Laos is on track with its plans for the development of special and specific economic zones (SEZs), which contribute greatly to the country’s economic growth.

Deputy Prime Minister and President of the Lao National Committee for Special Economic Zones (NCSEZ), Mr Somsavat Lengsavad, highlighted achievements in this sector when addressing a recent meeting in Vientiane attended by high-ranking officials from all the provinces . https://www.youtube.com/embed/Uz5TZ2ZMO5s?

The meeting summed up the accomplishments made in SEZ development since the establishment of the NCSEZ in 2011 and discussed plans to further develop the sector.

Mr Somsavat said SEZs still had strong potential for growth and called on the associated sectors to discuss detailed plans to advance the sector.

The deputy PM said SEZs not only contribute to overall development but also help to boost the growth of the industry and service sectors.

“Over 260 companies are now investing in these zones with a total registered capital of US$6.4 billion. Of this, more than US$1.27 billion has already been spent on development activities in the zones,” he said.

“We have found that the industry and service sectors represent 29 percent and 44 percent respectively of total investment in the 12 SEZs. This shows that Laos is on track to move towards industrialisation and modernisation.”

The value of goods exported from the 12 SEZs has reached over US$41.5 million while the value of goods imported to the zones has exceeded US$194.2 million.

Deputy Minister and Head of the General Secretariat to the Lao National Committee for Special Economic Zones, Ms Bouatha Khattiya, said “We are still in a stage of development so at present we import more than we export. But when many of the factories begin operation we will export more than we import.”

Laos is different from other countries when it comes to SEZs because it is landlocked and has limited funding to develop these zones.

In contrast, other countries have access to sea ports and have the financial capital in place to build up these production zones.

Between 2003 and 2010, the development of SEZs in Laos did not progress as anticipated due to a number of problems including the slow process of approving investment. During this period, only 20 companies invested in these zones.

However, more companies expressed interest in setting up operations following the establishment of the Lao National Committee for Special Economic Zones in 2011. This enabled the provision of one-stop services to facilitate investment.

One of the main challenges is that the NCSEZ lacks sufficient legislation concerning the government of SEZs. A law regulating the sector was agreed on by the government in 2015, but has yet to be submitted to the National Assembly for approval.

Another challenge is the provision of compensation for people whose land has been appropriated for the industrial zones, and in some areas this has not been paid out in full.

In addition, some companies have registered to invest in SEZs but their projects have not yet materialised.

By Somsack Pongkhao
(Latest Update April 18, 2016)