Laos, Japan discuss regional development
The Lao government is speeding up the building of roads nationwide in its bid to change Laos from a landlocked to a land-linked country.
A symposium entitled ‘The Development Strategy of the Lao PDR: Asean/East Asian Economic Integration and Special Economic Zone' took place on Friday in Vientiane to review the progress made towards Asean integration.
Speaking at the opening ceremony, Standing Deputy Prime Minister Somsavat Lengsavad said that since the government had embarked on a policy to develop a market based economy in 1986, Laos had received assistance from friendly countries and various international financial institutes.
This included assistance from Japan for the building of roads from the north to the south and to link Laos to neighbouring countries.
Mr Somsavat said the symposium was a good opportunity for Lao and Japanese officials to exchange their ideas on economic integration in light of the present trend of globalisation.
“This symposium helps Laos to disseminate its development strategy and to expand the potential of the country for integrating into the regional and global economy,” he said.
Since 1975, the government has followed several avenues of development, focusing on agriculture, forestry, industry and service. However, the country's landlocked location has caused major problems in developing these sectors.
To ease the situation, the government developed a renovation policy which focused on road construction to connect Laos to neighbouring countries, Mr Somsavat said.
In the central areas of the country, the focus is on upgrading Road Nos 9, 12 and 8 as part of the East-West Economic Corridor.
In the north, Road No 3 has been built from the Lao-Thai border at Huaykon in Ngeun district, Xayaboury province, to Pakbaeng district in Oudomxay province. This serves as a road link between Vietnam and China .
At present, a road is under construction from the Lao-Thai border in Luey province in Thailand leading to Xayaboury province in Laos . Road No 7 is being built to link Luang Prabang province in Laos and Vietnam .
In the south, Road Nos 13, 10 and 18B link Laos to Vietnam , Cambodia and Thailand . Road Nos 15 and 16 are under construction and will connect Laos , Vietnam and Thailand .
These extensive road-building projects will succeed in turning Laos from a landlocked to a land-linked country.
“This is an important factor in our socio-economic development and in attracting foreign investment,” Mr Somsavat said, as well as implementing regional economic integration policy. Much of the work has been done with Asean economic cooperation.
In addition to building road links, the government has formulated a foreign investment promotion policy and issued regulations on foreign investment promotion and protection. At present, foreign investment in Laos is estimated at US$1.4 billion.
More recently, the government has also embarked on a policy to develop special economic zones to support its foreign investment policy.
This has led to the signing of a Memorandum of Understanding (MoU) with Thailand 's TAX Company to build a special economic zone in Laos at the Savannakhet-Mukdahane Friendship Bridge , Mr Somsavat added.
Laos has also signed an MoU with a Malaysian company for the development of a special economic zone at Km 10 in Kaysone Phomvihane district, Savannakhet province, on Road No 9.
The objective of these two agreements is to use foreign capital to develop infrastructure so that the government does not need to borrow foreign capital, Mr Somsavat said.
The underlying concept is that the government will turn its land assets into capital by sharing the land with foreign investors in a 70:30 split. This means the government will receive 30 percent of the profits earned by the project and from excise taxes.
Just as importantly, the scheme will provide jobs for local people, he added.
The Charge d'Affaires a.i. of the Embassy of Japan to Laos, Mr Kazuhiro Fujimura, said La os and Japan had enjoyed good and friendly relations for many years and since his arrival in Laos almost one year ago bilateral ties had become even stronger.
“The opening of Road No 1 in Vientiane in December was one of the many symbolic events of the deepening collaboration between our two countries,” Mr Fujimura said.
“Special economic zones are one of the important challenges facing us now so I hope our discussions here today will lead us to ponder on the steps we need to take in the future.”
The symposium was supported by the Japan External Trade Organisation, the Institute for International Studies and Training and AEM-METI Economic Industry Cooperation Committee of Japan, and the National Economic Research Institute of the Lao Ministry of Planning and Investment.
By XAYXANA LEUKAI
(Latest Update February 11, 2008)