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Monday, July 15, 2024

Laos, Russia Bilateral Trade Sees Hope for Growth Despite Current Dip

This Week

In the complex world of diplomacy, Laos and Russia’s strong diplomatic ties contrast with their modest economic relationship.

The Lao-Russia bilateral trade has taken a hit, declining notably since Russia’s invasion of Ukraine in early 2022. This downturn raises concerns about the durability of economic connections amid global political upheaval.

According to Russia Briefing, trade between the two nations amounted to USD 312,000 in January 2023, a steep 83.2 percent from the same period last year. Imports from Russia to Laos amounted to just USD 118,000, while exports to Russia reached USD 194,000, an 88 percent drop from January 2022.

The current Russia-Ukraine war has led to a decline in bilateral trade due to sanctions impacting Russia’s economy. This has compelled Russia to shift focus to larger markets and reconfigure supply chains toward Asia.

However, the 2023/24 Trade and Investment Dynamics report does provide some optimistic data for an increase in trade.

As the Laos-China railway becomes a regional reality and trade flourishes between Russia and China, there’s a shared belief that accessing Russian and Lao markets will become more seamless. This is anticipated to herald an upward trend in bilateral trade between the two nations.

Laos’ imports from Russia mainly consist of wood, pulp and paper products, machinery equipment, vehicles, and chemical industry products. Whereas exports mostly consist of textiles, food, and agricultural raw materials.

“We are cooperating in many areas, including the economy, tourism, and human capital development, plus both countries share information and expertise gained in many other areas of mutual interest,” said Vice President Pany Yathotou during a meeting with Russian President Vladimir Putin at the Far Eastern Economic Forum in early September.

Laos first established diplomatic relations with the Soviet Union on 7 October, 1960.

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