Dramatic Upturn In Business Environment Expected: PM
Source: Vientiane Times
The business environment is expected to improve dramatically in the coming years as the government intensifies action to better facilitate business, Prime Minister Thongloun Sisoulith has told the National Assembly.
The premier was responding to a question raised by members of parliament at the ongoing 7th ordinary session of the Assembly.
Mr Thongloun previously announced an ambitious target to improve Laos’ ease of doing business (EDB) ranking to two digits by 2020 from the current ranking of 154th among 190 economies worldwide.
Laos was the second-worst performer in Asean, the 10 member regional bloc, coming in ahead of Myanmar which was ranked 171st, according to the World Bank’s EDB ranking index.
Laos is unlikely to achieve the two-digit target by 2020, but the ranking could slightly improve with the two-digit objective now expected to be reached by 2022.
Mr Thongloun explained that the 2020 ranking might not significantly improve because the World Bank collected information (concerning indicators it uses to assess the EDB) in 2019 – when the government’s efforts first escalated – and compiled them to form the ranking published in 2020.
But the government’s intensified action in 2019 and 2020 to improve the business climate will be reflected in 2021 or 2022.
“I believe the figure [ranking] will improve,” he told the biannual session.
“Even if the figure [ranking] is not much improved, I have given instructions that we should do our best to facilitate and attract more foreign businesses and Lao investors.”
The World Bank’s EDB index measures reforms in 11 areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and labour market regulations.
Mr Thongloun said he had assigned his deputy to oversee ways to improve the 11 indicators and report the progress made every month.
The government has attached special attention to facilitating business operations and accelerating the business startup process in a transparent manner.
“There must be no corruption. No under-the-table money within the process. We have been taking action in this regard,” the head of government promised.
He called for members of parliament to keep a close eye on the matter and to inform the government if they saw obstacles hindering the EDB process so the government could address these issues.
The World Bank said Laos’ 154th ranking reflected a complex and opaque business environment, with barriers to regional trade and integration that limit its attractiveness as an investment destination.
Investors complain about the high cost of doing business and the absence of a transparent, dynamic, and streamlined business environment.
However, Lao officials said a number of initiatives have been taken to improve the business landscape.
A single window system to facilitate the investment process and business operations has been implemented in many central and local state departments.
Procedures to start a business have been shortened to 43 days from the previous 206 days.
Deputy Prime Minister and Minister of Finance, Mr Somdy Duangdy, issued a decision in February introducing a single window customs system to streamline import and export procedures.
The Ministry of Industry and Commerce said it has also made remarkable improvements in easing and accelerating cross border trade.
Laos’ trading across borders facilitation ranking climbed from 124th in 2018 to 76th this year – an improvement of 48 places.