Lao Economy

Laos Learns From Switzerland’s Landlocked Development Model

Struggling to overcome its geological constraints, Laos, a landlocked and least developed country in Asia, has sought out lessons learnt by Switzerland, a landlocked but highly developed nation in Europe.

High-profile policy makers from the Lao government’s ministries and institutes came together at a one-day meeting held in Vientiane on Wednesday where Swiss experts shared the development strategies that have advanced Switzerland.

Speaking at the meeting, Senior Advisor of the Swiss Agency for Development and Cooperation (SDC) for the Mekong Region, Mr Regis Gerard Avanthay, said physical infrastructure development to connect with its neighbours has transformed Switzerland from a landlocked into a land-linked nation. However, he acknowledged that infrastructure development requires huge investment.

Mr Avanthay, the main speaker at the meeting, added that Switzerland has made use of the potential of the markets offered by its giant neighbours Germany and France.

To maximise this market potential, Swiss manufacturers have attached great attention to adding value to products, and Mr Avanthay gave cheese as an example.

He said Laos shared similarities with Switzerland – not only the status of being landlocked – but also the potential of the markets of giant neighbours, citing China as the world’s second and Asia’s largest economy with a market of about 1.4 billion people. Vietnam also offers huge market potential for Laos.

Given that tourism has been an integral part of the economy, Mr Avanthay recommended that Laos find ways to attract more tourists from its giant neighbours, especially China – a country that is producing a rapidly growing number of middle class and outbound tourists.

“How do you want to attract middle class tourists from China, Thailand and Vietnam,” he asked the meeting. He suggested that young people in Laos learn Chinese and noted that Laos is becoming increasingly popular with Chinese tourists.

The SDC advisor also recommended that Laos develop its small and medium enterprises and that businesses add value to the goods they produce.

To boost local economies and production, he stressed the need to ensure that financial services are available locally by setting up such services so that households and SMEs can access financing for production purposes. In addition, villagers can use them to deposit their savings securely.

In the field of education, Mr Avanthay touched on the need to develop strong vocational education, with training focusing on the skills needed for enterprises to develop so they can produce substitutes for imports and create exports.

In the political system, he acknowledged the importance of decentralisation, which empowers local authorities to contribute to decision making and implement various policies.

In the area of monetary policy, he emphasised the need to maintain a stable exchange rate.

Presiding over the meeting, Deputy Prime Minister Somsavat Lengsavad, who is in charge of economic affairs, specifically production and goods circulation, thanked Mr Avanthay for sharing his views.

The meeting came as Laos is drafting its 8th five-year National Socio-economic Development Plan for 2016-2020, the 10-year national development strategy for 2016-2025, and a vision for national development.

Mr Somsavat said Laos is keen to learn lessons from Switzerland as that country, although landlocked, is highly developed and its people enjoy a high per capita GDP.

According to World Bank 2013 statistics, Switzerland’s GDP per capita was US$80,477, while in Laos it was US$1,646.

Switzerland has a much smaller land area of 41,285 square kilometres but its population is larger at about 8 million, while Laos is 236,800 square kilometres in size and has a population of 6.5 million.

Regional Director of the SDC Office in the Mekong Region, Ms Ruth Huber, and other Swiss experts also attended the meeting.

Source: Vientiane Times