Exclusive Interview with His Excellency Vang RATTANAVONG
Ambassador Extraordinary and Plenipotentiary
of the Lao People's Democratic Republic to the United States of America

Laos Ambassador to US

Question 1: Following the events of September 11 in the U.S. and subsequent military action in Afghanistan, the economies of many Asian countries have suffered. Could you describe the state of the Lao economy today and its prospects in the coming year?

Answer: The financial crisis in the Asian region in 1997 had a very bad impact on the economy of Laos. In comparison, the past year was difficult but a successful year for the Lao people. The national economy recovered thanks to government efforts to deal with the effects of the crisis, and prevent its reoccurrence. With our efforts, we can see that, agricultural production rose promisingly, with a record rice yield of more than 2.2. million tons, while the government drive for increased production for import-substitution and exports was effective in all parts of the country. This has helped maintain or even strengthen the value of the national currency.

Alongside our efforts to resolve the currency and financial difficulties of the past two years, the government strongly encouraged public investment in more than 5,000 projects valued at over 2,000 kip (local currency). The national economy continued to develop with an annual economic growth rate of 6.4% and the inflation rate was lower than 10%. The national income for 2000-2001 achieved 95% of the figure set out in the government plan. This result has been very noteworthy although I do hope that the economy of the country continues to strengthen, in the coming year.

Question 2: Is Laos a fully market economy country or does your country follow a hybrid economic system? Also, if your economy is still in transition, and can you describe what changes are taking place or will take place shortly?

Answer: In 1986 the New Economic Mechanism (NEM) emerged from the implementation of the governments economic reform package. This package sought to transform economic management from a centralized system to the market-oriented economy characterized by decentralized economic decision making, with the private sector playing an active role.

Question 3: What regional economic groupings does Laos belong to and which additional economic organization does Laos plan to enter in the coming years? Also, how will entry to these organizations act to increase economic potential in your country?

Answer: In 1997, Laos became a member of the South East Asian Nations (ASEAN). Now the country is preparing to join the Asia-Pacific Economic Cooperation grouping and applying to be a member of the World Trade Organization (WTO). Becoming a member of the regional or world economic organizations will put Laos on an even playing field with other countries in the region and with those in the rest of the world vis-a-vis trade and investment with many nations. This development would further encourage the move toward a market-oriented economy.

Question 4: Who are Laos’s biggest trading partners and what are Laos’s biggest exports? Also are there particular industries that the government is trying to promote or agricultural areas where you feel that Laotian products have an advantage?

Answer: Laos trades with many countries, and its biggest trading partners are Thailand, China, Vietnam, and the EU. Laos exports electricity, wood processing, coffee and garments. The government is encouraging foreign and domestic investors to invest in the field of hydroelectric power, mining, manufacturing, agro-business and other industries.

Question 5: Does the Lao government actively seek investment in your country? Also, what investment advantages does your country offer companies or individuals interested in investing in your country?

Answer: Yes, the Lao government is actively seeking foreign investment in the country. The government offers opportunities to the investors to choose what is suitable for them, and what type of investment the investors wish to make.

Question 6: Earlier this year, there were a lot of articles on travel to Laos and the splendid tourist locations of the Mekong River valley, Luang Prabang and Vientiane? Have the events of September 11 acted to decrease tourism and how are your Embassy and your government attempting to promote more tourism?

Answer: Statistics show that thankfully the terrorists attacks on September 11th did not have much negative impact on tourism in Laos.

Question 7: In years past there were many articles on security incidents in Laos and the increase in armed groups of criminals. What is the current security situation in the major tourist areas and has the crime rate increased or fallen over the last year?

Answer: A year ago there were many articles talking about the security situation in Laos. As you know, Laos is rightfully well known for its tranquillity, social order and political stability. Unfortunately, after the country experienced a number of unprecedented mishaps as a result of criminal acts masterminded by an isolated group of terrorists and activist. This fact was reported by journalists. These criminal acts were intended to destabilize social order, impede the economic development process and tarnish the image of the country especially on the occasion of the opening of the tourist year and the celebration of the 25th anniversary of the Lao PDR. Due to the unique nature of these events, these incidents drew immediate attention of the foreign media, which often unwittingly and incorrectly exaggerated and reported them as a major threat to social order and stability. Meanwhile, bomb explosions, robbery and other criminal acts have already become part of the daily life in other countries worldwide but have not received nearly as much attention in the foreign media. The Lao government has stepped up its security and taken serious measures to punish those perpetrators in order to ensure our traditional tranquillity and peaceful life. Laos is and remains a very safe place to visit and to invest.

Question 8: Does the Lao government promote foreign investment in the tourism field in Laos and if so, what are the incentives offered?

Answer: The Lao government tries to promote and actively seeks foreign investment in many areas not just only the tourism field. The government also offers very attractive incentives for investors seeking to invest in Laos.

Question 9: In the event that a company or individual wants to research more about investing or doing business with Laos, what resources are available through your Embassy and other Lao Embassies around the world. In order to speed up and facilitate receipt of the needed information, what can investors or business people do to help the Embassy or other parties to give them the information they seek?

Answer: Anyone who is interested in doing business in Laos, particularly investors, can contact the Lao Embassy directly; we have documents regarding the investment process. Or they can visit our website at . This website has useful information relating to business opportunities in Laos, and also information about doing business in our country.

Question 10: Lastly, do you have any final words of advice to business people interested in doing business with Laos or considering an investment in your country?

Answer: In order to develop the country, and to improve the living standard of our people, the Lao government has implemented the economic reform policy by embarking on the market oriented economic path since 1986. This policy is to encourage more private sector involvement in order to play a important role in the process of economic development of the country. The policy also seeks to open up the country for international economic cooperation, especially to invite foreign companies to invest in Laos. I would like to inform American business persons that, at the present time many business opportunities in our country are available and need investment in many areas, such as in the field of communication, hydroelectricity, mining, fertilizer, construction, tourism, etc. Many projects are already elaborated; however, there currently is a lack of funds to implement the project. I therefore, would like to invite American companies to first investigate and ultimately to invest in our country.

For more information on doing business in Laos, the Embassy of Peoples Democratic Republic of Laos to the United States of America has kindly provided extensive information in the following Guide to Doing Business in Laos.  This can be viewed online or printed to assist you in your research and business efforts. .
About the Interviewer:  

Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (

Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service.

Copyright 2005 ©  Runckel & Associates

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