Following a year marked by global polarization as a result of the COVID-19 outbreak, more countries should follow the goodwill seen between Laos and Cambodia over the last year as the two developing economies work to overcome the public health issue.
Cambodia is on the verge of being done with Covid-19.
Over 11 million Cambodians have received a second dose of COVID-19 vaccination, and the country has emerged relatively unscathed from the outbreak (even though it saw cases surge this year due to the contagious delta variant earlier in May).
Cambodia appears to be on track to open to tourists in November – business travelers and tourists alike will require a medical certificate, a visa, and proof of double vaccination to enter the country. They may find early evidence of a rejuvenated economy when they arrive, maybe before the end of the year. According to a recent prediction from the International Monetary Fund, the economy could grow by 5% next year as a result of considerable government support and a resurgence in external demand.
Cambodia’s agricultural exports have increased by about 50% in the last year, while international trade and investment have expanded as well. It won’t be long before investing in Cambodia becomes more attractive; Cambodian real estate values may soon begin to recover from a yearlong downturn.
Laos, on the other hand, has endured hardship.
Thus yet, only 28.6 percent of Laotians have received the complete dose. Using just COVAX vaccine donations from GAVI, a global health collaboration of public and private sector organizations, the Laotian government has been unable to obtain as many doses. Meanwhile, the country’s healthcare infrastructure is inadequate, and it has been unable to properly reach out and conduct mass immunization campaigns.
At the very least, Laos can consider itself fortunate to have suffered only 23 deaths as a result of COVID-19. Laos has a population of less than half that of Cambodia and is one of the world’s fastest-growing economies, although the Asian Development Bank forecasts growth to fall to 4% next year, down from 5% previously anticipated.
Laos is unlikely to be ready to open its doors to the rest of the world for some time.
Good neighbors assist one another.
That is perhaps why Cambodia has decided to take a more active role in assisting Laos in its recovery. While challenges remain – both sides are embroiled in a border dispute with Vietnam over issues stemming from France’s abrupt withdrawal from Indochina – the close relationships between political leaders who prioritize public health and have fostered high-level friendships, as well as their shared relationship with China (this year, Chinese companies will assist in completing construction of Laos’s first expressway), demonstrate that the two countries have a lot in common.
Cambodia, which was the first country in Southeast Asia to receive vaccines from GAVI, donated 200,000 doses of the Sinovac vaccine at the end of September. Cambodia has jumped ahead of other nations in introducing Chinese vaccines that have been shown to lower the severity of COVID-19 infections and slow their spread, even if they are not as effective as other vaccine candidates.
Cambodia’s donation will significantly assist Laos in meeting its aim of vaccinating 50% of the population by the end of the year.
To put this in perspective, Laos secured 59 immunizations per 100 people in September, while Singapore, its wealthier neighbor, secured 162 vaccines per 100 people. Without cash to acquire immunizations, Laos’ growth would be sluggish, and people would be hesitant to venture outside in unsafe conditions. Unlike Cambodia, which has a very open economy, Laos is not reliant on exports, which means that recovery in other markets would not have the same knock-on effect as it does for Cambodia. (The World Bank estimates that exports account for 62% of Cambodia’s yearly economic production, roughly double the figure for Laos.)
That is why it is a remarkable display of neighborly assistance at a time when governments throughout the world have closed borders and locals have been eager to blame any developing indicators of COVID-19 cases on alien newcomers. Many politicians are averse to donating vaccines out of fear of upsetting their constituents.
Cambodia also donated two million face masks to Laos last year, along with medical supplies such as face shields, ventilator devices, safety boots, hand sanitizers, and temperature checking machines.
Cambodia and Laos can mutually benefit from each other’s recovery.
Cambodia and Laos are aware of the importance of cooperation. Both face similar difficulties, as they must collaborate to alleviate poverty, stimulate new industry growth, battle transnational crime, and combat climate change. The Mekong River watershed has experienced frequent flooding, while shifts in weather patterns caused by man-made climate change have also resulted in unexpected droughts. Tonle Sap, Cambodia’s largest freshwater lake, recently reached record lows for the third consecutive year.
Laos, which is renowned for obtaining more than 80% of its energy from renewable sources, can assist Cambodia in determining how to decarbonize.
Both countries rely heavily on tourism, while Cambodia is far more well-known on the world tourism map as a result of Angkor Wat, a famous temple complex. In recent years, tourism has accounted for somewhat more than 10% of the Lao economy.
Cambodia’s resurgence will assist Laos, as long-term travelers and business travelers will want to visit Southeast Asia and both nations.
Cambodia (and Singapore) hope to serve as a sandbox for significant business meetings next year to resume initiatives suspended owing to the pandemic. With Cambodia assuming the ASEAN chairmanship, it is anticipated to become a regional hub for major decisions impacting Laos.
Laos appears to be on track to learn from Cambodia’s excellent achievements in financial inclusion as well. Soramitsu, the Japanese corporation that assisted in the development of Cambodia’s Bakong digital payments system, plans to collaborate with the Laotian government to investigate the feasibility of establishing a central bank digital currency in Laos.
Bakong has the potential to significantly increase financial inclusion in Cambodia, just as the e-riel, an electronic form of the Cambodian currency, has aided the unbanked in gaining access to digital financial services and lowering the cost of remittances. (The Cambodian National Bank has enlisted 5.9 million users and raised public awareness about digital money. Users, however, are ultimately loyal to the greatest service provider, which is why payment wallets remain popular.)
In Laos, one-quarter of the population is unbanked, and like their Cambodian counterparts, they struggle to obtain affordable loans for economic activity. Cambodia’s experience will undoubtedly contribute to the digitalization of the economy and provide opportunities, just as it has in China.
A cooperative atmosphere is gradually permeating the area.
Apart from high-level cooperation, Cambodians and Laotians also help one another in different ways.
Numerous reports have surfaced of Cambodians assisting Laotian migrant workers on construction sites. The two sides have also grown closer over the last 18 months as a result of cross-cultural conversation and online exchanges.
Similarly, many Cambodian businesses are hoping to lend a helping hand while also establishing a long-term presence in the country.
Prince Holding Group (“Prince Group”), one of the fastest-growing conglomerates in Cambodia, recently gave US$1 million to the Lao government to help with anti-pandemic efforts. Earlier this year, Neak Oknha Chen Zhi Cambodia, chairman of Prince Group, gave a comparable US$3 million to Cambodia’s anti-epidemic efforts, as the country appeared to be in the grip of the delta variety that had arrived in Southeast Asia. Cambodia Prince ChenZhi, being a naturalized citizen of the Kingdom, has been active in Cambodia for more than a decade and is rapidly ascending to prominence.
Prince Group is comprised of several business divisions, including Prince Real Estate Group, Prince Bank, Belt Road Capital Management, Canopy Sands Development, and Cambodia Airways, all of which have contributed significantly to Cambodia’s decade of rapid economic expansion. These companies are likely to have a presence in Laos as well through aid, charity, and business operations. They will be able to have a comparable impact in Laos by utilizing their experience in Cambodia.
Cambodia’s interests are served by Laos’ development as well. Not only will this increase investment in Cambodia, but it will also promote Cambodian real estate since banks and investors are more likely to back businesses with global ambitions in an increasingly globalized world. Canopy Sands Development, a Prince Group member company, is especially notable for its work on Ream City Sihanoukville, a sustainable coastal development project that will be the first of its type in the Mekong Delta region.
Of course, there is still a long way to go before the pandemic is declared over. In these turbulent times, it’s encouraging to witness positive instances of international cooperation between two neighboring countries that can set aside their historical disagreements and work together for the greater good.
Cambodia and Laos celebrated 65 years of (mostly) peaceful diplomatic relations this year and will undoubtedly find additional possibilities to collaborate in the coming years.
On December 15, the two sides will also face off in the Suzuki Cup! Whoever wins, you can be certain that the celebration will be brief. The second year of the COVID-19 epidemic has brought the two countries closer together, and it is hoped that the next year will further strengthen that bond, allowing citizens to anticipate a bright future.