MINISTER OF COMMERCE WELCOMES U.S. INVESTMENT

UNCLAS SECTION 01 OF 02 VIENTIANE 000114 SIPDIS SIPDIS SENSITIVE STATE FOR EAP/MLS BESTIC STATE FOR EEB/ESC STATE FOR DS/IP/EAP STATE PASS USTR BISBEE COMMERCE FOR HP PHO E.O. 12958: N/A TAGS: PREL ECON EINV EMIN ENRG PINR LA SUBJECT: MINISTER OF COMMERCE WELCOMES U.S. INVESTMENT ¶1. (U) Summary: The Ambassador paid his initial official calls on Minister of Industry and Commerce Nam Viyaketh, whose father, Samane Viyaketh, is #2 in the Politburo, and Governor of the Lao Central Bank Phouphet Khamphounvong on February 11. Minister Nam welcomed U.S. investment in Laos and emphasized the positive role the U.S. has played in Lao's WTO accession process. The Ambassador noted his intention to encourage more U.S. investment in Laos, embracing Minister Nam's statement that Laos is "open for business." Governor Phouphet spoke repeatedly of the Government of Laos' cooperation with the U.S. in combating terrorist financing and money laundering. He also requested the U.S. allow Eximbank to operate in Laos. The Ambassador explained that the USG is examining the Eximbank restrictions. End Summary. -------------- Meeting with Minister Nam -------------- ¶2. (U) The Ambassador paid his initial official call on Minister of Industry and Commerce Nam Viyaketh on February 11. (The Ambassador had previously met with Minister Nam on a number of business and social occasions.) The Minister laid out a positive vision of U.S. economic engagement with Laos, emphasizing the constructive role played by the U.S. delegation in Geneva during WTO negotiations and the Government of Laos' (GOL) ongoing relationship with the United States Trade Representative (USTR). The Minister noted that the GOL continued to have difficulty implementing the Bilateral Trade Agreement (BTA),and was grateful for the State Department funded technical assistance provided by Nathan Associates to help with WTO accession and BTA implementation. Minister Nam stated that the GOL would like to see more U.S. investment in Laos. ¶3. (SBU) Minister Nam was frank in his assessment of the Lao temperament, noting that many Lao prefer non-taxing office jobs to hard work and are often out-competed by Vietnamese and Chinese who are coming into the country pursuing economic opportunities. He hopes that increased freedom for private businesses will allow the Lao population to increase its entrepreneurial activity. The Minister was also hopeful that as regional currencies appreciated, investors such as the Japanese would look to Laos as a centrally located country for future investment in labor-intensive manufacturing. The Asian Development Bank-financed East-West Corridor, along with the soon to be completed rail connection to Thailand's railroad network, are realizing the GOL vision of Laos as a "land-linked" country. Minister Nam noted that the GOL was looking at ways to attract overseas Lao back to Laos to encourage them to share the experience they have gained overseas. ¶4. (U) The Ambassador emphasized his desire to see more U.S. companies invest in Laos to take advantage of the economy's rapid and sustained growth, and briefly discussed the planned U.S. Chamber of Commerce sponsored business mission to Laos, scheduled for early May. He noted the importance of further development of Lao human resources, and the potential payoff from using some of the energy generated in Laos for internal development vice sale to neighboring countries. After describing the success of numerous Lao entrepreneurs in America, the Ambassador urged the Minister to see Lao-Americans as a resource, and to focus on measures, such as dual nationality and property ownership rights, to attract their investment capital back to Laos. -------------- Governor Phouphet -------------- ¶5. (U) In the Ambassador's call on Bank of Laos Governor Phouphet Khamphounvong, the Governor repeatedly stressed the GOL's cooperation with the USG on money laundering and terrorism finance while discussing Laos' strong economic performance in 2007. Governor Phouphet appeared especially pleased that Lao GDP growth, which he said was 8% in 2007, exceeded the government's projection of 7.5%. The Governor also requested the USG allow Eximbank to operate within Laos. ¶6. (U) The Ambassador praised the modernization and growth of the Lao economy and told the Governor of his interest in attracting more U.S. investors. He discussed current U.S.-Lao cooperation on money laundering and detecting counterfeit U.S. currency and requested a copy of the new implementing decree for the Anti-Money Laundering law; the copy was delivered following the meeting. Ambassador Huso also noted the USG was studying the issues surrounding the prohibition on Eximbank activity in Laos. -------------- Bio Notes VIENTIANE 00000114 002 OF 002 -------------- ¶7. (SBU) Nam Viyaketh has been Minister of Industry and Commerce since 2006. Previously, he served as Vice Minister of Industry and Handicraft, the precursor Ministry to Industry and Commerce. He has a Ph.D. in economics from the Academy of Social Sciences in Moscow. He is #46 on the party central committee. His father, Samane Viyaketh, is #2 in the Politburo and was President of the National Assembly from 1992 until 2006. Despite his Soviet education and strong family party ties, Minister Nam is one of the most outward-looking members of the government and has consistently been frank and friendly in his conversations with Post. His English is quite fluent. ¶8. (SBU) Phouphet Khamphounvong has been Governor of the Bank of Lao since 2006. Governor Phouphet's association with the Bank of Lao covers virtually his entire professional career; he has ascended from his first position as a bank officer in Savanakhet Province in ¶1976. Phouphet served as both Deputy Governor and Acting Governor of the Bank of Lao before assuming his current position. He has a Bachelors Degree in Economics from the Institute of Banking in Hanoi.