Lao SMEs may struggle in AEC: official
Lao SMEs may struggle in AEC: official
The government has outlined the three “accesses” – access to finance, techniques and markets – required to help domestic small and medium enterprises (SMEs) compete in the Asean Economic Community (AEC), according to a senior government official.
The Ministry of Industry and Commerce's Foreign Trade Policy Department Deputy Director General, Mr Xayana Xayakone, made the comment yesterday at a lecture at the Ministry of Foreign Affairs.
The ‘Asean: Lao Preparedness for the Asean Community' seminar was held to mark the 46th anniversary of the founding of Asean and the 16th anniversary of Lao accession to the regional bloc.
At the lecture, Mr Xayana admitted the AEC – a single market and production base to be introduced in 2015 – will pose great challenges for Lao SMEs, most of which are family-based businesses whose technologies and production capacities are insufficient compared to the standard of foreign competitors.
Mr Xayana said to deal with the issue, the ministry had set up an SME Fund from which business operators could apply for loans to improve their business operations.
In addition, the Finance Ministry has been tasked with formulating a policy to create easier access to bank loans for SMEs.
Other government ministries have worked towards providing skills and techniques to SME owners in relation to better business operation.
Mr Xayana said the Agriculture and Forestry Ministry was “playing a leading role” in upskilling in the food processing sector, an area in which Laos boasted potential.
He said the Ministry of Industry and Commerce and Ministry of Foreign Affairs had been focused on seeking and securing foreign markets for locally-made products.
“Lao embassies overseas are playing an important role in finding markets for our products,” he said.
The deputy director said his ministry had opened an SME information centre, where business operators could ask for advice on SME-related issues.
He told the meeting the government was drawing up an Enterprise Law to give general guidance in business operation.
Ministry of Foreign Affairs Asean Department Director General, Dr Khien Phansoulivong, stressed the need for Laos to accelerate the development of its human resources to meet future needs.
Economists have warned if initiatives for human resource development are not promptly carried out, unskilled Lao workers will suffer tough competition once the Asean community is realised and labour movement becomes freer in the region.
According to the Lao National Chamber of Industry and Commerce, many domestic enterprises have already employed foreign managers and highly-skilled technicians in place of local workers.
However, Mr Xayana said the AEC would also provide opportunities by offering bigger markets and investment opportunities.
With a combined market of more than 600 million people coupled with its status of being an emerging economic growth region, he described Asean as an ‘investment destination', suggesting local businesses adapt with integration to maximise its benefits.
In his opening remarks at the lecture, Deputy Minister of Foreign Affairs, Mr Alounkeo Kittikhoun, reiterated the need for Laos to forge forward with its strength and competitiveness in preparation for the realisation of the Asean community.
vientiane times
