Chinese firms responsible for largest SEZ investments

business August 04, 2017 09:42

By Vientiane Times/ANN

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VIENTIANE - More foreign companies have decided to invest in special and specific economic zones (SEZs) in Laos because of regional integration and improvement of facilities, with Chinese firms playing a leading role in the sector.



Over the past six months, 51 companies have registered to invest in the SEZs with a total recorded capital of US$54.7 million, according to the latest report from the Ministry of Planning and Investment.

Of these companies, 29 are from China, which has emerged the largest foreign investor in the SEZs over the past six months.

China was followed by Thailand and Laos (five companies each), Malaysia (three companies) and Japan (two companies).    

Of the total of 51 companies, 18 invested in Boten Specific Economic Zone in Luang Namtha province, followed by Savan-Seno special economic zone in Savannakhet province (13 companies) and Saysettha Development Zone (eight companies).

The services and trade sectors represented the largest proportion of these investment, accounting for 44 per cent and 42 per cent respectively.

The industrial sector made up only 14 per cent of the total investment in the zones. 

Though more companies were interested in investing in the SEZs, their registered capital was lower than the target set by the government.

The Ministry of Planning and Investment planned to attract private investments worth US$148.5 million for the zones in 2017, but was able to source only US$54.7 million in the past six months.

Economists have said much more needs to be done if Laos wants to entice more investors to its special and specific economic zones.

Given that Asean economic integration has led to freer markets and higher competition, Laos' neighbours, including Thailand, Cambodia and Vietnam, also offer similar incentives to attract foreign investment.

Economists said Laos needs to work harder to review its investment promotion policies to attract foreign investment.         

Over the past few years, the government has restructured the management of SEZs and developed human resources to better facilitate foreign investment in Laos.

The management authorities of SEZs have also worked with Lao embassies in foreign countries, particularly in China, Japan and European nations, to help attract investment.

Currently, there are 12 special and specific economic zones across the country. About 352 companies from Laos and overseas have invested, with a total registered capital of US$8 billion, of which US$1.6 million has been spent.

SEZs have generated revenues of US$17 million for the government's budget and 18,000 jobs for local residents and foreign workers.

The government has attached great importance to the development of SEZs, aiming to attract investment from the private sector in Laos and overseas, as well as to create diverse investments in Laos, generate more jobs for Lao people and boost socio-economic development.

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