Lao economy after the May 2014 coup in Thailand

It seems that Lao-Thai trade is not significantly affected by Thailand’s partial closures of land borders following last weeks coup (the 12th or 13th in modern Thailand, depending on how you count it). But some Myanmar media are reporting that trade is still blocked at some of their borders with Thailand. Some suggestions also that traders and richer individuals will be reluctant to carry large amounts of cash over the borders, what with all those extra officials taking an interest in the traveling public…

In the medium term, a weaker Baht is good for Lao importers, but bad news for poorer families dependent on remittances from relatives working in Thailand. The land of smiles will surely suffer a big fall in tourist numbers, and foreign investors are likely to stay away until the situation is clearer. So lower growth rates, again meaning less job opportunities for Laotians across the border.

The Thai generals and whatever ‘neutral’ politicians they eventually pull out of their hat are certainly not focused on the ASEAN integration agenda, so some of the common market reforms scheduled for 2015 are going to be delayed or frozen. Since Laos is not well prepared for such integration, delay on the Thai side could be beneficial for Lao businesses, if they use the extra time to get ready for the tremendous challenges of the common ASEAN economic community…
*Lao trade remains normal despite Thai military coup*

Vientiane Times, 24 May 2014

Lao trade via Thailand is expected to remain the same despite the Thai military seizing administrative power and enforcing a curfew.

Thai Army Chief Prayruth Chan-Ocha enforced a curfew for locals on Thursday May 22 from 10pm to 5am.

Trade at the border checkpoint between Laos and Thailand remains normal.

The coup hopes to restore national unity and ensure political, economic and social reforms. Lao Freight Forwarder Co. Ltd (LFF) Managing Director Mr Somphone Phasavath told Vientiane Times on Friday that transportation of goods from Laos via Thailand was not affected.

He said the curfew had affected Thai nationals travelling to Laos as the company had invited guests from Thailand to participate in a goods transportation workshop but they had to cancel due to border checkpoint authorities not allowing them to cross.

Many Lao residents who are going to Thailand temporarily are also denied entrance to the country during this time.

According to LFF, despite Thailand’s current political turmoil, transport services were operating as normal at the Lao-Thai border and freight routes were open via air, land and water.

Mr Somphone said trade had steadily increased by around 10 percent every year and he didn’t expect it to change.

Thailand comprises around 60 percent of the company’s transport services with most of the goods exported to Europe, US, Hong Kong and France.

Head of the first Lao-Thai friendship bridge, Mr Somboun Souvanchoumkham, also confirmed that goods transportation between Laos and Thailand at the checkpoint is normal but he could not be sure it would remain that way if there is a new announcement.

According to a report from the Lao Ministry of Planning and Investment, Laos’ export value was expected to reach approximately US$2.1 billion this year with the majority destined for Thailand or passing through Thai ports to other countries.

Thailand and Laos have agreed to double their bilateral trade to US$8 billion by 2015, increasing from the US$4 billion in 2011.

In 2012, trade between the two countries was worth US$4.82 billion, which was an increase of 23.82 percent from the previous year.

Lao is mainly importing and exporting goods via Vietnam and Thailand.

Vientiane Times 24 May 2014


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