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Laos: Investment Circumstances This Year Likely to Go Down
Source: kplnet.net
Source Date: Monday, April 26, 2010
Focus: Citizen Engagement
Country: Lao People's Democratic Republic
Created: May 10, 2010

(KPL) This year’s investment circumstances are projected to decrease due to the global financial crisis, the government's additional investment controlling measure in energy and mining, and the curb on industrial tree plantation area.

Last year’s investment in Laos reached US$4 billion while this year’s investment is projected to be only US$1.5 billion, Dr Singlavong Khoudphaythoune, Minister of Planning and Investment, told the Lao News Agency last week during a meeting held here on 21 April between the Cabinet, Vientiane Executive Board and provincial administrations. In the first six months of this fiscal year, 1,960 projects worth 1,030 billion kip have been put into action, 657 billion kip of which was domestic investment, accounting for 52 per cent of the annual target. The mobilisation of official development assistance (ODA) in the first six months of this year reached US$257.43 million, US$170.26 million of which were grant aid and US$83 million were loans.

Some 262 projects nationwide amounting to US$657.50 million, were invested by domestic and overseas investors, 96 projects worth US$108 million was domestic investment, accounting for 16 per cent of the total investment.

However these investments are classified into two categories: authorised by the central government and the other by provincial administrations. Of the total investment projects, 47 projects, valued at US$456 million, accounting for 69 per cent of the total investment have been authorised by the Government. Whereas the provincial administrations have granted authorisation to 215 investment projects, worth US$200 million, which accounted for 30 per cent.

The state investment in this year, in 3,100 projects is worth no less than 1,265 billion kip. Of these, only 50 per cent has been implemented. The first half of this year has seen a decline in private investment projects worth at least US$650 million, if compared to last year’s same period. Dr Singlavong gave his views that the investment value this year was projected at US$1.5 billion only if compared to the previous year’s figure. The decline was attributed to the government’s curb on projects on mining exploitation, energy development and industrial tree plantation.

This factor resulted in last year’s investment at US$4 billion. The majority of investors coming to Laos last year were to find raw materials for export.

The number of this year’s investment projects might decrease because the government has issued an additional number of measures, regulations and control on some investment sectors, particularly the rubber tree plantation or some kind of industrial tree plantation.

The industrial tree plantation sector has been capped on, which the government has considered to have long-term negative effects.
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