Laos to gain trade surplus over Thailand in five years
By Somsack Pongkhao
The Thai Embassy's Minister Counsellor for Commerce in Vientiane has predicted that Laos will have a trade surplus over Thailand within the next five years, due to the growth of its energy sector in particular. Mr Chalaempon Pongchabubnapa said during an interview with Vientiane Times yesterday that the Lao trade deficit with Thailand has been declining since Thailand signed agreements to buy energy from the country.Last year, Thai exports to Laos were worth more than 9.6 trillion kip (US$1 billion), while Lao exports to Thailand were worth 4.7 trillion kip (US$493 million). Trade value between the nations had reached 14.4 trillion kip (US$1.5 billion); the two nations plan to double their trade value by 2010 and triple the value of Lao exports to Thailand at the same time. The products being exported to Thailand include processed wood, energy, agriculture and forestry products, garments, raw materials and coffee, while Thai products imported into Laos include oil, agricultural machinery, clothes, household items and construction equipment. “I think it is possible for Laos to reach these goals because the country is completing its transition from being a ‘landlocked' to a ‘landlinked' nation, located in the middle of many industrialised countries,” Mr Chalaempon said. Laos shares borders with China , which has a population of more than 1.5 billion people, Thailand with 65 million people, Vietnam with 83 million people and Cambodia with 13 million people. “Producing crops and exporting to these markets is not so difficult if Laos is well managed,” he said. “If the government prepares properly, it will be able to make many Lao pe ople richer. I think it is very important to generate income from investment to support the agriculture sector for increased exports,” he said. Mr Chalaempon explained that Thai business people were now targeting their investments at contract farming in Laos , such as sugar factories in Savannakhet province. They will also focus on the ‘One Tambon One Product' project (meaning one product per sub-district), and increase investment in the Special Economic Zone in Savannakhet. The Thai CP Company aims to increase its sweetcorn plantation areas in Laos . The company currently produces 470,000 tonnes of sweetcorn, with a view to increasing production to one million tonnes to supply an increase in demand for animal feed in the region. “When the agriculture sector is more developed, the incomes of Lao people will be directly increased,” he said. Thai investors are also interested in planting rubber trees in Laos and want more land for these plantations. Mr Chalaempon hopes the Lao authorities will ensure appropriate land allocation for these investors. In the past, land allocation has involved villagers' property and some investors have not been provided with enough land to meet the agreed contracts, due to a lack of land surveying and inefficient document processing. “The market is changing very fast and price fluctuations could hurt investors. Investors are like wild ducks, they will travel wherever the food is,” Mr Chalaempon said. Laos and Thailand have a long history of exchanged trade; Thailand has recently held several fairs promoting trade between the two nations. The Export Department of Thailand will hold a Thailand Trade Fair in Vientiane from May 30 to June 3, with the Lao business sector displaying in 40 booths. During the fair, there will be training for the Lao jewellery and agriculture sectors, focussing on strategies for export and marketing. Thai businesspeople will also be able to attend the event to gain further understanding about the policies and strategies for promoting investment in Laos and to find investment partners within the Lao business sector. Source: vientianetimes.org.la
