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Domestic unrest in rural Laos has come to international attention in recent months, following two spectacular attacks on civilian buses travelling the highway North from Vientiane. According to reports, on 6 February a civilian bus was ambushed along the road North of Vang Vieng by a large group of gunmen. Ten travellers were killed, including two European tourists. The same scene unfolded on 20 April, resulting in the reported deaths of another 13 people. The Lao government denies suggestions that these attacks were the work of Hmong political insurgents, stating that they were merely robberies. Nobody has claimed responsibility for the attacks. Exiled Hmong leaders continue to support insurgency against the Lao government, but insist that Hmong rebels do not attack civilians. These incidents coincide with reports of heightened military activity in rural areas of Laos, with two divisions of the Vietnamese army now alleged to be operating in the North of Laos.
Security problems are naturally not helping the country’s slow economic progress. Laos has the dubious distinction of being one of only four countries in the world lacking Normal Trade Relations status with the US, and hence faces high tariffs for exports to the US. A bill to normalize US-Lao trade relations is currently before the US congress, but the bill faces stiff opposition - mostly from overseas Lao groups – on the basis of the nation’s poor human rights record. The tiny amount of trade with the US (just US$8million per year) is in contrast with the continued development of economic relations between Laos and other industrialized nations, such as Australia and members of the European Union (EU). The mining industry is reportedly flourishing, with recent major investments in gold and copper exploration by Australian interests. Economic cooperation with the EU also continues to develop. An office of the EU opened in Vientiane on 14 May, establishing a full-fledged diplomatic representation aimed at facilitating the development of Lao-European political, trade, economic and social interests.
WATCHPOINT: It seems likely that Laos will achieve Normal Trade Relations with the US within a year, as Cambodia did in 1996. Will significant economic benefits result?
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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