The Lao government will attempt to attract more investors in Special Economic Zones (SEZ) in order to create jobs for local people and generate more revenue for the state budget.
The Special Economic Zones Management Committee of the Special Economic Zone Promotion and Management Office under the Ministry of Planning and Investment plans to register 709 companies for operations in SEZs over the next five years.
The plan was reported by the office’s acting director-general Sonepasert Dalavong at a recent meeting.
It is expected that this number of companies would create over 130,000 jobs and authorities could collect over 1.2 trillion kip ($107.6 million) in revenue from taxes paid by businesses operating in the zones, despite the ongoing challenges posed by the Covid-19 pandemic, he said.
“It’s hard to predict when the pandemic will end and our SEZs have been directly affected, particularly in terms of attracting investment, collecting taxes, and creating employment,” Sonepasert said.
The government has stakes in the Vientiane Saysettha Development Zone, Zone C of the Savan-Xeno SEZ, the Golden Triangle SEZ, and the Pakxe-Japan SEZ. Under SEZ agreements, the government typically holds a stake through the provision of land, in accordance with a 2010 decree on Special Economic Zones.
But Sonepasert said that in cases where the government provides land but development fails to go ahead, it may change the investment arrangement from holding shares to charging an annual concession fee instead.
The committee will try to encourage manufacturers to turn out more goods for export and to resolve various problems that have arisen at SEZs, particularly in the Golden Triangle SEZ and the Boten Beautiful Land Specific Economic Zone.
“We will also reassess SEZ agreements on a regular basis to ensure they are complied with,” Sonepasert said.
Zones that are productive will be further strengthened so that they become models for future development, while zones that make a medium level of progress will be advertised among additional potential investors in the hope of bolstering their operations.
Steps will also be taken to resolve land disputes and ensure that developers have access to funding.
With regard to zones that make less progress, the committee will work with developers to seek solutions. In zones where no progress has been made, the committee has invited developers to help resolve difficulties, Sonepasert said.
To address the various problems encountered, the government will follow up on the application of the regulations and agreements drawn up. Authorities will also improve the one-stop service for SEZs so that it is easier for businesses to set up operations, while licences should be able to be issued on site, he added.
The SEZ Administrative Committee will also further improve the structure of SEZ management committees in Vientiane and the provinces so that they are more effective.
VIENTIANE TIMES/ASIA NEWS NETWORK