Laos: On The Border – Thai/Lao Trade At Chong Mek

2003

Holly Dunstan

The border crossing of Vang Tao/ Chong Mek, dubbed 'To Khet' by the Lao, has all the energy and bustle of a raw, primal capitalism. The game here is trade, and almost everybody is at it, buying, selling or both. The Thai side of the border is a chaotic and extensive collection of market stalls, selling everything Thailand has to offer, from denim jackets to seafood. The Lao side is much more subdued: the contrast is stark at this physical juncture between Thailand and Laos, the products of two very different, but inherently related, histories.

One major feature of the Lao side is the host of potted plants for sale. But these are far from ordinary plant nurseries: the plants sold here have been poached from the Lao jungle, to be sold to Thai traders. There are many exotic plants on offer, but by far the most common are the orchids. Rural Lao say one fistful of orchids collected from the forest can fetch 30 Thai baht at To Khet (just over one Australian dollar) – tempting enough for the forests to have been almost completely depleted in Champassak Province.

The Lao government has repeatedly stressed its desire to strengthen Laos’ trade position in the ASEAN region through improved transportation and ‘deregulation’ of trade. The imagery is of Laos moving from 'landlocked' isolation to a 'landlink' between its powerful and growing neighbors, the hyperbolic cliché is 'battlefield to marketplace'. In this metaphor, Laos is figured as a center of trade, a 'transit' nation, the 'truckstop' of Southeast Asia. Laos ironically seeks to profit from the regulation of the new 'deregulated' trade, for instance by insisting that Lao transport providers be used for cross-Lao trade. However muddled the moves towards the 'landlink' strategy are, the results are becoming apparent at Tho Khet.

The border point was promoted to its current status as an international crossing point in March 1999, and significantly Lao and Thai people are permitted to cross the border for one day, within a one-kilometer radius of the border, without needing passport clearance. Combined with the Japanese-funded bridge at Pakse, and feeder road to the border, completed in 2000, this policy has seen a boom in trade at Tho Khet.

Hundreds of people cross the border point daily to buy and sell. Lao Immigration officials report that Lao exports are typically primary products such as vegetables and forest products, while Thai exports are 'everything: food, cosmetics, clothes, electricals . . .' In 2001, trade at this border crossing was valued at US$22 million.

With the border skirmish at Tho Khet as recently as 2000, today’s enthusiastic trade boom at Tho Khet in many ways embodies the success of the 'battlefield to marketplace' policy. But while Tho Khet is a symbol of the potential of regional integration, it is also a warning sign. The inequality of Thai/Lao trade is highly visible at Tho Khet, as Lao traders sell primary products, while Thai traders sell higher-value, value-added goods. Additionally, the Lao Border Crossing Committee has highlighted poaching, illegal logging and the smuggling of goods and people as problems at the Tho Khet border. Laos’ potential power as a 'landlink' between its influential neighbours, then, is also its potential weakness. It may remain the forever junior partner in trade between more powerful neighbours.

WATCHPOINT: As Laos continues its path of integration with ASEAN, moves to encourage and profit from regional trade seem set to continue. But Laos walks a fine line between exploiting the trade flowing between her larger neighbours, and simply being exploited by them.

 

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.

Go to top