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Businesses urged to prepare for year of challenges
Lao businesses expect to face a number of challenges this year as the global political and economic situation remains complicated, according to a report from the Lao National Chamber of Commerce and Industry.
The chamber delivered the report at its annual conference at the International Training and Cooperation Centre in Vientiane last week, aiming to urge its members to prepare business and investment plans to meet the challenges.
According to the report, political conflicts and financial crises around the world will continue this year, posing big challenges for Lao businesses, particularly exporters.
Prices and demand for goods in world markets depend on international political and economic situations. Prices of major commodity exports such as mining commodities saw a steep decline at the end of 2008 when the global financial crisis took place.
Laos exports a number of goods to world markets including electricity, garments, and mining and agriculture products.
Economically powerful countries will continue to race for economic power, one of the main causes for the rapid fluctuations in international currency values.
The global unemployment rate will also remain high and rising prices of fuel and food will pose a major threat to Lao economic development.
Although there will be a number of major challenges, the chamber is still optimistic about the Asian region, a growing market, adding that political and economic cooperation among Asean nations will continue to improve and stave off the negative impact of the global financial crisis.
Cooperation between Asean and its dialogue partners of China, Republic of Korea, Japan, India and Australia is now under the spotlight of the world community.
Lao businesses experienced only minor negative effects from the global financial crisis thanks to government intervention which has boosted economic growth over the past two years, according to the report.
The government hosted the 25th SEA Games at the end of 2009 and the celebration of Vientiane's 450th anniversary as capital at the end of 2010; two major events that injected a large amount of funds into the economy to ensure economic growth of about 7.5 percent a year.
The government has encouraged investment in mining, hydropower and agricultural goods processing which has enabled the business environment in Laos to remain favourable.
The report also points out that government has been active in holding discussions with the private sector on eliminating business and investment barriers.
The Lao National Chamber of Commerce and Industry has more than 1,000 member companies nationwide. It plays an important role as the business community's representative in discussions with the government over ways to improve the business climate.
The government also considers the chamber as a consultation partner to improve the business environment and regards the private sector as one of the driving forces of economic development.
vientiane times
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