Lao business sector urged to prepare for Asean integration
The Ministry of Industry and Commerce in Laos yesterday held a meeting with representatives of the private sector as it formulates its policy on Asean economic integration.
Minister Dr Nam Vinhaket presided over the opening of the half day consultation workshop titled Public and Private Dialogue on Asean Economic Integration, in Vientiane.
A number of business operators attended the GIZ-sponsored event. They made suggestions as to the direction that government policy should take to benefit from the Asean Economic Community (AEC), which will come into effect in 2015.
Speaking at the opening ceremony, Nam said the meeting was an important forum to help the government create an economic development policy in the new environment of Asean economic integration.
Laos will face various opportunities and challenges when the Asean Economic Community comes into being, he said. He advised that the government and private sector should join forces to address the challenges so that Laos could maximise the potential offered by regional economic integration.
One of the main purposes of the AEC is to create a single market and production base within the region where goods are allowed to flow freely. The AEC will also empower the region to compete with China, Japan and the Republic of Korea.
Trade officials say one of the greatest challenges Laos will face is that it will have to reduce import tariffs for Asean member countries to enable the free flow of goods in the region. To compensate for the loss in revenue, the government has introduced the Value Added Tax system.
One of the challenges the private sector will face is that the extra inflow of goods will make it difficult for businesses to compete with foreign competitors. Industries that import raw materials from overseas may not survive in an environment of fierce business competition.
Lao business operators have urged the government to provide them with incentives to help them survive amid growing competition. Those businesses that use domestically sourced raw materials will be able to produce cheap goods for export. However, they must improve their operations and learn about regional demand for their products so they can turn out goods for which there is a market.
The government hopes regional economic integration will encourage foreign businesses to invest in Laos, especially in areas for which Laos has a stable supply of raw materials such as the agricultural processing industry.