Laos, Republic of Korea to enhance economic cooperation

LAO PDR (Vientiane Times) - Laos and the Republic of Korea are hopeful of more cooperation in the near future, in ways that will prioritise various aspects of society, culture and economics.

The recently held Korea Week in Vientiane informs visitors about Korean products and culture. --Photo Kotra Vientiane

Economic cooperation in particular should be strengthened. Although the current bilateral trade value amounts to US$114 million, it needs to be expanded to US$200 million by 2021. To this end, the Korea Trade-Investment Agency (KOTRA Vientiane) will create new business cooperation strategies to develop new business opportunities for companies in both countries. KOTRA plans to continue to strengthen efforts by organising investment forums, trade missions, technical road shows and business workshops.

In addition, more investment in promising industry sectors such as hydropower and renewable energy, infrastructure, smart cities, water resource development, and digital infrastructure and trading sectors is being considered. In 2017, Korea's President Moon Jae-in announced the “ New Southern Policy” which aims to substantially elevate the partnership with ASEAN to a higher level. President Moon has pledged to increase South Korea’s focus on ASEAN countries.

The vision of the New Southern Policy is that the Republic of Korea would like to share a future with the ASEAN community based on a ‘People-centred community of peace and prosperity’. The Korean and ASEAN peoples should build a community that values and connects people; where people can share prosperity based on mutual benefits; and which can contribute to maintaining and stabilising regional peace.

The New Southern Policy aims to expand diplomacy, economic prospects, and connectivity in infrastructure and in people-to-people relations. The Ambassador of the Republic of Korea to Laos, Dr Shin Sungsoon, said K-drama and K-pop aids the deepening cultural and people-to-people exchanges and, since the opening of a direct flight between the two countries in 2011, the number of travellers from Korea has dramatically increased from 81,799 in 2013 to 174,405 in 2018.

Laos and the Republic of Korea are developing further economic cooperation aiming to boost trade and investment between the two countries. According to the Lao Ministry of Planning and Investment, Korean companies have invested in 291 projects worth US$751 million as of June 2019.

When Korea companies began investing in Laos in 1992, they focused on the restaurant and agriculture sectors. Nowadays, Korea's investment is more diversified into different sectors such as energy, construction, finance services, vehicle manufacturing, and trading.

In 2018, bilateral trade between the Republic of Korea and Laos was valued at US$114 million. Laos’ imports from Korea were valued at US$84 million and mainly comprise vehicles, trucks, automotive parts, construction equipment, electronics and consumer products. As for exports to Korea, the main items are coffee, charcoal, scrap, fabrics and ingredients for traditional medicine, with a total export value of about US$30 million.

During the state visit by the President of the Republic of Korea, President Moon Jae-in, to Laos on September 5, he will hold summits with President Bounnhang Vorachit and Prime Minister Thongloun Sisoulith on boosting bilateral cooperation in a variety of areas. The two nations also expect the upcoming state visit by President Moon to bring a new horizon of cooperation on a higher level: ‘sustainable business development’.