Rising Cambodia-Laos trade spurs economy

(The Phnom Penh Post/ANN) -- The private sector is optimistic about the potential growth in trade, investment and tourism between Cambodia and Laos, following a pledge by both countries’ leaders to enhance economic and tourism relations and the resumption of direct flights between Vientiane and Phnom Penh by national flag carrier Lao Airlines.

Prime Minister Hun Manet (left) and his Lao counterpart Sonexay Siphandone held a joint press conference about bilateral ties in Vientiane, Laos.

Prime Minister Hun Manet recently visited Laos to strengthen bilateral ties and cooperation, in line with their comprehensive strategic partnership.
Both leaders expressed their commitment to advancing bilateral relations across various sectors, with several agreements signed, during their March 25 joint press conference.
“We exchanged experiences on an instrument for border demarcation, signed in February 2023. Cambodia is confident that both sides will effectively implement the treaty soon,” Manet stated.
He noted that the demarcations would be based on mutual consent, international law and best practices.
“I highlighted Cambodia’s full support for Laos as the rotating chair of ASEAN in 2024, and for its role as the ASEAN chair’s Special Envoy for Myanmar. In this context, we pledge to provide US$1 million to our Lao friends to support the successful hosting of the ASEAN Summit and related meetings,” added the premier.
Lim Heng, vice-president of the Cambodia Chamber of Commerce, told The Post on March 26 that although Cambodia-Laos trade relations remain limited, the leaders’ commitment could create new momentum and build confidence in the private sector.
“The direct flights between Vientiane and Phnom Penh will enhance connectivity and attract more tourists, businesspeople and investors, making visits and exchanges for investment or trade exhibitions much easier,” he said.
On March 19, Lao Airlines landed at Phnom Penh International Airport (PNH) with 116 passengers. The airline now operates three flights a week, on Tuesdays, Thursdays and Saturdays.
Thourn Sinan, chairman of the Pacific Asia Travel Association (PATA) Cambodia chapter, observed that the resumption of airline services signals positive growth for the tourism industry, which is recovering from the Covid-19 crisis.
“Cambodia has historically attracted many tourists from the region, so the reintroduction of Lao Airlines reflects the increasing demand for flights between the two countries,” he commented.
According to the Kingdom’s State Secretariat for Civil Aviation (SSCA), Laos was Cambodia’s fourth-largest source of foreign tourists in 2023, when the number of Lao visitors exceeded 370,000, a 302 percent increase.
Heng noted that both public and private sectors are actively working to enhance cross-border trade, focusing on provinces along the frontier: Preah Vihear, Stung Treng and Ratanakkiri in Cambodia and Champasak and Attapeu in Laos.
He anticipates a boost in two-way trade, supported by at least one planned railway link and other recent commitments by the two governments.
He also highlighted the advantages stemming from their ASEAN and Regional Comprehensive Economic Partnership (RCEP) membership.
Heng pointed out the potential for Laos, a landlocked country, to transport goods via the proposed railway links to export through Cambodian seaports.
He mentioned that the two ASEAN neighbours trade substantial volumes of agricultural products.
He added that Cambodia is also a major purchaser of Lao electricity and that Cambodian entities have established a significant presence in the Lao financial sector.
Sthabandith Insisiengmay, Lao Deputy Minister of Planning and Investment, reported at the 13th Conference on Trade, Investment and Tourism Promotion for the Cambodia-Laos-Vietnam (CLV) Development Triangle held in Attapeu on February 27 that Laos had attracted more than US$4.3 billion in these sectors from Cambodia and Vietnam, according to the state-run Laos News Agency, known locally as Khaosan Pathet Lao (KPL).
In 2023, Cambodia and Vietnam were respectively the 16th and 3rd largest investors in Laos, with investments of US$118 million and US$4.2 billion, according to the Council for the Development of Cambodia (CDC).

By Times Reporters
 (Latest Update March 29, 2024)