Foreign investment to put more pressure on Lao SMEs

Foreign investment to put more pressure on Lao SMEs

Increasing foreign investment in the small and medium enterprise (SME) sector, especially in up market shops, restaurants and hotels will require Lao business operators to improve their competiveness if they wish to survive.

Some business units may collapse if they don't improve their business management and become more professional, a Lao economic expert cautioned recently.

As the Lao government has opened the door to foreign investors, the number of investments in different sectors is growing, the Director of the Lao National Economic Research Institute Dr Leeber Leebouapao told Vientiane Times yesterday.

To compete with foreign bus iness operators, all Lao business units have to develop their capacity building in business management, improve their products up to standard and develop their employees' skills, he advised.

Different Lao business entrepreneurs are still lacking in business experience and capacity regarding dealing with competition and management, Dr Leeber said.

However they will still be able to operate their businesses sustainably if they know how to adjust to the realities of the global economy, and take advantage of national growth opportunities.

On its part, the government should promote and provide more training in business operations and management, he explained.

Laos has already acceded to the requirements of the World Trade Organisation after gaining membership and will integrate with the Asean Economic Community next year, so the government cannot obstruct any products or investment from entering the country, he warned.

The best thing to do at present, he counselled, is for the government to provide consultation for Lao business entrepreneurs so that they understand the new reality and adjust their businesses accordingly.

As a first step, the government should provide more facilities for Lao business operators to access loans or finance to improve their business operations.

The government should also provide a good policy for the private sector to encourage it to build more vocational schools and train the nation's workers.

Many SME business units in Laos have ceased operations due to a lack of access to finance and the consequent inability to deal with competition.

Dr Leeber said that any businesses operation is subject to competition so entrepreneurs formulate a good plan and enhance their management if they wish to enjoy success.

Competition will help business operators to develop themselves and improve their product quality to the standard level.

It is also good for consumers to have more choice when it comes to buying safe and quality products, Dr Leeber said.

vientiane times