The political culture of ASEAN involves an annual rotation among its member countries to hold the presidency. This presents a significant opportunity for the member countries to show their vision and leadership in the region by promoting regional policies, addressing ASEAN crises, bridging gaps between members, and adapting to the changing global context each year.
In 2024, Laos will succeed Indonesia as the ASEAN Chair, facing the dual challenge of global economic and political instability and its own longstanding domestic economic issues. It is anticipated that Laos will pursue an “Intermestic” (International and Domestic) approach in its international economic and political policies.
Laos has proposed the theme “ASEAN: Enhancing Connectivity and Resilience,” emphasizing the multidimensional challenges ASEAN has faced recently, including economic recession, disasters, traditional security issues, and emerging security concerns that have not yet fully recovered. The Laos government proposes enhancing connectivity and adaptability as mechanisms to effectively address these challenges, focusing on the three pillars of ASEAN: political-security, economic, and socio-cultural development. This approach includes narrowing the development gap and expanding cooperation with countries outside the region, from macroeconomic to people to people, while maintaining ASEAN Centrality.
In the past 2-3 years, Laos has experienced severe economic turmoil. By the end of 2023, the World Bank estimated Laos’ economic growth at about 3.7%, with inflation reaching 25%. The Consumer Price Index between May and November rose by an average of 2.3%. The Asian Development Bank predicts that in 2024, the Laos economy will grow by approximately 4%, and inflation could soar to 28%, leading to higher food prices and household expenses, increasing the risk of poverty.
The World Bank attributes the high inflation and devaluation of the Laos Kip mainly to a foreign currency shortage, stemming from foreign debt repayment, a significant portion of which is infrastructure investment loans from China.
Laos’ role as ASEAN Chair in 2024 is particularly challenging amidst numerous issues affecting ASEAN’s unity and progress. These include political and economic instability in Myanmar affecting security and border trade, the ongoing power struggle between China and the United States in the region, the U.S. presidential election, and the continuation of the ASEAN Indo-Pacific concept. These challenges highlight the overlapping “Intermestic” nature of issues that Laos will need to address, balancing domestic economic stability with leading ASEAN towards global stability and resilience.
International Institute for Trade and Development (Public Organization)
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 37 Issue: 12556
Date: Wednesday, January 17, 2023
Page: 8 (left)
Column: “Insight ASEAN”