Our Exclusive Interview with

Ambassador Vang Rattanavong, Vice President of the Lao National Tourism Administration



Question 1: First, thank you for agreeing to this interview with www.business-in-asia.com. Last time we talked with you Minister Vang you were your Laos’ Ambassador in the United States. Obviously your work must have been successful as just recently Laos was granted Favored Trading Status or Normalized Trade Relations (NTR) by the United States and now you are a government Minister. How did you come to your new job and how long have you been the Vice President of the National Tourism Administration of Laos?

Answer: I have bees assigned to be the Vice Chairman of the Lao National Tourism Administration (LNTA) since late 2003, and in fact my duties and responsibilities are increasing daily. As you might know, the Lao Government attaches high importance to the tourism sector. This sector possesses great potentialities to be explored and developed and thus could create more jobs for our people. Tourism is a green industry, which could generate allot income for our country. Our Organization is under the direct supervision by the Prime Minister’s Office, and we are striving hard in order to reach out to the international market. However, we have plenty of tasks to be achieved, many challenges to be overcome and we have to develop proper infrastructures that are necessary to develop this industry in our lovely country. The advent of Normal Trade Relations (NTR) and the Bilateral Trade Agreement (BTA) with the United States will help Laos in several ways. Increased trade will help Laos create jobs and improve the economy. Laos will go in line to adopt more transparent regulations, equal treatment for foreign and domestic companies, stronger protection for intellectual property rights and will establish procedures for settling trade disputes. NTR has opened up many opportunities for both Laos and the US. It means more opportunities for Laos to export to the US because goods will now enter at much lower tariff: an average of two point four (2.4%) percent instead of 45 percent. I think that during my previous post as my country’s Ambassador to USA, I have contributed greatly to the enhancement and cooperation between Laos and the USA.

Question 2: The Year of the Rooster has just commenced. Looking back at last year and looking forward to the current year, how has Laos’s tourism developed and do you see a bright year ahead and if so, what sorts of increases in tourist arrivals are you expecting?

Answer: In 2003, due to the outbreak of SARS and birth flu, Laos experienced a decreased number of tourist arrivals. Another factor could also be the spread of threats from war in Iraq. Between January 30 to February 7, 2004, Laos successfully hosted the ASEAN Tourism Forum (ATF 2004) held in Vientiane our capital city and thus made a lot of progress in tourism development. This led to an increased number of tourists at 41% for last year. In 2003 only 37 million visitors have visited ASEAN countries, while in 2004; 44 Million visitors have visited our region. As for Laos alone, in 2003, there were 636,361 visitors who arrived in Laos which could generate income at about 87.3 Million U$D, and in 2004 the number rose up to 894,000 equivalent to about a 33% increase. Among this number, 70% are those that are classified as regional tourist arrivals and the remaining 30% are international arrivals. The main objectives of tourist arrivals into Laos are for Culture Historical Tourism and Archeology counting at 70%. Next is Eco Natural Tourism which counts at 30%. In Eco Tourism visitors are experiencing the forest and nature and some other historical sites. Tourism is considered to be the biggest sector that has generated the most income at about 118.9 Million U$D, followed by the textile industry which ranked second and produced about 99 Million U$D, and third is export of power electricity bringing about 86 Million U$D.

Question 3: In 2003, what was the total number of international tourists who visited Laos and what was the breakdown between say Europe, the U.S., Asia and other areas? Which country in Asia is the biggest source of tourists and which areas of the world do you see the most potential for further tourist growth?

Answer: The total number of Tourist arrivals in 2003 was 636.361 and among this figure 498.185 were from Asia and the Pacific, 93.960 were from Europe, 39.453 from the Americas and 4.763 are from Africa and the Middle East. Most of tourist arrivals are from our neighboring country Thailand, due to the geographical proximity and the expansion of business interaction between peoples in our two countries. Europe is also a very important market for us, since a variety of people from Europe tend to experience lives and history in this part of the world. The Americas and especially North America is also a big market and has strong power to boost our economy, however the problems remaining and hampering growth are the lack of information and the promotion of a good strategy for marketing in the American continent.

Question 4: Laos is a very diverse country with mountains, major rivers like the Mekong River plus a host of ethnic minorities. Your organization has the responsibility to promote this diversity and beauty, what resources in terms of overseas offices, number of employees and a yearly budget does your organization have and how does this affect the extent of your marketing?

Answer: Laos is a multiethnic country. We do have 49 ethnic groups in the whole country and all the groups are united, peace loving, practicing a non discriminatory policy, equality, and stand against any use of force and wars. Currently, the entire nation is focusing on the development agenda and alleviation of poverty. The Government of Laos puts lots of efforts into decentralization policy and the promotion of people participation in the decision making process. The target groups are those that live in the remote and mountainous areas, and forest reservation areas. There are all together 20 reservation areas that still possess untapped forestry and nature. The Government is collaborating with various international organizations in the preservation and promotion efforts to preserve the variety of fine cultures. For instance a Project on Poverty eradication in NamHang, Luangnamtha Province where it borders with China, has been supported by UNDP and British Airways for the Phase 1 which is now over, and now Phase 2 is on going supported by the New Zealand Government and UNESCO for the culture preservation phase.

At this moment, our organization is improving the dissemination of information through our website at: www.tourismlaos.gov.la , and the main goal are to set up a Tourism Marketing and Promotion Board and a master plan in national tourism and eco-tourism development. Laos has already signed free visa(s) agreement with 6 neighboring countries namely: Vietnam, Thailand, Cambodia, Malaysia, Singapore and just recently with the Philippines. And we expect that in the near future within ASEAN no visa(s) will be required for our citizens to travel and enter any country in the region. This will help facilitate our citizens to travel easily and more conveniently, bring about good opportunities for more business interaction and the promotion of people-to-people contacts.

Laos has opened 12 International checkpoints, which have helped foreign visitors to obtain visa(s) on their arrival. The LNTA published various magazines, posters, brochures for distribution on different occasions of Expo and Tourism Fairs. Last year, I participated five times in fairs held in Kuala Lumpur, Singapore, Hawaii, Nan Ning (China), Myanmar and Berlin ....

The LNTA at this stage doesn’t have any representatives posted abroad and we do not have sufficient budget to cover this activity. We rely on our foreign tour agents and operator partners to represent us in their respective places such as: The Jumping Tour in Japan and our Honorary Consul based in Stockholm Mr. Willy Hsieh to cover the Scandinavian Countries.

Question 5: Laos is sandwiched between two much bigger neighbors in Thailand and Vietnam. Both have large tourism industries, particularly that in Thailand which is older and has developed into a multi-billion dollar business. Is Laos position between these two countries both a disadvantage and also an advantage?

Answer: The project namely the East West Economic Corridor (EWEC) or the Trans-Asia Highway spanning from Moulmein on the Andaman Sea in Myanmar to Da Nang Port in Vietnam by a 1,500 km road and crossing Thailand, Laos and Vietnam will bear the increasing volume of tourist arrivals and the volume of transported goods and encourage cooperation between countries in this region. We would become a linked market and single destination shortly, and therefore we can also promote our region as a single tourist destination. Once you visit Luang Prabang, you can easily travel to Halong Bay in Vietnam or alternatively by using the existing routes which are: Luang Prabang- Hue -– Sukhothai - Pagan (Myanmar).

The weak point for Laos is the absence of touristic sites that can attract people to spend more time and stay longer in Laos. We would like to invite investors and international companies to consider joining us in developing high class Hotels and Resorts and off course others to develop more attractive tourism sites, so that various tourist groups could spend more time in our country.

Question 6: Southeast Asia is a very scenic area. Cambodia has Ankor Wat and many ancient temples; Thailand also is highly scenic as is Vietnam and finally Laos. Do the four countries in Mainland Southeast Asia always compete for tourists or is there also cooperation to jointly market stops throughout the countries of Southeast Asia and how do you feel this cooperation works and how could it be improved?

Answer: Cambodia has much more advantage than Laos because of the Ankhor Wat. a giant World Heritage temple site. The LNTA is actively advertising the proposed project on the linkage of the various existing World Heritage sites in Laos namely Luang Prabang City, Wat Phou Champasak, the Great Water Fall and the Plain of Jars. In Vietnam there is Hue, which is also another World Heritage site, and when tourists plan their itinerary they could simply combine these destinations in one package. So it won’t be enough to visit only one country, it is recommended to combine Cambodia, Laos, Vietnam and other Mekong river riparian countries in one package. This idea will accelerate the process of promoting a single tourist destination for these countries and would bring about a win-win benefit for all of us. Competition in terms or services and identity among us will also happen. This would accelerate economic integration, common market and development of a collective unique destination. The rich resources of each country are expected to lead to beautiful trade. The Northeast of Thailand could have potential in the agriculture and consumer goods, while central Laos is rich in agriculture, forestry, mineral and hydropower resources. Laos is named “ Laos: the Jewel of the Mekong!”.

Question 7: Laos’s tourist areas are still relatively unknown. Can you name some of the scenic areas for tourists that you would most recommend and why?

Answer: I would recommend the following:

  • Luang Prabang has been identified by UNESCO as a world heritage site. It is in fact the old capital city of LaneXang dynasty. The living style and origin of the people has been preserved, as well as all architectural houses being kept in the same design. Buddhist influences are widely spread in the city itself.
  • WatPhou Champasack (A predecessor of AngKor Wat) was built in the 8th century, and the Old town of Sethapura was built in the 5th century even before Watphou.
  • The Plain of Jars in Xiengkhuang Province which is composed of about 3,000 jars is also preparing to be identified as a World Heritage Site.
  • Viengxay Cave also is a historic and tourism site and is now under rehabilitation to become a museum.
    • The Great water fall at Khonphapheng along the Mekong river is located in the extreme South of Laos and has a dimension of 10.8 Km.
  • Siphandone Islands (Four thousands Islands), the only place where you can watch freshwater Dolphins living in the unsalty Mekong river.
  • The Old Railroad built during the French colonization era.
  • Fifteen cultural and national heritage sites including: Thatluang Temple, Sisaked temple, Hoprakeo (Emerald Buddha) temple and so on.

And other national preserved sites (National Parks) with a variety and abundance of wildlife.

The Government intends to develop tourism to be a “Green Industry” which would thus create jobs and generate income for the country.

Question 8: Hotels and other infrastructure in Laos outside the major cities are still rather limited. Is Tourism a major focus of the current government and what current opportunities are there for foreigners to profit in assisting Laos to expand its tourism industry? Also, now that Laos has NTR status in the U.S. does this offer additional opportunity for U.S. companies?

Answer: Communications and transport by road are convenient in Laos. We can travel throughout the country easily from the North to South on national roads 8, 12, 9, 18A, 18B, 7. The highway from China to link with Thailand also passes across LuangNamtha and Bokeo Provinces of Laos. This highway connecting Kunming City of Yunnan province in China and passing across Laos towards Bangkok Thailand is under construction and about to be completed. In general land transport has been improved and road transport is considered to be a very convenient means of transport now.

The GoL is facing challenges with air transport. There are a small number of flights, and only 2 aircrafts are possessed by the GoL. The GoL expects to have about 4-5 aircraft in the future to serve the needs of air travelers. There are now also 5 airlines companies that fly into Laos such as: Thai Airway and carriers from Vietnam, China, Lao and Taiwan.

The GoL would like to invite foreign investment in developing infrastructures for the Tourism industry such as: building hotel resorts and developing more tourist sites that would attract more foreign visitors. Generally speaking, the GoL has fully opened its door for FDI, for instance road number 3 linking China-Thailand-LuangNamtha-Bokeo of Laos is ongoing and near its completion. One question often asked is why big companies and major industries from the US are not considering to develop service areas to build brand named restaurants and hotels to serve the transit passengers along the main highway roads, for instance: MacDonalds, KFC and some other famous restaurants? We would like also to invite Disney and Water Park Complex companies to build facilities along the roads, to create recreational and amusement centers for tourists and foreign visitors. The GoL has fully opened itself for business, and thus invites major firms from the US to undertake their own business feasibility studies. The GoL more then welcomes this. We would like to invite the internationally recognized specialists to prepare feasibility studies on such investments since these would be more trusted by other companies.

Question 9: Laos has unique scenery and is still largely unspoiled by tourism. Because of this, tourist arrivals in this area are increasing rapidly. At the same time, development is increasing pollution, traffic and destruction of wildlife habitat. How does your government and your government’s plan for development factor in these very real downsides of development?

Answer: The firm position of the GoL towards this issue is first of all to preserve the fine existing tradition and the so called ‘Lao identity’. Environmental protection, social impacts, and especially the wasted water treatment caused by unplanned urbanization and inflows of people are also real concerns. An additional concern is tourists coming to the city and entertaining with lots of alcoholic drink leading to undesirable affects in the city.

The GoL will keep a Fifteen percent growth rate for the Tourist sector. In this manner we will enable to guide growth toward more sustainable goals according to the growing market size. We will also promote the people participatory approach, which is a prerequisite prior to undertaking any projects in the sites and to listen to the feed back from the local population. In Spain, tourism growth is at about 40% and has harmed various tourist sites. In Thailand 40% growth has demonstrated signs of negative effects, and Cambodia with 50% growth indicates impairment already, so with this respect Laos needs to be also very cautious.

Question 10: Tourism in Thailand has been more actively developed and is a multi-billion dollar industry that brings in much foreign exchange for Thailand and also helps substantially with job growth. Has Laos studied the Thai tourism industry and could you mention some good points and also perhaps some lessons learned that Laos has drawn from Thailand’s experience with mass tourism?

Answer: Currently, the GoL has shared experiences of Thailand’s tourist development with our counterparts in Thailand. We learned what is good and noted the negative impacts as well. For instance in Pattaya many problems arose such as the sex industry, tourist sites are damaged, waste water flows into the sea, and thus disturbs the well being of nature. In Siem Riep of Cambodia the condition of Angkhor Wat is getting worse, because of too fast development. Too many tourists are there, and bring about heavy flow of increased population and insufficient water supply, lodging places and demand for food supply which needs to be imported from Thailand, and some other negative factors.

Laos has different characteristic in terms of tourist development, we are a small populated country with vast potentials for sustainable growth. We would certainly keep our way for development, but we would do our best to reach out to the international market. We will grow in just the right pace but we will go firmly and sustain ably ahead. Thank y

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.

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