The small landlocked country of Laos is looking to turn that negative into a positive by increasing trade and travel with its neighboring countries and Korea.
"The volume of foreign direct investments and trade relations are still small and we need to attract more foreign investments to contribute to the development of our economic infrastructure," Laotian Ambassador Soukthavone Keola told The Korea Herald.
Laos, with its population of 5.6 million people is being transformed into a corridor between East and West.
The country is rich in natural resources such as tin, lead, zinc, iron, ore, copper, gold, gypsum, lignite and sapphires, just to mention a few.
It also has one of the highest ratio of forest areas, suitable for many companies looking to invest in this sector.
To help increase its exports to neighboring countries, Laos is currently building a 1000 megawatt hydropower dam where 90 percent of the output will be exported to Thailand.
In relation to this future venture, joint agreements between Korean and Laotian state-run energy and resource corporations were signed in order to share all information regarding energy trends
The ambassador admitted that increasing trade with Korea is a bit challenging because of its geographical location. Laos has no shipping lanes, making exports to Korea highly expensive because of the dependence on air transport.
"But we do want to attract investments from Korea to build manufacturing plants and export those goods to the world," he said with optimism.
As of last year, Korean firms invested $93 million in Laos, mainly in mining.
Recently, both countries signed agreements that will give greater access for Korean companies to mine in the mineral rich country.
South Korea's Seodong Co. is currently exploring the Xiengkhuang mine, which might hold some 50 million tons of iron ore estimated to be worth well over $4.5 million.
Laos' highly rich tin deposits have also attracted many local companies looking to extract and export the mineral back to Korea.
Earlier this year, Laos signed a major deal with Shinhan Bank and its securities arm, Goodmorning Securities where they invested a total of $45 million in the production of biofuels.
The ambassador explained that at first the energy will be used for the development and needs of his country and once a constant flow has been established both sides will look into the possibilities of exporting the biofuels to other countries.
"Step-by-step we would like to replace the entire country with biofuels if it's possible," he said.
Korean companies looking to invest in Laos are guaranteed against expropriation and nationalization without compensation explained Keola.
"Remittance of dividends and profits back home or to a third country is allowed through the banking system," he said.
Also, the Laotian government offers long term investment options with land lease terms of up to 75 years.
Trade relations grew substantially between 2005 and 2006. Last year, total trade reached $41 million while the previous year both shared a balance of $16 million.
Laos exported to Korea wood and wood products, mining, garments and products from various other sectors.
On the flip side, Korea exports to Laos electronic products, office equipment, materials used in construction, automobile parts, garments, medicaments and food to mention a few.
Keola explained that Korean companies should look at setting up operations in Laos because of its low wages which gets passed on to a wide variety of products for purchase.
The tourism sector also offers challenges for the ambassador, but challenges that can be overcome.
He explained that he is currently in negotiations with one of the Korean airlines to start a transit flight. For the airline to be attracted to this idea his small embassy has started spreading the word about the marvels his country has to offer.
"There were 500,000 Koreans visiting Vietnam, and Laos is right next door but we only have about 10,000 so we want to attract more tourists. They can spend some time in Laos while on vacation in Thailand or Vietnam," he said.
One positive plan the embassy is working on is to do away with tourist visas for Koreans wanting to vacation in Laos.
But that is also the beginning; the Laos Tourism Authority is also in the process of producing tourism guides and manuals for Koreans looking for a vacation to someplace familiar but distant.
"Laos is now concentrating on the development of eco, agro and cultural tourism," Keola said. "It has 985 tourist sites and 364 of which are already ready to serve the public while 621 are waiting for foreign direct investments."
One attraction Koreans will enjoy Keola said is the UNESCO World Heritage site of Luangphabang City.
"It is probably one of the best preserved tourism sites in Southeast Asia," he said with a smile that indicates a well-known secret.
He described Luangphabang City as a wonderful getaway because of its architectural mix of traditional Laotian wooden houses which have subtle European styles -- reminders of the French colonial times.
Visitors can marvel at the golden-roofed wats (temples) which are decorated with paintings about the life of Buddha.
One of the most famous and beautiful temples Luangphabang City has to offer is Xieng Thong. It is also highly recommended to watch the sunset over the Mekong River at Wat Pha Baat Tai.
