Updated at 11:15 a.m. ET on 2013-8-16
Laos has opened a Chinatown market in Bokeo province near the lawless Golden Triangle in a bid to draw more trade and tourism to an area that already hosts a casino catering to Chinese clientele.
Funded by a group of Chinese firms, the market opened last week in Bokeo’s Golden Triangle Special Economic Zone to great fanfare with a ceremony in Tonpheung district attended by a number of Lao senior government officials.
“The project is important for Bokeo as the investors are striving to turn this area into a trade and tourism hub,” Bounpheng Moulphoxay, Minister to the Government Office and National Committee for Special Economic Zones (SEZ), told RFA’s Lao Service.
“Hopefully, the success of the Chinatown will lead to the creation of a Lao ethnic and cultural center in the near future,” said the minister, who was in attendance at the market’s opening ceremony.
The Vientiane Times quoted Zhao Wei, the 61-year-old chairman of the SEZ committee and president of the Hong Kong-registered King Romans Group, which has led investment in the zone, as saying that the market will create essential commercial links between communities in the Golden Triangle.
“More importantly, the market will attract foreign traders as well as boost tourism in the area, thanks to efforts by the Lao government and line development partners to support the construction of the market,” he said.
Parts of Laos, Myanmar and Thailand make up the Golden Triangle region, a lawless area notorious for the production of narcotics sold by cartels throughout Asia.
Land concession
The Lao government has conceded to King Romans 10,000 hectares (24,710 acres) of land—3,000 hectares (7,410 acres) of which are dedicated to the SEZ—for 99 years, with the objective of promoting trade, investment and tourism.
The SEZ, which is tax exempt, began construction in the early 2000s and now includes an international border checkpoint and river port, the King Romans Casino, hotels, and the Chinatown market with as many as 70 restaurants and shops selling a variety of retail.
The SEZ appears to be targeting Chinese clientele and investors exclusively, with the new market sporting a show room filled with statues of soldiers—reminiscent of the terracotta warriors unearthed and on display in central China’s ancient city of Xi’an in Shaanxi province.
Senior company staff at King Romans Group said the market includes accommodation and various other facilities worth about U.S. $80 million.
The company has reportedly invested around U.S. $491 million in the first phase of the SEZ and plans to invest a total of U.S. $2.25 billion by 2020 in facilities that include a golf course, massage and karaoke parlors, and medical clinics.
Virtual impunity
The head of King Romans, also known as Dokngiewkham in Lao and Golden Kapok in Chinese, told the South China Morning Post last year that his company is “doing something for the well-being of the Lao people, helping them to improve their standard of living.”
The company constructed a 30-kilometer (19-mile) road to connect the SEZ with the Bokeo capital of Huay Xai and has spent millions of U.S. dollars reinforcing the river bank along the Mekong, on which it perches.
King Romans has also donated substantial amounts to schools in both Myanmar and Laos.
But reports say the company operates with virtual impunity in the region, creating a self-sustained enclave that has done little to benefit the local community.
Nearly all of the several thousand people living and working in the zone are from China, a key investor in cash-starved Laos and whose investments nearly match those from traditional ally and neighbor Vietnam.
The existing hotel, restaurants, shops, and currency used in the SEZ are all Chinese and the casino draws crowds mostly from China and Thailand, where gambling is officially illegal.
King Romans even employs its own guards to protect tourists from the dangers of the drug trade in the notorious Golden Triangle, though security issues are at least nominally handled by a handful of Laotian police.
Endorsing an entry stamp into foreign visitors’ passports is about the only remaining semblance of authority still exercised by the host Laotian government in the zone, according to reports.
The South China Morning Post in a recent report quoted King Romans chief Zhao as saying that the Chinese investors are firmly in control of the SEZ.
“We have 100 percent right to manage the zone,” he said.
Questionable funding
The investor scheme for the SEZ project remains opaque, the report said, quoting Thai businessman Pattana Sittisombat, president of the Committee for the Economic Quadrangle, as questioning where the money is coming from.
“I am absolutely concerned about the possibility that illicit funds could be attracted to this project, and that it could provide opportunities for money laundering,” he said.
A U.N. official with the Office on Drugs and Crime, speaking on condition of anonymity, echoed Pattana’s concerns, saying “the Golden Triangle SEZ may also attract some of the narcotics trade through Bokeo province and could also be an attractive venue for money laundering.”
Zhao has rejected the claims.
In January, the Vientiane Times reported that China invested nearly U.S. $4 billion in Laos last year, ranking it among the top three spenders in the country.
Citing Chinese Ambassador to Laos Bu Jianguo, the newspaper said that from January to November last year, the value of bilateral trade between the two countries reached about U.S. $1.5 billion, an increase of some 34 percent over the same period the previous year.
Reported by RFA’s Lao Service. Translated by Viengsay Luangkhot. Written in English by Joshua Lipes.
CORRECTION: An earlier version of the story wrongly described construction on the SEZ as beginning in 2009.