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US investors seek opportunities in Laos
The number of US investors exploring foreign investment opportunities in Laos is growing, with the country's economy continuing to expand at a rapid rate as the trade liberalisation process continues.
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| Mr Somdy Douangdy (second left) talks to Ms Karen Stewart (second right) at the seminar. | “Today the number of US companies interested in Laos has increased to 40,” Minister of Planning and Investment Mr Somdy Douangdy said at a seminar with a visiting US business mission to Laos yesterday in Vientiane.
“We had similar events in 2006, when only 20 US companies attended, that increased to 30 the next time round and now it has doubled to 40,” Mr Somdy said.
The visiting US business representatives will explore potential investment opportunities in Laos and meet with leading foreign businesses and Lao government officials. The trade delegation includes members of the American chambers of commerce in Thailand, Vietnam, and Singapore and representatives of small businesses and major corporations such as the Coca-Cola Company, General Electric and Citibank.
One of the goals of the trade mission is to increase trade between the US and Laos, which reached a value of US$71 million last year, according to a press release. US Ambassador to Laos Ms Karen Stewart made an address on the political and economic climate in Laos, saying that “we are here in Laos because Laos is open for business.”
Ms Stewart said that rapid economic growth is driving change and creating lucrative new opportunities for trade and investment. Laos was the second fastest growing economy in Asia after China over the 1999-2010 period. Real GDP growth has averaged more than 7 percent since 2004 and ongoing economic reform is making investing easier.
The economic growth is driven largely by natural resources extraction including mining, hydropower and timber harvesting. The Lao government began to open up the economy in 1986, joined Asean in 1997, normalised trade relations with the US in 2004 and concluded a Bilateral Trade Agreement in 2005.
“Bilateral trade is rising. In 2007 it was worth US$25.4 million, in 2008 it was US$62 million, in 2009 it was US$63 million and last year it reached US$71 million,” Ms Stewart said. Laos' bid to join the World Trade Organisation is underway and the US is providing technical assistance, she said. Laos opened a stock exchange in January this year and the US and Laos signed an Open Skies Agreement in July last year, she added.
Ms Stewart said the US government is eager to support US business investment in Laos and the US Export-Import Bank is able to finance specific commercial transactions to cover US sourced components of equipment and services to the Lao government. According to Washington, the US removed Laos and Cambodia from a trade blacklist in 2009, opening the way for US loans to companies doing business in Laos.
Mr Somdy said that there are many US investment projects now underway in Laos, including in agriculture, construction, hotels and banking, as well as the garment and handicraft industries, wood processing, education and consultancy services, amounting to many millions of US dollars.
The US goods trade deficit with Laos was US$23 million in 2009, down US$1 million from 2008. US goods exports in 2009 totalled US$20 million, up 11.4 percent from the previous year. Corresponding US imports from Laos were US$43 million, up 2.2 percent. Laos is currently the 181st largest export market for US goods, according to the website of the US Embassy to Laos.
vientiane times
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