Luang Namtha set to become international business centre

VIENTIANE (Vientiane Times/ANN) - The northern province of Luang Namtha will soon become a regional transport hub with investment in a dry port, thanks to its strategic location close to China – the world’s second biggest economy.

The Lao government has set aside a massive budget to develop and improve infrastructure in order to create better links with neighbouring countries.

Luang Namtha is a prime site for an international trade centre compared to other provinces in Laos after the north-south economic corridor via the 414-km railway crosses from China into Laos at the Boten border checkpoint in Luang Namtha province.

This route will spur socio-economic development in the province. The cost of the railway construction is about US$5.986 billion and is set for completion at the end of 2021. When the railway is operational, the journey from Vientiane to the Boten border crossing will be reduced from the present three days by road to less than three hours by train.

Construction of the Vientiane-Kunming railway began on December 2, 2015, when the Lao PDR celebrated its 40th anniversary. The railway is part of the Kunming-Singapore Railway Project, which connects Kunming with Singapore, passing through Laos, Thailand and Malaysia, Mr Bounsong Keomanivong, President of the Luang Namtha Chamber of Commerce and Industry (LCCI), told Vientiane Times during the first ever LCCI collaboration with Thai business operators last week.

Mr Bounsong gave an interview during an international trade fair titled Mini Thailand Week 2020, held in the provincial capital from February 5-9.

He said Luang Namtha would be part of the east-west economic corridor that runs from Myanmar to Vietnam and between Thailand and Vietnam, reducing travel time to just a few hours. This will be suitable for investment to provide services for travellers from these countries.

Road R3 has already been built from the Laos-China border to Thailand via Luang Namtha and Bokeo provinces. This route enables business operators to transport their goods from and to Thailand, Laos and China as a logistics hub in the region.

According to a strategic development plan for transportation and logistics in Laos, this was officially approved by the government in 2015.

The Lao PDR is a member of the United Nations Economic and Social Commission for Asia Pacific for Dry Ports, which sets aside nine locations that are assigned for international logistics parks in the country. They include Huayxai in Bokeo, Nateuy in Luang Namtha, Xay in Oudomxay, Luang Prabang province, Thanalaeng in Vientiane, Lak Xao in Borikhamxay, Thakhaek in Khammuan, Xeno in Savannakhet, and Vangtao in Champassak.

Mr Bounsong said Luang Namtha was a small province with a land area of 9,191 square kilometres, of which 85 percent is mountainous. It has five districts and a population of about 189,000 people, with 17 ethnic groups that have their own traditions and cultures. The province shares a border with China to the north, Myanmar to the west, Bokeo province to the south, and Oudomxay to the east.

Infrastructure has improved, including the airport, roads, electricity, water supply, schools, hospitals and hotels as well as public places, he added.

In 2019 the province’s economy grew by 8.8 percent and GDP per capita income was about US$1,700. The majority of local people are farmers who rear animals and grow sugarcane, rice, cassava and watermelons. The most popular plantation crop is rubber and the province has planted more than 36,000 hectares and produces more than 73,000 tonnes a year.

In 2019 more than 743,000 people visited Luang Namtha via Boten across the Lao-Chinese border, while more than 67,000 people from within Laos visited the province.

Luang Namtha is best known for its nature-based activities but also has plenty of cultural and heritage attractions that are easy to reach.

These include the Nam Ha Biodiversity Conservation Area, which stretches from the Chinese border through the middle of Luang Namtha province. It covers over 222,400 hectares of forest and about 24 percent of the province, with dozens of rivers and streams crisscrossing its rugged landscape. In 2003 the unexploited forests of the Nam Ha National Protected Area were designated an Asean Heritage Site and consist of more than 300 species of plants and animals.

The area offers many outdoor activities, including homestays, cycling, trekking and kayaking. Visitors can buy local handicrafts and taste organically farmed vegetables, fruit, and traditional dishes.

When talking about the Luang Namtha Chamber of Commerce and Industry, Mr Bounsong said the Chamber had been in existence for 13 years and now has 11 board members and one advisor, which has a three-year term.

The Chamber serves as a bridge between state organisations and businesses, and representatives of employers, business groups, associations and various enterprises that have been established and operate under Lao law in the province. There are four business associations under the LCCI, five business groups and 38 units, while about 20 units will soon become members of the Chamber.

Another role of the Chamber is to channel government views and comments on business operations; to mobilise, persuade, guide and unite businesspeople to harmonise and help each other promote trade, industry, agriculture, finance and services; and to protect the legitimate rights and benefits of businesses while ensuring that their operations are in compliance with Lao laws and regulations.

The LCCI has collaborated with Lao and international organisations to conduct training courses on business operations, including hotel management and services, as well as trade fairs. The LCCI has provided demand-based services to SMEs and tried to seek out markets for them.

Mr Bounsong, who has served two terms as president of the LCCI, formerly worked for a state enterprise in the province. After he retired he continued working and now has five business operations including a hotel, an ice-drinking water factory, and educational supplies shops in the province, with more than 70 employees.

His business was selected by provincial authorities as a model for the province in the categories of best services and model family.

He said it was very challenging to develop small and medium enterprises (SMEs) to become industrialised because they lacked funds. But the LCCI tried its best to cooperate with the Lao National Chamber of Commerce and Industry as well as foreign investors. In particular it encouraged Chinese businesses to invest in the province to make it one of the most developed cities in Laos and a logistics hub within the region.

Referring to Mini Thailand Week 2020, which was hosted by the LCCI in cooperation with Thai and Lao business operators, as the president of the LCCI he said the event brought together more than 40 companies from Thailand and Laos and comprised 61 booths.

Twenty-two Thai companies set up 24 booths, while 16 Thai businesses with dealerships in Laos occupied 27 booths. The event featured a wide range of Thai and Lao goods, including food and beverages, health and beauty products, and fashion, household items and local wisdom products made under the One District, One Product scheme in Luang Namtha province.

These handmade and forest products have been exported and sold on the Lanna markets of Xiang Mai in the north of Thailand. The trade fair was a good example for the LCCI as well as provincial trade officials, he concluded.