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The dream of Laos being the 'hub' of transport and communications in mainland Southeast Asia seems to be slowly taking shape, but it may make the country nothing more than a corridor for Thai-Vietnamese and Thai-Chinese traffic. The Australia-donated ‘Friendship Bridge’, which does not serve any major transport route beyond Vientiane, has seen little more than a trickle since its opening in 1994. More is expected of the planned bridge across the Mekong at Savannakhet/Mukdahan, where exports from Thailand have more than tripled in the last seven years. Construction starts in early 2002, funded by soft loans to Thailand and Laos equally of $US68 million from the Japan Bank for International Co-operation. Thai exports (motorcycles and parts, electrical and electronic appliances, and food) are mostly bound for Vietnam. In Northern Laos, China and Thailand provide the demand for through traffic, and the desire to open the Mekong to large capacity river transport has even led to proposals to dynamite the river's rocky and un-navigable sections. Less likely to attract traffic are planned improvements to international communications at Laos's Southern border with Cambodia. Recent talks in Phnom Penh between Lao Prime Minister Bounyang Vorachit and Cambodian counterpart Hun Sen saw proposals to improve roads to the border of the two countries, and even a suggestion that a bridge be built over the Mekong at the point where the two countries meet. They have agreed to ask the Japanese government for assistance, despite the current almost complete lack of international trade in the area.
While Laos and surrounding countries generally agree on the need to facilitate better transport and investment, thornier issues were raised recently between foreign ministers Somsavat Lengsavad (Laos), and Surakiart Sathirathai (Thailand) at the recent 10th Thai-Lao Joint Commission meeting. They agreed to exchange lists of prisoners held in their respective countries, and to allow cross-border visits by officials and relatives. Currently the most high-profile prisoners in Laos are the Australian couple, Kerry and Kay Danes. The Lao authorities were reportedly angered by the Danes' appeal against their conviction on gem theft charges, and Foreign Minister Lengsavad was quoted as saying that they would be released if they withdrew the appeal and paid some $2 million or more in fines and compensation. This has been denied by the Danes' lawyer. After meeting in Hanoi with Lengsavad, Alexander Downer reported that the Danes may be released soon.
WATCHPOINT: Recent attention on the Lao legal system has resulted in reports of gross violations of human rights in the Lao prison system, exacerbated by the Lao government's inability to pay its police and prison officers a wage that they can live on. Will foreign governments continue to ignore the situation?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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