Mekong Monitor: Vietnam remains Laos’ third-largest investor
Photo credit: Cambodia Ministry of Tourism
TRADE, ECONOMY, AND INVESTMENT
Vietnam remains Laos’ third-largest investor
(9 December 2019) Vietnam remains Laos’ third biggest investor with investments totalling US$4.22 billion in 413 projects to date, said Vietnamese Prime Minister Nguyen Xuan Phuc. Furthermore, Vietnam will purchase 5,000 MW of electricity from Laos from now till 2030, in addition to providing US$30.4 million in 2019 and US$139.76 million in non-refundable aid for the 2016-2020 period for infrastructure and human capital development. Trade between Vietnam and Laos reached US$940 million from January to October 2019 and is expected to reach US$1.2 billion by year-end (an increase of 12.6% y-o-y).
Vietnam to import additional 200 MW of electricity from Laos in 2020
(9 December 2019) Vietnam will procure another 200 MW of electricity from Laos in 2020 on top of the planned procurement of 1,000 MW as the government looks to foreign sources to meet its surging energy needs. According to the Vietnamese government, the country will be short of 3.7 billion kWh of electricity in 2021 and 15 billion kWh in 2023. As such, the country is looking to meet this shortage in the near term by importing more electricity from Laos and expediting work on major local power projects.
Cambodia-Vietnam forum discusses plans for a cross-border SEZ
(8 December 2019) The governments of Vietnam and Cambodia have approved plans to develop a special economic zone (SEZ) along the countries’ shared border, said Cambodia Chamber of Commerce vice head Lim Heng. According to him, the plan is for the SEZ to be located partly in Cambodia’s Kratie province and partly in Vietnam’s Binh Phuoc province. However, if the countries find it too difficult to reconcile their respective investment laws for the project, they may instead set up twin SEZs on each side of the border. It has been noted that Cambodia may benefit from access to Vietnam’s existing free trade agreement with the US.
Thai investors foresee delays in Vietnamese petrochemical project
(5 December 2019) Two Thai investors, Vina SCG Chemicals Company Limited (VSCG) and Thai Plastic & Chemicals Public Company Limited (TPC), have submitted a request to the Vietnamese government to push back the commercial launch date of the Long Son Petrochemical Project by three years to December 2022 due to land acquisition delays. According to local media, the investors also hope to increase the project capital by 27% to US$5.15 billion to increase the project’s “competitiveness” and “economic efficiency” with new technologies. The project is expected to ultimately generate US$115 million in annual revenue for the government for 30 years.
Thailand’s Big C supermarket opens first Cambodian outlet
(6 December 2019) Thailand’s Big C supermarket chain opened its first branch in Cambodia this week, with plans to expand to other parts of the country in the near future. The new outlet, which costs around US$6.8 million to build, is located in Poipet town. Poipet town is located on the Cambodia-Thailand border and is known as a key trade hub that hosts the countries’ main border crossing. Big C is expected to tap into Poipet’s population of 200,000 people to hire 1,200 people to operate the new branch.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.