The Lao-Japan High-Level Roundtable Discussion on High-Value Agriculture, Regional Value Chains, and Green Energy, held on January 22, 2025 at the New Otani Hotel, Tokyo, Japan, highlighted the strategic importance of enhancing bilateral cooperation between Lao PDR and Japan. The ASEAN-Japan Centre, with Lao Ministry of Planning and Investment and JETRO, co-organized this high-level event to mark the 70th anniversary of diplomatic relations between the two nations, featuring key government and business leaders from both countries. Discussions focused on Lao PDR’ potential as an investment hub, particularly in clean energy, agriculture, and manufacturing, as well as the role of Japan’s expertise in driving sustainable development and technological innovation.
The roundtable facilitated direct dialogue between the Lao government, led by Prime Minister Sonexay Siphandone, and Japanese companies, aiming to address challenges and identify concrete solutions for boosting investment. Key sectors discussed include green energy, agriculture, and technological advancements, emphasizing the shared opportunities to develop robust regional value chains and contribute to mutual economic prosperity.
The roundtable featured speeches from distinguished leaders such as:
- H.E. Mr. Sonexay SIPHANDONE, Prime Minister of Lao PDR
- H.E. Phongsamouth ANLAVAN, Ambassador of the Lao People’s Democratic Republic to Japan
- Mr. Takehiko MATSUO, Vice Minister for International Affairs, Japan Ministry of Economy, Trade, and Industry
- H.E. Mr. Malaithong KOMMASITH, Minister of Industry and Commerce of Lao PDR
- Mr. Katsunori NAKAZAWA, Executive Vice President, JETRO
- Mr. Kunihiko HIRABAYASHI, Secretary General, ASEAN-Japan Centre
Key Takeaways
- Lao PDR’ Strategic Potential as an Investment Destination:
- Lao PDR offers a wealth of opportunities for Japanese businesses, particularly in green energy and high-value agriculture. The country is a regional leader in clean energy, with vast resources such as hydropower, solar, and wind energy, and is actively pursuing carbon credit trading. The Lao government’s Green National Development Strategy, initiated in 2018, positions Lao PDR as a competitive and sustainable investment destination, with initiatives in clean energy and agricultural production that align well with Japan’s green and digital transformation goals.
- Manufacturing Sector Growth: Laos is also positioning itself as an investment hub for light manufacturing, machinery, and advanced processing industries, supported by ongoing development in industrial zones and infrastructure.
- Lao Investment Promotion Law (2024) and New Policies: The updated Lao Investment Promotion Law introduces important reforms, including tax incentives and tariff exemptions for domestic production. These changes signal Lao PDR’ commitment to fostering a more balanced investment ecosystem that encourages local production, innovation, and sustainability.
- Bilateral Relations and Economic Cooperation: The Lao PDR-Japan economic ties have been strengthened over decades, with both countries benefiting from multilateral frameworks such as the RCEP and WTO. Notable areas of bilateral cooperation include infrastructure development, with Japan being a major contributor to Lao’s development in areas like roads, bridges, and industrial zones. Furthermore, Japan’s experience in advancing clean technology and green energy solutions presents significant opportunities for collaborative investments.
- Challenges in Expanding Trade and Investment: Despite the opportunities, challenges such as high transportation costs, complex export routes, and limited product diversification remain. Japanese companies highlighted the need for reforms in taxation policies, particularly the excise tax on hybrid vehicles, which could facilitate the transition towards green vehicles and sustainable development in Lao PDR. Furthermore, the forced exchange of foreign currency from export-oriented companies was raised as a policy challenge that could potentially undermine Lao PDR’ investment climate.
- Lessons from Company Experiences:
- Mitsui & Co. Ltd. shared insights into their involvement in Lao PDR, including their partnership in hydropower and forestry projects. The company raised concerns about taxation policies and currency regulations, urging the Lao government to consider reforms that would benefit foreign investors and promote a stable investment environment.
- TBS Corporation emphasized the potential for green energy investments, particularly in hydrogen production, with a project that aims to produce clean hydrogen energy for coffee roasting in Lao PDR. This initiative exemplifies the synergies between Japan’s cutting-edge technology and Lao PDR’ abundant hydropower resources, highlighting the economic value of leveraging sustainable practices for both local economic growth and global export potential.
- ANA Foods demonstrated the growing success of Lao PDR-grown bananas in Japan, marking a significant expansion of agricultural exports. Their experience underscores the potential of high-value agriculture and the importance of creating stable production systems to meet international demand.
- Infrastructure and Technological Collaboration: The development of regional value chains and infrastructure is central to Lao PDR’ strategy for economic growth. Japanese investment in manufacturing and technological innovation can contribute to the country’s industrialization and enhance its competitiveness in the global market. Companies like Hoya and Lao Tsumura highlighted the importance of skilled labor and advanced manufacturing technologies in achieving long-term success in Lao PDR.
Call to Action
- For Japanese Businesses: Actively explore investment opportunities in Lao PDR, particularly in green energy, high-value agriculture, and manufacturing, leveraging the country’s sustainability initiatives and abundant natural resources. Engage in collaborative projects that promote the localization of production and contribute to the development of regional value chains. Address the challenges related to taxation policies, currency exchange regulations, and infrastructure limitations through direct dialogue with the Lao government.
- For the Lao Government and Stakeholders: Continue to refine investment-friendly policies, focusing on streamlining export processes, improving infrastructure, and addressing the concerns raised by foreign investors. Provide targeted support for green energy initiatives and agricultural innovation to maximize the potential of Lao PDR as a hub for sustainable development and regional trade.
- For ASEAN-Japan Centre and JETRO: Facilitate further engagement and collaboration between Japanese companies and Lao stakeholders, ensuring that both the challenges and opportunities identified during this roundtable are addressed. Support follow-up initiatives, including investment seminars, business matchmaking, and policy dialogues, to drive mutual prosperity and enhance the bilateral relationship between Japan and Lao PDR.
This roundtable is a crucial step in strengthening the growing relationship between Lao PDR and Japan. By harnessing Lao PDR’ strategic position and abundant natural resources, alongside Japan’s technological expertise, both countries have a unique opportunity to foster sustainable economic development and enhance trade relations. This collaboration has the potential to benefit not only Lao PDR and Japan but also the wider ASEAN region.
However, for Lao PDR to fully capitalize on its growth potential, simultaneous development in key areas such as tax reforms, infrastructure, and human development is essential. The outcomes of this roundtable signal the urgent need for continued investment, collaboration, and policy improvements to secure a prosperous future for Lao PDR and its partners.
