Development partners to focus on Lao SME development
Development partners to focus on Lao SME development
Development partners have voiced support for the Lao government's policy to boost the development of small and medium enterprises (SMEs) as one of the measures to sustain economic growth in the country.
According to a senior official from the Ministry of Planning and Investment, the development partners pledged their support earlier this week during the 11th High-Level Round Table Meeting (RTM) between the government and development partners in Vientiane.
The ministry's office head, Dr Kikeo Chanthaboury told Vientiane Times yesterday that “It is not surprising to learn that development partners will support Lao SME development. Development of SMEs plays an important role to boost and sustain economic growth in every country,” he said.
Dr Kikeo, who is also one of the round table meeting participants, said that he was unable to provide details on the amount of financial support which development partners, adding that a number of international organisations have already helped Laos to develop SMEs.
At present, the Lao economy is based largely on mining and hydropower. The mining sector played an important role to boost economic growth in Laos over the past several years, however economists and policy makers have expressed concerns over the depletion of natural resources which will cause a drop in economic growth if SMEs are not developed.
The Lao government approved an SME promotion and development policy several years ago. However, development of the sector saw slow growth due to a lack of financial support and incentives.
SMEs in Laos not only face financial shortages but also technical challenges therefore they are often unable to make their businesses competitive. Owners of SMEs have already voiced concerns over the negative impact of trade liberalisation in 2015 after the country becomes a part of the Asean Economic Community.
Dr Kikeo said development partners will also support Laos to improve its business environment as part of efforts to attract private investment and boost economic growth, adding that the private sector will become a main driving force of the Lao economy in the future.
According to a press release from the roundtable meeting organisers, development partners will continue to support Laos to develop vocational schools as the country is facing a shortage of skilled labour to meet the demands of socio-economic development.
The country needs to import foreign labourers to operate major investment projects in particular in businesses which demand high skilled jobs such as mining and the construction of hydropower plants. The growth of the Lao economy has not necessarily seen large scale job creation in the country.
vientiane times
