11 Mar, 2024

Lao Companies Slow to Adapt to Wage Increases

Several companies across Laos have shown reluctance to comply with government initiatives to raise the minimum wage.Despite the government’s approval of a minimum wage increase in 2023, it has proven insufficient to counteract the escalating prices of food and consumer goods.In collaboration with the Lao Federation of Trade Unions, senior officials from the Ministry of Labor and Social Welfare recently conducted visits to companies in Vientiane to gather direct information. Shockingly, only 10 percent of all companies had adjusted their minimum wage in line with decisions made at the trilateral meeting, as reported by Lao state media.Officials emphasized that wage hikes negatively impacted businesses, potentially leading to workforce reductions. Despite numerous job vacancies, few individuals are willing to accept positions at low pay rates.The high cost of living in Laos has widened the significant gap between the minimum wage and workers’ basic needs. Consequently, in the quest for higher wages, Lao workers are seeking job opportunities abroad, particularly in countries such as South Korea and Thailand.In Thailand, unlike in Laos, employers actively seek skilled workers and offer competitive wages, exacerbating the worker shortage dilemma faced by companies in Laos.Additionally, the lack of accurate data in Laos has contributed to issues such as informal recruitment processes and insufficient employment protection, with the absence of job market indicators complicating efforts to gauge employment opportunities and unemployment rates.To address the issue, the Lao Employment Business Association is working to empower local workers by educating them about their rights and providing platforms for negotiation with employers and authorities. Through representing recognized employment agencies in Laos, the association aims to protect workers from exploitation, particularly in the context of both Laos and overseas employment opportunities.Despite efforts, Laos still faces challenges such as the lack of data on labor issues and limited negotiation capacity with relevant sectors. Further effort is also needed to promote better industry practices and facilitate access to legal services for workers.

06 Mar, 2024

Electricity Exports Propel Laos to Trade Surplus, Marking Record Growth

Laos has recorded a significant surge in its annual trade, reaching a total value of over USD 15.5 billion in 2023. The figures, released by the Lao Trade Portal, highlight a 3.5 percent increase compared to the previous year. According to the data, Laos witnessed a notable rise in both export and import activities throughout 2023. The total export value amounted to approximately USD 8 billion, marking a 3.5 percent increase over 2022, while total imports surged over USD 7 billion, reflecting a 5 percent increase compared to the previous year.The top five export categories in 2023 were dominated by electricity, which accounted for USD 2.382 billion, followed by gold bullion at USD 703 million, paper and paper products at USD 467 million, gold ore at USD 425 million, and iron ore at USD 411 million. These exports signify Laos’ diverse range of products contributing to its trade portfolio.On the import front, diesel emerged as the top imported commodity, valued at USD 952 million, followed by mechanical equipment at USD 606 million, land vehicles at USD 580 million, iron and steel products at USD 451 million, and gasoline at USD 428 million. The import spectrum showcases Laos’ reliance on various goods to fuel its domestic economy and development initiatives.The country’s trade surplus surpassed USD 1 billion for the annual trade, a positive indicator amidst global economic fluctuations. Despite reporting a ten-month trade deficit in 2023, the inclusion of electricity trade at the end of the year, a significant export product, tilted the balance in Laos’ favor.Electricity exports have notably propelled Laos’ trade surplus, emphasizing the country’s increasing role in providing sustainable energy options to the region. This highlights a growing demand for renewable energy sources in Southeast Asia.In terms of trade partners, Thailand emerged as the leading export destination with USD 2.8 billion, closely followed by China, Vietnam, Australia, and Cambodia. Thailand has also claimed the top spot as Laos’ primary importing source, with USD 3.3 billion, followed by China, Vietnam, the United States, and Japan.Looking ahead, China is poised to solidify its position as Laos’ leading trading partner. Reports from state media indicate that China has invested in 17 projects totaling nearly USD 1 billion since the beginning of the year, suggesting a deepening economic relationship between the two nations.