Laos - Strategic Economic Partner of Vietnam

The two countries will cooperate in commerce, transportation, energy, mining, oil and gas exploration, post, telecommunication, tourism, industrial crop planting and processing, and other important fields.

Vietnam used to be the largest investor in Laos for years. In 2006 and 2007, Thailand and China ousted the top position of Vietnam. In 2008, Vietnam returned to its top position following large investments for hydropower, industrial crop planting and mining.

 

Laos is seen as a favourite investment destination of Vietnamese enterprises. Half of their investment capital has been injected into this market. Vietnam now has 123 direct investment projects valued at over US$1.28 billion in Laos. Vietnamese projects in Laos are mainly involved in hydropower and mining. Particularly, the Xekaman 3 hydropower plant worth US$247 million is one of the significant projects between the two nations. Regarding hydroelectric development, Laos reported 78 locations suitable for hydropower plants. The largest hydropower project invested by Vietnam is the 1,410 MW Luang Prabang plant whose capacity accounts for 8.5 per cent of the total potential capacity on the Mekong River.

Regarding electric trading between the two countries, on April 21, Vietnamese Minister of Industry and Trade, Vu Huy Hoang, and Laotian Minister of Mining and Energy, Soulivong Dalavong, agreed on the development of electricity. Specifically, Vietnam and Laos will discuss the price for specific projects.

 

The development of electric transmission lines plays special roles in enhancing commercial efficiency between Vietnam and Cambodia. The two countries will also calculate cooperation with Cambodia and regional nations. Therefore, in the coming time, Vietnam and Laos will build 220-500-KV electric transmission lines. The Electricity of Vietnam (EVN) and the Electricite du Laos (EDL) will complete applications to ask for loans from the Asian Development Bank (ADB) to build, operate manage their transmission lines.

 

Regarding mining, Laos has surveyed 60 per cent of its natural area and found 500 places containing minerals, including 232 places with coal, iron, tin, gold, bronze, lead, zinc, salt, gypsum, clay and gemstone. By July 2008, Laos granted 20 out of 30 ores to Vietnam.

 

In terms of energy cooperation, Minister Vu Huy Hoang said both Vietnam and Laos needed to push forward their electric and mining projects invested by Vietnamese, Laotian enterprises or third countries to sell to Vietnam as mentioned in the agreement on development investment for hydropower projects. By 2020, hydropower projects invested by Vietnamese and Laotian companies are expected to reach a capacity of 5,000 MW. The two countries are also preparing to make amendments to electric and mining agreements signed in 2006. 

Vietnam and Laos will cooperate in building border gate economic zones to bring two-sided trade turnover to US$1 billion and Vietnamese-invested capital in Laos to US$2 billion in 2010. The two sides will facilitate their ministries, branches and enterprises to boost exporting activities to eradicate hunger and reduce poverty. Vietnam will continue to create conditions most favourable for transit of Laotian goods through Vietnamese seaports.

 

The two-way trade turnover in 2008 amounted to US$422.8 million, a rise of 35.5 per cent over 2007. Of the sum, Vietnam’s exports to Laos valued at US$149.7 million, a year-on-year increase of 43.5 per cent. Key commodities exported to Laos included garments, textiles, coal and plastic products. Meanwhile, Vietnam spent US$273 million in 2008, up 31.3 per cent from 2007. Major imports were timbers, woodwork, finished automobiles and tobacco.

 

The joint communiqué on building Vietnam - Laos cooperation strategy for the 2011- 2020 period also expressed the mutual satisfaction of their foreign activities and agreed to strengthen information exchange and cooperation in regional and international issues as well as their activities in multilateral organisations and forums like ASEAN, ASEAN +3, AIPA, ACMECS, the UN, Francophone, the Non-Aligned Movement, the Greater Mekong Subregion, the East-West Economic Corridor, and the Vietnam-Laos-Cambodia development triangle.

 

Besides, the two sides boosted a cooperative programme, exchanged information in agriculture, forestry, fishery, hydrometeorology, environmental protection, resource management and health, and expanded arts and cultural exchange.

 

Vietnam actively supports and shares experience with Laos to organise the SEA Games 25 as well as an international economic integration experience. Apart from exploiting gypsum ores in Savannakhet, the deepest impression of Vietnamese enterprises is the construction of urban infrastructure, especially sports facilities for the SEA Games 25 in Vientiane. Vietnam will help Laos build 100 villas for athletes near sport centres.