Vietnam Given Capital Concession

Laos awards Vietnam an economic zone in the capital, weeks after granting one to China.
2012-01-09
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An advertisement displays Vietnamese investment projects in Vientiane, March 16, 2011.
An advertisement displays Vietnamese investment projects in Vientiane, March 16, 2011.
AFP

Vietnam has signed an agreement to open its first specific economic zone in Laos as Hanoi competes for influence with giant neighbor China in the tiny Southeast Asian economy.

Vietnam is the largest investor in resource-starved Laos, which suffers from high rates of poverty and a lack of viable infrastructure. But China is fast catching up with a variety of investments, including casinos, as Vientiane moves rapidly to draw investment from its neighbors.

The agreement, which was signed Saturday by Lao Minister of Planning and Investment Somdy Douangdy and Chief Executive Officer Le Van Kiem of the Long Thanh Golf Investment and Trade Joint Stock Company, which is the project developer, will turn a Vietnamese-backed Vientiane golf course and real estate project into an exclusive economic zone.

The signing ceremony was also attended by Vietnamese Deputy Prime Minister Nguyen Xuan Phuc, who was visiting Laos to attend a bilateral meeting on economic, cultural, and technological cooperation.

Lao Deputy Prime Minister and Foreign Minister Thoonglun Sisoulith said that the specific economic zone would become “a symbol of investment cooperation” between Laos and Vietnam, thanking Kiem for the investment as well as his donations to support a number of charitable activities in Laos.

Some residents of Dongkhamxang village near the Long Thanh specific economic zone had complained about the compensation they were offered when Vietnamese developers were granted a concession to construct the zone’s golf course two years ago.

To date, Vietnam has implemented 424 investment projects in Laos worth a combined U.S. $3.57 billion.

The two countries pledged to increase two-way trade to U.S. $1 billion this year and to U.S. $2 billion by 2015.

Courting investment

The decision to establish the Long Thanh economic zone follows an earlier concession on the outskirts of Vientiane granted to Chinese developers two weeks ago.

Under the earlier agreement Wan Feng Shanghai real estate company will invest 12 trillion kip (U.S. $1.5 billion) in the development of a tourism and cultural center in a 365-hectare (900-acre) portion of the That Luang Marsh area—a move that triggered some resentment amongst residents who said they were given no voice in the decision-making process.

But the Lao government has no plans to stop courting investment from its neighbors, according to Kheungkham Keonouchanh, director of the planning and assessment department in the Secretariat of Lao National Committee.

“The government has [recently] approved the development of five special and specific economic zones in the country,” he told RFA in an interview.

“Three of them are in Vientiane—namely the That Luang Marsh specific economic zone, the Dongphosy specific economic zone, and the Golf Long Thanh specific economic zone.”

The remaining two are located near the border with Thailand in the vicinity of the first Lao-Thai Friendship Bridge, he said.

According to a report from the National Committee for Special and Specific Economic Zone Management Secretariat Office, the Lao government has listed 41 areas as special and specific economic zones, of which 25 will be built over the next 10 years.

The army has forced hundreds of Laotians off of their land to make room for foreign investment in specific economic zones.

Reported by RFA’s Lao service. Translated by Max Avary. Written in English by Joshua Lipes.

CH. 1: MANDARIN | CANTONESE

CH. 2: VIETNAMESE | BURMESE | KOREAN

CH. 3: KHMER | LAO | UYGHUR

CH. 4: TIBETAN

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