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Lao govt empowered to boost investment in special economic zones
The National Assembly has given the go-ahead to the National Committee for Special and Specific Economic Zones Management to boost local and foreign investment.
According to National Assembly Standing Com-mittee Resolution No 47, the committee, which consists almost exclusively of high ranking government officials, will have the power to consider and propose the setting-up of special and specific economic zones around the country.
The move aims to boost investment in the development of public and industrial infrastructure in remote parts of the country, in particular former revolutionary strong-holds, and is one of the main driving forces for attracting business people to invest and do business in these areas.
The committee will have the right to exempt special economic zone developers in remote parts of the country from import tariffs on fuel, set up land concession fees (provided the amount is not higher than that approved in Presidential Decree No 02), and consider and approve vehicles quotas for use in the zones.
The National Assembly al so approved the right of the special and specific zones' management board to set up an independent financial system, allowing it to set the tax rate for businesses that invest and operate in the zones. However, this rate should not be higher than that set by the government fo r businesses outside of the zones.
The management board will also have the power to protect forests and other vulnerable areas, with the aim of ensuring environmental sustainability and bio-diversity. It will also be responsible for registering all vehicles operating in the zones.
The government initiated its policy to establish special economic zones a decade ago, hoping to encourage bu sinesses to invest in and operate processing plants in these areas, boosting trade and ancillary services, and creating jobs for local people .
Investment in the zones is less expensive than outside since businesses setting up operations there have access to industrial infrastructure such as roads, water and electricity, and environmental protection.
Laos approved the establishment of the first special economic zone in 2003 in Savannakhet province.
However, development of the zone is facing a shortage of funding and investment and is still considered too risky as the country cannot access larger markets and has a relatively unskilled labour force.
At present, there are two private special economic zones, one in Luang Namtha province and the other in Bokeo province.
vientiane times
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