Reinforcing Growth in Vietnam- Laos Relationship

“Vietnam - Lao friendship and cooperation has been intensified in all fields since the signing of Vietnam-Laos Friendship and Cooperation Treaty (VNFCT) in 1977. The VNFCT is a mainstay for all cooperation activities between the two countries,” said Thetlakhone Douagsonthi, Consul General of the Laos People's Democratic Republic in HCMC in a recent talk with Vietnam Business Forum.

After more than 30 years since the signing day, I am very happy to see stronger growth in the traditional relationship between Vietnam and Laos. In the last few years, the brotherhood of both countries is stable and remains a good relationship in all aspects.

 

Both countries often exchange national-level visits such as the visit of Laos President Chumaly Saynhason to Vietnam (August 2006), the visit of Vietnam General Secretary Nong Duc Manh to Laos (October 2006), the visit of Prime Minister Nguyen Tan Dung to Laos (Dec 2006), etc. Vietnam vigorously supports Laos’ bids to join regional and international organizations such as APEC, WTO, etc. Laos is also unanimous in its support for Vietnam to be non-permanent member of United Nations Security Committee.

 

Both countries witness good results of defense and security cooperation. Vietnam and Laos have finished land border demarcation and marker planning, built up 5 international border gates, and expanded main border gates. This is a landmark for goods exchange. The Vietnam-Laos national border has become a border of peace and friendship.

 

The two countries focus on six main cooperation programs in the period of 2001-2010 including: education and training; border development; culture, information; trade – investment; infrastructure, services, tourism; and improvement of project competence.

By September 2009, Vietnam had 204 projects licensed in Lao with total investment capital of more than US$2 billion. The projects mainly focus on agriculture, wood processing, mining, pharmaceuticals, trade and services. The most outstanding project is valued at US$ 30 million, planting rubber trees on 20,000 hectares in Southern Laos. In return, Laos also has 7 investment projects in Vietnam valued at US$16 million.

I think the number US$1billion is completely possible. However, the two sides need to enact many preferential policies in favour of investors’ operations in their respective countries.

The direct competitors of Vietnam enterprises in Laos are Thailand and China. Many Laotian people can communicate in the Thai language and it is their habit to use Thai baht. In addition, Chinese goods are flooding the market with very low prices. The competitiveness of Vietnamese enterprises in Lao depends on their ability and their community solidarity. What I have seen is that Vietnamese enterprises still lack cooperation to protect common benefits.

 

I suppose that Vietnamese enterprises should pay more attention to the business culture and habits of Laos.

 

In addition, Vietnamese enterprises should focus on investing in farming, wood processing, hotel services, restaurants and ecological tourism. Another factor is that they should strictly abide by Vietnamese and Laotian regulations and laws, investing in export-oriented products back to Vietnam.

 

Last but not least, Vietnamese enterprises need to strengthen promotion and marketing activities, especially packaging and trade language.

 

As presented by Deputy Prime Minister of Lao P.D.R, H.E Somsavat Lengsavad, the Laotian Government commits to closely cooperate with the Vietnamese Government, specifically between the Ministries of Planning and Investment, to quickly overcome difficulties and increase the presence of Vietnamese investors in Northern Laos.

 

The Laotian Government will access, adjust, supplement and unify local and foreign investment laws, to create favourable conditions and fairness between local and foreign investors. Besides, we also offer attractive tax policies to encourage Vietnamese enterprises to invest in remote and rural areas; making adjustments in Mining Laws to strengthen survey and exploration activities of minerals, and considering the issuance of investment licenses in programming direction. 

 

At the same time, the Laotian Government is researching an expanding portfolio of investment encouraged projects; narrowing the portfolio of conditional investment projects; and bringing into force investment attraction policies including tax incentives, one-step investment license procedures, and improving investment information systems of newspapers, internet and other media.