Imports of expensive vehicles like Toyota Land Cruisers have been temporarily banned by the Lao government in its latest effort to manage inflation and reduce the country’s trade deficit.
It’s long been common to see luxury cars carrying high-ranking officials and wealthy people through the streets of Vientiane, a resident of the capital told Radio Free Asia.
For the owners of the vehicles, it’s a way of showing off their status, he said.
“Most of the government officials are either a deputy director general or a director general of some department in a ministry,” he said. “And they always have a Toyota Land Cruiser.”
Last month, the Ministry of Industry and Commerce issued a notice banning the import of any vehicle that costs more than US$50,000 between Aug. 20 and Dec. 30.
A new Toyota Land Cruiser can cost US$160,000, while the lighter-duty Toyota Land Cruiser Prado carries a US$98,000 price tag.
Only officially licensed car dealers can import less expensive cars during the time period, and they must show that the purchases were made through Lao commercial banks, the notice said.
There are no official numbers on how many cars that cost more than US$50,000 are imported to Laos each year.
The measures aim to stabilize the national currency, the kip, which has dropped in value in recent years amid an inflation rate that stood at nearly 25% earlier this year.
Bought with dollars or baht
Most vehicle purchases in Laos are made using the Thai baht or the U.S. dollar, according to an official who is knowledgeable about the government’s finances who requested anonymity to speak about a government matter.
“This aims to reduce the use and loss of foreign currencies,” he said. “Vehicle trades have been the main factor causing Laos to lose its foreign reserve to other countries.”
Some exceptions to the import ban can be made under the ministry’s order, such as for vehicles required for government or international NGO work. But those exceptions will require government approval, according to the ministry.
A car dealer in Champasak province told Radio Free Asia that the effectiveness of the ban depends on whether government officials follow up with strong enforcement.
“Some companies will still import these vehicles,” he predicted. “In some areas, the import of luxury cars will continue because car dealers will bribe local officials.”
Translated by Phouvong. Edited by Matt Reed and Malcolm Foster