Laos 20241120: Prismatic, Efficacious, Incongruous
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Headlines:
Tourism Pulls in 5 Million Visitors and $1 Billion
Laos Faces Mounting Debt and Inflation Woes
National Assembly Tackles Inflation and Reforms
Call for Diaspora to Invest in Homeland
Digital Identity System Collaboration with Japan
Tax Policies to Boost Revenue and Draw FDI
IMF Flags Unsustainable Debt
Strict Labeling Policy Targets Smuggled Goods
Medical Rescue Training in “Peace Train-2024”
Japan and UNDP Partner in Southern Laos
Vietnam Wants 5 Million Tonnes of Coal Annually
New Vietnam-Laos Border Gate
Border Market Thrives with 4-Currency Trading
Tourism Pulls in 5 Million Visitors and $1 Billion
Laos laid out the welcome mat for more than five million tourists in 2024, topping expectations and generating more than a billion U.S. dollars in revenue. The Visit Laos Year campaign and improved connectivity via the Laos-China Railway contributed to the boom, bringing visitors to destinations like Luang Prabang and Vang Vieng. Efforts to improve accommodations, roads, and facilities have all been supportive of this growth. Luang Prabang has also earned another feather in its cap with a listing in the Green Destinations Top 100 Stories for sustainable tourism.
Read more: The Star (Tourism Growth), Laotian Times (Revenue and Recognition)
Laos Faces Mounting Debt and Inflation Woes
Struggling with massive debt to China and soaring inflation, Laos faces severe economic challenges, with sharp rises in food prices driving many families to foraging. Traders in Vientiane report stagnant business as the value of money continues to erode post-Covid. The economic strain is indicative of broader implications of debt dependence and the need for urgent fiscal reforms to stabilize the nation's economy and mitigate the growing hardship faced by the people.
Read more: The Manila Times
National Assembly Tackles Inflation and Reforms
The National Assembly opened discussions on dealing with inflation, debt, and fiscal challenges as the economy continues to sputter. Prime Minister Sonexay Siphandone reported moderate progress, including GDP growth of 4.6% for 2024, driven by services, tourism, and private investments. Inflation dropped to 24.4% but remains far above the government’s single-digit target. Main reforms include modernizing revenue collection, stabilizing exchange rates, and improving state enterprise efficiency.
Read more: The Star
Call for Diaspora to Invest in Homeland
The government hosted the “Love Your Home Country” event in Vientiane, this week, urging Lao nationals abroad to reconnect with their roots and consider investments in the “home country” to aid socio-economic growth. Discussions led by Deputy PM Saleumxay Kommasith focused on simplifying residency and land ownership policies for the diaspora, preserving Lao cultural identity, and community development. Planned initiatives include strengthening cultural ties through language and Buddhist traditions as well as encouraging technical and business contributions to the country’s progress.
Read more: Laotian Times
Digital Identity System Collaboration with Japan
The governments of Laos and Japan are working together to develop a secure digital identity system for Laos, supported by Japanese companies like Ryobi Systems and funded by Japan’s Ministry of Internal Affairs and Communications. The system is being designed to improve access to public and private services and improve digital identity verification for businesses and individuals. Workshops in Vientiane include trial registrations using Japanese simulation technology, with the program continuing through December 2024.
Read more: Laotian Times
Tax Policies to Boost Revenue and Draw FDI
Laos raised its VAT rate from 7% to 10% in May of this year and introduced obligations for foreign digital service providers to register and file taxes locally. These changes were intended to increase tax revenue, currently sitting at 13% of GDP, and bring Laos into alignment with global tax trends. At a recent American-Lao Business Association roundtable, industry leaders spoke of the importance of clear tax policies and public-private collaboration to attract foreign investment and support economic growth. Efforts also include convincing the government to modernize tax administration and expand the tax base.
Read more: Cambodia Investment Review
IMF Flags Unsustainable Debt
The IMF has issued a critical review of Laos' economic stability, citing unsustainable public debt, inflation at 25%, and the continued devaluation of the kip. The report exposes intensifying labor and foreign exchange shortages, dwindling foreign reserves, and limited fiscal flexibility. The review calls for urgent structural reform, better financial management, and international support, including debt relief from China, in order to stabilize the economy and prevent further deterioration.
Read more: The Diplomat
Strict Labeling Policy Targets Smuggled Goods
The Lao has issued a ban on unlabeled food imports, requiring FDA registration numbers and labeling in Lao starting August 2025 in order to protect consumers from potentially dangerous products. Critics cite border corruption and smuggling as major hurdles to enforcement. Residents agree on the need for stricter oversight of imported goods, particularly cosmetics and food supplements, to ensure public safety. Officials promise tougher inspections but acknowledge that smuggling remains pervasive.
Read more: RFA
Medical Rescue Training in “Peace Train-2024”
Chinese and Lao militaries collaborated in the “Peace Train-2024” exercise, focusing on humanitarian medical rescue operations in Phonhong, Laos. The training involved military medical trains, field ambulances, surgical vehicles, ambulance helicopters, and other advanced medical rescue equipment. The joint effort are designed to improve bilateral coordination in medical emergency response and strengthen military medical capabilities in humanitarian settings.
Read more: China Military (Video)
Japan and UNDP Partner in Southern Laos
Japan and the UNDP are working together on a $3.8 million project to build 12 evacuation centers across Khammouane, Salavan, and Champasack provinces over three years in order to improve disaster preparedness and reduce vulnerabilities caused by floods and climate-related disasters. The project also includes revising national guidelines for evacuation centers and promoting inclusive designs.
Read more: UNDP
Vietnam Wants 5 Million Tonnes of Coal Annually
Vietnam National Coal and Mineral Industries Group (Vinacomin) says that it intends to import five million tonnes of coal annually from Laos via Quang Tri Province starting next year. The project includes developing a coal processing and storage facility in the Southeast Quang Tri Economic Zone. Upgraded transport infrastructure, including the La Lay Border Gate and National Highway 15D, will be in support of these purchases. This buying is necessary to ensure a coal supply for Vietnam's thermal power plants while growing economic activity in Quang Tri.
Read more: Tuoi Tre News
New Vietnam-Laos Border Gate
The Long Sap (Vietnam) and Pa Hang (Laos) international border gate officially opened in Son La province, Vietnam, yesterday, November 19. The new border gate will ease bilateral trade, improve tourism, and help develop people-to-people exchanges between the two nations. Officials were keen to talk about the gate’s role in deepening economic ties and facilitating smoother cross-border logistics as both countries make efforts to improve regional connectivity and support economic development in border provinces.
Read more: VietnamPlus
Border Market Thrives with 4-Currency Trading
Na Meo Market, near the border between Laos and Vietnam, offers a trading space where transactions are conducted in four currencies: Vietnamese dong, Lao kip, U.S. dollars, and Thai baht. The market, held every Saturday, pulls in local ethnic groups and Lao traders selling forest produce, brocade fabrics, and unique foods like bamboo rats. It serves as a cultural hub and an economic lifeline for border communities, a center of commerce despite differences in language, culture, and currency.
Read more: VnExpress
That’s all for this week, thanks for reading.
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