The Lao government has approved more than 6,000 investment projects with combined funding of nearly $37 billion since the introduction of the market-oriented economy in the 1980s.
The Ministry of Planning and Investment, which is in charge of public and private investment administration, unveiled the latest figures recently, which showed that between 1989 and last year the total number of investment projects was 6,144, with an overall investment value of $36,899,098,671.
The government began to encourage private investment in the mid-1980s after introducing its opening-up policy, which allowed the private sector to play a greater role in driving economic growth and national development.
Statistics posted on the ministry’s website show that of the total number of investment projects, 2,621 projects were funded by Lao entities with a value of $13 billion, while the rest were funded by foreign countries.
China is the top foreign investor with a total of 862 projects with a combined investment value of $10 billion. Thailand and Vietnam were named the second and third largest foreign investors with investment values of $4.7 billion and $3.9 billion respectively.
Among the other top 10 foreign investors from 1989-2019 were South Korea, France, the US, Japan, Malaysia and Australia. Cambodia ranked 23rd at 11 projects with investment value of $8,363,324.
The most popular investment sector among both Lao and foreign companies from 1989-2019 was electricity generation, which attracted investment of about $14 billion and was the largest investment sector.
The second sector attracting a significant amount of Lao and foreign funding during this period was mining, with total investment of $7.5 billion. Other sectors attracting high levels of investment were services, agriculture, industry and handicrafts.
It is the government’s policy to further promote private investment in the coming years. One of the steps taken by the government to encourage more investment is to improve the business climate and make it easier for businesses to invest and operate in Laos.
To make it easier for companies to start a business, the government has issued a list of controlled businesses in which enterprises must seek permission to engage. Types of business that are not included in the controlled business list can be carried out without restriction.
To improve the situation for new business operators, the ministry has set up a one-stop service to make it easier for businesspeople to obtain investment permission as well as the necessary business-related documents.
One of the sectors in which Laos has huge, untapped potential is agriculture thanks to the abundance of fertile land. This is made even more attractive by the surging demand for agricultural produce in neighbouring China. This will help boost investment in Laos in the future.
Data from the Cambodian Ministry of Commerce shows that bilateral trade between Cambodia and Laos topped $10 million last year, up 11 per cent from 2018. The Kingdom exported $2.45 million (up 66 per cent year-on-year) and imported $7.60 million (up 349 per cent).
Data from the Cambodian Ministry of Tourism shows that Laos is the Kingdom’s fourth largest source of tourists with 363,951 Laotians travelling to Cambodia last year, down 14.6 per cent year-on-year.
VIENTIANE TIMES/ASIA NEWS NETWORK