Laos’ SEZs Surge with Major Investments, Fueling Economic Growth Amid Lingering Concerns for Worker Safety

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ThatLuang Lake Special Economic Zone Project in Vientiane. (Photo: ThatLuang SEZ)

Laos experienced a slight economic upswing in 2023 as approximately 178 companies funneled investments into Special Economic Zones (SEZs) across the country, generating over 3,600 job opportunities for both local and international workers.

The diverse spectrum of investors included 127 companies in the services sector, 18 in the industrial sector, 30 in trade, and three in agriculture. The combined investments reached a monetary value of USD 520 million, with a registration capital of USD 178 million.

The SEZs also witnessed substantial contributions from over 2,645 shops and enterprises, delivering annual revenues of up to LAK 174 billion (over USD 8 million) to the government budget. Notably, these businesses employed 3,644 workers, comprising 3,572 Lao workers and 72 foreign workers.

However, Sonepaseuth Dalavong, the Head of the Office of Special Economic Zones Promotion and Management (OSEZPM), acknowledged a recent decrease in the number of workers due to a spike in inflation. This economic challenge has prompted some laborers to seek employment opportunities in neighboring countries.

Over the past year, companies within SEZs have engaged in international trade activities, importing materials and machinery worth approximately USD 1.7 billion. Simultaneously, their exports reached a commendable USD 302 million.

While enterprises within SEZs played a role in the nation’s economic advancement, the country grappled with an increasing menace of online fraudulent activities. In late November 2023, authorities from Laos and China jointly apprehended 462 online fraud suspects in an operation conducted within the Golden Triangle SEZ and the Tonperng district in Bokeo province.

In another operation in September 2023, the Lao and Chinese police also detained 164 individuals involved in fraudulent activities across various areas of Laos. Among them, 77 were arrested in Vientiane Capital, 46 in the Golden Triangle SEZ in Bokeo Province, 22 in Vientiane Province, and 19 in Savannakhet Province.

Specifically, the Golden Triangle SEZ has long been under scrutiny from both Asian and Western nations, including the UK, US, and Canada, which are implementing sanctions against individuals and entities engaged in human trafficking and fraudulent activities in Laos, where individuals are assured high-paying jobs but end up experiencing torture or other forms of cruel, inhuman, or degrading treatment.

To address the issue, Sonepaseuth said that the OSEZPM has played a pivotal role in enhancing the regulatory framework by amending and creating decrees, agreements, and laws applicable to key SEZs such as the Golden Triangle SEZ and Boten SEZ.