Laos: Reaping the Benefits of a New Era of International Cooperation

This month, the Southeast Asian nation of Laos hosted two of the region’s most important annual gatherings—the ASEAN Summit and the East Asia Summit—in its capital, Vientiane. President Barack Obama, who led the U.S. delegation, made history by becoming the first sitting U.S. president to visit the country. The excitement surrounding the events was palpable across the entire capital, as leaders and citizens welcomed the chance—as ASEAN Chair—to shine a spotlight on the significant strides the country has made in its efforts to develop its economy, increase economic integration with regional neighbors, and deepen ties with the international community.

Lao PDR President Bounnhang Vorachit and President Obama emphasized during their meeting a shared desire to heal the wounds of the past and build a foundation for the future, signaling the start of a “new era of bilateral relations.” President Obama announced an additional $90 million over three years to assist Laos in clearing unexploded ordnance, as well as the “Let Girls Learn” initiative to empower women. The two presidents welcomed the signing earlier this year of a Trade and Investment Framework Agreement that “recognizes the importance of protecting the most vulnerable populations, while pursuing economic development and upholding international labor standards, including combatting child labor, forced labor, and human trafficking.”

In addition to the Framework Agreement with the U.S., agreements with Japan and South Korea focused on economic cooperation that will contribute to the already strong investment flows from China and ASEAN neighbors. Laos is clearly seeing economic benefits from its stepped-up engagement with the regional and international community. Laos’ annual GDP growth has averaged 7 percent for the past decade. In 2011, the World Bank upgraded Laos to the status of a lower-middle income economy, and Laos now has a 2015 gross national income per capita of $1,730. More recently, in the run-up to the establishment of the ASEAN Economic Community at the end of last year, Laos saw a 71 percent jump in foreign direct investment to $1.2 billion.

Recent strong economic growth in Laos provides scope for the government to redouble its efforts to drive broad-based social and economic development. Fundamental to that goal is strengthening governance and the rule of law so that access to opportunities is fair and transparent.

The Asia Foundation is supporting the country’s efforts in this regard. For example, through formal education scholarships and vocational training, we are helping to level the playing field for vulnerable groups, including victims of trafficking, violence, and other forms of gender-based discrimination.

We have long supported efforts of the Ministry of Justice, the Lao Bar Association, and National Assembly to empower citizens to understand and access their rights as endowed by Lao laws. In particular, our Access to Justice programs established the country’s first legal aid clinics which assist citizens to resolve disputes through varied legal channels.

With Laos now reaping significant economic benefits from its increased participation in the global and regional economy, the time is right for the country’s leadership to reinforce its commitment to the social and economic development of all its citizens.

Nancy Y. Kim is The Asia Foundation’s country coordinator in Laos. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation or its funders.