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Working Toward the Development of the Mekong Region
Laos

March 2009

1. Politics

Japan and the Lao People's Democratic Republic established diplomatic relations in March 1955. The relationship between the two countries is friendly, with no major concerns. In recent years there has been an active exchange of high-level VIP visits; in May 2008, Mr. Choummaly Sayasone, President of the Lao People's Democratic Republic and Secretary General of the Laos People's Revolutionary Party, paid a visit to Japan, and in January 2009 Minister for Foreign Affairs Hirofumi Nakasone visited Laos. Both countries are working to take advantage of such opportunities to further promote friendly bilateral relations through the "two wheels" of economic cooperation and promotion of investment.

From summer 2006 to summer 2009, Laos is serving as the country coordinator with Japan in ASEAN, and the two countries are working in close cooperation. Furthermore, Laos consistently supported Japan's bid for permanent membership on the United Nations Security Council.

This year is the Mekong-Japan Exchange Year 2009, and a variety of events are planned between Japan and the five countries of the Mekong region, including Laos. In 2010, which marks the 55th anniversary of diplomatic relations between the two countries, a further expansion of relations is expected in all fields and at all levels.

2. Economy

Japan is Laos' fifth-largest investor (cumulative total for 2000 to 2008; authorization basis) and its sixth-largest trade partner (October 2006 to September 2007). There has been progress on creating conditions to promote investment in Laos, notably the entry into force of the Agreement between Japan and the Lao People's Democratic Republic for the Liberalisation, Promotion and Protection of Investment in August 2008, and the Laotian Action Plan for improving the business environment announced at the Japan-Lao Public and Private Sectors Joint Dialogues in December of the same year.

The number of Japanese tourists traveling to Laos is approximately 30,000 people annually. Since January 2007 the Government of Laos has implemented a short-term visa waiver for Japanese nationals holding a regular passport, leading to a 30% increase in the number of tourists year on year.

(1) Trade with Japan (October 2006 to September 2007)

A. Trade Volume
Exports: 3.37 million dollars
Imports: 15.14 million dollars

B. Principal Products
Exports: Wood products, handcrafted goods, industrial products
Imports: Industrial products, construction equipment, raw materials

(2) Direct Investment from Japan

In the past three years, investment from Japan amounted to approximately 410 million dollars. Major investment areas have been the apparel industry, machine assembly factories, and agriculture and forestry. Recently, there has also been an increasing focus on hydroelectric power generation and the mining industry. As of March 2009, approximately 50 Japanese companies were registered in Laos.

3. Economic Cooperation

Since fiscal 1991, Japan has been Laos's top donor of bilateral assistance. Japan's basic policy toward assistance to Laos has been to support self-help efforts of Laos for the reduction of poverty and for voluntary, independent, and sustainable growth with a view to integration in the global and regional economies.

Japan's Assistance (total through fiscal 2007）
(1) Yen loans: 17.43 billion yen (500 million yen in fiscal 2007)
(2) Grant aid: 115.694 million yen (5.179 billion yen in fiscal 2007)
(3) Technical cooperation: 46.644 billion yen (2.165 billion yen in fiscal 2007)

4. Culture

Japan has provided cultural grant aid to Laos since 1976 to preserve the traditional culture of Laos and support cultural exchange with Japan. In December 2008, construction of the Lao-Japan Budo Centre began. This center is expected to be put to use in the Southeast Asian Games, which will take place in Laos in December 2009.

In the latter half of the 1960s, Japan began accepting students from Laos through Japanese government scholarships. The program was temporarily halted in 1975 due to the revolution in the country, but it was resumed in 1986 when reform and liberalization began. Now, over 50 students from Laos come to Japan to study each year (59 in 2007). The Japan Alumni Association of Laos (JAOL) was established in 2003 and conducts exchange activities with Japan.

When Prime Minister Bouasone visited Japan in May 2007, the Government of Japan announced a plan to invite 1,000 Laotian young people to Japan over five years. Through initiatives such as the Japan-East Asia Network of Exchange for Students and Youths (JENESYS) program, over 250 young people from Laos visited Japan in 2008.

5. Japanese Nationals in Laos

453 (as of October 2007）

6. Laotian Nationals in Japan

2,478 (as of December 2006)

7. Bilateral Treaties/Agreements

  • Treaty of Peace with Japan (came into force June 20, 1952)
  • Waiver of Claims for Reparations (March 11, 1957)
  • Japan-Laos Agreement on Economic and Technical Cooperation (came into force January 23, 1959)
  • Agreement on Technical Cooperation between the Government of Japan and the Government of the Lao People's Democratic Republic (came into force December 12, 2003)
  • Agreement between Japan and the Lao People's Democratic Republic for the Liberalisation, Promotion and Protection of Investment (came into force August 3, 2008)
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