Long Live Laos
Inflation, flooding, landmines, dengue fever and beauty queens plague Laos
UPDATE: Laos is a landlocked Mekong country facing extraordinary challenges in the face of imminent global recession, unserviceable dollar denominated debts and a damaging season of floods that have severely reduced agricultural output and further exacerbated high inflation. Laotian coffee is one bright spot in the economy but more needs to be done. The Long Mekong Daily parent organisation, The Mekong Research Center at the International Relations Institute of Cambodia (IRIC) has started an academic research collaboration with research organisations in Laos to find better solutions.
Laos Inflation
Laos is facing one of its worst economic crises in many years. The year-on-year inflation rate in Laos increased from 30.01 per cent in August to 34 per cent in September, according to an updated report from the Lao Statistics Bureau website. The 22-year high price rise was driven by the surge in the price of food, medicines, fuel and other consumer goods. Inflation in Laos has surged significantly since 2021, and the country now has one of the highest inflation rates in Southeast Asia, according to the report. The Lao Statistics Bureau also attributed the continuing surge in the consumer price index to low productivity and the fact that Laos is over-reliant on imports. The weak kip, the Lao currency, and growing demand for foreign currencies needed to import goods and repay debts is another driver of inflation.
The kip continues to depreciate despite the government's attempts to regulate currency exchange rates. In addition, floods have destroyed crops and other property, sparking demand for more food at local markets. In September, the cost of food and non-alcoholic beverages increased by 4.9 per cent month-on-month and 35.5 per cent year-on-year. The price of rice has surged by 45.3 percent year-on-year. The cost of pork rose by 35.1 per cent year-on-year, poultry rose by 32.1 per cent, fish and seafood surged by 28.9 per cent, and eggs, cheese and milk went up by 35.9 per cent. Costs in the communications and transport category rose by 2.9 percent month-on-month and 55.9 percent year-on-year. Specifically, the price of vehicle, fuel and transport equipment went up by 56 percent, 100.6 percent and 64 percent year-on-year respectively. The cost of medical care and medicines increased by 4.9 per cent month-on-month and 44.5 per cent year-on-year. In addition, prices in the house goods category surged by 3.6 per cent month-on-month and 27.5 per cent year-on-year. Prices in the education category surged by 10.6 per cent year-on-year. The Star
Debt Crisis
As surging food and fuel prices continue to weigh heavily on the global economic outlook, a growing number of countries now find themselves in a precarious position. Among the most vulnerable is Laos, the small, Southeast Asian nation that faces not only accelerating inflation for its many imports but also a spiralling debt crisis that has crippled the country’s finances and positioned it perilously close to default. As such, Laos is now deep amidst a painful economic crisis.
Although Laos’ economy was humming along at 6-7 percent growth in its gross domestic product (GDP) per year throughout much of the decade before the coronavirus outbreak, the country was badly hit by the pandemic. Indeed, growth in 2020 was registered at just 0.2 percent as the pandemic inflicted a crippling squeeze on its biggest export industries, including food, electricity and metals, and remittances from the Laotian diaspora of workers in neighbouring countries. And although Laos fully reopened its borders on May 9, ending most of its pandemic restrictions in the process, mounting public debt and rising global prices are now threatening Laos’ macroeconomic stability and living standards, according to the Lao PDR Economic Monitor—”Restoring Macroeconomic Stability to Support Recovery”. International Banker
Laos Dengue Fever Outbreak
As of August 15, Laos health officials report 17,892 total dengue cases with more than half the cases reported from the capital city of Vientiane (9,114). The death toll has risen by three during the two week period and now stands at 17. How does this compare to recent years in Laos? Authorities reported approximately 1,400 cases nationwide in 2021 and 7,700 cases in 2020. That’s the whole year. Dengue is a viral infectious disease that is spread through the bite of an infected Aedes mosquito. Patients may experience symptoms such as fever, red rash on the skin, headache, pain in the back of the eyes, joint pain, muscle pain, bleeding under the skin, nose, and gums. Outbreak News
Payengxa Lor was crowned Miss Universe Laos 2022 in a glittering competition held on Saturday, October 8 at the Grand Ballroom of Landmark Mekong Riverside Hotel in Vientiane. The 21-year-old business management student at the Lao-American College bested 19 other finalists to win the national title. She succeeds Tonkham Phonchanheuang and will now prepare to represent Laos at the 71st Miss Universe pageant in New Orleans, Louisiana, the USA this January. The new Miss Universe Laos is also an English teacher and a co-founder of the Hmong Women Network, a platform for women empowerment. She volunteers to help the poor and in the future, she wants to build her own school to influence the young generation to believe in themselves and have a dream. This year's national competition themed "The Change Is Now" was the fifth edition of the Miss Universe Laos pageant. Laos first joined Miss Universe in 2017 with Souphaphone Somvichith. Pageant Circle
A fund raising appeal to clear a village in Laos of unexploded bombs left from the Vietnam War has raised almost half a million pounds. The Unlock the Land campaign, created by the Manchester-based charity the Mines Advisory Group (MAG), raised a total of £449,309, including £211,336 of matched funding from the UK Government. This was made up of public donations as well as funds from a sponsored cycle ride through Bosnia and Herzegovina. The money will enable MAG teams in Khammouane province, Laos, to search and clear the village of Vangkhom, including agricultural land, of dangerous items. The charity had initially sought to raise enough funds to deploy one team to clear 161,000 square metres of land (News, 29 April). The new total will allow it to deploy an additional team and clear more than 230,000 square metres: the equivalent of 32 football pitches. Education sessions will also be organised to promote safer behaviour and to raise awareness of the risks from potentially lethal items. The British Ambassador to Laos, John Pearson, said: “I have visited Vangkhom village in Khammouane province, and seen the scale of the devastation caused during the Vietnam war. The clearance work that MAG is doing is so important — it will mean that fields can be farmed again, that children can safely attend the local school, and that water wells can be used.”The Unlock the Land appeal was supported by the actor Rosamund Pike, who is an MAG ambassador. Church Times
Coffee Gives a Lift to Lao Economy
The Luang Prabang Chamber of Commerce and Industry will launch a three-day coffee event at the French Institute of Luang Prabang in conjunction with Sabaidee Luang Prabang Festival from Oct 8-10. The Department of Agriculture of the Ministry of Agriculture and Forestry will co-organise the event with support from the French Development Agency in collaboration with EU Laos, USDA, the Winrock CLEAN project, ARISE Plus and other international development partners. The event will promote coffee businesses in Laos and raise awareness among the younger generation of the values of Lao coffee as well as promoting local farmers production of quality coffee following sustainable practices. According to the Department of Agriculture, the event will be an opportunity for participants to learn about the great potential for coffee stakeholders and to share information about coffee chain and the development of coffee products in line with green and fair-trade policies. Visitors to the event will be able to taste a cup of coffee, share their thoughts on coffee business operations, and expand their business networks with a view to boosting sales and production. The fair is a great opportunity for local entrepreneurs to create a better future through adding value to and supplying high quality green bean coffee for niche markets in the region and further afield. Laos registered record production of over 150,000 tonnes of coffee beans last year, which were sold to more than 20 countries around the world, earning more than US$100 million in revenue, according to the Department of Agriculture. The Star
US Targets Laos
The United States Assistant Secretary of State for East Asian and Pacific Affairs Daniel J. Kritenbrink will travel to Vietnam and Laos from October 9-14. The visits will reaffirm the U.S. commitment to two important partners in Southeast Asia and the importance of ASEAN centrality ahead of the ASEAN-related Summits in November. In Vientiane, Laos, Assistant Secretary Kritenbrink will lead the U.S.-Laos Comprehensive Bilateral Dialogue to discuss closer U.S.-Laos cooperation and forge a deeper connection with Laos as the 2022 Mekong-U.S. Partnership co-chair and in meetings with officials from the Lao Ministry of Foreign Affairs. He will also meet officials from the Mekong River Commission and will engage with alumni of Department of State exchange programs.
OCK Group Bhd has inked a shareholder agreement with the Ministry of Finance (MOF) in Laos to expand its presence. In a statement on Wednesday (Oct 5), the telecommunication network solutions provider said that under this agreement, OCK will set up a joint venture company under the name OCK Laos TowerCo Co Ltd, whereby OCK will hold a majority stake of 70%, while the remaining 30% stake will be held by the Laos MOF. It said OCK Laos TowerCo will subsequently apply for a tower licence in Laos. OCK said this strategic venture will allow it to tap into the telecommunications industry in Laos and further expand its global footprint. OCK Group managing director Sam Ooi Chin Khoon said this partnership allows the company to bring its services to other parts of the Southeast Asian region. “OCK believes in the need to constantly look at expanding its telecommunication services to better suit the rapidly evolving industry and constant demand for better connectivity. The Edge Markets
Laos and Cuba have signed four memorandums of understanding to step up cooperation in education, health and agriculture. The signing ceremony, held in the Lao capital Vientiane on Sunday, was witnessed by Lao Prime Minister Phankham Viphavanh and his visiting Cuban counterpart, Manuel Marrero Cruz. Marrero is paying a visit to Laos from Sunday to Tuesday at the invitation of the Lao Prime Minister, the Lao Ministry of Foreign Affairs said on Monday, Xinhua news agency reported. The agreements are related to cooperation in education and scientific research, agriculture, health, and education projects between the National University of Laos and the University of Havana. Phankham thanked the Cuban government for providing scholarships to Lao people in the past, supporting Lao health officials, providing a trainer to train Lao boxers for competition in international events, and assistance in other areas. He thanked Marrero and his delegation for visiting Laos, saying he hoped the longstanding friendly relations and cooperation between Laos and Cuba would grow stronger and become more productive. Social News
Last year’s opening of the Laos-China railway saw large freight volumes transported by rail between the two countries. The route is also vital for Thailand since it is its gateway to China. Currently, the three countries are considering building a rail-dedicated bridge along the Thai-Laotian border to facilitate freight flows and close infrastructure gaps. The China-Laos Railway is an electrified railway crossing Laos. It connects Kunming in Southern China and Vientiane in Laos, next to the border with Thailand. Its construction started in May 2010, and the whole line opened to traffic in December 2021. When the China-Laos Railway was about to open to traffic, the State Railway of Thailand stated that it would increase the frequency of freight train services to and from Laos to handle the increased cargo volumes targeting the Chinese market. In the long run, between 2023-2025, the frequency of freight round-trips is aimed to increase to 16 per day and again to 24 in 2026. In addition, the Thai Railway plans to open a new storage area in Nong Khai and a new container yard at Nathalang Station.
Despite the willingness of the Thai railway to increase rail roundtrips and to invest in transport facilities, one problem persisted. Thailand and Laos have different track gauges. As a result, trains transiting between the two countries must stop before the border and tranship cargo on trucks that run through the Lao-Thai Friendship bridge. From there, cargo gets onboard trains again, either on its way to Laos’ hinterland and China or to the Thai hinterland. With over a million tons of goods transported along the route in less than a year, it became apparent to the three countries that something should change. As a result, they currently examine the construction of a railway bridge parallel to the existing road bridge between Laos and Thailand. Information provided by PBS, Thailand’s public broadcasting service, speaks of a bridge with four railway lines, probably serving two different gauges. The project indicates China’s commitment to investing equally in projects along the Belt and Road Initiative, of which Laos and Thailand are part. Rail Freight