Thai political turmoil threatens Lao export market
Thai political turmoil threatens Lao export market
Laos' export trade will suffer if Thailand is unable to resolve its political conflict peacefully, according to an economist.
“Thailand is not only our major trading partner but our transit road to export our products to the international market. We can not avoid an impact if the political turmoil in the neighbouring country gets worse,” Dr Mana Southichack told Vientiane Times yesterday.
The senior economist's comment comes amid rising concern among Lao exporters over the ongoing political turmoil. The Thai anti-government protesters are staging rallies in Bangkok and have vowed to intensify efforts to shut down Bangkok if the caretaker government fails to resign this week.
It remains unclear how Thailand will put an end to its political woes as the government and opposition struggle to find common ground.
Laos' export value this fiscal year is expected to reach US$2.1 billion while its import value will be US$2.7 billion, according to a report from the Lao Ministry of Planning and Investment.
Most expo rted Lao goods are destined for Thailand, or move through Thailand on their way elsewhere.
Laos and Thailand have agreed to double bilateral trade to US$8 billion (240 billion baht) by 2015 from US$4 billion in 2011.
In 2012, trade value between the two countries was worth US$4.826 billion, up 23.82 percent on the year before.
Thailand is Laos' top trading partner. In the same year, its exports to Laos were worth US$3.588 billion, while its imports were worth US$1.238 billion.
Thailand's main exports to Laos are finished oil, vehicles, machinery and steel, and its main imports from Laos include metal scrap, processed wood, fruit and vegetables.
Dr Mana, who also owns business consulting firms, has urged Lao business people to formulate back-up business plans in case the political turmoil in Thailand does get worse by seeking new markets and export routes.
Laos shares borders with China, Vietnam and Cambodia, which could all act as transit export roads.
But Dr Mana said exporting goods via Vietnam was more expensive than through Thailand due to the greater distance.
Laos has taken steps to protect itself from the ongoing political turmoil in Thailand. Over the past few years, the government has been increasing its efforts to improve roads into Vietnam to reduce freight costs.
The country has allowed a Malaysian firm to build a high speed rail line that will link a special economic zone in Savannakhet province to Vietnam. The move will help reduce the cost of ferrying goods from Laos to the international market.
The government has also joined with Vietnam to build a deep sea port in central Vietnam, aiming to establish a new import and export gateway.
State-owned enterprise Lao Airlines is implementing the government's policy of establishing flight connections with major cities in Asian nations including China, South Korea and Japan, aiming to better facilitate the inflow and outflow of tourists.
vientiane times
