Laos approves US$2b in investment projects this fiscal year

Laos approves US$2b in investment projects this fiscal year

Private investment in Laos saw an unexpected surge over the first six months of this fiscal year after the government launched its one stop registration service in October.

From October to March, the government approved 98 domestic and foreign investment projects with a total investment value of US$2 billion, 31 percent higher than originally forecast, according to a report from the Ministry of Planning and Investment.

The government had expected to approve only US$1.5 billion worth of investment projects this fiscal year, but after six months the approved investment value was already above the target figure. The increase was attributed to the improved services provided for investors.

The government launched the one stop investment service to make it easier for local and foreign businesses to obtain permission to invest in a concession project.

In the past, businesses had to visit many ministries and officials before getting investment permission from the government. This not only wasted time but became an expensive exercise.

The government has now amended a number of laws and regulations to facilitate private investment after realising that the private sector is a major driver of economic growth and sustainable development.

Mining, hydropower and agriculture remained the top three industries of choice for investors in the first half of the fiscal year.

According to the report from the Planning and Investment Ministry, one of the most significant investment projects is the US$1.3 billion iron ore mining operation in the southern province of Xekong and the US$199 million Xepian-Xenamnoy hydropower project in Champassak province.

The growing amount of investment funding and projects will play a significant role in boosting economic growth and creating jobs over the next five years.

The government plans to achieve an economic growth rate of 8.3 percent next fiscal year and maintain that level until 2015.

Over the first six months of the 2011/2012 fiscal year, Laos received US$2.6 billion in investment capital. US$605 million of this was in cash and transferred to Laos through commercial banks while the rest was supplied in the form of materials.

Laos has to import a large amount of construction materials, machinery and trucks to build mining and hydropower plants, as the country is unable to supply these goods.

The government said it would achieve 8 percent economic growth this fiscal year, about 0.3 percent less than earlier forecast after flooding severely damaged agricultural production bases last year. Construction of facilities and infrastructure to host the Asia-Europe Meeting Summit has also bolstered economic growth.

By Times Reporters
(Latest Update July 09, 2012)