Lao enterprises too optimistic about AEC
Lao enterprises too optimistic about AEC
Provision of information on the positive and negative impacts of the Asean Economic Community should be more balanced, according to a university lecturer.
National University of Laos' Faculty of Economics and Business Management lecturer, Associate Professor, Dr Phouphet Kyophilavong made the comment on Wednesday after finding out that Lao business people are too optimistic about the regional economic integration.
“According to an enterprise survey, business people are very positive about the AEC,” he said, adding that the positive aspects are good but if they do not know about the negative impacts, businesses will not prepare themselves to address these ahead of regional economic integration.
Associate Professor, Dr Phouphet who was involved in the latest enterprise survey released earlier this month, said 70 percent of enterprises interviewed believed that the establishment of the AEC in 2015 will lead to a reduction in tariffs, one of the main conditions to enable them to import and export more goods easily.
Over the past several years, the government has launched a number of Asean awareness campaigns among business people, creating opportunities for them to learn about what the country will get from regional economic integration.
Associate Professor, Dr Phouphet said the government should continue to campaign about the AEC but also provide more information about the negative impacts of regional integration, adding there are many challenges which business people, in particular small and medium enterprises, need to know about.
One of the negative impacts, which enterprises need to be aware of, is that establishment of the AEC will lead to a huge increase in business competition in the country, adding that many enterprises will struggle if they are not ready.
He said Lao enterprises also needed to improve their business management and marketing skills to cope with the stronger business competition. Dr Phouphet said local enterprises also need to study English if they want to communicate with foreign business partners and customers.
The 2013 enterprise survey conducted by the National University of Laos, Faculty of Economics and Business Management and funded by GIZ, suggested that enterprises do not know about the negative impacts of economic integration, and they have not set up business plans and strategies to accommodate the business challenges once the AEC is formed in 2015.
According to information from the Ministry of Industry and Commerce, businesses which use local materials to produce goods for export will be able to compete with foreign ones, while businesses which import materials from abroad to produce goods for domestic consumption may not be able to survive.
Motorbike assembly plants, which import materials from foreign countries to produce goods for the domestic market, may not be able to compete after the government reduces tariffs, creating opportunities for companies which produce the same goods and export them to Laos.
vientiane times
