Vientiane Times, 8 Sept 2012

Laos expects to see the value of its exports to Thailand take a big jump over the next few years as several hydropower plants have begun the sale of electricity to the neighbouring country.

According to information from the International Trade Policy Department, the export value of Lao products sold to Thailand from 2011 to 2015 will see a three-fold increase, with electricity as the main driver of growth.

The 1070MW Nam Theun 2 hydropower plant in Khammuan province has been exporting electricity to Thailand since 2010. Last year the 615MW Nam Ngum 2 plant also began electricity production and export, while four new dams are expected to be completed and start operations at the end of this year.

The 1800MW Hongsa lignite fired power plant is also under construction in Xayaboury province. The plant is scheduled to be completed and begin electricity exports to Thailand in 2015.

Thailand has also agreed to accept Lao sweetcom exports after having placed a temporary import ban on the product as part of efforts to protect domestic farmers.

Increasing the export of electricity, industrial products such as sugarcane and agricultural products like sweetcorn will enable Laos to increase the total export value of goods to Thailand by three times in 2015, in accordance with the bilateral trade agreement between the Lao and Thai governments, department officials said.

According to data from the import and export department, the export value of Lao products to Thailand reached US$749 million in 2010, a 61 percent increase compared to the previous year. The big increase is due to the sale of electricity from the Nam Theun 2 dam.

Over nine months in 2011, the export value of Lao products to Thailand reached US$870 million, a 65 percent increase over the same period the previous year.

Despite the rapid increase in exports to Thailand, Laos still faces a major trade deficit as imports continue to grow. Laos imported US$2.1 billion worth of goods from Thailand in 2010, a 30 percent increase compared to the previous year. Over nine months of 2011, the import value of Thai goods reached US$2 billion, a 26 percent increase compared to the same period in 2010.

Most of the goods imported from Thailand are fuel, vehicles, construction materials and electronic items.

Laos and Thailand have agreed to boost Thai investment here. From 2000 to 2009, Thailand was the largest investor in Laos with a total investment value of US$2.6 billion