Laos 20241002: Quiescent, Mutable, Risqué
Mekong Memo Laos Weekly: Business, politics, finance, trade & legal news.
Get the latest Southeast Asian business news delivered to your inbox every weekday.
Choose to receive our daily editions covering Cambodia, Myanmar, Laos, Vietnam, and Thailand individually or together: account settings.
The Memo is published each weekday for the country of your choice. Paid subscriptions receive full editions while free subscribers get top headlines and an abbreviated selection of stories.
Support us and unlock unlimited access by becoming a paid subscriber today to stay informed on emerging opportunities in Southeast Asia with just a few minutes a day.
The Mekong Memo is proudly presented by:
Horton International is your premier partner for executive search in Southeast Asia. Whether you're a small startup or a global corporation, our reliable and effective recruiting solutions are tailored to meet your unique needs. With extensive experience and offices across the region, we excel at overcoming recruitment challenges and securing top talent for your organization.
Click here to learn how Horton can make your life easier.
Headlines:
Inflation Drops to 21.7% in September
Eighth Consecutive Month of Trade Deficit
Japan and Laos Strengthen Strategic Partnership
Power Line to Vietnam Nears Completion
President to Attend 19th Francophonie Summit
Minimum Wage Lift to Address Rising Living Costs
Tourism Surges on Festivals and Promotions
ADB Foresees 4% 2024 Growth
Laos and Russia in Joint Training Exercise
Malaysia Investment in Energy and Agriculture
Inside the Lawless Laotian Las Vegas
Mobile Money and Digital Payments
New Data Shows Extent of Agent Orange Spraying
Inflation Drops to 21.7% in September
Inflation in Laos fell to 21.7% in September, down from 24.3% in August, according to the Lao Statistics Bureau. The highest price increases were seen in medical care, housing, utilities, and food categories. This decline follows efforts by the government, including the establishment of a special committee to address rising prices.
Read more: The Star
Eighth Consecutive Month of Trade Deficit
Laos registered a trade deficit of USD 129 million in August, the eighth consecutive month of negative trade balances in 2024. Total trade reached USD 1.2 billion, with exports valued at USD 541 million and imports at USD 670 million. Main exports included electrical appliances, rubber, and gold, while major imports were diesel, vehicles, and steel. The biggest trade partners included Vietnam, China, and Thailand.
Read more: Laotian Times
Japan and Laos Strengthen Strategic Partnership
Japan and Laos are moving toward a "comprehensive strategic partnership" to build economic, security, and diplomatic cooperation. The partnership is intended to diversify Laos' strategic options, reducing its dependency on China. The collaboration will focus on the usual suspects of infrastructure, economic development, and regional stability. Japan's socio-economic assistance, including fiscal capacity-building, is a big help to Laos in maintaining autonomy and reinforces a rules-based international order against the backdrop of an intensifying great power competition.
Read more: East Asia Forum
Power Line to Vietnam Nears Completion
Vietnam is on track to complete the Nam Sum–Nong Cong 220kV transmission line in October 2024, allowing electricity imports from Laos to meet the growing demand in Vietnam’s northern provinces. This infrastructure is crucial to ensuring stable power supply, particularly during peak periods. The line's completion is part of Vietnam’s strategy to secure energy imports from neighboring countries and addressing the energy shortages the country has experienced in recent years.
Read more: VietnamPlus
President to Attend 19th Francophonie Summit
President Thongloun Sisoulith will lead a delegation to France for the 19th Francophonie Summit from October 4-5, 2024. The summit, hosted by French President Emmanuel Macron, will focus on creativity, innovation, and business in the French language. Leaders from over 100 countries will attend, with sessions taking place in Villers-Cotterêts and Paris. This summit is an important diplomatic and cultural event for France.
Read more: The Star
Minimum Wage Lift to Address Rising Living Costs
In response to rising living costs, the government has increased the minimum wage to LAK 2.5 million (USD 114) per month, effective October 1, 2024. This policy will go some way to alleviating economic pain faced by workers due to inflation and the depreciation of the Lao kip. A subsistence allowance of LAK 900,000 (USD 41) will be provided to unskilled workers, to try and ensure fair compensation across the workforce. Employers must adjust salaries to meet the new standard or maintain current higher wages.
Read more: Laotian Times
Tourism Surges on Festivals and Promotions
Laos has seen a recovery in its tourism sector, with 2.6 million international visitors between January and August 2024, supported by visa exemptions and promotional campaigns like "Visit Laos Year 2024." Thailand, Vietnam, and China lead in visitor numbers, and the iconic Bun Pha That Luang festival is expected to pull in even more tourists in October. The government is still shooting for 4.6 million international visitors by year-end, and an expected haul of USD 1.3 billion in tourism revenue.
Read more: Travel and Tour World (Festival boost), Laotian Times (Tourism recovery)
ADB Foresees 4% 2024 Growth
The Asian Development Bank (ADB) forecasts 4% growth for Laos in 2024, driven by tourism and clean energy investments. Macroeconomic issues, particularly public debt and inflation, are holding back broader investment and consumption. Inflation is forecast to average 25% in 2024, thanks to the depreciation of the Lao kip. While international tourist arrivals approach pre-pandemic levels, ongoing debt service payments and labor shortages continue to pose risks to economic stability.
Read more: Asian Development Bank
Laos and Russia in Joint Training Exercise
On September 25, Laos and Russia initiated a joint military exercise, "LAROS 2024," at the Sergievsky training ground in Russia’s Primorsky region. The training focused on tactical maneuvers, hostage rescue, and combating illegal armed groups using modern vehicles and drones. This exercise involved knowledge exchange and preparations of both nations for coordinated military operations.
Read more: Laotian Times
Malaysia Investment in Energy and Agriculture
Malaysia is increasing its investment in Laos, particularly in renewable energy and agriculture. Deputy Prime Minister Fadillah Yusof announced plans to establish a joint task force to enhance energy cooperation, particularly power supply from Laos to Malaysia, and explore investment opportunities in Laos' energy sector. Major projects include the Don Sahong Hydropower Project, a 260 MW facility by Mega First Corp, and Agrotech Pro Ltd's 40-hectare Agro Vege Farm. Malaysia is Laos' fourth-largest investor, with trade reaching RM48.3 million in the first half of 2024.
Read more: The Edge Malaysia (Energy), Malay Mail (Agriculture)
Inside the Lawless Laotian Las Vegas
The Golden Triangle Special Economic Zone (G.T.S.E.Z.) in Laos, centered around the opulent Kings Romans Casino, reportedly operates as a hub for drug, human, and wildlife trafficking. Under the facade of a luxurious casino, this region has allegedly become a lawless enclave, evading international scrutiny. Said to be controlled by foreign investors and corrupt officials, the area appears to function with impunity, blending tourism with a vast criminal network. Visitors are greeted with eerie opulence masking the region's dark underbelly of illicit trade.
Read more: Air Mail
Mobile Money and Digital Payments
Despite high debt and inflation challenges, Laos is trying to increase financial inclusion through fintech solutions like mobile money and digital payment systems. The M-Money platform, operated by Lao Telecom, has grown to serve more than 30,000 merchants with plans for nationwide coverage, providing services like tax payments and cash transfers. The country is also exploring central bank digital currencies and is working on cross-border payment collaborations, seeing fintech as a driver for growth and inclusion in rural areas.
Read more: The Fintech Times
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article.
This is an interesting piece of new research that touches on an unfortunate part of Laos’ recent history:
New Data Shows Extent of Agent Orange Spraying
Declassified U.S. spy satellite imagery has uncovered previously unrecorded instances of herbicide spraying, including Agent Orange, during the U.S. Secret War in Laos. These operations, conducted primarily between 1965 and 1967, were intended to defoliate the Ho Chi Minh Trail and reveal enemy positions. The new data shows that the affected areas were smaller but more concentrated than initially reported, raising concerns about long-term health impacts on local communities exposed to dioxin contamination.
Read more: CEOBS
That’s all for this week, thanks for reading.
Your voice matters to us. Feel we're missing something? Have additional sources to suggest? Don't hold back— hit reply and help us get better.
If you value the Mekong Memo, please consider buying (or gifting!) a paid subscription, sharing it on social media or forwarding this email to someone who might enjoy it. Please also “like” this newsletter by clicking the ❤️ below (or sometimes above, depending on the platform), which helps us get visibility on the Substack network.