Benoni Cafe - my choice for lunch and coffee in Vientiane

In case you want to meet me there is a good chance to see me during lunch time at Benoni cafe. It is located upstairs fo the Phimphone Minimart and belongs to the same owners. They served coffee and small snacks before downstairs, but a year ago they decided to extend to upstairs - what was a good decision. What you get here, is Asian food from Pad Thai to Chicken with noodles and veggies, but also mouthwatering sandwiches and baguettes (the Mediterranean baguette is my favorite). Also recommended is the salmon burger with home made french fries. Talking about drinks: The coffee is home roasted and considered on of the best in town - if not THE best. Also delicious the freshly made fruit juices. In case of lacking calories, try the cakes - my choice si the apple crumble cake, but cheese cake and lemon tart are favorites as well. The crowd is Lao people and foreigners, pretty much fifty-fifty. During lunch it is getting busy, come 12 sharp and you may get a table, or after 2pm (kitchen ist open until 5pm).

Doing business in Laos - Part X

There is written law and there is reality. There is a one-sto-service and there are excuses. There is a tax law and there is a tax officer. Both are different worlds. While the Worldbank itself is praising Laos for the growth of the GDP of 8.3 percent, its own business ranking agency dropped Laos on the business index recently from 163 to 165. Today, even the Vientiane Times, brought this problem to daylight.

Laos has amended laws relating to investment, the economy and business but this has not been enough to raise the country's Doing Business ranking.

As good as it is to name the problem, as bad is it then to easily find excuses:

One of the issues resulting in the drop in ranking is the difficulty businesses face when seeking credit or investment funding.

While it is true that is hard to get credits in Laos, this doesn't effect foreign investments. The drop in tax payment and handling ranking should concern more. As usual, a third of the article explains that Laos isn't as bad and did a lot to improve. Wonder why improvment then results in a drop.

GDP growth based on mining, telcos and service sector

The World Bank was sorting out some tea leaves and read from them the predictions for the Lao GDP growth. It will be 8,3 percent, if there is no majore disturbance like floods (occuring yearly), storms (the same) or revolutions (rarely). The Vientiane Times wrote:

The World Bank has raised its GDP growth forecast for Laos this year,expressing optimism that agricultural output will rebound. The bank announced the revision of its earlier projection of 7.5percent growth to 8.3 percent during a video conference yesterday from Tokyo, Japan, when unveiling the East Asia Economic Update mid-year review.... the main driver of Lao GDP growth in 2012 will be the mining sector...Construction will also play an im portant role in driving economic growth....The services sector is also expected to see remarkable growth this year. The sector will benefit from higher wholesale and trade volumes,and growth in tourism, transport and telecommunications

Undoubtly mining is still growing and revenues are as high as expectations for higher salaries within the mining companies. The latter isn't to bad for local consumption, so let's see how far the unions will go (just avoid the same wild strikes as they happen in Vietnam and Cambodia. They start tio scare away investors). What about construction? What I see so far the construction sector may not bring the money the world bankers expect. Most workers are from Vietnam or China anyway, same goes for construction material - only Lao Cement seems to be the one who has the biggest advantage. And again: Who will move in into all these shopping centers, and who will buy? A quick look to Vietnam shows that only crescent in Saigon seems to do well. Telecommunicatons: While the number one Lao Telecom is still not really profitable, Beeline just announced to pull out of Cambodia, and only Unitel made a lot of money recently. The question is, how much more they can grow (or simpler: Whan will every Lao has a phone or two?) Tourism: For now, the numbers are Fata Morganas. Means, it is real, but also unreal. Yes, numbers are increasing, but mainly from neighboring countries. It is still not clear, how much money comes from a Thai organized day tour. At least, more wealthly Thais still like Luang Prabang, and Chinese are starting to travel on a premium level as well. But Laos still lacks of infrastructure to grow significantly, and the extension of the airport will not make a change, unless the market will be more open to other airlines. By the way: This is just my opinion and analysis; If you think I am totally wrong, please let me know why.

Road kill

Road kill, a photo by thomaswanhoff on Flickr.

Found this guy in the morning, already dead, in our street. Seems to be the season for this guys ...

Quote of the day: Profit? What profit?

GIZ took some German taxpayer money to survey the Lao SMEs and do some research if they are fit for the Asean Common Economy. Of course they are not, so not many surprises. But I did not expect it in such clarity:

Of the remainder of the businesses surveyed, one said profits had fallen while the rest of the respondents said they had no idea whether they made a profit, a loss, or their income was stable.

Would be interesting to see how many of these businesses have staff with a MBA.

Dog killers in Vientiane

Last night some criminals killed a neighbors dog when they attempted to break in. They threw in some poisoned food, and one dog didn't survived it. Since there where about 5 other dogs on the property, the burglars left. This is sadly a quite common story. In the last 2 years at least one dog was stolen in our street, in the last 2 months we had 4 break-ins in our village. The latter is something that comes with development, so I just protect our property as best as I can. But when it comes to dog poisoning, my patience is gone. Not only that poisoning shows what cowards this people are, it also targets innocent creatures. Police don't care, of course, have't seen a more useless institution like the Lao police. So, in case I can catch one of these guys who try to break in here, be assure, he will be no threat anymore.

European Food Festival

Just a few dishonest officials

Today the VT state newspaper runs a piece about the not so improved one stop service for investors.

“Many businesspeop le want to invest in Laos but have decided to give
up the idea after having so much trouble getting permission,” he said
while giving directions to policy makers about how to boost private
investment in the country.

He said another major problem was that a few dishonest officials were
creating leaks of state revenue, making it impossible for the
government to raise the salary of honest officials."

A few. Aha. Reminds me of a few prices increasing in Thailand right now, says the government.

Salad prices

At Simuang market they are selling iceberg salad from China for 35,000 key for just one. when I go to my local vegetables shop, I pay 12,000 not only for salad but also tomatoes, cucumbers, dill, basil and some other vegetables.
I would understand if the mini mart is selling organic food or something that's more special.but paying more money for these crappy Chinese vegetables? No way!

Boring Sunday with surprises

There is not much to do on a Sunday in Vientiane if you want to stay in town. So the little things make your day. For example an hour in a spa. So we went to Nirwana Spa, or more precisely in front of it. The second we went off our car a girl cam out and told us to move the car " a little bit". When I asked why, she said the boss said so. When I asked why the boss want us to move the car, she said because people can't see the Spa. So first of all, the entrance is basically blocked by the staffs motobikes.I even parked my car a way the can easily leave. Second, Lao government repeatedly reminded business owners that they have no right to block space in front of their shop. Third: I guess there is a reason why Nirwana offers discounts between 9am and 4 pm - because it is not busy. So I asked the girl and the boss, if it is more important for them to move the car "a little bit" or having to customers and 50 USD in the cashier drawer. Of course they decided that customers not following their orders can't be customers, and we left. Dalah Spa (off Khuvieng Road) on the other hand has much parking space, provides you fresh cool towels and a warm greeting, offers the best massage in town, fruit and tea after the massage and a clean and beautiful environment. They saved us the day.

No jobs in Laos?

When I talk to business people, the biggest complaint is always "no staff" available. Human ressources is a big issue in Laos, for several reasons. The Vientiane Times was running a piece about Lao people complaining about not getting a job, saying it is the lack of experience why companies prefer foreigners (can't link to it since VT is behind a password wall). A quote:

It's not just new graduates who are in trouble; others are also complaining about how hard it is to find a job. This is a reflection of the fact that a significant percentage of Lao people have not benefited from the growing local and foreign investment and strong economic growth.

So, why they don't get the job? First, yes, it is a lack of experience. Instead of just starting to work, people here study and study and study, focussing on certificates (which are worthless), but not on actual experience. Then, it is a total lack of reality check when it comes to salaries. College graduates demand way to much money considering the fact that they don't know anything (sometimes not even what the company they apply for a job is doing). And: Lack of motivation and dedication. If you think from the beginning the company ows you something, you may be on the wrong path. On the other hand, local companies also have to improve. They have to train and develop staff, supporting them ind trusting in them. Better business skills apply to bosses as well. But, help is coming:

Officials say one of the major challenges for job seekers is their lack of skills compared to people from other countries. The government has acknowledged the problem and increased its education budget, hoping to train more people so they can find jobs and benefit from the burgeoning economy.

Sure, more budget means better education... what about just changing the curriculum?

Black Canyon Coffee opened in Vientiane/Laos

And finally it's there: Announced a long time ago Black Canyon Coffee, the Thai coffeeshop chain, finally opened it's first branch in Laos. Located in Ban Sihom at Samsenthai road, it has the usual menu and seating downstairs and upstairs. Tomorrow (Thursday) is the grand opening, so be prepared to meet a large crowd (I guess Cells will perform). Personally, I am quite happy since we have another chain that ensures quality and supply of food and service - something many other restaurants still struggle with in Laos. For me, the coffee isn't the best, but I kinda like the food. So, give it a try.

UPDATE: Looks like they running into some problems. Food comes late (still delicious), and my friend found insects in the salad. More concerning, staff and management doesn't care much but goes into ignore mood (means checking emails on laptop or iphone). Looks like someone has to pull out the Black Canyon Handbook again and staff (and manager) have to go back to class.

Why Lao companies struggle

These are just thoughts based on my experience so far, I would be more than happy if you can prove me wrong. After 2 years now living in Laos, I still see one big problems: Many if not most Lao companies struggle because they still don't know (or don't accept) international business rules. One business rule is for example the old roman "Pacta sunt servanda" - contracts should be safe. It means once you signed a contract, you have to fulfill. You also have to understand needs of customers. Now this seems to be a challenge in a country where planning rather then competing was the main business task. For the last 30 years people got what was available. That changed: Now everything can be available, and you have to find the right approach to your customers. This means secure supply, deliver in time, pay the bills. Simple things, still not common. Communication is still an issue, not technically. Emails are not answered, getting an appointment is a nightmare, and even if, there will be a delay anyway. What is called a cultural thing is actually is a lack of education in business rules. Laos is a developing country because of it's lack to develop enough - that includes developing business rules. I can't see much change coming from the so called business colleges, since these people are still juniors in a company run by an old guy who thinks he (or she) is the center of everything. As a customer, I don't beg for having business. Even as a possible business partner I would't do if there are equal opportunities for both of us. There is a reason why most successful businesses in Laos are still run by foreigners. Instead of blaming them for their success, it would be better if the Lao business community takes a look of the fence (or the river, literally). By the way: When I say Lao companies, then it includes also those run by foreigners or Lao-Falang, who came back from overseas in the old home country and sometimes strangely adapt to local practices very fast.