Lao PDR’s ASEAN Chairmanship 2024: Advancing Regional Economic Integration, Connectivity and Resilience

The year 2024 marked a significant milestone for Lao PDR as it assumed the ASEAN chairmanship for the third time, following stints in 2004 and 2016. This term came amid growing geopolitical complexities, regional challenges, and a rapidly changing global trade landscape. While international trade has driven economic growth and improved living conditions over the past three decades, its benefits have not been equally shared among individuals, countries, and regions.

Many low- and middle-income economies, including those in ASEAN, face difficulties diversifying and integrating into global trade networks. Trade generates jobs and provides access to affordable goods, but rapid changes to the trade landscape pose challenges to economies attempting to adapt. Protectionism fails to address these issues. However, diversifying value chains, reducing trade costs through digitalisation, and transitioning to a low-carbon economy may offer better opportunities for these economies.

In this context, Lao PDR’s ASEAN chairmanship took on added significance. By focusing on enhancing connectivity and resilience, Lao PDR has worked to position ASEAN as a region capable of adapting to global trade challenges while ensuring that the benefits of economic integration are shared equitably. Its leadership in advancing the 14 Priority Economic Deliverables (PEDs) and the ASEAN Economic Community (AEC) Blueprint 2025 underscored its commitment to fostering connectivity, resilience, and unity within ASEAN.

Leadership Amid Geopolitical Challenges

Lao PDR’s chairmanship in 2024 is particularly significant amid an increasingly polarised geopolitical environment. The intense competition between the US and China and global economic uncertainties placed ASEAN in a delicate position. As a small, landlocked nation with close ties to its neighbours and a non-aligned foreign policy, Lao PDR sought to maintain ASEAN’s neutrality and centrality.

A key aspect of Lao PDR’s chairmanship was its efforts to encourage Myanmar to participate in ASEAN economic meetings. Myanmar’s ongoing political crisis has threatened ASEAN’s unity and economic integration. Encouraging its participation is especially important for Lao PDR, given their shared borders and economic ties. Integrating Myanmar into ASEAN’s economic initiatives prevents further isolation, which could destabilise the region.

Lao PDR sought to reduce these tensions by fostering dialogue and ensuring that all member states and dialogue partners remain engaged in ASEAN’s economic agenda. For Lao PDR, this was not only about maintaining ASEAN’s centrality but also promoting regional stability and economic cooperation, which are critical for its development as a landlocked economy reliant on regional trade.

Key Achievements in 2024

During its chairmanship, Lao PDR, particularly through the Ministry of Industry and Commerce and related sectors, was pivotal in advancing the AEC. Through extensive research, consultation, and leadership in key meetings — including the Senior Economic Officials Meeting, the High-Level Task Force on ASEAN Economic Integration, the ASEAN Economic Ministers’ Meeting, and the ASEAN Economic Community Council Meeting — Lao PDR drove significant progress.

One of the most notable achievements was the adoption of 20 key documents at the 44th and 45th ASEAN Summits and related meetings. Some examples include the ASEAN Declaration on Enhancing Supply Chain Connectivity, Joint Statement on the Substantial Conclusion of the ASEAN-China Free Trade Agreement 3.0 Upgrade Negotiations, ASEAN Leaders Declaration on Promoting Sustainable Agriculture, and ASEAN Guidelines on the Reduction of Crop Burning. These documents reflect ASEAN’s commitment to advancing economic integration and addressing emerging challenges. Additionally, Lao PDR oversaw the continued implementation of the AEC Blueprint 2025, with 807 activities carried out in 2024 — a 34 per cent increase compared to 2023. This demonstrated Lao PDR’s dedication to accelerating regional economic integration and ensuring ASEAN remains on track to achieve its strategic goals.

Lao PDR also contributed to the development of the AEC Strategic Plan 2026-2030 under the broader ASEAN Community Vision 2045, which will guide the region’s economic integration efforts in the coming years. Furthermore, as of October 2024, Lao PDR successfully completed 10 out of 14 PEDs for the year. The PEDs showcase efforts to integrate economies through trade agreements and intellectual property cooperation, foster sustainability through energy trade, agriculture, and Micro, Small and Medium Enterprises (MSME) support, and advance digital transformation with Industry 4.0 education.

Additionally, key initiatives, including upgrading the ASEAN-Australia-New Zealand Free Trade Agreement, finalising a study on the ASEAN Single Window, developing a digital trade standards roadmap, and establishing ASEAN-wide business identification numbers underscore Lao PDR’s ability to address both immediate and long-term economic priorities.

Finally, Lao PDR’s chairmanship has contributed to reducing geopolitical tensions in the region. All ASEAN member states, including Myanmar, had opportunities to share their views on key economic documents and cooperation programmes between ASEAN and its dialogue partners such as the mid-term review report of the work programme on further deepening ASEAN–China trade and economic cooperation 2022-2026 and the ASEAN plus three economic cooperation work programme 2025-2026. By fostering dialogue and cooperation among member states and external partners, Lao PDR has reinforced ASEAN’s role as a platform for promoting peace, stability, and economic collaboration.

Advancing Connectivity and Resilience

Despite Lao PDR’s efforts, significant challenges remain in advancing key regional initiatives. One notable shortcoming is the slow progress in the negotiation of the ASEAN Digital Economy Framework Agreement (DEFA). While the DEFA Negotiating Committee (NC) has set ambitious performance targets — such as achieving 50 per cent cleaned articles in DEFA and commencing discussions on all substantive obligations by 2024 — progress has been limited. As of October 2024, only 25 paragraphs (14 per cent of all paragraphs) have been finalised. This slow pace reflects the complexities of aligning diverse national interests and regulatory frameworks across ASEAN, which is critical for advancing the region’s digital economy. The delay risks undermining ASEAN’s ability to fully capitalise on the opportunities of the digital era and may hinder efforts to enhance regional digital connectivity and competitiveness.

Notwithstanding these challenges, Lao PDR’s leadership has made significant strides in advancing digital connectivity. Recognising the transformative potential of digital technologies, Lao PDR has championed initiatives to promote digital trade through the development of an ASEAN roadmap on digital trade standards and enhance innovation through the adoption of recommendations to upgrade the ASEAN Framework Agreement on Intellectual Property Cooperation. These efforts are crucial as ASEAN seeks to harness the benefits of the Fourth Industrial Revolution and build an inclusive, sustainable digital economy. By prioritising digital connectivity, Lao PDR has helped narrow the digital divide among ASEAN member states and enhanced the region’s global competitiveness.

In addition to digital transformation, sustainability has been a key pillar of Lao PDR’s chairmanship. By advocating for the ASEAN Power Grid, sustainable agriculture, and blue economy initiatives, Lao PDR has underscored the importance of addressing climate change and ensuring that economic development is environmentally sustainable. These efforts align with ASEAN’s commitment to the Sustainable Development Goals (SDGs) and position the region as a leader in sustainable development.

Conclusion

Lao PDR’s ASEAN chairmanship in 2024 demonstrated its ability to provide effective leadership in advancing regional cooperation, particularly in areas such as digital transformation, sustainability, and economic integration. By focusing on the implementation of the AEC Blueprint 2025 and achieving progress on 10 out of 14 PEDs, Lao PDR contributed to strengthening ASEAN’s resilience and unity. However, it is important to recognise that these achievements were not solely the result of Lao PDR’s leadership but rather a collective effort by ASEAN member states, facilitated by the chair’s role in coordinating and driving the agenda.

While Lao PDR’s leadership was commendable, it was not without its challenges. The slow progress in negotiating the ASEAN DEFA highlights the complexities of aligning diverse national interests and regulatory frameworks across member states. This delay underscores the structural difficulties inherent in ASEAN’s consensus-based decision-making process, which often limits the ability of any single chair to independently drive initiatives.

Lao PDR’s chairmanship leaves a legacy of progress in advancing ASEAN’s economic integration and sustainability goals, but it also highlights the ongoing need for collective action and structural reforms to address the region’s challenges. As ASEAN approaches the conclusion of the AEC Blueprint 2025 and transitions to the AEC Strategic Plan 2026-2030, significant challenges remain. These include addressing the digital divide among member states, accelerating progress on digital economy initiatives, and ensuring that sustainability goals are met in the face of climate change and resource constraints.

Looking ahead, ASEAN’s ability to adapt to an increasingly complex and uncertain global landscape will depend on its capacity to build on the achievements of past chairmanships while addressing these persistent challenges. Lao PDR’s contributions in 2024 provide a foundation for future efforts to strengthen ASEAN as a dynamic, cohesive, and resilient economic community.

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Editor’s Note:
ASEANFocus+ articles are timely critical insight pieces published by the ASEAN Studies Centre.