The Lao garment industry has been on the decline. The value of exports increased from US$87 million in 1995 to a peak of US$219 million in 2011, before gradually falling to US$174 million in 2015. The share of garments in total exports also declined from an average of 36 percent during 2001–2005, to only 8 percent during 2011–2015.
Laos has announced a new leadership team amid calls for the country, as the ASEAN Chair for 2016, to unite ASEAN on territorial disputes in the South China Sea.
According to Chinese state media, one of the Middle Kingdom’s citizens was killed in a shooting in Laos that also injured three people, according to the Associated Press. The incident occurred in Luang Prabang province, and suspected terrorists launched the attack at a workspace used by a Chinese company. Authorities do not have a motive, but some suspect that the shooting grew out of growing anti-Chinese sentiment within Laos.
The recently signed Joint General Scheme of Mohan–Boten Economic Cooperation Zone is the first cross-border economic cooperation zone that China has established in Laos and, for that matter, in the whole of Southeast Asia. The deal hints at the Asian giant’s goal to expand its economic ties with its southern neighbours.
Leadership changes announced at the 10th Congress of the ruling Lao People’s Revolutionary Party will give the United States an opportunity to boost ties with Laos when President Barack Obama visits Vientiane in September 2016. This will be the first visit ever to Laos by a sitting US president.
The first high-level US engagement with Laos this year took place in California on 15–16 February when Obama and Lao Prime Minister Thongsing Thammavong jointly chaired a summit discussion between Southeast Asian and US leaders.
The ASEAN economic community (AEC), enacted on 31 December 2015, presents new opportunities for Laos, but it also underlines significant challenges. Laos has long been a country of promise given its resources and geographic proximity to China and the ASEAN members. Yet, despite relatively high growth over the last two decades, the country remains among the world’s poorest nations.
Since 1990, global inequality has declined, following almost two centuries of gradual increase. Inequality has fallen between countries, but increased, on average, within countries. On average, poor countries have grown more rapidly than rich countries, causing between-country inequality to fall. Most, though not all, economic literature on inequality has focused on the increase within rich countries. But inequality has also increased within many developing countries, such as Laos. This trend threatens social and political stability and must be understood.
The accession of Laos to the World Trade Organization in 2013 was the latest in a series of steps towards achieving economic integration. The next milestone in its integration agenda is the establishment of the ASEAN economic community at the end of 2015.
