Experts debate Lao economic integration
Experts debate Lao economic integration
Lao and international authorities have discussed the preparations necessary for Laos to be part of regional economic integration this year.
The discussions took place during the Conference on Economic Development last week, attended by Deputy Minister of Industry and Commerce Mr Somchit Inthamith and other lecturers from France, Laos, the World Bank office in Cambodia, the Asian Development Bank and GIZ.
During the discussions the lecturers explained some of the challenges Laos faces in regional integration.
On behalf of the International Cooperation Centre of Agronomy Research and Development, Ms Isabelle Vagneron said that economic integration may be defined as a process through which barriers that limit the flow of goods, services, capital, labour and communication across borders, are progressively eliminated in order to abolish discrimination between economic units belonging to different countries.
Since 1992, several agreements and initiatives have paved the way for the rapid integration of Laos into both the regional and global economies. Laos became a member of Asean in 1997.
The country also signed various bilateral trade agreements (with the EU, Japan, Australia, the United States) through which it was granted a Ge neralised System of Preference status.
More recently, the ADB-led Greater Mekong Sub-region initiative focusing on cross-border infrastructure development projects between Thailand, Myanmar, Vietnam, Cambodia, Laos and two Chinese provinces, further contributed to economic integration.
“And it looks like, driven by this powerful regional dynamic, the Lao economy has boomed,” Ms Vagneron said.
Laos has recorded an impressive growth rate of 6-8 percent over the past 15 years. The value of exports has soared from US$133 million in 1992 to US$2.8 billion in 2012, while imports have grown from US$265 million to US$4.4 billion over the same period.
Foreign direct investment from Asean countries between 2006 and 2012 reached US$6.2 billion. Labour flows from and towards Laos greatly increased. Finally, 80 percent of the 3.7 m illion tourists who visited Laos in 2013 came from Asean countries, generating still further revenue.
The downside, however, is that Laos mainly exports extractive resources rather than manufactured products, which are increasingly imported from neighbouring countries (China, Vietnam and Thailand).
The country's industrial sector is constrained by a small domestic market, still poor although improving infrastructure, low labour productivity, and a lack of an enabling environment for business.
In the agricultural sector, the influence of neighbouring and resource hungry countries (Vietnam, Thailand and China) is also increasing.
French ambassador to Laos, Mr Yves Carmona, also attended the conference.
