Laos expects to see a 15 percent surge in the value of private investment next fiscal year after the government took steps to improve the business climate. According to the latest report from the Ministry of Planning and Investment, the value of private investment is projected to reach 14,400 billion kip (US$1.8 billion) in the 2012-2013 fiscal year, which begins in October. This is an increase of 14.9 percent compared to the current fiscal year.
Private investment is on track to reach about 12,400 billion kip this fiscal year, the ministry said.
Officials said the government’s expectation of a surge in private investment was a strong indicator of its confidence in attracting domestic and private investment after amending laws to create a better investment and business climate.
The government has amended the Investment Promotion Law, set up a streamlined one-stop investment service, and offered tax breaks and a number of incentives to attract investors in a bid to create more job opportunities.
The tax and customs laws have also been amended, to make it easier for businesses to pay taxes and import and export goods more easily. This is part of requirements for Laos to join the World Trade Organisation (WTO) early next year and implement the obligations of the Asean Free Trade Area in 2015.
Deputy Minister of Industry and Commerce Ms Khemmani Pholsena said recently she had received unofficial information from the authors of the Global Doing Business Ranking that Laos would rise in the rankings next year after overhauling import and export procedures.
As well as being required for WTO membership, the changes to import and export procedures will help to boost investment in the
processing industry, according to trade officials.
The Ministry of Planning and Investment unveiled its private investment forecast during a meeting to discuss the implementation of the 2012-2013 socio-economic development plan, which will be in effect from the start of next month until September 30, 2013.
The plan anticipates total public and private investment funding of about 26,800 billion kip, accounting for 31 percent of GDP to secure GDP growth of about 8.3 percent next fiscal year.
The government expects to contribute 2,950 billion kip or 10 percent of the value of public investment and to mobilise loans and grants worth 6,200 billion kip or 23 percent of that amount. The value of private investment is expected to reach 14,250 billion kip, accounting for 53 percent of the total, while the rest will be in the form of bank credit.
Photo Credit:Lao Voices