Vientiane, 09 March 2005 — A major step was taken today to improve the business environment in Lao PDR. In a signing ceremony attended by more than 80 people from government, private enterprise and donor agencies, the International Finance Corporation and the Lao government signed an agreement to establish the Lao Business Forum. The Forum, which will meet every six months beginning in mid 2005, provides a mechanism for improving the business environment, building trust between the business community and government, and promoting private investment.
In his speech at the event, H.E. Dr. Lian Thykeo, Vice President of the Committee for Planning and Investment (CPI) expressed strong optimism for what the Forum could achieve. “The government strongly favors private sector development. With more than three quarters of the population living on less than $2 per day, and the population growing rapidly, we see private sector development as essential to creating badly needed jobs and reducing poverty. Although Lao PDR is a poor country, we are well located in the heart of the rapidly growing Mekong region and have substantial undeveloped forest, mineral and hydropower resources.
To help us develop our assets, the government’s National Growth and Poverty Eradication Strategy identifies the private sector as key to economic growth and stresses the need to promote a favorable business climate. Towards that end we are currently approving new foreign and domestic investment promotion laws, developing a new business law to replace the existing one, and reforming the banking sector. We are also launching the new Lao Business Forum in partnership with IFC.
Speaking on behalf of IFC, which is the private sector arm of the World Bank, World Bank Country Director, Mr. Ian C. Porter, also expressed strong optimism for what the Forum could achieve. “Among others, the Forum will promote consistent enforcement and non-discretionary interpretation of laws and regulations. It will also remove the barriers that businesses face in establishing themselves and closing down, and provide feedback on government policies, laws and regulations that affect the private sector. IFC is very grateful to the Grand Duchy of Luxembourg for providing USD 200,000 towards two years of funding for the Forum.”
IFC has initiated similar Forums in both Vietnam and Cambodia with very good results, said Mr. Porter. “In Vietnam, the Business Forum has had a long list of successes. These include streamlining licenses and approvals; reducing taxes and fees; relaxing interest rate ceilings; removing restrictions on unsecured lending; simplifying rules concerning foreign exchange; and improving patent and industrial design protection and the regime for foreign direct investment.”
On behalf of IFC, its multi-donor initiative, the Mekong Private Sector Development Facility, will host the Forum’s Secretariat. In addition to staging the Forums twice a year, MPDF will support the sectoral working groups that will meet between Forums to identify problems and make recommendations for resolving them. MPDF will also undertake research commissioned by the working groups and provide capacity building activities for selected business associations to enhance their contributions to the Forum.
