Investment in concession projects drops in Laos, says finance report

  • Laos
  • Thursday, 01 Jun 2023

Tourism related businesses have been recovering after Laos opened its door to international visitors last year. - Vientiane Times/ANN

VIENTIANE, June 1 (Vientiane Times/ANN): While investment in concession operations and special economic zones dropped in Laos last year, the number of newly registered businesses has increased significantly, a new report has unveiled.

The value of authorised investment in concession projects dropped from US$7.39 billion in 2020 to only US$2.41 billion in 2021 and US$2.14 billion in 2022, according to the latest report from the Macro-economic Research Institute of the Lao Academy of Social and Economic Sciences (LASES).

The new report attributed the significant drop to the huge decline in investment in hydropower projects in 2021 and 2022.

Meanwhile the actual value of investment in special economic zones fell by 69 per cent last year from US$210.1 million in 2021 to only US$65.7 million in 2022.

The decline was linked to the fact that no new investments were made in the Savan Seno Special Economic Zone in 2022. In 2021, some US$132 million from investment projects flowed into the zone, according to the report.

Lao researchers called for the bodies concerned to review legislation, policies and mechanisms concerning investment promotion with a view to removing red tape and rolling out the red carpet to encourage more foreign companies to invest in Laos.

The number of new businesses registered in Laos increased by 36 percent. Some 18,218 new enterprises registered in 2022, up from 13,392 in 2021.

Meanwhile the value of registered capital rose from 138.03 trillion kip in 2022 to 82.87 trillion kip in 2021, an increase of 67 per cent.

The wholesale and retail trade and vehicle repair represented the largest amount of registered capital in 2022, accounting for 31.4 per cent of the total.

This was followed by the supply of electricity/gas/air-conditioning (13.5 per cent), financial and insurance businesses (12.8 per cent), mining (9.3 percent), and the processing industry (7.8 per cent).

The increase in newly registered businesses reflects the government’s drive to diversify the economy by encouraging more people to operate businesses, thereby creating jobs and generating more revenue for the government.

One of the most important points to note is that the value of registered capital in the wholesale and retail trade and vehicle repair jumped from 27.13 trillion kip in 2021 to 43.35 trillion kip in 2022.

In addition, the value of registered capital in finance and insurance businesses soared from 6.39 trillion kip in 2021 to 17.63 trillion kip in 2022.

However, the business sector is still largely dominated by Small and Medium Enterprises (SMEs), which account for more than 90 percent of all enterprises in Laos.

Over the past few years, businesses have suffered hugely because of the Covid-19 pandemic, particularly those operating in the service sector, such as airlines, travel agents, hotels, transport operators, restaurants, massage parlours and golf clubs. But the service sector is making a recovery after Laos reopened its doors to international visitors in May last year. - Vientiane Times/ANN

Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Aseanplus News

Marcos’ rating plunges
Trail of child brides and abuse leads to cult’s ‘saviour’
Remembering the Kanjuruhan crush
Endangered Sumatran rhino born in Indonesia
Falling beer sales show growing risk for nation’s GDP
Haze: Avoid outdoor activities, wear masks when going out, says Health DG
Taiwan investigating accusation submarine programme details leaked
Malaysia fail to qualify for Asian Games hockey semi-finals
Soccer-UEFA introduce minimum standards framework for women's national teams
Schools, kindergartens to close if API exceeds 200

Air Pollutant Index

Highest API Readings

    Select State and Location to view the latest API reading

    Source: Department of Environment, Malaysia

    Others Also Read