Being landlocked posts challenges, opportunities for Laos

World Today

Being landlocked posts challenges, opportunities for Laos

Laos has just finished hosting the meeting of foreign ministers from the 10 ASEAN countries and the dialogue partners, including the U.S. and China. Despite high economic growth averaging almost eight percent a year over the past decade, it remains one of the region’s least developed countries. It is also ASEAN’s only landlocked country, sharing borders with Myanmar, Cambodia, Thailand, Vietnam and China. But while that geographic location presents challenges, it is also an opportunity to go from being land-locked to land-linked.

CCTV America’s Rian Maelzer reports from the capital Vientiane. Follow Rian Maelzer on Twitter @rdamael

Being landlocked posts challenges, opportunities for Laos

While that geographic location presents challenges, it is also an opportunity to go from being landlocked to land-linked. CCTV America's Rian Maelzer reports from the capital Vientiane.

The extent of Laos’ rail system is a mere few kilometers-long line across a bridge from the Thai border to the outskirts of the Lao capital. But China is planning to help build a fast rail link from Yunnan province, China to Vientiane.

Gradually, with foreign assistance, Laos has been upgrading its roads, boosting cross-border trade with its five neighboring countries and drawing more tourists.

“These have helped building transport corridor, transport backbone for Lao to integrate its economies to the regional economy and the rest of ASEAN,” Rattanatay Luanglatbdith of Asian Development Bank said. “And of course infrastructure inadequacies remain one of the constraint for the sustainable and inclusive growth in Laos.”

A full 80 percent of Laos’ trade is with other ASEAN countries, and 80 percent of the investment here comes from its ASEAN neighbors as well. Add in China’s trade and investment, and Laos’ near total reliance on its closest neighbors is all too clear.

Given its location, Laos is among those that could benefit most from greater integration as part of the ASEAN Economic Community. But integration also brings more demands and more competition, for which Laos is ill prepared.

“It’s very important to invest in people and invest in young people, to have a labour force that is available, that is skilled, especially with such a young population, and investing in human capital,” Kaarina Immonen, UN resident coordinator, said.

The proposed new rail line from China through Laos to Thailand, and linking to Malaysia and Singapore, will hugely improve the country’s connectivity and economic potential. But Laos can’t wait for that to materialize.

It needs to continue to improve road, electricity and telecommunications and upgrading the skills of its people to take full advantage of its central location.