultural processing, renewable energy equipment production, auto and parts manufacturing, as well as electrical equipment making. The project is expected to support export growth, create jobs, bring back Lao migrant workers, and set an example of modern, eco-friendly industrial parks.
Read more: Laotian Times
$1.45 Billion Chinese Deal Supports Hub Plans
Laos just signed a $1.45 billion deal with China Western Power Industrial to develop an 1,800-megawatt clean energy project in southern Laos. Expected to finish by early 2030, the project plans cover design, supply, and construction of power infrastructure. This deal will help Laos diversify beyond hydropower, which currently makes up 80% of its energy production. The project is also in support of Laos’ goal to become Southeast Asia's primary energy hub, with plans to sell even more electricity to Thailand and Vietnam.
Read more: Reuters (Energy Deal), Power Technology (Power Project), Yi Cai Global (Contract Details)
Net Zero Roadmap Launched for Energy Sector
The ASEAN Centre for Energy has started its first country-specific net-zero emissions roadmap, focused on the Lao energy sector. The plan will guide Laos toward its 2050 net-zero emissions goal through planned decarbonization paths. The project brings together the ACE, Lao government agencies, academic institutions, and state-owned companies. The roadmap has an emphasis on renewable energy and low-carbon technologies through a Carbon Neutrality Scenario. The roadmap could become a model for other ASEAN countries while promoting regional energy transition and knowledge sharing.
Read more: Laotian Times
Major Gaps Found in Social Protection System
UN Resident Coordinator Bakhodir Burkhanov shared findings on the Lao social protection situation at a recent workshop with government officials. While National Health Insurance covers 94% of the population, gaps exist in social security coverage - only 11% of businesses and less than 1% of informal workers participate. Public spending on social protection is just 1.6% of GDP. The assessment found problems including an underfunded health insurance system and limited social welfare resources. Recommendations include broadening protection coverage, improving financial stability, and bringing the system into line with international standards.
Read more: UN Laos
Health Security Review Identifies Needs
The Ministry of Health has finished its second Joint External Evaluation to improve health security preparedness. Working with the World Health Organization under International Health Regulations, the evaluation checked national health security capabilities and found some gaps that will need to be addressed. The biggest recommendations include improving whole-of-government coordination on health regulations, increasing qualified health security professionals, and the establishment of domestic funding for health security programs.
Read more: ReliefWeb
AI Pushes Digital Transformation Forward
The Ministry of Technology and Communications is leading an AI-driven digital movement. The government has already begun work on 37 digital government systems and is building a national digital identity system. The system covers the retail, manufacturing, and media sectors, with a priority given to AI ethics and governance. Planned projects include the creation of a national AI strategy, participation in UNESCO's AI Ethics Readiness Assessment, and workforce development to make public administration more efficient, drive economic development, and improve services.
Read more: Borneo Bulletin
Luang Prabang Economy Booming
Luang Prabang has grown at a 6.9% annual rate with GDP reaching LAK 3,989 billion (~$183 million), beating targets. The region's per capita income now averages LAK 39 million ($1,897) per year. Tourism is still a big economic driver, bringing 2.3 million visitors in 2024. The city has pulled in 72 investment projects worth $174 million, including 53 domestic projects ($140 million) and 19 foreign investments ($33 million). Some of the biggest improvements include concrete village roads, expanded tourism facilities, and the Lao-China Railway. The city has earned recognition as a "comprehensively strong city" and "poverty-free city."
Read more: Laotian Times
Rail Links Support Thai Ag Exports
The State Railway of Thailand (SRT) is working to develop rail freight connections with Laos and China to improve trade efficiency. Their plan is to create a seamless rail network linking the three countries, with the Laem Chabang-Kunming railway cutting transport time from one week to just 2-3 days. The project involves teamwork between SRT, Lao National Railway Enterprise, and Lao-China Railway Company, with improvements to infrastructure and simpler cross-border processes.
Read more: Fresh Plaza
Cambodia-Laos Border Marking Moves Forward
Cambodia and Laos' Joint Border Affairs Committee met to discuss border marker construction, focusing on contentious Border Marker No. 033 and issues between Markers No. 032 and 032/6 in Stung Treng province. Khum Ponnaban from Cambodia and Anousine Khattiyalath from Laos led the meeting. So far, they've resolved 86% of the 540-kilometer shared border, with 14% still pending final agreement. Following commitments made in December 2024 to speed up border demarcation, both countries are working to settle remaining border issues, seeing the challenge as both a technical task and peace-building effort.
Read more: Khmer Times
Cambodia-Laos Security Cooperation
Cambodian Interior Minister Sar Sokha and Lao Minister of Public Security Vilay Lakham Phong led a cooperation meeting to review 2024 collaboration and set plans for 2025. The meeting addressed issues including border security, cross-border crime, drug trafficking, and trade promotion. Provincial governors from Ratanakiri, Preah Vihear, and Stung Treng took part, which shows how important provincial cooperation on the border has become. Officials said that almost half of smuggled drugs enter Cambodia through the Golden Triangle through the border provinces.
Read more: Khmer Times (Bilateral Cooperation), Khmer Times (Ministerial Visit)
Chinese Rubber Company Expands Operations
Chinese natural rubber producer Hainan Rubber wants to expand into Laos and Cambodia. Company chairman Wang Hogxiang has met with the Lao agriculture ministry as well as the Cambodian Rubber Association to look into development opportunities. In Laos, the company wants to create standardized rubber plantation demonstration sites to improve local rubber technology and production. For Cambodia, Hainan Rubber is considering building an advanced rubber processing facility. Hainan Rubber has said that the projects are able to work thanks to supportive government policies and growing investment in the natural rubber sector.
Read more: European Rubber Journal
That’s all for this week, thanks for reading.
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