The number of people seeking to do businesses in Laos last year fell by more than half compared to the figure recorded in the previous year, according to the Ministry of Industry and Commerce.
In 2013, some 3,829 business units registered with the ministry. Meanwhile in 2014, there were only 1,832 business units listing with the ministry.
The Ministry of Industry and Commerce attributed the shortfall to some difficulties that hindered people from doing businesses and other external factors including the impact from the economic crisis, monetary policy and debts.
A senior economist from the National Economic Research Institute Dr Leeber Leebuapao told Vientiane Times on Tuesday that the dropping may have been triggered by bot h external and internal factors.
He said the external factor was related to the growing regional competition with more entrepreneurs moving to invest in Myanmar.
The internal factor was related to the country’s economic slowdown and the government’s revenue shortfall which impacted on business operation.
“As many businesses were set up in 2013 I think that entrepreneurs may be focused on exploring new business opportunities,” he said.
Concerning the Party and government’s policies to improve the investment climate and business operation, Dr Leeber said the policies are already good but much more needs to be done in terms of the implementation process.
“The government sectors need to create favourable conditions for people to do business as a way to drive economic growth,” he said, saying that it’s critical to listen to the problems of the business sector and also seek solutions to their problems.
Vientiane Department of Industry and Commerce held a meeting with other relevant sectors in the capital recently, chaired by Vientiane Mayor Dr Sinlavong Khoutphaythoune .
During the meeting, the business sector proposed that the government needs to urgently address certain problems, notably the issues related to the transportation of goods, services, tax payments and the export of raw materials.
One of the main challenges for Lao entrepreneurs remains the lack of access to funding and the high interest rates charged by the banks.
There are still several procedures to approve investment and business operations which create obstacles for people to do businesses.
Officials said the Lao economy is projected to vitalise this year but the government needs to further improve the business and investment climate to facilitate the business sector.
The government forecast last year that the Lao economy is expected to slow down to only 7.5 percent for 2014-15, triggered by the government’s budgetary tension, natural disasters and external factors.
Thus the government needs 30.69 trillion kip (over US$ 3.8 billion), equal to 30 percent of Gross Domestic Product (GDP) to boost national development and the continued growth of the country’s economy for 2014-15.
For the next five-year plan, the government will focus on human resource development to produce more skilled labour in response to the development needs of the country and to ensure that more Lao people can benefit from regionalisation.
Source: Vientiane Times