Source: Vientiane Times
Private investment prospects in Laos remain robust despite the nation’s drop in ranking on the World Bank’s Ease of Doing Business Index, according to a government report.
Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy recently delivered a government report to a Lao National Assembly conference highlighting the current state of private investment in the country.
According to the report, which was made public during the assembly conference at the end of last month, private investment prospects have remained robust as investors expressed interest in investing more in Laos.
Over the first nine months of this year, the government registered 2,924 investment projects with a total investment value of US$3.8 billion. This figure is 60 percent higher than what the Lao National Assembly approved.
Despite the proposed massive investment projects, the government admitted in its report that the actual inflow of investment funds was only US$636 million over the first nine months of this year. The government still expected that foreign private investment funds would continue to flow into the country over upcoming years.
The continued increase in private investment prospects appears to contradict Laos’ ranking slide on the World Bank’s Ease of Doing Business Index from 141st to 154th place this year.
A question was raised whether the World Bank index actually affected the business climate in Laos.
There is no detail in the government report which business and economic sectors have expressed interest in investing in Laos.
However, based on data from the Ministry of Planning and Investment, most foreign investment is in natural resources such as mining and industrial projects. These sectors are exclusively for large investment firms; therefore the growth in investment in this sector does not necessarily reflect the business climate in the country.
The government has a policy to boost investment in non-resources sectors as part of its efforts to diversify its economic base. However, many local and foreign businesses have said that they find it difficult to do business.
Business people told Vientiane Times that they faced difficulties in obtaining business operating licenses and accessing affordable finance.
A source from Lao Ministry of Planning and Investment said the government was considering a controlled business list, adding that after the introduction of the list, businesses outside the list would be promoted and business people wanting to invest in this area would find it easier to do so.
An official from the Enterprise Business Registration Department said he expected new business registration procedures would be introduced next year meaning it would be easier to do business in Laos.