The bilateral relationship between the Republic of Indonesia and the Lao People's Democratic Republic (PDR) that began in 1957 has remained solid. Laos consistently supports the sovereignty and integrity of the Republic of Indonesia.
The bilateral relationship between the Republic of Indonesia and the Lao People's Democratic Republic (PDR) that began in 1957 has remained solid. Laos consistently supports the sovereignty and integrity of the Republic of Indonesia.
The country of Laos, also known as the Lao People's Democratic Republic (PDR), is known for the Pha That Luang stupa and the Luang Prabang temple. These two icons of Laos symbolize the grandeur of the country.
Interestingly, Pha That Luang serves not only as a symbol of Laos but also as a destination for tourism. It is not only a place of worship for Buddhists but also a premier tourist attraction in Laos. The main attraction of Pha That Luang is its large stupa covered in gold, reportedly weighing up to 500 kilograms.
During the 43rd ASEAN Summit in Jakarta on 7 September 2023, the government of Laos received the ASEAN Chairmanship from Indonesia. The country will hold the Chairmanship of the Association of Southeast Asian Nations for the third time, previously in 2004 and 2016 and now in 2024.
"I appreciate Indonesia's dedication and efforts in formulating priority programs for ASEAN-BAC to lead us toward inclusive sustainable development," said Prime Minister Sonexay Siphandone of Laos during his speech at the handover of the ASEAN-BAC Chairmanship from the Indonesian Chamber of Commerce and Industry (Kadin Indonesia) to the Laotian Chamber of Commerce and Industry (Kadin Laos) on Monday, 4 September 2023.
According to PM Sonexay, trade and investment cooperation are among the effective ways for the ASEAN region to continue its economic recovery and growth. "As the future leader of ASEAN and ASEAN-BAC, Laos has the position and dedication to continue our common goal of making ASEAN the epicenter of global growth," said PM Sonexay.
In the past decade, the Land of a Thousand Elephants has experienced the fastest economic growth among ASEAN countries. From 2012 to 2021, Laos achieved an average annual growth rate based on its Gross Domestic Product (GDP) of 6.3%. This figure is the highest among ASEAN countries, which had an average of 4.1%.
Lao PDR outperformed Cambodia with an average of 5.7%, followed by Vietnam in third place with an average of 5.6%. Myanmar ranked fourth with an average of 5.4%. Meanwhile, Indonesia ranked sixth with an average of 4.4% during the 2012-2021 period.
Tourism is the key to Laos' rapid economic growth. Initially, the Lao government was closed to other countries. However, starting in the 1990s, they began to open up. As quoted from the Statistical Report on Tourism in Laos 2020, tourism is one of the sectors in the six socio-economic development priorities of the Lao Government's programme for the period 2021-2025.
Since the government of Laos reopened its doors to foreign tourists and the China-Laos Railway began operating, people from other countries have been flocking to Laos. The railway is a popular means of travel, passing through the provinces of Luang Prabang and Oudomxay, which have several attractive destinations for tourists, including adventure activities.
The China-Laos Railway route serves as important tourism infrastructure. Laotian authorities estimate that around 368,000 Chinese tourists will visit Laos in 2023, a 21% increase from the previous year.
This is evident from the surge in the number of tourists in the first six months of 2023, with more than 1.6 million foreign tourists visiting Laos. Data from the Department of Tourism Marketing at the Ministry of Information, Culture, and Tourism of Laos in July showed that the highest number of visitors came from Thailand with 668,595, followed by 398,937 from Vietnam and 317,604 from China.
The number of visitors has increased significantly compared to the first six months of 2022 when only 42,197 foreigners entered Laos with tourist visas.
Indonesia-Laos Relations
The bilateral relationship between the Republic of Indonesia and the Lao People's Democratic Republic (PDR), which began in 1957, is quite solid. Laos consistently supports the sovereignty and integrity of the Republic of Indonesia. The closeness of the relationship between the two countries can be seen from the increased frequency of high-level visits between the two nations and mutual support for each other's positions and nominations in various international forums.
When Laos served as the Chair of ASEAN in 2016, the Indonesian government provided US$1 million in assistance to support Laos's chairmanship. The strong friendship between the two countries was demonstrated by the installation of the World Peace Gong on 22 November 2008, at the Patuxai (Victory Gate) monument area, which is the main landmark of Vientiane. The ceremony was attended by senior government officials, parliamentary leaders, the diplomatic corps, and the wider community and was presided over by Laos' then-Vice President Bounnhang Vorachith.
Meanwhile, in the post-Covid-19 pandemic era, it is recorded that Indonesia's trade volume with Laos in 2022 reached US$194.2 million. This figure increased by 326% compared to 2021, when it was only US$45.5 million.
On the other hand, Indonesia's exports to Laos in 2022 amounted to US$26.6 million. This value increased by 251% compared to the value in 2021, which was only US$7.6 million.
Indonesia's export commodities to Laos include motor vehicle parts and heavy machinery, cars, electronics, ready-made garments and accessories, snacks, coffee and tea concentrates, cotton, processed paper and tobacco, coal, pharmaceutical products, and agricultural machinery.
The value of Indonesia's imports from Laos in 2022 amounted to US$167.6 million. This value increased by 341.4% compared to the value in 2021, which was only US$38 million. The imported commodities from Laos to Indonesia include potassium (raw material for fertilizers), raw tobacco, gold, and calcium aluminum.
Although the trade value between Indonesia and Laos is still in deficit, and Laos experienced double-digit inflation in January 2023, their potential in tourism and agriculture could be the driving force for future growth. Therefore, the momentum of the ASEAN Chairmanship in 2024 can be an opportunity to boost the growth of Laos and the region as a whole. It's time for Lao PDR to showcase its potential on the global stage.
Translator: Irvina Falah
