Korean Wave in Laos: Trade and Investment
SME Development Specialist
Mekong Institute, Khon Kaen, Thailand
LAOS, the Land of Ample Opportunities and Success, is abundant in natural resources, including coal, hardwood timber, hydropower, gypsum, tin, gold and gemstones. It is the fifth lowest labour cost country in Asia with a daily minimum wage of 3USD$. These all play significant roles in inducing foreign investment into the country. This study uses information drawn from secondary sources aiming to review the situation and prospects for Korean trade and investment in Laos, and cooperation areas for trade and investment promotion between the two countries. Korea ranked fourth most important investment partner for Laos in 2010 after Thailand, Vietnam and China (The Ministry of Planning and Investment of Laos, 2010). From 1989-2012, Korea’s FDI inflow to Laos included 287 projects with a value of US$748 million. The Government of Laos (GoL) sees that the prosperity and welfare of Lao people can be enhanced through prosper trade facilitation and promotion policies to attract foreign businesses to boost the domestic market and increase exports. Korea has been targeted as a source of investments in Laos. The GoL has made efforts to enhance bilateral economic ties with Korea and extend larger cooperation with Korean institutions to increase Korean investment in the country. By July 2012, more than 18 Korean firms have opened in the capital Vientiane capital to seek business opportunities and expand their business operations. The Korean automobile industry is one of the success stories and it has 37% of the market share in Laos. Laos seeks the support of advanced technology and wishes to learn more the experience of Korea’s development to maximize an exploitation of resources and jointly conduct various trade promotion activities and industrial cooperation projects for sustainable economic growth.
This is the abstract for another of the papers to be delivered at the forthcoming International Workshop on Korean Trade and Investment in the Mekong Region to be held at SIU on November 1st and 2nd, 2013.
Announcing: Southiseng, Nittana and John Walsh, “Human Resource Management in the Telecommunications Sector of Laos,” International Journal of Research Studies in Management, Vol.2, No.2 (2013), doi: 10.5861/ijrsm.2013.235, available at: http://www.consortiacademia.org/index.php/ijrsm/issue/current.
This paper presents quantitative outcomes regarding human resource management (HRM) in telecom companies in Laos. A total of 73 valid responses from managers and 396 from employees were obtained as part of a self-completing personally distributed survey, using questionnaires. Analysis of the results showed that the management team seemed not to have a great deal of impact in terms of strengthening the companies’ human capital development (HCD). Employees felt that the more the HRM practices were put into practice, the more that employees’ performance improvement, perceptual development and satisfaction were improved. Factor analysis grouped HRM practices into three categories: (1) compensation management and information exchange, (2) training and development (T&D) management and (3) needs assessment. It is apparent that HRM in the telecom industry of Laos is not yet properly executed and executives involved in it had low attention in managing and developing their human resource. There was unclear understanding of how to execute HRM effectively, as a result, the variables of the compensation management and information exchange had been fallen into the same aspect. With such findings, the recommendations have been proposed to the telecom companies of Laos to firstly gain higher awareness from the top management, to have precise HRM policies and adequate supports, and to include the HRM, HRD and T&D in either formal or informal curricular of the education system in Laos.
Keywords: human resource development, Laos, telecoms
I will be attending a workshop at City University in Hong Kong in a couple of weeks and the title of the paper (written jointly with Dr. Nittana Southiseng) is Recalibrating Asymmetric Relationships through Economic and Business Development: The Case of Lao PDR. We adopted a neo-Gramscian perspective for this paper, which had the advantage of bringing into focus those issues which we considered important to analyse and avoids the rigidity of the structural dependency and world systems approaches.
The full paper was submitted the other day and the organisers consider it promising for publication in African and Asian Studies in due course. Given the speed with which the peer reviewing, revising and publishing process takes place, I imagine it should be due some time in 2013.
In the meantime, here is the abstract:
Poor and land-locked, communist-ruled Laos began opening its economy to capitalist methods at the end of the 1980s. With a sparse population and very limited technical capacity, the country’s principal economic activities involve foreign investors building dams for hydroelectricity or mining for minerals that are destined for export. The local economy is dominated by small and uncoordinated enterprises operating in mostly undeveloped and unsophisticated markets. Laos is in the process of becoming more integrated into the Mekong Region by virtue of the building of parts of the Asian Highway Network across its territory and some opportunities arising from the planned single market of the ASEAN Economic Community of 2015. The vision is for Laos to become a bridge for economic development. However, it is not clear that the mere presence of infrastructure will be sufficient for Laotian companies and institutions to receive benefits on a substantial and sustainable basis. Principal difficulties are (i) underdeveloped public human resource capacities and institutional support systems, (ii) lack of industry clusters and facilities that can provide SMEs access to regional and global value chains, and (iii) limited endowment of resources, logistics, finance and limited capabilities to meet market demand. This paper examines the conjunction between ability of Lao actors to participate in emergent economic activities and the country’s ability at government level to articulate its own developmental priorities and attempt to achieve these through negotiation with other states. This requires seeking to recalibrate hugely asymmetric relationships with China, Japan and Thailand, among others.
Announcing the publication of:
José Edgardo Gomez, Jr., Nittana Southiseng, John Walsh and Samuel Sapuay, “Reaching across the Mekong: Local Socioeconomic and Gender Effects of Lao-Thai Crossborder Linkages,” Journal of Current Southeast Asian Affairs, Vol.30, No.3 (2011), pp.3-25, available at: http://hup.sub.uni-hamburg.de/giga/jsaa/article/view/473/471.
Following trade agreements between ASEAN states, the expansion of cross-border roads and bridges between Laos and Thailand has linked local communities and distant markets in increasingly diverse ways. Although the planned impacts of such integration are expected to be beneficial, effects on the ground vary, as witnessed at a sleepy outpost in Xayabury and a more vibrant crossing in Savannakhet. This paper discusses first the physical setting of such border facilities, and then explores their actual local effects on traders’ activities, highlighting changes in gender roles and perceptions of entrepreneurial competition participated in by women in the two research sites.
Keywords: Laos, Thailand, Greater Mekong Subregion, GMS, frontier trade, female entrepreneurs, gender, regional development
Currently and for the next decade or so, Laos is going to be a market which requires either a long-term perspective or the willingness to operate on a small scale. Neither of these factors would appear to be hugely compelling for an ambitious entrepreneur but, in the Mekong Region, the majority of businesses are organized and operated at the micro level. Operating at a small scale, in fact, can be an unavoidable but also reasonably attractive proposition for many people.
Online business programs are an option for those who want to learn more about business.
Read the full article here.
Laos remains one of the poorest countries in Asia: it has been handicapped in the attempt to achieve economic development by the low density of population, the very difficult terrain (much of which is mountainous and forested) and by the land-locked nature of the country – it has become well-known that lack of access to a good seaport has become a serious negative effect for a country that wants to achieve development.
Read the full article here.
Announcing: Southiseng, Nittana and John Walsh, “Informal Networks as Alternatives of Life Development of Returned Migrants,” International Journal of Behavioral Science, Vol.6, No.1 (September, 2011), pp.1-11, available at: http://bsris.swu.ac.th/journal/i6/1Nittana_1-11.pdf.
Labour migration is a vital part of modern economies and the management and integration of migrants into the labour force of great importance in fashioning its ability to adapt to and take advantage of emergent opportunities. This study applied a qualitative approach to exploring how returned migrants re-integrated into society and their informal networks with a view to improving the quality of life of the people concerned. In-depth interviews and direct observation were used in combination with the content analysis of secondary data. Findings were mainly based upon evidence from the interviews. Both skilled and unskilled returnees have regularly turned to informal networks for assistance on their own account, partly because official programs could be disorganized and lack resources. It has been found that most return migrants find themselves unemployed and have had to turn to access to their informal networks (parents, relatives, cousin and friends) to borrow money, get ideas and suggestions, locate further network connections so as to prepare to enter self-employment and personal investment in ventures such as grocery stores, beauty salons, food street vending and similar. Returnee management has been disappointing because of inadequate NGO involvement, lack of strategies to mobilize migrants’ knowledge and expertise, and lack of complete and up-to-date statistics, among other constraints. This has given rise to a new generation of cyclical migrants, who move back and forth across borders attempting to integrate their internally multiple identities and senses of loyalty and belonging.
Key Words: Return migrant, informal network, Laos
Announcing: Walsh, John and Nittana Southiseng, “Challenges of Economic Stress on Chinese Entrepreneurs and Their Families in Laos,” Journal of Social and Development Sciences, Vol.2, No.1 (July, 2011), pp.31-7, available at: http://www.ifrnd.org/JSDS/Vol%202/2(1)%20Jul%202011/5.pdf.
Abstract: Chinese are increasing in number in Laos as new inter-governmental agreements permit labour migration for infrastructure development. Entrepreneurs have been accompanying migrants and establishing their own businesses, alongside the long-standing businesses established over the years by ethnic Chinese in the country. Many industrial sectors are involved. Problems that Chinese entrepreneurs might face include language issues and discrimination, as well as lack of business infrastructure and support services. Additionally, Lao consumers are primarily motivated by price alone and have little interest in exploring new brands or products. While these business management related issues are clear, what is not clear is the impact that conducting business on such a basis has on additional family members, who are also commonly employed within the business. Key informants were Chinese entrepreneurs and their family members in the capital city of Vientiane and they were interviewed personally with a view to understanding what stresses there may be on family members doing business in an environment which is not entirely friendly or welcoming, especially under conditions of global economic crisis. Competition is intensifying as increasing numbers of Thai and Vietnamese entrepreneurs are seeking to establish a foothold in the Lao market. Many Chinese entrepreneurs have, as a result of these changing conditions, been forced to offer better deals for customers, thereby restricting profits. This has had a follow-through effect on family members.
Keywords: Economic stress, Chinese entrepreneurs, Laos
‘Cowboy capitalism’ is a term given to the kind of capitalist system that takes place outside the control and supervision of the state. Without such control, there is no enforcement of property rights, no protection for consumers or workers and no need to pay formal taxes or duties.
Read the full article here.
Walsh, John and Nittana Southiseng, “Understanding and Strengthening the Health of Family Businesses in Laos,” Information Management and Business Review, Vol.2, No.1 (January, 2011), pp.12-8, available at: http://www.ifrnd.org/IMBR/2(1)%20Jan%202011/Understanding%20and%20strengthening_health%20of%20family%20businesses.pdf.
More than 90% are family-businesses and are concentrated in retail, handicrafts, and personal services sectors. More than half are female-owned and managed, although baseline information about business and family management are limited. This paper reports on qualitative research aimed at understanding family business practices, impact of education in family businesses in a range of activities in Laos. Most such businesses remain based at or very close to home, and along the main road with any growth managed by hiring additional family members. Firms were run on traditional lines, while the management decisions were generally taken by senior family members depending on their existing prejudices. Although family businesses in Laos are still largely disorganized, they play critical roles in creating job opportunities and boosting household income for local residents as well as helping family members to utilize their existing talents, time, and resources. In promoting this sector, the Government of Laos has significant roles in developing policies, establishing a relevant governing agency, and encouraging training and involvement from the private sectors and from key international organisations.
Business development, Entrepreneurial development, Family business, Laos, SMEs