Laos rises in World Bank's Doing Business ranking
Laos rises in World Bank's Doing Business ranking
The ability of firms to obtain credit and have their legal rights recognised, along with the availability of accurate credit information, were the highlights of Laos' steady climb in the World Bank Group's Doing Business (DB) 2016 ranking.
Overall, Laos climbed five places since last year to 134 in the latest survey of 189 economies around the world.
The main reason for the rise was the nation's performance in the Getting Credit category, with strong results among various indicators. Laos was ranked 70th, an impressive rise of 58 places from last year's 128th position.
Laos also improved in terms of access to credit information, which is important for banks in making decisions on lending and risk assessment.
On the Strength of Legal Rights index, Laos scored a creditable 6, equal to the OECD high income average. On the Depth of Credit index, Laos managed to score 5 out of 8. This is higher than the East Asian and Pacific average of 3.9, but lower than the OECD high income figure of 6.5.
Laos is a lower middle income country in the East Asia and Pacific region with a population of more than 6.8 million people and a gross national income per capita of US$1,600.
Over the past two years, Laos has experienced an economic slowdown because of poor revenue collection and external factors such as the falling price of gold on the world market.
Economists say further reform is needed to attract foreign investors and encourage more people to start businesses to help drive economic growth. More than 60 percent of the country's economy is currently dominated by the private sector.
Despite the improvement in the business climate, many business operators still request up-to-date information regarding new businesses, for example data on goods consumption and demand.
All processes involved in the authorisation of new business operations should be simplified to further improve the business climate in Laos.
The World Bank stated that Laos could improve the situation by providing access to a more reliable electricity network and by eliminating the requirement for a company seal to register a business.
A senior economist from the National Economic Research Institute, Dr Leeber Leebuapao, said the government's policy to improve the investment and business climate is operational, but much more needs to be done in terms of implementation.
“The government needs to create favourable conditions for people to do business in order to drive economic growth,” he said, adding that it is essential for the government to acknowledge the problems faced by the business sector and to seek solutions.
