“Vientiane New World” stimulates Lao economic growth
“Vientiane New World” stimulates Lao economic growth
The Vientiane New World Project has drawn applause from local and foreign people living in Laos, with many saying it will help Laos to secure strong economic growth this year.
The mega real estate development project on the Don Chan riverfront in central Vientiane looks set to become one of the driving forces of economic growth and will lend support to the government's plan to achieve 8 percent growth this fiscal year.
The first phase of the US$600 million Vientiane New World Project is the construction of 50 villas to house delegates to the Asia-Europe Meeting (ASEM) Summit in November. The villas are currently under construction and are part of government efforts to realise the 8 percent GDP growth target this year.
Tropical storms and flooding in 2011 caused serious damage to the agriculture production base, forcing the government to lower the GDP target from 8.3 percent to 8 percent. Without the construction of the ASEM facilities, the GDP might fall below eight percent this year.
The government plans to achieve GDP of US$8.8 billion kip this fiscal year, which is an increase of 8 percent over last year. The government is targeting GDP growth of at least 8 percent over the next few years to enable realisation of the UN Millennium Development Goals.
The World Bank announced this week that one of the main driving forces of 2012 GDP growth is the construction sector, which includes the ASEM villa project.
The Vientiane New World Project will not only help to boost GDP growth, but will create more business and investment infrastructure as Laos prepares to participate in the Asean Free Trade Area in 2015, and will inspire confidence among potential foreign investors in Laos.
Senior Vice President and Vientiane Branch Manager of the Bangkok Bank, Mr Phisit Charoenphan, said on Tuesday the launch of the Vientiane New World Project would help foreign businesses feel more confident about investing in Laos.
He said businesspeople need high quality infrastructure, including offices and residences for the CEOs of local and foreign companies.
Laos also plans to join the World Trade Organisation at the end of this year, providing an additional boost to foreign investment. Today, potential investors are reluctant to do business in Laos because of the lack of foreign markets.
Besides the mining and hydropower sectors, the government is promoting investment in agribusiness as Laos has a large area of fertile land.
The government is also encouraging foreign investment in logistics as the country is centrally located among the Mekong nations, and forms a land bridge in the region.
Local and international economists said on Wednesday that any form of investment will boost growth but one of the main challenges is to ensure that the government and overseas investors properly manage investment projects so they benefit the ordinary people.
They said investors should make use of domestic resources, including construction ma-terials, as this would help the government to distribute income to those employed in the ma nufacture of such materials.
They also said projects should help the government to create jobs and income to ensure sustainable development.
According to CAMCE Investment Lao Co Ltd, when the Vientiane New World Project is built over the next six to eight years, it will provide more than 5,000 direct and indirect jobs.
Many foreign workers said they believed the development would secure the existence of traditional architects, adding that temples and colonial buildings in Vientiane are what lend the city its charm
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