Laos

The annual summit of Southeast Asian countries kicks off. Here are what's on the agenda at the six-day event in Vientiane

By Emanuele Ballestracci

Between Oct. 6 and 11, Vientiane will host the 44th summit of ASEAN countries and the most important political event of the year for the Southeast Asian region. There are many thorny dossiers that will need to be addressed, chief among them the civil war in Myanmar and tensions in the South China Sea, and there will be no shortage of high-level meetings with representatives of key partner countries.

The chairmanship of ASEAN rotates annually, and in 2024, for the third time in its history, it fell to the Lao People's Democratic Republic. Already in July this year, a meeting of the foreign ministers of the member countries was held, where the bloc's difficulty in dealing with the two most sensitive foreign policy issues emerged. Indeed, the slow implementation of the five-point peace plan for resolving the civil war in Myanmar and the military junta's feeble willingness for dialogue has caused quite a few disagreements among ASEAN members. Indeed, Malaysia, Thailand, Indonesia and Singapore are pushing for a stronger stance by the bloc to resolve the conflict while others, including Laos and Vietnam, prefer a less invasive approach. The handling of tensions in the South China Sea between China and, first and foremost, the Philippines and Vietnam have also been divisive. Indeed, Manila and Hanoi are calling for tougher responses toward Beijing while other members prefer not to risk escalating tensions given China's preponderant economic presence in the region. 

Vientiane's chosen theme for its chairmanship is “ASEAN: Enhancing Connectivity and Resilience” and will be developed based on three pillars: promoting infrastructure connectivity; reducing the development gap; and promoting greater economic integration and human mobility. Already during the summit of the Economic Ministers of ASEAN countries held in mid-September, the importance of responding to global and regional challenges through greater unity and cooperation was enunciated, concretely realizing the slogan “enhancing connectivity and resilience.” The focus on these issues reflects the national interests of Vientiane, which, being landlocked, needs greater regional connectivity to move from being “land-locked” to “land-linked.” Already during the previous two presidencies, Laos had placed a focus on similar issues. In fact, the “Vientiane Action Program” and the “Vientiane Declarations,” which resulted from the 2004 and 2016 summits, had strengthening infrastructure and regional integration as pivotal elements. 

Two other more distinctly foreign policy issues were placed at the center of the proceedings: strengthening ASEAN's relations with external partners and maintaining the organization's centrality in the evolving regional order. Indeed, the October summit will be peppered with numerous meetings with representatives of other global powers, which were already preceded between mid- and late September by as many consultations and preliminary meetings. Indeed, bilateral summits are on the agenda with all major regional players (starting with China, India, Australia, Japan) as well as the European Union and the United States. Particularly relevant will be meetings with Beijing representatives, given China's importance in infrastructure investment, development finance and because of territorial disputes in the South China Sea. 

The 19th East Asia Summit (EAS), the annual forum of East Asian leaders focused on regional cooperation and strategic dialogue on security, political and economic issues, will also be conducted in parallel. In addition to the ASEAN countries, China, the United States, Russia, India, South Korea, New Zealand, Japan and Australia are members. 

Finally, East Timor's process of joining ASEAN as a full member will be discussed. The small island state gained official observer status in 2022 at the conclusion of the 41st ASEAN summit and approval “in principle” to become a member. In the following two summits, the roadmap for full membership was established, and East Timor has since made significant efforts to fulfill the criteria imposed. Nevertheless, achieving these goals will require cooperation with current members and dissolving the reservations of Singapore and Myanmar, still cool about its membership. The 44th ASEAN summit will thus be a golden opportunity for East Timor to gain the consensus needed to become its 11th full member.

Toward the Oct. 6-11 summit in Vientiane. A key element of the Lao strategy is the ambition to transform from a “landlocked” to a “land-connected” nation. This goal includes enhancing transportation and digital infrastructure 

By Luca Menghini

In 2024, Laos assumed the presidency of ASEAN with the theme "Strengthening Connectivity and Resilience" during a crucial period to address and resolve growing geopolitical and economic challenges. Laos has previously held the ASEAN presidency twice, in 2004 and 2016, but this time it is facing increasing pressures. Connectivity has long been a strategic goal of ASEAN, and under Laos' leadership, the focus will be on strengthening regional ties and building greater resilience in the face of emerging threats.

The ASEAN Master Plan on Connectivity (MPAC) 2025 is crucial to regional integration efforts, focusing on sustainable infrastructure, digital transformation, and people-to-people connections. These objectives are vital not only for economic growth but also for social and political cohesion. Laos will promote deeper regional integration, sustainable development, and the reduction of development gaps between ASEAN nations.

A key element of Laos' strategy is the ambition to transform from a "landlocked nation" to a "land-linked nation." This goal involves enhancing transportation and digital infrastructure, making Laos a strategic hub for trade and investment within ASEAN. This transformation is essential for strengthening regional cooperation and consolidating supply chains, especially as Southeast Asia recovers from the economic consequences of the Covid-19 pandemic.

ASEAN's resilience in the face of global and regional challenges is equally crucial. The region must tackle climate change, natural disasters, cybersecurity threats, and economic uncertainty. Laos' presidency aims to promote regional stability by building robust infrastructure and developing partnerships with external powers such as the United Kingdom and the European Union to improve disaster response, energy security, and sustainable development.

Another key objective of Laos' leadership is promoting inclusion, particularly for women and marginalized communities. The aim is to ensure that all groups can benefit from ASEAN's growth, addressing the needs of vulnerable populations, especially in remote areas. Through these initiatives, Laos seeks to foster greater equity and sustainability of livelihoods across the region.

Digital transformation will be a key area of focus. As ASEAN moves towards building a digital economy, Laos will prioritize digital innovation and infrastructure. This includes cooperation on cybersecurity, data governance, and trade digitalization. The ASEAN Digital Masterplan 2025 sets ambitious goals, and Laos' leadership will be critical in promoting digital literacy and infrastructure development, especially in less developed areas. Strong digital connectivity will drive economic growth and improve access to education, healthcare, and government services.

Energy connectivity is another vital element of the ASEAN 2024 agenda. With growing energy demand and the transition to a low-carbon economy, Laos will play a central role in strengthening regional energy cooperation. The ASEAN Power Grid, aimed at improving energy security and integrating renewable energy sources, will be a priority. Events such as the Energy Business Forum and the ASEAN International Conference on Energy and Environment in 2024 will provide a platform to address issues of energy security, climate action, and the sustainability of energy infrastructure.

In addition to its role as ASEAN's rotating president, Laos will promote its campaign to boost tourism and investment, called "Visit Laos Year 2024." By showcasing its cultural and natural heritage, Laos aims to attract 4.6 million visitors, positioning itself as a key player in the region's tourism sector. This goal aligns with ASEAN's broader aim of strengthening cultural connectivity and people-to-people ties, essential elements for building a regional identity.

Laos faces a complex geopolitical landscape as it takes on the presidency. Geopolitical tensions, particularly in the South China Sea, pose a challenge to ASEAN unity. Laos, with its tradition of maintaining neutrality and mediating between major powers, will need to balance the interests of China, the United States, and other external actors while ensuring ASEAN remains cohesive. This delicate diplomatic balance will be crucial, especially as ASEAN grapples with maritime security issues and relations with major powers.

Looking ahead, the success of Laos' presidency will depend on its ability to implement ASEAN's post-2025 agenda. This agenda focuses on building a dynamic, inclusive, and people-centered community, requiring coordination across all sectors. By promoting infrastructural development, social inclusion, digital transformation, and energy cooperation, Laos has the opportunity to lay the foundation for a more interconnected and resilient ASEAN. Its success will depend on the region's ability to adapt, innovate, and strengthen both external and internal ties.

How is Vientiane faring in these first months as ASEAN chair, ahead of the summit in the fall?

Francesco Mattogno

There was a time, around the end of April, when Laos was missing both the president and the prime minister at the same time. This seems odd for a country that has a reputation for being “land-locked,” meaning “trapped by land,” as the only state in Southeast Asia that is landlocked. A condition that, according to some theories, would make Vientiane by its nature less interested or touched by international affairs. 

On April 23, while President Thongloun Sisoulith was meeting in Phnom Penh with Cambodian Premier Hun Manet and King Norodom Sihamoni, Prime Minister Sonexay Siphandone was attending the ASEAN Future Forum, held in Hanoi. Speaking with his Vietnamese counterpart Pham Minh Chinh, Siphandone renewed Laos's commitment to strengthen cooperation with Vietnam in various areas, from defense to trade, via infrastructure, energy, and tourism. All while Sisoulith gave his support to the Funan Techo canal that Cambodia plans to run from the Mekong River, with accompanying Vietnamese protests.

This was an interesting balancing act, showing some diplomatic initiative on the Laotian side. Vientiane has inserted itself more often than usual into regional and international affairs in recent months, aided by its role as chair of ASEAN. The chairmanship of the Association of Southeast Asian Nations (ASEAN) is an annual position, awarded on a rotating basis to the bloc's ten member countries in alphabetical order according to English. And 2024 is the year of Laos, which chairs the association for the third time in its history (after 2004 and 2016).

As has been the case for the past three years, Laos has inherited from its predecessor (Indonesia) a number of thorny dossiers left unresolved. From the civil war in Myanmar, which the group has never been able to affect, to territorial disputes over the South China Sea between China and five ASEAN countries (the Philippines, Malaysia, Vietnam, Brunei and Indonesia). Issues compounded by tensions between Beijing and Washington and conflicts (Ukraine, Gaza) that threaten to change the international order on which Southeast Asia's economic growth has been based for decades.

Given these critical issues, in these early months Vientiane has sought to promote ASEAN's centrality more economically, than politically. Laos is a country with a huge public debt (125 percent of GDP in 2023) that has seriously risked default in the last two years, which is why it is using the association as a launching pad to lift the state of state finances. Not surprisingly, in his agenda as ASEAN chair, the Laotian government has decided to prioritize issues such as economic integration among the bloc's countries, digitalization, tourism, and sustainable economic growth.

In all meetings, from ministerials to summits with partner countries such as Australia and New Zealand, trade, investment and infrastructure projects have been discussed, without ever firmly touching on sensitive issues such as the war in Myanmar (a generic cessation of hostilities has been called for several times) or the South China Sea. The latter, for example, was also barely mentioned during the early April meeting between Laotian Foreign Minister Saleumxay Kommasith and Chinese counterpart Wang Yi, despite the fact that the two spoke during one of the most tense moments in the area between China and the Philippines.

Heavy economic dependence on Beijing (which holds half of Lao's foreign debt), compounded by ambiguous relations between the Lao People's Revolutionary Party government and the Burmese military junta, made it complicated to think that Laos could succeed in truly affecting major international issues where much more influential countries have failed, such as Indonesia.

Despite this, Vientiane has not remained completely immobile, especially on the Burmese front. The ASEAN special envoy for Myanmar appointed by Laos at the beginning of the year, Alounkeo Kittikhoun, immediately met with Burmese military junta leader Min Aung Hlaing (but failed to talk to regime opponents), and Naypyitaw sent its own non-political representative to an ASEAN meeting for the first time since 2021. This last point is positive because it represents a step backward by the regime, which had always claimed to be represented by a member of the government, and would be due precisely to the good relations between the two countries. It remains to be seen whether the Laotian government can-and will-do more in the coming months.

Vientiane guida il blocco dei Paesi del Sud-Est asiatico per il 2024. Il governo laotiano punta su connettività e resilienza ed è chiamato ad alcune sfide interne ed esterne importanti, a partire dalla questione Myanmar

Il Laos si sta preparando a guidare l’ASEAN nel 2024, succedendo all’Indonesia nella presidenza di turno dell’organizzazione. Il Paese, che si chiama ufficialmente Repubblica Popolare Democratica del Laos, è uno Stato socialista a partito unico dal 1975, anno in cui il Pathet Lao prende il potere grazie al supporto determinante del Vietnam comunista. I rivoluzionari Lao avevano profondi legami militari, culturali e anche personali con i loro compagni vietnamiti, dato che erano stati tutti membri dello stesso movimento durante la lotta contro il dominio coloniale francese. I due Paesi, insieme alla Cambogia, erano parte dell’Indocina francese, il cui centro amministrativo e culturale era Hanoi. Dopo la comune lotta per l’indipendenza prima e contro le forze anticomuniste poi, i comunisti lao e vietnamiti hanno mantenuto un legame profondo. Con una differenza: Vientiane ha rapporti strettissimi (e moltissimi debiti) con Pechino; a differenza di Hanoi, che talvolta guarda con preoccupazione alle mosse cinesi. L’influenza cinese sul Laos potrebbe secondo i più pessimisti indebolire la capacità del Paese di guidare l’ASEAN, in particolare sui dossier delicati dove la maggioranza dell’organizzazione ha posizioni opposte a quelle di Pechino, come le dispute sul Mar Cinese Meridionale.

I rapporti con il Tatmadaw, le forze armate birmane, di nuovo al potere a Yangon, da un lato, e con il governo democratico in esilio, dall’altro, sono il tema più delicato e importante al momento per l’ASEAN. Sulla carta, l’organizzazione e i golpisti hanno trovato un compromesso, noto anche come Five-Point Consensus, che prevederebbe l’immediata cessazione delle violenze nel Paese, l’avvio di un dialogo tra le parti in lotta facilitato da un inviato speciale ASEAN e assistenza umanitaria dagli altri Paesi del blocco. In concreto però, l’accordo è considerato un fallimento da autorevoli ONG come Human Rights Watch, dato che il Tatmadaw continua a reprimere violentemente l’opposizione e a condurre le operazioni di pulizia etnica contro le minoranze del Paese. La posizione collettiva dell’organizzazione è stata ulteriormente minata dalla Thailandia. Bangkok ha avviato un dialogo parallelo con i militari birmani, soprannominato Track 1.5, a cui la maggioranza dei Paesi ASEAN non partecipa, con l’eccezione di Laos, Vietnam e Cambogia. Una mossa che ha irritato la Presidenza di turno indonesiana.

Giacarta ha preteso che la gestione del dossier Myanmar fosse affidata a una troika composta dalla presidenza uscente, da quella incipiente e dalla successiva, quindi da se stessa, Laos e Malesia, rispettivamente. Singapore, esclusa dalla troika, si è affrettata a ricordare che si tratta di un meccanismo informale che non deve sostituire gli organi ASEAN. La vicenda dimostra quanto la questione birmana stia mettendo a dura prova l’ASEAN sul piano politico e istituzionale: le divisioni tra i membri rendono difficile elaborare una strategia comune e l’efficacia dell’organizzazione dipende molto dalla posizione del Paese che detiene la presidenza di turno. Negli spazi lasciati liberi dall’ASEAN si inseriscono gli altri attori regionali, come Cina e Giappone, che stanno partecipando al Track 1.5. Il Laos ha legami stretti con entrambi – abbiamo già menzionato Pechino, ma anche Tokyo è un partner essenziale sia per investimenti che per cooperazione allo sviluppo – e ha la necessità di mantenere buoni rapporti con chiunque sia al potere a Yangon. Entrambi i Paesi devono affrontare la criminalità organizzata, molto forte lungo il confine tra la provincia lao del Bokeo e lo Stato Shan birmano.

In attesa di iniziare ufficialmente il suo mandato, Vientiane ha indicato i suoi obiettivi, riassunti nel titolo “Rafforzare connettività e resilienza”. Il primo ministro Sonexay Siphandone ha declinato la resilienza in una dimensione politica, ossia la “costruzione di un’architettura per la pace, la stabilità e lo sviluppo nella regione” basata sul potenziamento dell’ASEAN e delle sue relazioni esterne. La connettività poi è un tema caro al Laos, visto che si tratta dell’unico membro dell’Organizzazione senza uno sbocco sul mare (la principale via di comunicazione naturale è il fiume Mekong) e che le esportazioni sono una voce importante dell’economia nazionale. Oltre ai prodotti agricoli e tessili, il Paese esporta verso i suoi vicini soprattutto minerali, come rame e oro, ed energia elettrica, prodotta prevalentemente da fonti rinnovabili come i corsi d’acqua e il vento. Vientiane intende promuovere la neutralità carbonica durante la sua presidenza e ha le credenziali giuste per farlo, anche se alcuni osservatori sollevano dubbi sul fatto che l’energia idroelettrica nazionale sia ad impatto ambientale zero, a causa dei metodi di costruzione delle dighe, molto invasive rispetto agli ecosistemi fluviali. Per il Governo lao, dotato di modeste risorse, un’opportunità nasconde spesso anche una sfida non facile da affrontare.Il Paese non ha avuto infatti la stessa fortuna di altri suoi vicini. Nonostante il Laos abbia sempre imitato le politiche dei vicini vietnamiti, per esempio liberalizzando a sua volta l’economia quando ad Hanoi iniziava il Doi Moi, i risultati economici non sono comparabili. Anche la portata della sua politica estera è meno ambiziosa rispetto alle altre cancellerie ASEAN, limitata alla regione e a pochi senior partner come Cina, Giappone e Russia. La presidenza ASEAN potrebbe costituire un’opportunità di apertura internazionale per il Laos, a patto che smentisca i dubbi sul fatto di essere un proxy di Pechino nell’organizzazione, dubbi erano stati già sollevati in occasione del suo precedente mandato nel 2016. L’Unione Europea potrebbe cogliere l’occasione per offrire la sua cooperazione a Vientiane e avviare un dialogo su Myanmar, rispetto dei diritti umani e scambi commerciali. Rompere l’isolamento diplomatico ed economico della “Terra da un milione di elefanti” potrebbe aiutare il Laos ad essere più autonomo da Pechino.

Public debt and inflation are on the rise, but according to several analysts, the current problems of the Laotian economy can become a boost for the future

By Ilaria Zolia

Laos has been hit hard by the effects of the pandemic but also by the food and inflationary crisis. With rising fuel prices caused, in part, by the depreciation of the Kip, many farmers have left the countryside and gone abroad in search of work. According to the Food and Agriculture Organization of the United Nations, about 20 percent of Laotian farmers cannot afford to plant rice because of the increases. Laos' recent economic performance describes this reality. Public debt has risen from about 70 percent of GDP in 2019, to 88% in 2021, according to Lao government data. Inflation has also risen, from less than 2% in February 2021 (year-on-year) to 30% in August 2022, threatening the standard of living especially of low-income urban households. In contrast, hydropower and mining have expanded rapidly, becoming dominant sectors. Investments to expand these two sectors have been financed with external loans, but these projects have not yet generated revenue due to long gestation periods. However, according to some analysts, the crisis may be a starting point for the implementation of major development reforms. This turnaround could take place through reforms on public debt reduction and improvements regarding public expenditure management, which would ensure increased revenues. According to Nikkei Asia, the country will need to know how to make the most of the resources it already has, such as its natural capital and its young citizens. It would therefore be important for Laos to invest in its population, increasing spending on health and education in order to create a new workforce, Nikkei concludes. However, the Lao economy has good potential to embark on a path of reform. Indeed, it should not be forgotten that with a gross domestic product growth rate of 7% for more than two decades, Laos has been one of the fastest growing economies in Southeast Asia for more than two decades through 2019.