Laos is the only landlocked country in Southeast Asia, surrounded by China to the north, Vietnam to the east, Cambodia to the south, Thailand to the west and Myanmar to the northwest.
Laos has a diverse geography, with mountains, forests, and rivers, including the Mekong River, which plays a vital role in the country's ecosystem and economy. The capital city, Vientiane, is situated on the Mekong River and serves as the country's largest city and economic center. Being a landlocked country has several implications for Laos:
Economic Challenges
- Limited access to international trade: Laos relies on neighbouring countries for access to ports and international markets, increasing transportation costs and times.
- Dependence on neighbouring countries: Laos is heavily reliant on Thailand and Vietnam for trade and economic development.
Opportunities
- Hydropower potential: Laos has significant hydropower potential, which can be harnessed to generate electricity for domestic use and export.
- Tourism development: Laos's natural beauty, rich culture, and history make it an attractive destination for tourists.
- Agricultural development: Laos has fertile land and a favourable climate for agriculture, making it a potential hub for agricultural production and trade.
Strategic Location
- Connecting Southeast Asia and China: Laos's location makes it a strategic hub for trade and investment between Southeast Asia and China.
- Regional integration: Laos is a member of regional organizations, such as ASEAN, which aims to promote economic integration and cooperation among member states.
However, Laos’s 2024 ASEAN Chairmanship marked a significant milestone for the country, as it took on a leadership role in promoting regional integration and cooperation. This was the third time Laos held the chairmanship, following previous stints in 2004-2005 and 2016.
Key Focus Areas:
- Enhancing Connectivity and Resilience: Laos prioritized strengthening ASEAN’s connectivity and resilience, focusing on digital transformation, sustainable development, and the ASEAN Community Vision 2045.
- Regional Integration: The country aimed to promote regional integration through improved infrastructure, trade, and investment facilitation.
- Myanmar Crisis: Laos played a crucial role in addressing the Myanmar crisis, facilitating the country's participation in an ASEAN meeting, the first since the 2021 military coup.
Challenges and Opportunities:
- US-China Rivalry: Laos faced challenges in maintaining ASEAN centrality amidst the US-China rivalry, which could impact regional stability.
- South China Sea Disputes: The country's close ties with China presented challenges in managing regional tensions, particularly regarding the South China Sea disputes.
- Debt to China: Laos's significant debt to China, amounting to 122% of its GDP, constrained its effectiveness as ASEAN Chair.
Taking everything into account, being a landlocked country presents both challenges and opportunities for Laos. Its economic growth is driven by its natural resources, strategic location, economic development, and foreign investment.
However, the country must navigate challenges like debt and dependence on neighbouring countries to sustain its economic progress. The country is also working to develop its economy, infrastructure, and tourism industry to overcome the limitations of being landlocked.
Additionally, Laos’s 2024 ASEAN Chairmanship demonstrated its commitment to regional leadership and cooperation, despite facing various challenges and opportunities.
