MOIT VIETNAM | The ‘Lever’ of Vietnam-Laos Economic Cooperation

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The ‘Lever’ of Vietnam-Laos Economic Cooperation

11th July 2024 post by MOIT Vietnam

The State visit by President Tô Lâm to Laos is expected to bring numerous breakthroughs in investment and trade cooperation between the two countries.

President Tô Lâm and General Secretary, President of Laos Thongloun Sisoulith stood on the platform of honor, listening to the national anthems of both countries played by the military band

President Tô Lâm will make a State visit to Laos and Cambodia from July 11 to July 13, 2024, at the invitation of Comrade Thongloun Sisoulith, General Secretary and President of Laos, and Cambodian King Norodom Sihamoni. This is also President Tô Lâm’s first overseas visit since taking office.

The Vietnam-Laos relationship is flourishing comprehensively, based on increasing trust and solidarity. Party-to-party cooperation plays a core role, guiding and driving the strong development of relations between the two countries. Since the signing of the Treaty of Amity and Cooperation on July 18, 1977, the comprehensive cooperation between Vietnam and Laos has been consistently strengthened, renewed, and developed in depth.

Vietnam continues to be one of the largest investors and trading partners of Laos, with 255 active investment projects in Laos totaling $5.5 billion, making it the third-largest investor among countries and territories investing in Laos.

Additionally, to facilitate businesses and citizens of both countries, the two sides signed a Memorandum of Understanding on the development and connection of border trade infrastructure between Vietnam and Laos, the Vietnam-Laos Trade Agreement, and effectively implemented the Vietnam-Laos Border Trade Agreement. Thanks to efforts on both sides, bilateral trade turnover in the first five months of 2024 reached $779.6 million, an 11% increase compared to the same period in 2023.

In particular, cooperation among localities, especially those with shared borders, continues to deepen comprehensively, contributing to maintaining security and order in border areas of the two countries. Achievements from the Vietnam-Laos Solidarity Year 2022, as well as various friendship exchanges in recent years, have strengthened mutual understanding and solidarity between the peoples of the two countries.

Many projects operated by Vietnamese businesses in Laos are running effectively, positively contributing to Laos' socioeconomic development across multiple sectors. They have also created jobs for thousands of workers, improved livelihoods, and added revenue to the Lao state budget (approximately $200 million annually on average).

The signing ceremony of the trade agreement between Vietnam and Laos in Vientiane.

Furthermore, many Vietnamese businesses in Laos have fulfilled their social responsibilities by actively supporting the community, building schools, clinics, roads, and resettlement housing for local residents and disadvantaged communities in remote areas (with a total value of approximately $150 million). These efforts strengthen the traditional friendship and comprehensive cooperation between the two nations.

Notably, cooperation between the business communities of the two countries has been actively promoted recently. At a working session with Phạm Tấn Công, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), Lao Minister of Industry and Commerce Malaithong Kommasith praised VCCI’s role in promoting and deepening business cooperation between the two brotherly countries, Vietnam and Laos.

Minister Malaithong Kommasith noted that through in-depth exchanges with VCCI, the Lao National Chamber of Commerce and Industry (LNCCI) and the Lao Ministry of Industry and Commerce could gain valuable organizational experience, thereby enhancing LNCCI’s operational efficiency and supporting Lao businesses.

VCCI Chairman Phạm Tấn Công also affirmed that VCCI is always ready to share information, experiences, and cooperation with LNCCI to facilitate business growth and effective partnerships between companies from the two countries. He expressed support for facilitating Lao businesses to expand their investment and trade activities in Vietnam.

Both the Vietnamese and Lao governments believe that the potential for investment cooperation between the two countries' businesses remains vast, especially in fields such as mining, pharmaceuticals, construction, tourism, technology application in agricultural project development, and wind power cooperation.

At the 46th session of the Vietnam-Laos Intergovernmental Committee on Bilateral Cooperation, the two governments agreed to continue organizing productive dialogues between Vietnamese businesses and Lao authorities, focusing on thoroughly resolving outstanding issues and obstacles in cooperative investment projects.

The Lao government is offering preferential conditions for major and key projects of Vietnamese businesses, aiming for strong growth in trade turnover, with a target to increase trade volume between the two countries by 10-15% in 2024 compared to 2023. Additionally, both sides are committed to resolving difficulties, promoting transportation infrastructure connectivity, and considering agriculture and rural development as pillars of economic cooperation between the two countries.

In 2024, as the rotating chair of ASEAN, Laos introduced the theme: “Enhancing Connectivity and Resilience.” Following this spirit, with a new cooperation mindset and decisive, groundbreaking measures from both sides, many major investment cooperation opportunities are anticipated, further promoting economic development for both countries in the future.