Question 1: Following the
events of September 11 in the U.S. and subsequent military action in
Afghanistan, the economies of many Asian countries have suffered. Could
you describe the state of the Lao economy today and its prospects in
the coming year?
Answer: The financial
crisis in the Asian region in 1997 had a very bad impact on the economy
of Laos. In comparison, the past year was difficult but a successful
year for the Lao people. The national economy recovered thanks to
government efforts to deal with the effects of the crisis, and prevent
its reoccurrence. With our efforts, we can see that, agricultural
production rose promisingly, with a record rice yield of more than 2.2.
million tons, while the government drive for increased production for
import-substitution and exports was effective in all parts of the
country. This has helped maintain or even strengthen the value of the
national currency.
Alongside our efforts to resolve the currency and financial
difficulties of the past two years, the government strongly encouraged
public investment in more than 5,000 projects valued at over 2,000 kip
(local currency). The national economy continued to develop with an
annual economic growth rate of 6.4% and the inflation rate was lower
than 10%. The national income for 2000-2001 achieved 95% of the figure
set out in the government plan. This result has been very noteworthy
although I do hope that the economy of the country continues to
strengthen, in the coming year.
Question 2: Is Laos a
fully market economy country or does your country follow a hybrid
economic system? Also, if your economy is still in transition, and can
you describe what
changes are taking place or will take place shortly?
Answer: In 1986 the New
Economic Mechanism (NEM) emerged from the implementation of the
governments economic reform package. This package sought to transform
economic management from a centralized system to the market-oriented
economy characterized by decentralized economic decision making, with
the private sector playing an active role.
Question 3: What
regional economic groupings does Laos belong to and which additional
economic organization does Laos plan to enter in the coming years?
Also, how will entry to these organizations act to increase economic
potential in your country?
Answer: In 1997, Laos
became a member of the South East Asian Nations (ASEAN). Now the
country is preparing to join the Asia-Pacific Economic Cooperation
grouping and applying to
be a member of the World Trade Organization (WTO). Becoming a member of
the regional or world economic organizations will put Laos on an even
playing field with other countries in the region and with those in the
rest of
the world vis-a-vis trade and investment with many nations. This
development would further encourage the move toward a market-oriented
economy.
Question 4: Who are Laos’s biggest trading partners and what are
Laos’s biggest exports? Also are there particular industries that the
government is trying to promote or agricultural areas where you feel
that Laotian
products have an advantage?
Answer: Laos trades with
many countries, and its biggest trading partners are Thailand, China,
Vietnam, and the EU. Laos exports electricity, wood processing, coffee
and garments. The government is encouraging foreign and domestic
investors to invest
in the field of hydroelectric power, mining, manufacturing,
agro-business
and other industries.
Question 5: Does the Lao
government actively seek investment in your country? Also, what
investment advantages does your country offer companies or individuals
interested in investing in your country?
Answer: Yes, the Lao
government is actively seeking foreign investment in the country. The
government
offers opportunities to the investors to choose what is suitable for
them,
and what type of investment the investors wish to make.
Question 6: Earlier this
year, there were a lot of articles on travel to Laos and the splendid
tourist
locations of the Mekong River valley, Luang Prabang and Vientiane? Have
the events of September 11 acted to decrease tourism and how are your
Embassy
and your government attempting to promote more tourism?
Answer: Statistics show
that thankfully the terrorists attacks on September 11th did
not
have much negative impact on tourism in Laos.
Question 7: In years
past there were many articles on security incidents in Laos and the
increase in armed groups of criminals. What is the current security
situation in the major tourist areas and has the crime rate increased
or fallen over the last
year?
Answer: A year ago there
were many articles talking about the security situation in Laos. As you
know, Laos is rightfully well known for its tranquillity, social order
and political stability. Unfortunately, after the country experienced a
number of unprecedented mishaps as a result of criminal acts
masterminded by an isolated group of terrorists and activist. This fact
was reported by journalists. These criminal acts were intended to
destabilize social order, impede the economic development process and
tarnish the image of the country especially on
the occasion of the opening of the tourist year and the celebration of
the 25th anniversary of the Lao PDR. Due to the unique nature of these
events, these incidents drew immediate attention of the foreign media,
which often unwittingly and incorrectly exaggerated and reported them
as
a major threat to social order and stability. Meanwhile, bomb
explosions,
robbery and other criminal acts have already become part of the daily
life
in other countries worldwide but have not received nearly as much
attention
in the foreign media. The Lao government has stepped up its security
and
taken serious measures to punish those perpetrators in order to ensure
our
traditional tranquillity and peaceful life. Laos is and remains a very
safe
place to visit and to invest.
Question 8: Does the Lao
government promote foreign investment in the tourism field in Laos and
if so, what are the incentives offered?
Answer: The Lao
government tries to promote and actively seeks foreign investment in
many areas not just only the tourism field. The government also offers
very attractive
incentives for investors seeking to invest in Laos.
Question 9: In the event that a company or individual wants to
research more about investing or doing business with Laos, what
resources are available through your Embassy and other Lao Embassies
around the world. In order
to speed up and facilitate receipt of the needed information, what can
investors or business people do to help the Embassy or other parties to
give them the information they seek?
Answer: Anyone who is
interested in doing business in Laos, particularly investors, can
contact the Lao Embassy directly; we have documents regarding the
investment process. Or they can visit our website at www.laoembassy.com . This
website has useful information relating to business opportunities in
Laos, and
also information about doing business in our country.
Question 10: Lastly, do
you have any final words of advice to business people interested in
doing
business with Laos or considering an investment in your country?
Answer: In order to
develop the country, and to improve the living standard of our people,
the Lao
government has implemented the economic reform policy by embarking on
the market oriented economic path since 1986. This policy is to
encourage
more private sector involvement in order to play a important role in
the
process of economic development of the country. The policy also seeks
to
open up the country for international economic cooperation, especially
to
invite foreign companies to invest in Laos. I would like to inform
American
business persons that, at the present time many business opportunities
in our country are available and need investment in many areas, such as
in the field of communication, hydroelectricity, mining, fertilizer,
construction,
tourism, etc. Many projects are already elaborated; however, there
currently
is a lack of funds to implement the project. I therefore, would like to
invite American companies to first investigate and ultimately to invest
in our country.
